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Hon. Dan Flood, who frightens me by the length of the tome that is in front of him.

Without objection, we will include it in the record, because I know from personal experience over a long number of years he does not need that or anything else to talk.

(Mr. Flood's prepared statement and attachments follow :)



Mr. Chairman, as a former member of the Committee on Foreign Affairs with assignment to the Subcommittee on Inter-American Affairs when first coming to the Congress, I am happy to be with you again on the vital interoceanic canal question—a subject of world importance destined to receive much attention in the future.


For many years I have been studying Panama Canal history and problems and made numerous addresses in and out of the Congress on this complex matter. The deeper that I have delved into it the more I have been impressed with the vision and wisdom of those great leaders, who, in the early part of the century formulated our Isthmian Canal policies. They were Rear Admiral John G. Walker, John Bassett Moore, Secretary of State John Hay, Secretary of War William Howard Taft, John F. Stevens, George W. Goethals, and above all, President Theodore Roosevelt.

Because many of my colleagues and others have asked me what is the explanation for my long time interest in interoceanic canal problems, I wish to say that during my boyhood in Hazleton, Pennsylvania, ex-President Roosevelt used to be an occasional house guest in my grandfather's home. He spent many hours describing how the Canal Zone was acquired and his problems in launching the construction of the Panama Canal, which he viewed as comparable in geo-political significance with the Louisiana Purchase. Thus he became my youthful ideal and created a lifetime interest on my part in Isthmian Canal policy questions for which I have always been grateful.

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The Panama Canal enterprise consists of two inseparable parts: (1) the Canal itself, and (2) its absolutely necessary protective frame of the Canal Zone territory. The two great canal issues now before the nation are: (1) the transcendent

ey issue of retaining United States undiluted sovereignty over the Canal Zone and (2) the important project of modernizing the existing Panama Canal by the construction of a third set of larger locks for larger vessels adapted to include the principles of the strongly supported Terminal Lake Plan, which was developed in the Panama Canal organization as the result of World War II experience. All other issues, however important, are irrelevant and should not be allowed to confuse or further delay proper consideration of the two pertinent ones.

Unfortunately, the handling of the two principal issues has been greatly complicated by radical Panamanian attacks on U.S. sovereignty over the Canal Zone and the exhumation of the corpse of the old controversy over types of canalhigh level lake lock versus sea level tidal lock. Because of the prime importance of the question of sovereignty, a knowledge of the history of its evolution is essential for reaching wise decisions.


The present status of the Canal Zone territory traces back to the 1901 HayPauncefote Treaty between the United States and Great Britain that ended half a century of conflict over canal routes. In line with that agreement, the United States made the long range commitment to construct and operate an Isthmian canal under its exclusive control in accordance with the rules set forth in the 1888 Convention of Constantinople for the operation of the Suez Canal.

At the same time that the Hay-Pauncefote Treaty was being negotiated, our government was conducting a major investigation by an Isthmian Canal Com

mission for Exploration with Rear Admiral Walker, one of our ablest naval officers of his time, as president. In the supplementary report of that commission on January 18, 1902, recommending the construction of the Panama Canal, it made the following highly significant recommendation that merits study:

“The grant (for an Isthmian Canal) must not be for a term of years, but in perpetuity, and a strip of territory from ocean to ocean of sufficient width must be placed under the control of the United States. In this strip the United States must have the right to enforce police regulations, preserve order, protect property rights, and exercise such other powers as are appropriate and necessary." (Sen. Doc. No. 123, 57th Congress, 1st Session, p. 9.)

The reason for this recommendation was that this commission had studied Isthmian history and foresaw that only by such exclusive control could the project for an Isthmian canal be successfully constructed, maintained, operated and protected.

What did our government do? Under the dynamic leadership of President Roosevelt, the Congress passed the Spooner Act, approved June 28, 1902, authorizing the President to acquire by treaty with Colombia the perpetual control of the needed strip across the Isthmus and to construct thereon, and to “perpetually maintain, operate and protect,” the Panama Canal. It also provided, in event of inability to secure the necessary strip from Colombia, for obtaining the needed territory for the construction of a Nicaragua Canal.

