duces the required degree of fear is not objective. The threat need not be such as would put a brave man, or even a man of ordinary firmness, in fear. The question is rather, did it put one entering into the transaction in such fear as to preclude the exercise by him of free will and judgment. Age, sex, capacity, relation of the parties, attendant cirmumstances, must all be considered. Persons of a weak or cowardly nature are the very ones that need protection. The courageous can usually protect themselves; timid persons are generally the ones influenced by threats, and the unscrupulous are not allowed to impose upon them because they are so unfortunately constituted.

b. It is, therefore, not essential that a threat should be accompanied with apparent ability to execute it; but in determining whether such fear as is essential for duress did in fact exist in a particular case, evidence showing whether a reasonable man would be put in fear is pertinent.

c. The length of time that elapses between the act or threat which is asserted to amount to duress, and the transaction attacked is likewise important only as evidence bearing on the issue of whether fear produced by the act or threat continues to operate at the time that the transaction is entered into, in such force as to preclude free judgment. A state of such fear may continue long after the threats that cause it, but in determining the probability of this, time, distance, opportunity to obtain disinterested advice and protection, are all important.

d. Duress of the second type always results from threats. What has already happened is in the past. It is what may happen in the future that is the essential element in fear, and consequently, in duress. The threatened future situation may be, however, a mere continuance of what has already been begun; and the doing of an act often involves, without more, a threat that the act will be repeated or will continue, or at least that a wrong will not be righted. When A strikes B and demands that B enter into a transaction, the fear that induces B to assent is based on the probability that the blow will be repeated. Similarly when A imprisons B, and thereby secures B's consent to a transaction, it is B's fear that the imprisonment will continue that operates in his mind. And where A wrongfully takes B's goods, the fear that causes B to enter into a transaction which A demands is based on the implied if not expressed threat that A will not otherwise return the goods.

e. As a practical matter it is obvious that there is no line of absolute demarcation between fear that deprives a person of free will and judgment, and lesser degrees of fear; or at least if there is a difference in kind between varying degrees of fear it is only between an extremity of terror sufficient to destroy every motive except the desire to escape, and lesser degrees. No such extremity of terror is necessary for duress. Courts of law originally restricted duress to imprisonment or threats, sufficient to put a brave man in fear of loss of life, of mayhem or of imprisonment. These boundaries have been gradually enlarged and in courts of equity under the name of undue influence contracts were held voidable where persuasion rather than fear or persuasion combined with fear induced their formation. The designation adopted by courts of equity "undue influence” indicates the question of degree that is inseparable from the subject. The pressure must be improper and excessive in going beyond what is reasonable under the circumstances in order to constitute either duress or undue influence.

f. Not only must fear be produced in order to constitute duress of the second type but the fear must be a cause inducing entrance into a transaction, and though not necessarily the sole cause, it must be one without which the transaction would not have occurred.

g. Acts or threats cannot constitute duress unless they are wrongful, even though they exert such pressure as to preclude the exercise of free judgment. But acts may be wrongful within the meaning of this rule though they are not criminal or tortious or in violation of a contractual duty. Just as acts contracted for may be against public policy and the contract vitiated for that reason, though the law imposes no penalty for doing them, so acts that involve abuse of legal remedies or that are wrongful in a moral sense, if made use of as a means of causing fear vitiate a transaction induced by that fear, though they may not in themselves be legal wrongs.

h. Illustrations of Clause (a) are given under § 494; illustrations of Clause (b) under § 495.

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$495. WHEN DURESS MAKES A TRANSACTION INDUCED THEREBY VOIDABLE. Where the duress of one party induces another to enter into a transaction, the nature of which he knows or has reason to know, and which he was under no duty to enter into, the transaction is voidable against the former and all who stand in no better position, subject to the qualifications stated in § 499.

Comment

a. Duress inducing a person to perform his exact legal duty does not give him power to avoid his act; but where a claim is unliquidated or the subject of an honest dispute, even a reasonable settlement induced by duress is voidable.

b. A fraudulent person cannot fail to know that he is fraudulent; and even one who makes a material misrepresentation innocently cannot honestly retain the fruits of his misrepresentation if it is material. Threats, however, are not necessarily intended or expected by one making them to cause such extreme fear as the definition of duress requires. Argument and even threats may be necessary to induce performance reasonably demanded, and if they are not pushed too far it is not unconscientious to retain an advantage. Though the giving of the advantage was induced by fear, under the rule stated in the Section fear does not render a transaction voidable, if the acts or threats causing it were not wrongful. In that case they do not fall within the definition of duress (see § 492). c. Duress may induce not merely the formation of a contract but some performance under it, or an assignment of a right or a discharge of a duty.

d. A transaction which one party is induced to enter into by duress of the other, though voidable against the other, subject to the exceptions stated in the Section, may be effective to give rights to a bona fide purchaser for value of land or chattels or negotiable instruments ownership of which was created or transferred under duress, but the rules governing such cases are not within the scope of the Restatement of this Subject. This qualification of the power to avoid a transaction for duress against a bona fide purchaser for value is the same as in the case of fraud (see § 476, and Comment e, and Illustrations).

