STATEMENT BY
THE HONORABLE SOL M. LINOWITZ
BEFORE THE
SENATE FOREIGN RELATIONS COMMITTEE
SEPTEMBER 26, 1977

FILE COPY
DO NOT REMOVE

Mr. Chairman and Members of the Committee:

Although I have not been involved in Panama Canal diplomacy for as many years as Secretary Vance and Ambassador Ellsworth Bunker, for a long time I have been deeply concerned about the Panama Canal issue and its implications for our whole relationship with Latin America.

For three years prior to my designation as Co-Negotiator of the new canal treaties, I served as Chairman of the Commission on United States-Latin American Relations.

In the Report which our Commission issued on December 20, 1976 we said: "The most urgent issue the new Administration will face in the Western Hemisphere in 1977 is unquestionably the smoldering dispute with Panama." We went on to say: "1977 will be a crucial year for resolving the volatile Panama issue; if negotiations do not produce an equitable solution during this coming year, deepened hostility seems inevitable". We then urged the new President "to exercise prompt, vigorous and decisive leadership in negotiating an acceptable compromise with the Panamanian Government while serving our own interest in the canal. Such an action will also indicate our desire to address the issues which concern the United States and Latin America in a more cooperative and mutually respectful atmosphere."

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Our recommendation was: "The new Administration should promptly negotiate a new canal treaty with Panama; it should involve members of both parties and both Houses of Congress in the negotiations; and it should make clear to the American public why a new and equitable treaty with Panama is not only desirable, but urgently required."

Mr. Chairman, the treaties which we have negotiated and which are now before you in large measure follow that prescription. We have negotiated treaties which are, we believe, fair and equitable and which fully preserve our interest in the canal while taking into account Panamanian aspirations. In the course of the negotiations, we have involved members of both parties and both Houses of Congress. And the terms we have agreed upon clearly reveal a more cooperative and mutually respectful atmosphere in hemispheric relations.

There are, I believe, three basic facts which must be understood about the Panama Canal issue.

First, it is an issue which involves far more than relations between the United States and Panama. For it is an issue which affects all United States-Latin American relations. In the eyes of our Latin American neighbors, the Panama Canal runs not just through the center of Panama, but through the center of the Western Hemisphere. All the countries of the hemisphere have made common cause in looking upon our position in the canal as the last vestige of a colonial past which evokes bitter memories

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and deep animosities. So in going forward with these new treaties with Panama, the United States will be improving its position with virtually all the countries of this hemisphere whose attitude towards us as a nation will be importantly influenced by how we conduct ourselves on the Panama Canal issue.

Second, our primary interest in the canal is, and always has been, to assure that it remains secure and open, on a neutral, non-discriminatory basis. Viewed in this light, it is unmistakably clear that the greatest threat to the operation and security of the canal would be to try to insist upon retention of the present outmoded treaty and its anachronistic provisions -- provisions which have in the past, and can so easily again in the future, trigger hostility and violence. The simple fact is that if we do not agree upon treaties which are mutually agreeable and acceptable, the time may come when we would be in the position of having to defend the canal by force against a hostile population and in the face of widespread condemnation by the countries of Latin America and even the rest of the world.

Third, it is, therefore, clear that the best way to preserve an open, accessible, and secure canal and to maintain its permanent neutrality would be to substitute for the 1903 Panama Canal treaty a new arrangement which will be mutually fair, which will properly provide for Panama's just aspirations, and which will take into full account our own national needs. Putting it another way, a new treaty arrangement is, we believe, the most practical

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means for protecting the very interest we are seeking to
preserve in the canal.

We believe that the new treaties meet this test by pre-
serving for the nation the important interest it has in
assuring that the canal remains secure, accessible and
open on a non-discriminatory basis -- and in a manner which
will both advance our national security interests and further
our hemispheric objectives.

With your indulgence I would like to recall a few words
of history about how we got where we are in the Panama Canal.

During the middle of the 1800's we were, as a young nation,
interested in the possibility of constructing a canal across
the isthmus in order to connect the Atlantic and Pacific Oceans.
This need was dramatically underlined when, during the Spanish
American War, it took the battleship *Oregon* 67 days to get from
the Pacific coast to its Atlantic battle station.

