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irrational, antieducation, antiskilled level approach of these terrorists has no general environment in which it can grow.

For instance, the case of West Germany where the Baader-Meinhof exist and grow and develop solely and exclusively because toleration exists for environmentalists' rejection of industrial development, and other forms of advances of society.

Therefore, referring exclusively to that problem, the policy of the United States Labor Party, what we propose to this committee is that the intense industrial development of Panama and entire Central America region and in fact often the Third World is the central top policy priority for the U.S. Government at this point.

I refer in particular to statements made earlier by Ronald Reagan and I believe in Miami, excuse me, these are statements by Ronald Reagan and made elsewhere. What he did say was that he is dissatisfied with the existing treaties because they do not take into account the important questions of the development of the region. He, in fact, proposed a development program of $1 billion to $2 billion over a certain period for Panama, all of which in the opinion of our party points in the absolutely correct direction; it does not go far enough.

I would also like to make reference to statements by M. Thompson, the Governor of New Hampshire which were made in Miami where Governor Thompson also talked about the necessity for industrial development in Panama and said particularly that debt moratorium on the part of Panama was a necessary precondition to actual equitable relationships between our two countries.

We endorse that statement of Governor Thompson fully, again simply noting it does not go quite far enough, either.


This brings me to the final point I would like to make which is the question of the role of international banks in Panama.

I noticed in the statement of the Liberty Lobby and other declarations that have been made people have noted the fact that the increased tolls to Panama as things stand now will simply serve to bail out certain New York banks in particular Chase-Manhattan and Marine Midland which have been the most mentioned.

On the basis of debt service payment of the Panamanians the bald figures, if I am not mistaken, indicate that the debt service payoff to the Panamanian Government are about $250 million to $300 million yearly, therefore, the increase in total revenues would cover somewhere in the vicinity of a quarter of those debt service payments.

This is an important point but it misses the crucial one which is that the New York banks identified have no intention of seeing the Panama Canal Treaties, that are proposed by this Government, adopted. Quite the contrary, their interests are indeed for debt collection; their interests are to guarantee that monetaristic rights are preserved. However, they have not limited their pursuit to the question of Panama, and are looking instead for a broader policy approach to the entire Central America and in fact Latin American region with instability in Panama and a contrived scenario for that instability is the key to guaranteeing those debt service payments.

The scenario for this has been laid out with rather shocking candor by the spokesman for the banking industry. I refer in particular to the report from the Commission on Critical Choices, a private organization headed by Nelson Rockefeller who has known connections with the banking community, which I would like to enter into the record. I will not read it. I will simply submit it.

What Commission on Critical Choices

Senator SARBANES. You are submitting that as an addendum to your statement?

Mr. SMALL. Yes.

Senator SARBANES. It will be so received.

Mr. SMALL. Thank you.

To summarize in one sentence what this report notes, the most likely outcome of th ecurrent debate on the canal issue will be that if the Senate rejects the canal, there will be violence within Panama created by the ultra-leftists of the Institute for Policy Studies that I have identified which will then be met by a Right Wing Pinochet style response within Panama. That kind of statement, of course, is well known in Latin America as the safest of guaranteeing the privileges of monetarism throughout the continent.

The Commission on Critical Choices adds furthermore, and I believe this is very dangerous, something that must be considered by this committee, that the guerrilla activity that is forecast to occur in Panama could not flourish without the aid of Cuba. Cuban involvement would be likely, in their view-something which I view as highly unlikely, and that this would pose the situation in which there would be a showdown between the Cubans and the United States. In short, to summarize, there are broader factors involved in the Panama question than simply the question of Panamanian interests; in the view of our party, the primary question involved is the monetaristic interests that seek to preserve those rights, of continuing debt repayment throughout the area as posed to what is the correct foreign policy approach of the U.S. Government as implied by the positive principle behind the Monroe Doctrine which now requires updating in the case of Panama Canal.

Thank you, Mr. Chairman.

[Mr. Small's addenda follows:]

[Supplied by U.S. Labor Party]


In anticipation of the forthcoming testimony of Governor Ronald Reagan to the U.S. Senate on the subject of the Panama Canal treaty. I propose that the principal substantial and otherwise apparent defects in the signed draft of the treaty be remedied by means of issuance of a new policy doctrine statement, updating the Monroe Doctrine.

The following draft includes, it should be noted, a policy element recently publicly voiced by Governor Reagan, a point on which I and many other leading U.S. citizens are in essential agreement.


In 1823, at a time of grave peril to our nation, President James Monroe promulgated what has been known as the "Monroe Doctrine." This was done in the context of consultation with two former U.S. Presidents, Jefferson and Madi

son, and with key participation by then-Secretary of State John Quincy Adams. If the circumstances and intent of that doctrine are properly understood, it has an appropriate continuation in the United States Western Hemisphere policy at the present time, a continuation which ought to be clearly identified in connection with discussions of the signed draft treaty between the governments of the United States and Panama.

The circumstances were principally these.