U.S. ACQUIRES EXCLUSIVE SOVEREIGN CONTROL OF CANAL ZONE, 1904 Events developed quickly. When the Colombian Senate failed to ratify the Hay-Herrán Treaty of January 23, 1903, Panamanian leaders, fearing that the Canal would be lost to Nicaragua, decided to secede from Colombia and thus enable the United States to make the canal treaty with Panama instead of Colombia.

In the resulting convention of November 18, 1903, following the Panama Resolution of November 3, Panama granted to the United States in perpetuity the "use, occupation and control” of the Canal Zone territory for the "construction, maintenance, operation, sanitation, and protection" of the Panama Canal with full “sovereign rights, power and authority” within the Zone to the "entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority.” This was the indispensable agreement under which the United States undertook the great task of completing the construction of the Panama Canal and its subsequent opertion and defense, which is binding on the United States as fully as on Panama. (Hay-Bunau-Varilla Treaty, Articles II and III, quoted in Foreign Relations, 1904, pp. 543–51.)

The terms of this treaty were not accidental. Our leaders at that time had studied the history of the Isthmus and understood the problems that would be involved in such undertaking in a land of frightful disease and endemic revolution. They realized that the United States could not accept responsibility without complete authority as best stated in Article III of the 1903 Treaty. Just as the provisions of this treaty bind the United States in perpetuity to maintain, operate and defend the canal, they are likewise binding on Panama to recognize their validity. Moreover, except for the prompt recognition by the United States of the independence of the Province of Panama following the Panama Revolution of November 3, 1903, the Republic of Panama could never have survived and the Panama Canal would never have been constructed. (For additional information see Earl Harding, The Untold Story of Panama, New York: Athene Press, 1954.)



In addition to the grant of full sovereign rights, power and authority over the Canal Zone, the United States obtained title by purchase of all privately owned land and property in the territory from individual property owners, making the Canal Zone the most costly territorial acquisition in the history of the United States (Ho. Doc. No. 474, 89th Congress, p. 361.)

These purchases included all works of the French Panama Canal Company and all the stock of the Panama Railroad Company, the latter then a New York corporation.

EXCLUSIVE U.S. CONTROL OVER CANAL ZONE RECOGNIZED BY PANAMA, 1904 When was exclusive control by the United States over the Canal Zone recognized by Panama ? This was done on May 25, 1904, in a note by Secretary of Government Tomás Arias, which stated : "The Government of the Republic of Panama considers that upon the exchange of ratification of the treaty for opening an interoceanic canal across the Isthmus of Panama its jurisdiction ceased over the Zone ...” That exchange occurred on February 26, 1904, in Washington.

SECRETARY HAY CLARIFIES SOVEREIGNTY QUESTION, 1904 The ink was hardly dry on the 1903 Treaty when Minister of Foreign Affairs of Panama José D. de Obaldia, in a note to Secretary of State Hay on August 11, 1904, raised the sovereignty issue. (Foreign Relations, 1904, pp. 598–607.) In reply to the Panamanian Government's contention that the works "construction, maintenance, operation, sanitation, and protection” of the canal as used in the treaty constituted a “limitation on the grant,” Secretary Hay, on October 24, 1904, wrote a comprehensive reply that is still classic. (Ibid., pp. 613–30.)

In this reply Secretary Hay explained that the words, "for the construction, maintenance, operation, sanitation, and protection of said canal” were not intended as a "limitation on grant" but were a "declaration of the inducement prompting the Republic of Panama to make the grant.” (Ibid., p. 614.) He then asserted that the "great object sought to be accomplished by the treaty is to enable the United States to construct the canal by the expenditure of public funds of the United States—funds created by the collection of taxes ..." (Ibid., p. 616.) Though Secretary Hay in this note did refer to Panama as the “titular sovereign of the Canal Zone,” he declared that such sovereign is "mediatized by its own acts, solemnly and publicly proclaimed by treaty stipulations, induced by a desire to make possible the completion of a great work which will confer inestimate benefit on the people of the Isthmus and the nations of the world.” He also stated that it was diffcult to conceive of a country contemplating the abandonment of such a "high and honorable position, in order to engage in an endeavor to secure what at best is a 'barren scepter'.” (Ibid. p. 615.)