Illustrations

(For many other illustrations of the rule stated in the Section, see the Illustrations under § 493.)

1. A has a claim against B for $100. The debt is liquidated and undisputed. By duress A coerces B to pay him the debt. The transaction cannot be avoided.

2. A owes B money. B contracts to give A a discharge but subsequently refuses to do so. A by threats coerces B to give the agreed discharge. It cannot be avoided.

3. A has an unliquidated claim against B for work and labor. B refuses to pay A's bill. By duress A compels B to enter into a contract of accord by which B promises to pay $100. This sum is less than the fair value of A's work. The contract of accord is voidable.

U.S. HISTORICAL RECORD CONCERNING PANAMA

Senator HOLLINGS. But then, look at the coercion that continued. Look at the news reports, the historical record, and all of the events, and you will see the resentment and resistance of Panama to the present treaty. And people call this a Communist issue-a Communist issue. They didn't start with the Communist revolution in Russia until 1917. I am talking about what happened in 1903. This was 14 years before there was a Communist issue. It was 14 years before that we created this as a national issue—the United States did-not a Communist issue.

In 1903, news reports indicated demonstrations against ratification. In 1904, the United States started setting up customs houses and ports of entry, and again the sovereignty issue was raised. Panama protested, but was helpless against the U.S. giant. The sovereignty issue developed, in other words, 10 years before the canal was built.

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Incidentally, Mr. Chairman, the only two deepwater ports, Colón and Balboa, are in the zone and were taken away. So, we not only took away their sovereignty, or attempted to do so, we took away their economy, too, and we still say how we "treated them so good," "we treated them right."

In May of 1916, the United States engaged in an incident disarming the Panamanian police. You see, we were the police force of Panama. In July 1918, the United States went outside the zone to the Chiriqui province and we stayed there for 2 years. We were out of the Canal Zone and this had nothing to do with the canal itself. We occupied that. Again, Panama protested helplessly.

In 1919, the United States exercised eminent domain over the island of Tobago. Just look at the history of this. Again, Panama protested and they do so vigorously and they finally began to enter into the negotiations. And they talk about blackmail now. We started negotiating a new treaty back in 1924. And, in the meantime, we had a coverup. We felt bad about Colombia, so in 1914 we tried to get a new treaty there to absolve our consciences. It was not agreed to, but finally in 1921 we appropriated this Senate in a coverup appropriated $25 million and gratuitously said, "Here, Colombia, if you will just forget this sordid thing, we will forget it. We paid you off." It was a $25 million coverup.

Now, jumping back to Panama, when a new treaty was ready after the negotiations from 1924 to 1926, this was again rejected by Panama on sovereignty grounds-not on blackmail. There were no Communists running around in Panama. There was no blackmail, violence, or anything else of that kind.

Things improved under President Hoover; and finally, under President Roosevelt, in 1936, we recognized Panama for the first time as a sovereign nation. The payments were then increased to $430,000—and mind you, every 4 years they got $1 million. That is why you can prove that you only paid out $70 million in the whole history of this thing. But the protests still continued. Even some of the properties taken over in World War II—we had difficulties over that in the late 1940'sbut in 1953, after World War II, we again entered into negotiations to settle the differences and take care of their grievances. Out of this came the treaty of 1955. But this was again inadequate and was followed by student-led riots against the National Guard in 1958, when nine lives were lost. Blackmail? High school students? In 1958communism?

Throughout it all, President Eisenhower even worked to meet the Panamanian grievances and personally recognized their sovereignty in 1960. In September of that year he provided for the Panamanian flag to fly daily over one site in the Canal Zone, but we would not comply with that.

Nationalism continued to seethe, and in 1962, President Kennedy and President Chiari agreed that the time was right to appoint representatives to discuss the Panamanian grievances. This is the historical fact and record.

In 1964, when the American students in the Canal Zone refused at that high school to fly the Panamanian flag alongside Old Glory-that is all they wanted, alongside-the Panamanian students marched into the zone and riots broke out, as you know, and 24 were killed.

Now who was blackmailing whom? This constant thread of history is of a nationalist, not a Communist, issue.

President Nixon supported the negotiations, and in 1973, it finally got to the Security Council, and there we were embarrassed. Britain abstained, she didn't vote. The United States, of course, used its veto. But 13 nations of the Security Council voted in support of Panama, and in January of this year, when President Carter was taking office, eight Latin American Presidents wrote the President asking that we now get a new treaty on Panama and remove this one last vestige of colonialism. So, after 13 years they will cry "Blackmail," and get on to Bethancourt.

