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ing the canal and we did so. So in short we have been very good to Panama. Our annual payments to them now are just under $2 million plus the fact that our presence there and the fact that the canal is operating there is a tremendous assist to their economy.

I think I sum it up in my final paragraph where I say that we have been more than fair with Panama and our own national interest dictates that we maintain full sovereignty and jurisdiction over the Panama Canal and the Canal Zone.

Mr. FASCELL. Well, I thank you for that very practical position statement and the facts that you point out with respect to earnings for Panama, and the benefit to their gross national product. I agree with you on the benefit of our presence there.

As you know, there has been a longstanding dispute on the question of ultimate sovereignty even though the United States by treaty has all the rights to act as if sovereign. Of course there is an admitted value to the canal, both commercially and otherwise. So let me ask you this question.

The new treaties will speak for themselves obviously when they are submitted and everybody can take a look at them, but let's assume we were able to do the same thing again under different language; that is, retain the full attributes of sovereignty in terms of the management, the operation, and the defense of the canal and the Canal Zone. Then let's also assume that the congressional prerogatives remain inviolate; in other words, the Congress would continue to determine the question of tolls, the ultimate operations, the ultimate defense questions, the question of improvements of the present canal or going the sea level route. All of that would remain in the Congress or otherwise follow the normal processes of government.

Now if it were possible to arrive at such a treaty and we could get it agreed to by the Panamanians in light of the express need to expand or improve our present canal, isn't it possible to serve our national interest within that kind of a framework?

Mr. WILLIAMS. Well, first of all I have to ask you the question, "How would this differ from our present arrangement with Panama, the situation you are describing?"

Mr. FASCELL. I don't think it would change one bit-that would be my own thinking because it still would have to be done by treaty. Mr. WILLIAMS. In other words, what you are saying is we could still retain sovereignty and we would still retain jurisdiction.

Mr. FASCELL. Well, let's put it this way. We would not have any more or any less than we have now.

Mr. MAILLIARD. Then you don't need a new treaty.

Mr. WILLIAMS. That is right.

Mr. FASCELL. That is just language. This is a game of semantics. Mr. WILLIAMS. All I have to say is what we have in the Panama Canal and it does amount to total sovereignty and to total jurisdiction, and I am in favor of keeping it.

Mr. FASCELL. I understand.

Mr. WILLIAMS. Now there is a definite reason to maintain the Panama Canal-and perhaps some day we will have this sea level route referred to in the study which was authorized in 1965 or 1966, fine. But in the meantime I don't believe that the Government of

Panama is stable enough to really take sovereignty over the canal even if we would permit them to do so.

The general, the head man there now, went away on a short trip and two colonels took over and he came back and had to throw them out, in effect, and that is the sort of thing that has gone on.

You have had that going on plus the fact that more and more unrest is evolving in Central America. You have got Communist Cuba just a short distance away. So I think that the stability of the operation of the Panama Canal, and the Panama Canal Zone, must remain as it is under our sovereignty and our jurisdiction. To do anything else would be a serious mistake.

Mr. FASCELL. If the United States maintains sole jurisdiction and the sole right to operate, maintain and defend the canal and the Canal Zone, what else is there? That is what I can't understand.

Mr. WILLIAMS. It is my understanding that in the negotiations which are taking place right now and which have been in progress since I believe 1969 there is a definite———

Mr. FASCELL. Present negotiations have not been going on since 1969, the present negotiations have had only 15 sessions, I believe. Mr. MORSE. They started last June.

Mr. WILLIAMS. All right, in 1970. Actually, a statement dated September 1971 from the Office of Interoceanic Canal Negotiations said, "Panama is determined to terminate current U.S.-treaty rights as if sovereign and extend the jurisdiction of the Government of Panama into what is now the Canal Zone.”

Now there is a very intensive propaganda campaign going on right now in Panama to achieve this. The riots of 1964 were stimulated by the fact that Panama wants to take over the Panama Canal and the Panama Canal Zone.

Mr. FASCELL. Let's just assume that that is not a negotiable issue from the standpoint of the United States.