At the end of the 1800's the French Canal Company had
undertaken to construct a canal through the Province of Colombia
known as Panama. By the end of the century it acknowledged
failure -- failure because of disease, because of technological
and scientific problems which seemed unsurmountable, failure
because of lack of financing, and finally because of lack of
spirit and morale.

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At that time an engineer, Philippe Bunau-Varilla, who had worked for the French Canal Company spurred an effort for the United States to take over the French company's assets and enter into a treaty with Colombia for the completion of the canal. Such a treaty providing for a 100 year lease was signed, but it was rejected by the Colombian Senate.

At that point it was suggested that the Province of Panama might undertake to declare its independence from Colombia and then enter into a satisfactory treaty with the United States. On November 4, 1903 a revolution occurred in Panama and a few days later the United States recognized Panama's independence. Thereupon a treaty was entered into known as the Hay-Bunau-Varilla treaty. It was signed for Panama by the same French engineer before the official Panamanian negotiating team arrived in Washington. The treaty granted the United States rights "in perpetuity" to construct a canal within a zone 10 miles wide over which the United States would exercise the "rights, powers and authority" it would have "if it were the sovereign". Secretary of State Hay candidly wrote to a leading Senator that the treaty was "very satisfactory, vastly advantageous to the United States and, we must confess with what face we can muster, not so advantageous for Panama." The treaty was ratified in 1904 and construction of the canal was begun immediately. It was completed in 1914 after a brilliant engineering and scientific performance by American engineers, doctors, scientists and builders who were determined to conquer the unconquerable and make the canal a reality.

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Today the canal stands as an engineering marvel, as one of
this country's greatest accomplishments. In a very real sense
it was our moon shot of the early 1900's. Any American must
view with pride this highly complex, integrated hydraulic system
of locks, dams and artificial bodies of water designed to move
ships over the uplands of the isthmus for 50 miles from ocean
to ocean.

And we can also point with pride to the way we have operated
the canal. For 62 years it has been run as a public service for
the nations of the world rather than as a business. Tolls have
been set as low as compatible with meeting costs and providing
a modest return, and world commerce has been a major beneficiary
of the canal operation. The toll rate when the canal opened in
1914 was $1.20 per Panama Canal ton; today it is $1.29.

But while the canal has been a source of deep pride to the
United States, it has also been a troubling and festering presence
in Panama. Under the treaty the United States exercises juris-
diction over the Zone courts. It has established the Zone's
schools, jails and its police force. It set up what the Pana-
manians have regarded as a colonial enclave splitting their
country in two and using 550 square miles of their territory.
And the Panamanians have made known their resentment at the
United States having occupied a portion of Panama and having
done so pursuant to a treaty which was not even signed by a
Panamanian.

It is against this backdrop that these new treaties must
be evaluated.

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Several arguments have been widely advanced against a new
treaty arrangement with Panama. Secretary Vance has already
discussed the sovereignty issue, and I would like to touch upon
several other major concerns which have been asserted in con-
nection with the new treaties.

First, will the new treaties in any manner prejudice our
national security? Your Committee will have the benefit of the
testimony of our foremost defense authorities on this score,
but it must be clear that in all of our negotiations we have
worked closely with the Department of Defense and the Joint
Chiefs of Staff to assure that our national security interests
would not in any respect be prejudiced under the new treaty
arrangements. And we have been assured by them that the treaties
we have agreed upon will not only preserve but indeed enhance
our national security interests.

Second, will the new treaties seriously affect United States
commercial interests? The new treaties, we believe, are the best
protection of our commercial interest in the canal. The simple
fact is that obviously the commercial value of the canal has dimin-
ished considerably as world commerce patterns and technologies
of shipping have changed. Today supertankers and other larger
vessels cannot use the canal. In percentage terms the canal is
much more important to the various countries of Latin America
than it is to us. Today approximately 7 percent of total United
States international maritime trade passes through the canal
each year. About 4 percent of the trade between the East and

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West coasts traverses the canal. It is, therefore, clear that to
a substantial extent, though the canal is still important, it
has become economically obsolescent.

Third, is the present Government of Panama the one with
whom we should be negotiating these new treaties? For 13 years
we have been engaged in negotiations for a new Panama Canal treaty.
The Chief of Government, General Omar Torrijos, who has been in
power for almost 9 years, has been committed to trying to work out
a new treaty with the United States and in doing so he is sup-
ported by the people of his country and is following in the
footsteps of every Panamanian Head of State since 1903 --
irrespective of ideological differences. Moreover, pursuant to
the Panamanian Constitution, the treaties will now have to be
submitted to a plebiscite in Panama next month so that the Pana-
manian people will be able to express their judgment with respect
to these treaties.