If you create a nation, Mr. Chairman, and it develops as a nation and you treat it as a nation, you have to expect it to act like a nation. That is exactly what Panama is doing today. You cannot punish Panama for acting like a nation. You cannot call 13 years of negotiations by four Presidents blackmail. That just abuses the common sense and sense of fairness of all of us.

PRESENT QUESTION

The question now is not what to do with Panama, but what are we going to do with the United States. That is really what bothers me. Are we going to keep our word-not just the word of four Presidents, but the word of our own Declaration of Independence. It is best expressed there. I want to read this next item to you because it is the late Adlai Stevenson, and he has always been the best in my book. He said:

Let us remember that when man had few rights anywhere, the Declaration of Independence proclaimed the earthshaking doctrine of the rights of man everywhere. As its words went ringing around the world, those whose eyes were cast down and those whose backs were bent cupped their ears to listen. They raised their eyes, and by ever so little straightened their backs, bit by bit. As centuries ago we were the hope of the world's oppressed, we remain their hope today.

Mr. Chairman, from the opening shot on Lexington Green over 200 years ago the American people have stood and fought for the principle of self-determination. That principle of self-determination is the unquenchable dream of the past two centuries. Sometimes we fail to realize that.

What was the beacon for us in 1776, though, still lights the way in these years following our Bicentennial. I could go on, and I will include the rest of this statement for the record. It is not my idea to get dramatic on this thing.

[The information referred to follows:]

ADDITION TO STATEMENT OF SENATOR HOLLINGS

From the opening shot on Lexington Green over 200 years ago, the American people have stood-and fought for the principle of self-determination. We struggled then against the world's mightiest empire our resources being a rag-tag army and a burning conviction. That was but the first of many battlefields the world around on which half a million of America's finest made their ultimate sacrifice so the ideal could sustain.

That principle of self-determination is the unquenchable dream of the past two centuries. Although we sometimes fail to realize it, what was a beacon for us in 1776 still lights the way in these years following our Bicentennial.

What was our strength 200 years ago is our strength today. Some think our power lies in our military might alone. But America's power is in its solid stand

on the principle of self-determination. In too many circles it is the fashion to downplay convictions, to be embarrassed by a reaffirmation of the ideals which took this land to greatness. Even in the councils of government, there have been too many policymakers who are afraid that by speaking our ideals we will offend the Soviets or some other group.

But mark my words-the day when we are afraid to stand up for our beliefs will be the day America's decline begins.

It does not have to be that way. We can be true to ourselves. We can reaffirm that which we believe. We can reaffirm it with deeds rather than words. The place to begin is the Panama Canal. Our reluctance to follow through on the treaties before the Senate will rightfully be interpreted as a refusal to follow that Beacon of '76. But by pursuing the cause of justice, we will be true to our past, true to ourselves, and true to the cause which has been the primary dream of mankind since the days of Washington, Adams and Thomas Paine.

QUESTION BEFORE US

Senator HOLLINGS. The question before us is whether we can understand and appreciate the true meaning of our country. Can we be true to ourselves? Can we reaffirm here that in which we believe? Can we reaffirm it with deeds, rather than words?

I believe, Mr. Chairman, that the place to begin is the Panama Canal.

NECESSITY OF LEADERSHIP ROLE

I would be glad to try to answer your questions. I cut short many of the points I wanted to make because I know I have probably gone a little bit over my time. But there is no question in my mind that we have a real burden to bear in getting the truth before the American public. This committee is the only way we are going to be able to do that. We should not look upon this lightly as something to just perform during the month of October and hurry home to wait to see what the people think. We have to take a leadership role. If we don't take a leadership role on this one, then we are going to be in trouble all over the world because there is no question that the Communists would have a readymade issue and we would have manufactured it for them. There is no question about that. I have been to Panama and I have seen it. The Communists oppose these treaties. They know they have a really good issue. We cannot afford to play around with it or treat it lightly. It is awfully complex; but it is awfully simple, too.

Senator CHURCH [presiding]. Senator, you have made a very forthright presentation. I agree so keenly with you when you say that it is incumbent upon us to assume the responsibility for leadership in a matter of this kind.

LAST VESTIGE OF COLONIALISM IN WESTERN HEMISPHERE

You mentioned in your testimony the votes that have occurred at the United Nations and the way other governments have regarded Panama. The other day, when the Chairman of the Joint Chiefs of Staff referred to it as the last vestige of colonialism in the Western Hemisphere, I thought maybe this is a new day, I never thought I would hear anyone so highly placed in the military describe the Canal Zone that way.

But it is, in fact, the way the rest of the world regards it, wouldn't you agree?