Through various agents affiliated with the banking interests of London, Amsterdam and Geneva, banking interests allied with the British monarchy and with circles around Lord Shelburne and William Pitt the Younger, the United States' friends in France had been variously guillotined, otherwise dead, exiled or otherwise reduced from former positions of influence. Those British agents included Danton, Mara, Mirabeau, Necker, Tallyrand and others. With the defeat of France, the imposition of the British agent Duke of Orleans on the restored French throne, and the British establishment of its Holy Alliance order upon continental Europe, the elements of the "League of Armed Neutraility" so essential to U.S. victory in the American Revolution had been eliminated. The British had thus dared to launch war against us, provoking the War of 1812, and after the Treaty of Vienna used their global hegemony in efforts to provoke us and to subvert and crush us.

It is notable, in this connection, that London-based financial interests and their allies in the British government were responsible for development of the plantation slave system in the United States during the 1815-1860 period, and were directly responsible for promoting and indeed almost creating the U.S. Civil War. Although Great Britain formally acknowledged U.S. independence at the Treaty of Paris in 1783, the United Kingdom did not in fact recognize U.S. Sovereignty in practice until negotiations between Her Majesty's government and the administration of Abraham Lincoln in 1863.

It was under the dangerous circumstances of the 1815-1863 period, the period in which British power was predominantly committed to subverting and crushing our nation, that the administration of resident Monroe steered perilous political and military waters to the adoption of the so-called Monroe Doctrine.

Although the popular account of the Monroe Doctrine is that it was a de facto compact with Great Britain's naval power against Latin American intrusions by the Holy Alliance powers, those responsible for the Doctrine understood that the Holy Alliance powers were principally subjects of a British-controlled "concert of powers" on the European continent.

British Foreign Minister Canning had proposed to make de facto U.S.-British hegemony over the Western Hemisphere a treaty-agreement between His Majesty's government and the government of the United States. This would have been, in effect, U.S. granting to Great Britain official looting rights throughout Latin America. Thus, on the advice of Secretary of State John Quincy Adams, the United States declined the treaty offered by Canning.

However, the United States was in no position to make a direct confrontation with Great Britain. Hence, the Monroe Administration adopted the Monroe Doctrine, which had the double purpose of placating London while maintaining the principles of United States foreign policy doctrine for the time that the United States grew strong enough to enforce such a doctrine.

The principal distinction between the proposed treaty with Great Britain and the Monroe Doctrine was identified at that time by John Quincy Adams. The United States maintained the principle of unconditional sovereignty of new republics in the Western Hemisphere, whereas the British had a doctrine of "limited sovereigny," meaning British creation and destabilization of Latin American governments at its pleasure, through British influence over such clients as Simon Bolivar.

This principled difference between Britain and the United States was most clearly expressed in the Maximilian affair, in which the combined naval forces of Great Britain, France, and Spain overthrew the legitimate Benito Juarez republican government of Mexico as part of a looting effort of debt collection against the subjugated people of Mexico.

There were two elements in the influential thinking of John Quincy Adams behind the Monroe Doctrine. First, there were extensive precedents in United States foreign policy, as notably expressed in preceding treaties for the policy of absolute sovereignty of new American republics. More fundamentally, from the political movement associated with Benjamin Franklin and his collaborators

leading into the American Revolution and in the establishment of the United States as a federal republic, the principal issue between the United States and His Majesty's government was American commitment to the realization of technological progress in industrial and agricultural development, in opposition to the British policy, as set forth in Adam Smith's colonialist policy in The Wealth of Nations, of keeping England's colonies and competitors in a condition of ruralized labor-intensive relative technological backwardness.

The foreign and domestic policy of the founders of the United States, from the roots of the American Revolution through the election of 1828, was the constitutional principle that the proper basis for government and law of a republic was the development of the wealth and culture of the people through promoting an environment of technological progress in discovery, in the expansion of industry and agriculture, and in the educational and free-press policies of the nation. The establishment of sovereign republics committed to those principles and enjoying the benefits of such principles is the purpose and essence of the establishment of the United States and its order of constitutional law.

Over the intervening decades, and most notably during the present century, a growing bulk of fraudulent reinterpretation of United States history has been popularized both inside the United States and abroad. The false report has been circulated that the English Plantations and republic of eighteenth century North Americans was principally an aggregation of rough, semi-literate frontiersmen. In fact, despite the efforts of the British government and allied financial interests to prevent the people of this nation from acquiring the capital needed for industrial development, our people were the most literate in the world, with a much higher level of popular culture than existed either in England or in France. It was that literacy and other factors of the superior popular culture of the English-speaking people of North America which made the American Revolution and establishment of the constitutional Federal republic possible where efforts to the same effect failed in both England and France. Although the early United States lacked the capital resources of Great Britain, wherever our people's passion for science and technological progress were given outlets, our technical accomplishments, such as those of Robert Fulton, were conspicuously in advance of what was generally possible in the poorer level of popular culture then available in England.