In addition, the evidence is conclusive that under no circumstances would the United States have assumed the grave responsibility maintaining, operating, sanitating, and protecting the Panama Canal in an area notorious for tropical disease and endless turmoil under a weak and helpless emergent government except for the grant of full sovereignty over the Canal Zone and Canal.



When discussing the question of United States power on the Isthmus on January 12, 1905, in a report to Pres nt Theodore Roosevelt, Secretary of War Taft made the following statement :

“The truth is that while we have all the attributes of sovereignty necessary in the construction, maintenance, and protection of the Canal, the very form in which these attributes are conferred in the treaty seems to preserve the titular sovereignty over the Canal Zone in the Republic of Panama, and as we have conceded to us complete judicial and police power and control over the Zone and the two ports at the end of the canal, I can see no reason for creating a resentment on the part of the people of the Isthmus by quarreling over that which is dear to them but which to us is of no real moment whatever.” (Quoted in Hearings before Senate Committee on Interoceanic Canals, 1907, Vol. III, p. 2399.) This statement referred to Panamanian claims of being the token sovereign of the Canal Zone.

Again on April 18, 1906, when commenting on Article III of the 1903 Treaty in testimony before a Senate Committee, Secretary Taft stated :

“It is peculiar in not conferring sovereignty directly upon the United States, but in giving to the United States the power which it would have if it were sovereign. This gives rise to the obvious implication that a mere titular sovereignty is reserved in the Panamanian Government. Now, I agree that to the Anglo-Saxon mind a titular sovereignty is like ... a barren ideality, but to the Spanish or Latin mind, poetic and sentimental, enjoying the intellectual refinements, and dwelling much on names and forms, it is by no means unimportant.” (Hearings before Senate Committee on Interoceanic Canals, April 18, 1906, Vol. III, p. 2527.)

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These were courteous efforts by Secretary Taft to sooth the sensibilities of our Panamanian friends but never with the thought or purpose of surrendering the actual, necessary and exclusive sovereign rights, power and authority of the United States over both the Canal and its indispensable protective frame of the Canal Zone. The term “titular sovereignty” means nothing more than a reversionary interest on the part of Panama in the sole event the United States should abandon the Panama Canal as in the case of the execution of a reversionary deed of property in Anglo-Saxon countries. Hence, there can never be any reversion of the Canal Zone to Panama unless our country abandons the canal enterprise, which includes the Zone.

Unfortunately, many writers have quoted Secretary Taft out of context and this practice has led to much public confusion as to precisely what he said and meant. Some of this confusion is not accidental especially on the part of certain officials of our government who through motives of appeasement have pursued a weak and unrealistic course.


After Secretary Taft's election as President, Panama Canal construction was well underway. In an address on the work at New Orleans on February 9, 1909, the President-elect made the following remarks :

“Because under the treaty with Panama we are entitled to exercise all the sovereignty (in the Canal Zone) and all the rights of sovereignty that we would exercise if we were sovereign, and Panama is excluded from exercising any rights to the contrary of those conceded to us .. that is a ticklish argument, but I do not care whether it is or not. We are there. We have the right to govern that strip, and we are going to govern it. And without the right to govern the strip, and without the power to make the laws in that strip bend, all of them, to the construction of the Canal, we would not have been within 2 or 3 or 4 years, hardly, of where we are in the construction.” (Ho. Doc. No. 474, 89th Congress, p. 52.)

Those unqualified words of President-elect Taft are even more applicable today than in 1909, for the Panama Canal has become one of the greatest maritime crossroads in the world with an estimated transit total in 1971 of 15,550 vessels, which is an average of 42.6 per day. (Hearings before Sub Committee of Committee on Appropriations for 1972, Pt. 2. p. 312.)



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Again as President of the United States on November 16, 1910, while attending a banquet given by the President of Panama, Mr. Taft made this significant statement :

"We are here to construct, maintain, operate, and defend a world Canal, which runs through the heart of your country, and you have given us the necessary sovereignty and jurisdiction over the part of your country occupied by that canal to enable us to do this effectively." (Canal Record, Vol. IV, (Nov. 23, 1910), p. 100.)