Secretary Vance and Ambassador Bunker have already described
to you the major terms of the new Panama Canal treaty, and I
would like to focus my remarks on the neutrality treaty. This
treaty commits the United States and Panama to maintain a regime
of permanent neutrality for the canal. Under the rules of neu-
trality set forth in this treaty, the canal is to be open to
merchant and naval vessels of all nations at all times without
discrimination as to conditions or charges of transit. A special
provision authorizes United States and Panamanian warships to
transit the canal expeditiously in both peace and war without

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being subject to any restriction as regards means of propulsion, armament or cargo.

Under this provision no question can be raised about the right of U. S. naval vessels to transit the canal with all their weapons nor can any restriction be placed on the type of cargo they may carry. Further, we are assured of a preferential right to expeditious transit of our naval vessels whenever we consider this necessary.

Under the treaty the United States is in a position to assure that the canal's permanent neutrality is maintained and there is no limitation on our ability to take such action as we may deem necessary in the event the canal's neutrality is threatened or violated from any source.

The precise type of response we might determine to make would of course depend upon all the political, military, legal, economic and other factors involved in a particular situation. But the key point is that it is up to the United States to make the determination as to how we should respond and how we should defend our rights under the canal's regime of permanent neutrality. The treaty retains for the United States maximum freedom to determine how to carry out its responsibility for canal neutrality. We are under no obligation to consult with or seek approval from any other nation or international body

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before acting to maintain the neutrality of the canal nor
does the treaty in any other way limit our ability to act.

This permanent neutrality treaty will also apply to any
other international waterway that may be built in Panama in the
future. In short, the neutrality treaty provides a firm
foundation for assuring that our long-term interest in the
maintenance of an open, accessible, secure, efficient canal
is preserved -- now and in the future.

In order to emphasize the importance of the regime of
neutrality to world shipping there is a protocol to the
neutrality treaty which will be open to accession by all the
countries of the world. The signatories to this protocol will,
in effect, endorse the neutrality treaty by specifically
associating themselves with its objectives and by agreeing
to respect the regime of permanent neutrality of the canal
both in time of war and in time of peace. The Instruments of
Accession will be deposited with the Secretary-General of
the Organization of American States.

The lasting and deeply significant implications of this
treaty have been fully recognized by the Panamanians. In
signing the treaties at the Pan American Union here in Washington
on September 7, 1977, General Torrijos clearly told the people

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of Panama, the people of the hemisphere, and the people
of the world: "We have agreed upon a neutrality treaty
that places us under the protective umbrella of the Pentagon.
This pact could, if not administered judiciously by future
generations, become an instrument of permanent intervention.
However, what has been agreed is the product of an understand-
ing between two leaders who believe that their nations should
live together peacefully and who have the courage and the
leadership to stand before their people armed only with the
truth and their deep conviction of what is just."

We too regard this as a mutual commitment which not only
assures that our own interests will be fully preserved
but helps us assure the other countries of the world that
the United States will be ready to do whatever may be required
in the future to preserve the openness, security and accessi-
bility of the canal.

It is vitally important that the American people study these
new treaties carefully and open-mindedly and recognize what is
at stake. In these agreements we believe we have a rare
opportunity to demonstrate to the world how a large nation
and a small nation can settle their differences amicably and
with mutual respect and enter into a lasting partnership of which
future generations will be proud. They will bear witness to
our intentions to build a balanced, constructive, and lasting
relationship among the countries of this hemisphere.

FOR OFFICIAL USE ONLY UNTIL RELEASED BY
THE SENATE FOREIGN RELATIONS COMMITTEE

STATEMENT BY
GENERAL GEORGE S. BROWN, USAF
CHAIRMAN OF THE JOINT CHIEFS OF STAFF
ON THE PANAMA CANAL TREATY BEFORE THE
SENATE FOREIGN RELATIONS COMMITTEE

27 SEPTEMBER 1977

I am here to discuss the security aspects of the proposed
Panama Canal treaty.