Mr. WILLIAMS. We made it a negotiable issue because it is on the list of that which is to be negotiated during the present negotiations. Mr. FASCELL. Well, it may be on the list but from the standpoint of our ultimate position let's just assume that it will not be; let's just say we are going to insist on the sole maintenance right and jurisdiction. We don't know that until we see what the draft treaty says.

Mr. WILLIAMS. All that you are proposing is that you apparently would like to see done, from the remarks you are making, is precisely what I am proposing. In other words, we don't give up our jurisdiction, we don't give up this sovereign right which we presently have, even though

Mr. FASCELL. Let me ask it another way if I can and then I am going to be through. Would it make any difference to you whether or not the United States leased the land for a hundred years or in perpetuity or we owned the land in perpetuity? Would it make any difference to you?

Mr. WILLIAMS. If you are going to do that, you might just as well maintain the present treaty because we have jurisdiction over a strip of land 10 miles wide for the length of the canal, approximately 50 miles, and we are paying Panama approximately $2 million a year. So what we are doing in effect is leasing a strip of land 50 miles long

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and 10 miles wide, and let's not upset the present arrangement which would be precisely what you are suggesting.

Mr. FASCELL. I don't know that I am suggesting anything but I must say the witness is a darn good businessman.

Mr. Mailliard.

Mr. MAILLIARD. Well, it seems to me I said a little while ago before you came in that there could only be two reasons why we would fuss with the present treaty that I can see. One would be some overriding international consideration which I suppose one would have to weigh against our relations with the hemisphere and so on. The other one, a more specific one, would be if our future requirements demand that a new canal be constructed in some place other than the zone which we are now acting as sovereign. If we reach that point and there are tremendous economic possibilities; advantages, for instance, of operating a sea level canal where you don't have all the mechanical problems and the maintenance and don't require the personnel and so forth, and if we decide that it is in our best interests to build that in Panama but not in the present zone, then obviously we are going to have a new treaty because the present treaty would not apply to any other territory.

Mr. WILLIAMS. Yes; but your new treaty would apply only to the land that you needed to build the new sea level canal. Now I believe, and I am subject to correction on this, that the recommended sea level canal route does not lie in Panama.

Mr. MAILLIARD. Well, there are a number of proposed routes but the one that looks the best does lay in Panama, it is to the south but it is still in Panama. My point is that in order to get that, if we decide that that is an overriding issue, it is obvious we would have to give up our present treaty.

Mr. WILLIAMS. No; not necessarily. Work out another treaty covering another canal zone, say Canal Zone No. 2.

Mr. MAILLIARD. Do you seriously believe that that would be a possibility?

Mr. WILLIAMS. Yes. I am not by any means convinced that it would not be for this reason: The country of Panama needs revenue. Also, somebody has got to put up the money for this new canal and it is probably going to have to be the United States. Now as long as we are putting up the money, as long as we are putting up all of the capital expenditures, and as long as we are willing to pay Panama another $2 million or $2.5 million a year, I think that they would be forced to do that.

Mr. MAILLIARD. I must say I have to disagree with you there because from Panama's point of view moving the canal to another part of the country, an uninhabited part of the country, and the abandonment of the present canal around which all their population center is gathered

Mr. WILLIAMS. Why do you say abandonment?

Mr. MAILLIARD. If you have a sea level canal that you can go through without lockages, why in the world do you want locks?

Mr. WILLIAMS. The reason for improving the Panama Canal is the fact that it is having difficulty carrying the traffic that it is carrying. Mr. MAILLIARD. That is true.

Mr. WILLIAMS. It is also my thinking that both canals will be maintained.

Mr. MAILLIARD. The facts don't support that because the capacity of a sea level canal carries as far into the future as we can see, so that you would not go to the expense of operating two canals.

Mr. WILLIAMS. You say the capacity of a sea level canal goes as far as we can see. The probability of this sea level canal ever being built may be as far as we can see, too.

Mr. MAILLIARD. That is possible; I agree with you on that. What I am saying is that this is a consideration that might require us to find it desirable to abrogate our present arrangement to get one that we think is more advantageous.

Mr. WILLIAMS. When we are ready to build the sea level canal.

Mr. FASCELL. As Mr. Mailliard points out, we may be confronted with that issue depending on what the real expert decision is with respect to the present canal's improvement and its capacity, and how long that improvement will suffice.