Although our forefathers were largely of British origins, they represented in kernel the most advanced impulses from among the British people, who had founded societies on these shores to the purpose of establishing political and cultural forms not generally possible in the oppressive and politically backward England. This nation drew skilled persons from England, from France and other European nations, seeking here the possibility for the freer and more fruitful expression of their productive powers.

It was on the basis of those impulses and principles that the United States was founded and the foundations established for this nation's growth to great economic power.

In the early successes of the American republic and in the comparable failures of the French Revolution, a fundamental principle was demonstrated.

In the struggle between Federalist Thomas Paine and other friends of Benjamin Franklin, on the one side of the French Revolution, and in the associates of Robespierre on the other side, the allies of Paine sought to establish France as a republic committed to scientific and technological progress under constitutional principles modeled on the lessons of the United States experience. The followers of Robespierre's faction, including British agents Danton and Marat, offered an opposite conception, mob democracy. It was the success of the latter faction which produced the hideous Red Terror in France, and led to the Napoleonic period through which British hegemony over Europe was established for most of the 19th century.

This demonstrated that the "American System" works, while the British system, and political forms derived from Rousseau and Bentham's "philosophical radicalism," led to chaos and dictatorship.

The principle underlying the success of the American System is that in a climate of freedom and cultural development of the individual focused upon objec tives of technological progress, the individual member of society is encouraged to value himself or herself for his or her creative mental powers, his or her ability to discover, transmit, enrich, and practice new scientific and related conceptions through which man's dominion over nature is advanced. By so placing the valua

tion of the individual upon that creative mental power which fundamentally distinguishes man from such lower beasts as baboons, the individual member of a republic committed to technological progress develops respect for his or her own mind, and for the mental potentials of his fellow citizens.

This policy and cultural circumstance has two consequences essential for a republic. First, a climate of technologically progressive popular culture and education is the indispensable means for raising the productive powers of labor, which is in turn the fundamental human basis for enhancing the prosperity of the nation and its individual members. Second, the practical emphasis such a republic places on the individual human mind's creative potentials provides the basis for the prevalence of moral values consistent with the needs of humanity, and consistent with the quality of general electorate a republic requires.

The antitechnological progress prejudices associated with both the doctrines of Rousseau and those of Jeremy Bentham are intrinsically what we call today Malthusian or neomalthusian. In these latter anti-American conceptions the human individual is degraded politically and morally to likeness with a lower beast. He is degraded to the status of a mere biological individual, with more or less fixed potentialities and impulses attributed to him, just as the needs and behavior of lower beasts is apparently determined from generation to generation by a fixed genetic heritage. Just as the judge who sent the great Lavoisier to the Red Terror's guillotine said, "The revolution has no need of men of science,” so the Malthusians and their cothinkers degrade man generally to a lower beastlikeness fit only to find his miserable peace with existing natural conditions, and to propose political utopias in which man returns to baboon-likeness in harmony with some more primitive condition of the ecology.

It was America as the symbol and reality of the principle of technological progress which made America the cynosure of oppressed Europeans fleeing from relative zero growth to the land of opportunity here. Although we have often deviated from that principle in our foreign and domestic policies, it is the perpetuation of the American System despite those deviations which has given our nation its greatness and power, a power which depends for its perpetuation upon a repudiation of both what our forefathers regarded as the British system and of the antitechnological doctrines of philosophical radicalism traced in part to Rousseau and Jeremy Bentham.

It is therefore the historical and still imperative fundamental policy of the United States to base its domestic and foreign policy upon the principles of the American System. That is the viable continuing principle embedded in the Monroe Doctrine, and the proper basis for our policy toward Panama and other Latin American nations today.

The guiding principle at the basis of United States foreign policy is to foster Sovereign republics committed to the fulfillment of the humanist principles of technological progress and the cultural development of their populations. We do not arrogate to ourselves as a nation the right to determine the internal political processes of those nations, but we do assume responsibility for the effects of our foreign policy in determining the climate in which nations pursue their internal development.

Thus, in the United States' treaty relations with Panama, it would be an abomination if such treaties promoted the circumstances under which the internal life of Panama favored atrocities of the sort symbolized by the Red Terror of Danton and Marat in 1792-1794 France. It is the vital self interest of the United States that its neighboring countries be viable republics, which those nations cannot accomplish without the circumstances favorable to technological progress in the expansion of their industry and agriculture. It is our vital interest, insofar as our means and other relevant circumstances allow, to afford to the struggling weaker republics of this hemisphere the kinds of friend in ourselves our own new republic desired during the late 18th and early 19th century.

In this connection, some critics of the treaty signed between the governments of the United States and Panama have raised the most relevant criticism that this treaty does not adequately consider Panama's need for a climate of technological progress, of fruitful capital formation in the progress of its industry and agriculture and in the corresponding advancement of the employment and cultural opportunities of its people. This criticism is a valuable one.

If we do indeed condone in Panama and other Latin American nations the conditions of raging sansculottism and the political philosophy of the culturally backward, desperate sansculottist mob, we are thus permitting the kinds of in

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