The Joint Chiefs of Staff recognize the Panama Canal as a major
defense asset, the use of which enhances United States capa-
bility for timely reinforcement of United States Forces. The
strategic military value of the canal is reflected in our
ability to accelerate the shift of military forces and logistic
support by sea between the Atlantic and Pacific Oceans. The
strategic value of the canal is not expected to change sub-
stantially throughout the life of the new Panama Canal Treaty
and beyond, so long as the canal provides the sole means of
transiting ships across the American continent.

United States military interests in the Panama Canal are in
its use, not its ownership. Therefore, any new treaty must
assure that access to and security of the Panama Canal are
protected in times of war and peace. This assurance is pro-
vided by a permanent regime of neutrality to be maintained
by the US and Panama which specifies that the canal will
remain open to all world shipping at reasonable tolls,

without discrimination, in accordance with specific rules of neutrality, and that it will always be operated efficiently under rules that are just, equitable and reasonable and necessary for safe navigation and efficient, sanitary operation.

Defense of the Panama Canal has two components: internal security and external defense. Both are presently the responsibility of the United States Government.

Internal security entails surveillance and control. It is primarily concerned with countering sabotage and terrorist activities. Currently the Canal Zone's police and security forces are responsible for internal security. When required, reinforcement is provided by the United States military units assigned to US Southern Command. Under the new Panama Canal Treaty there will no longer be a Canal Zone and police functions will become the responsibility of the Government of Panama. However, the Canal Commission will continue to provide security for Canal installations. The military units of US Southern Command will be available to augment the Panamanian forces and Commission guards.

External defense is concerned with defense against armed attack by hostile forces using guerrilla or conventional tactics. Our current plans will be described by General McAuliffe. Under the new Panama Canal Treaty, the United

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States will have primary responsibility for the defense of
the canal during the balance of this century. Under the new
Panama Canal Treaty, the Panamanian Guardia Nacional and
appropriate US Forces commander will develop plans in concert
to provide for mutual defense. The Joint Chiefs of Staff
will continue to plan for rapid reinforcement of US Southern
Command in the event of emergency need.

Our capability to defend the Panama Canal will be enhanced
through cooperation with the Government of Panama. The new
treaty provides a basis for such cooperation between the
United States and Panama. The alliance relationship should
develop and strengthen during the life of the Panama Canal
Treaty and be further enhanced by the Neutrality Treaty. The
regime of neutrality provided in the Neutrality Treaty calls
for a canal open to all ships of all nations in times of peace
or war. It specifically provides that US and Panamanian naval
ships shall transit expeditiously without impediments or pre-
conditions. Since both the United States and Panama agree to
this regime, our right to take the measures that we may deem
to be necessary to maintain the canal's neutrality is assured.

For these reasons, the Joint Chiefs of Staff support the
treaty as being protective of the military interests of
the United States and as providing an effective basis for
defense of the canal.

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I have gone on record with the other members of the Joint
Chiefs of Staff, in supporting the Panama Canal Treaties.

The Joint Chiefs of Staff are unanimous in their position
supporting the Panama Canal Treaty and the Treaty Concerning
the Permanent Neutrality and Operation of the Panama Canal,
although each of us may have reached this conclusion on the
basis of our individual line of reasoning. I would like to
provide the Committee, in this statement, with my own rationale.

The Panama Canal is and will remain of major importance
to the United States. Its use is a key factor in the Navy's
ability to accomplish its responsibilities in connection with
essential war plans and other contingencies involving our
national security. While I cannot state that loss of the
Canal would result in the failure of these plans or in the
inability of the Navy to carry out these responsibilities,
it would certainly make these tasks enormously more difficult.
We would be much better off with the use of the Canal than
without it.

The importance of the Canal to the Navy for defense pur-
poses lies in its assured use, not in its ownership. There
are two threats to the continued use of the Canal by our
naval forces and essential shipping: the external threat and
the internal threat.

The external threat is represented by a general war sit-
uation. In a conventional conflict, our capabilities to

defend the approaches of the Canal are adequate to provide me
with reasonable confidence that defense of the Canal against
an external threat is practicable. In the case of a nuclear
conflict, defense of the Canal would be virtually impossible
as would be defense of almost any other major installation of
importance to the United States. However, in a strategic nuclear
war, the importance of the Canal in relative priorities
diminishes to an inconsequential position.