This was not an excercise in banquet comradery but an unchallenged statement of policy as to the Panama Canal enterprise by the President of the United States, which policy is now being bitterly assailed by an unconstitutional governnient in Panama founded by force and violence and which might be superseded at any time by a Constitutional government that would reverse the policy of the revolutionary regime.

Again on December 5, 1912, pursuant to the Panama Canal Act of 1912 and in conformity with treaty provisions, President Taft in an Executive order declared that.

“All land and land under water within the limits of the Canal Zone are necessary for the construction, maintenance, operation, protection and sanitation of the Panama Canal.” (Encyclopaedia Britannica, 1971, Vol. 17, p. 206.)

There are greater needs for this area now than there were at that time. In fact the Canal Zone Territory should be extended by the purchase of the entire watershed of the Chagres River that provides the summit level water supply as was once recommended by General Clarence Edwards when he was in comniand of U.S. Forces on the Isthmus.


In early 1923 the Panama Government attempted to reopen negotiations for a new canal treaty (Foreign Relations of the United States, 1923, Vol. II, pp. 638-48). Secretary of State Hughes studied the history of our relations with Panana, called in the Panamanian Minister and, with a refreshing degree of candor, stated that the U.S. Government "could not and would not enter into any discussion affecting its full right to deal with the Canal Zone under Article III of the Treaty of 1903 as if it were the sovereign of the Canal Zone and to the entire exclusion of any sovereign rights or authority on the part of Panama." To this he added that, “it was an absolute futility for the Panamanian Government to expect any American Administration, no matter what it was, any President or any Secretary of State, ever to surrender any part of these rights which the United States had acquired under the Treaty of 1903.” (Ibid. p. 684.) That forthrightness on the part of Secretary Hughes met with the situation for many years. The present Secretary of State should speak out with like candor in defense of our just and indispensable authority over the Canal Zone. The argument made that the United States does not need all the Canal Zone territory to protect the Canal is unrealistic because any part of it might be needed in time of war to create defenses and to deploy the protective forces for the Canal and Panama itself.

During the construction of the Canal the State Department did not control policy as regards the Canal Zone, and construction went forward effectively and expeditiously. After the completion of the Canal the State Department got its nose into the tent and finally its body. Ever since it has muddled our Isthmian policy by weakness, timidity and vacillation, rendering some of the consequent problems almost beyond solution.


Because of the economic support of the Panama Canal, the full effects of the Great Depression of 1929 were not felt in Panama until 1932 when they stimulated agitations for a new treaty. With the change of administrations in the United States in 1933 our government weakened as to the earlier offiical positions taken by President Theodore Roosevelt, Secretaries Hay and Hughes, and negotiated the Hull-Alfaro Treaty of 1936 with Panama.

Because of a strong opposition in the Senate it was not ratified until 1939 just before the start of World War II. In this treaty, the United States made important concessions to Panama, which included the construction of a TransIsthmian highway in Panama extending through the Canal Zone to Colón, giving Panama jurisdiction over that highway in the Zone, renunciation of the right of eminent domain in the Republic of Panama for Canal purposes, and surrender of U.S. authority to maintain public order in the cities of Panama and Colón and adjacent areas. In a realistic sense this treaty was the start of our great giveaway programs, causing serious difficulties in obtaining military bases in Panama for defending the Panama Canal in World War II and creating dangerous precedents. A positive result of the treaty, however, was that Panama recognized that the word “maintenance" in Article I of the treaty allowed “expansion and new construction" when undertaken in accordance with the treaty, that is, for the maintenance, operation, sanitation and protection of the existing Canal.

It was under this authority that the Congress enacted legislation for the Third Locks Project soon afterward and on which more than $76,000,000 was expended before it was suspended in May 1942 because of more urgent war requirements. The useful work accomplished on this project included huge lock site excavations at Gatun and Miraflores for the proposed larger locks, which could be used for the modernization of the existing canal; and for which a new treaty would be unnecessary.


By 1953 agitations were well underway in Panama for the Chapin-Fábrega Treaty, which without adequate understanding or debate, was ratified in 1955. This treaty gave further concessions to Panama, including provisions for the construction by the United States of a free bridge across the Canal at Balboa to supersede the Thatcher Ferry, relinquishment of the right to enforce health and sanitation ordinances in the cities of Panama and Colón, and the cession to

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