Mr. WILLIAMS. Surely. Well, the time to cross that bridge is when you reach that point.

Mr. FASCELL. Except for the leadtime, Larry. We have had testimony here that the leadtime is something like 15 years if you start right now.

Mr. WILLIAMS. You mean the preparation of plans and all that? Mr. FASCELL. Yes; to get all the stuff done.

Mr. WILLIAMS. All right. So that when you start with that 15-year period, that is the time to start to get another treaty for the area across which to build another canal. Of course, one of the major reasons for a second canal is some of the supertankers that are built and some of these other ships which the Panama Canal cannot handle.

Mr. MAILLIARD. Including aircraft carriers.

Mr. FASCELL. Mr. Kazen.

Mr. KAZEN. Mr. Chairman, I just throw out this fact, that the statement was made that the United States would be the only country that would be able to put up the money for a new canal. I submit that the Russians are standing on the sidelines and it may be to their tremendous advantage to work something out with Panama on a new canal. Mr. WILLIAMS. That is right. That makes it all the more important that we insist on our present agreements being continued because what you are talking about is a situation similar to the Aswan Dam on the Nile River. We were in there, Russia was in there. Russia promised them more than we did so as a result Russia took care of most of the costs of building the Aswan Dam and they now have Egypt as a close ally.

Mr. KAZEN. Is this liable to happen if we don't negotiate a new treaty with Panama for another site?

Mr. WILLIAMS. Look, when you are ready to go ahead with that second site, the second canal, then that is the time to see what can be done in the way of acquiring permission for another second canal zone in Panama. Now, incidentally, when you are talking about leadtime I think that part of the leadtime that you are talking about is going to be spent in determining which is the best route.

Mr. MAILLIARD. That the commission has already done.

Mr. WILLIAMS. The commission has recommended which route? Mr. FASCELL. What they call Route 10 which is west of the present canal.

Mr. KAZEN. We are at that time now to do something about a sea level canal because we have stopped all the work on the Panama Canal, all the improvements, as I understand it. There is no work going on down there now and they need improvements.

Mr. WILLIAMS. Well, are you saying then that part of the present negotiations is a right-of-way or a second canal zone for the sea level canal?

Mr. KAZEN. Yes, sir.

Mr. WILLIAMS. That is part of the present negotiations?
Mr. MAILLIARD. That was part of the 1964 to 1967 negotiations.
Mr. WILLIAMS. I didn't know it was part of this.

Mr. KAZEN. It is part of this.

Mr. FASCELL. Mr. Morse.

Mr. MORSE. Thank you, Mr. Chairman.

Thank you, Mr. Williams, for coming here and helping us with our deliberations. I was going to raise the very point that Mr. Kazen raised. It seems to me we are all concerned about not giving up anything that is not going to erode U.S. national security or our own national interests in any way, but let's assume that the resolution which you and many colleagues cosponsored were to become law. It might restrain the U.S. negotiators and thus could lead to a breakdown of the negotiations. This is a terribly hot political issue in Panama.

We might end up with a canal which won't accommodate our aircraft carriers and conceivably the Soviet Union would end up with control of the sea level canal. I don't see where that would help our security interests at all.

Mr. WILLIAMS. Actually some of the improvements that were being planned for the canal would greatly increase the canal's capacity and I think our nuclear powered aircraft carriers and Lord knows I hope we get more of them in the very near future are not as large in size as some of the nonnuclear powered aircraft carriers. I will have to make a check on that but that is what my memory tells me. So if it comes to that point, then I think that the improvement of the present Panama Canal could be continued. At the same time there is no question that Panama does not have a very stable government. There is no question at all of this propaganda campaign against the United States as being inspired, as it is in most other places.

Mr. MAILLIARD. Will the gentleman yield?

Mr. MORSE. Yes.

Mr. MAILLIARD. On the size of the canal I think we ought to get it clear that all of the improvements that are being proposed for the present canal are for expediting transit. Nobody is proposing that we build new locks which is what we would be required to do to accommodate the super tankers and these very, very large ships that are being built because the cost of that is absolutely astronomical at today's prices. I don't believe anybody seriously belives that the present canal can be improved to admit large ships; it can be improved to speed the transit of ships.

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