The second threat to our continued use of the Canal is the
internal threat from subversive, clandestine, or local guerrilla
activities. The defense against such a threat in the
formidable jungle terrain of the Canal area would be extremely
difficult, particularly in view of the vulnerability of the
lock system to disruption as the result of relatively minor
damage to critical mechanical components. Defense against a
persistent and continuing internal threat would be particularly
difficult. Therefore defending against this internal
threat is significantly enhanced if the cooperation of the
local interests, the Panamanians and Central Americans, can
be maximized. On the other hand, our ability to defend and
protect the Canal so as to ensure its continued operation,
would become extremely difficult in the face of an adversary
relationship with our Latin neighbors, or an active hostility
on the part of the local population. Our adherence to these
treaties, which make the Panamanians our direct partners in
the defense of the Canal, will substantially contribute to

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a friendly and cooperative attitude among all Latin Americans toward the United States on the Panama Canal issue.

The specific provisions in the Panama Canal Treaty providing for the defense of the Canal by the United States until the year 2000, and in the Treaty of Neutrality which will guarantee our use of the Canal after the turn of the century, are considered by the unified commander, Commander-in-Chief Southern Command, to be adequate. That view is shared by the Joint Chiefs of Staff, based upon the analysis of the Services and the unified commander. It is my judgement that the favorable effect which I believe the Treaties will have on the attitudes of the Panamanians and Central Americans toward our continued use of the Canal, for national and hemispheric security purposes, will substantially assist the United States to defend the Canal against the internal threat. On this basis, it is my view that the continued use of the Panama Canal for military purposes in our national defense plans is best assured through the provisions of the new Treaties.

STATEMENT BY
LIEUTENANT GENERAL D. P. McAULIFFE
COMMANDER IN CHIEF, US SOUTHERN COMMAND
ON THE PANAMA CANAL TREATY BEFORE THE
SENATE FOREIGN RELATIONS COMMITTEE

27 SEPTEMBER 1977

Mr. Chairman and Members of the Committee, thank you for inviting me to appear before you, as the Commander in Chief of the United States Southern Command. My priority mission is the defense of the Panama Canal.

I will discuss with you my present capability to perform that mission with the forces and facilities presently available and also an assessment of my capability to perform that mission under the treaties signed on 7 September.

The forces presently available to me to carry out the mission of canal defense are well trained and capable of implementing a wide range of defense tasks to protect the canal and also to protect US lives and property. They are not capable, without reinforcement from the United States, of protecting the canal from a major external threat. Substantial reinforcement forces would be needed in the event of such a contingency. We could not, however, assure the uninterrupted operation of the canal in such a hostile environment, but it is my firm conviction that under the most likely threats, we can limit such interruptions to ones of short duration.

I have been consulted regularly during the course of the treaty negotiations and have furnished information, comments and recommendations to the Joint Chiefs of Staff for the development of US defense positions concerning the negotiations.

In my judgment the Panama Canal treaty provides adequately for the United States to exercise primary responsibility for the defense of the Panama Canal and for the support of the forces needed to carry out that mission. That judgment is based upon the following factors: The United States has an adequate military force structure in the canal area now; that force structure is expected to remain adequate and may, of course, be modernized during the treaty period; our capability to reinforce from the United States will continue to exist; US Forces, located astride the most critical canal facilities, have sufficient bases and training facilities, the latter of which will be shared; the treaty and its agreements provide freedom of movement for military forces in carrying out the canal defense mission.

The Panama Canal treaty establishes a concept of defense which includes US and Panamanian forces operating cooperatively to defend the canal. Indeed, the most effective defense of the canal can be obtained in conjunction with a friendly Panama.

We expect that the Panamanian armed forces, that is, the Guardia Nacional, will contribute military units to canal defense and that they will train with our forces in appropriate canal defense tasks.

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The concept for combined defense which I have recommended to the Joint Chiefs of Staff envisions the continued presence of American forces in the vicinity of the canal for the term of US control of canal operations, not only to assist in defense of the canal but also to provide protection of US lives and property.

Under this concept certain types of military facilities are essential to support the US Forces committed to canal defense. These include the major airfield, cantonment areas for stationing of forces in close proximity to the canal, training areas, communications facilities, piers and docks, logistic support facilities and family housing. These essential facilities are provided for in the Panama Canal treaty and its implementing agreements.

It is apparent that the Panama Canal treaty will require the relocation of a few US military units from their present locations in the Canal Zone to other locations within selected US military defense sites in Panama. These consolidations will not adversely affect our capability to defend the canal and, in fact, in many ways will contribute to a more efficient operation.

The US primary defense responsibility and the presence of US military forces in Panama, together with the provisions of the neutrality guarantee, adequately protect the security interests of the United States. When these factors are combined with a

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cooperative defense effort by the Government of Panama and its
armed forces, they even more adequately provide for the security
interests of the United States.

That concludes my statement. I shall be pleased to answer any
questions you may have.

WASH. POST Oct. 10, 197

# Panama Sees No Conflict in Treaties

By Marise Simons

Special to The Washington Post

PANAMA CITY, Oct. 9—Ranking Panamanian officials seeking to dispel doubts in the U. S. Congress about the Panama Canal treaties have made it clear in recent speeches and interviews that there are no basic differences between Panamanian and U. S. interpretations of key defense provisions of the agreements.

These officials say that the United States could resort to military action to protect the canal's neutrality once the waterway comes under Panama's control after the year 2000. They also

imply that U. S. warships would be given priority in an emergency.

The crux of apparent contradictions that surfaced in Washington last Tuesday over interpretation of the treaties focuses on the use of the word "intervention." That word suggests meddling in internal affairs to most Panamanians, and the notion has been angrily rejected by the Panamanian government.

"We have repeated time and again that the United States will not have the right to intervene in the internal affairs of Panama," Romulo Escobar Bethancourt, chief Panamanian negotiator, declared on television Friday.

"But Panama and the United States have the responsibility to keep the canal open, secure and accessible. And each one has the right to defend the canal."

"The question of whether the treaties adequately safeguard future U.S. military rights has become crucial to the Carter administration's drive to win Senate ratification of the canal pacts.

Panama is not expected to issue any public clarification of its treaty interpretation until government leader Gen. Omar Torrijos returns from his

See PANAMA, A31, Col. 3

## PANAMA, From Al

European tour next week, high government officials here said.

The thrust of their remarks, how ever, suggests that American opponents of the treaties, "have picked erroneously or maliciously on the word intervene" to try to prevent their ratification in the U.S. Senate, as one official put it.

"How much blood do the American Senators expect to draw," said one senior Panamanian official angrily. "Haven't we already said enough? How can they expect Torrijos to tell his people that U.S. Marines are invited to invade here whenever they wish. They are asking us to give them the right to come and kill us. Obviously, no such right exists."

Carlos Lopez, a member of the Panamanian team that negotiated the agreement, said in a televised interview Thursday that the United States has the right to access to the canal and when "a country's rights are disregarded, that country has the authority to react. It can go to war, or may take reprisals."

"This must be very clear," he continued, "because there is a very clear right conceded to the U.S. and to the entire international community—the right to have the canal always neutral and always open."

A senior Panamanian official who asked not to be identified said in an interview: "Of course the United States has the right to take military action. But it is the hardest thing for us that the Americans keep saying they can come back here and intervene."

Another acknowledgment of Panama's explicit understanding of U.S. military rights was made last month by Aristides Royo, also a member of the negotiating team, who said:

"The United States could and would and is authorized to take measures regarding anything that is contrary to the concept of neutrality" of the canal.

American officials here say that there remains a gray area with Panama not giving explicit assurances that the United States can defend the canal against possible actions by Panama itself.

As outlined by top U.S. officials, the language of the treaty pledges both countries to "maintain the regime of neutrality" in the canal and gives the United States the "permanent right of intervention" if it considers the canal to be threatened by anyone.

The problem obviously deals with Panama's sensibilities. "When in this century have we asked from any country that it must declare that the United States has the right to intervene?" one American official commented.

A good part of the confusion appears to stem from the fact that unlike the Americans, Panamanian officials do not use position papers when explaining sensitive legal and political points. In addition, there is an element of political opportunism and nationalist passion that enters into the picture.

Torrijos, in an interview with the French magazine L'Express published in Paris today, said his country got much less from the new treaties than he had expected.

"It is the price my generation had to pay to put to an end the perpetual presence of the United States on a part of our territory," Torrijos said.

"It is certain that the right of intervention has not been clearly defined by the texts and it is therefore dangerous. I personally give it only a moral value. The future generations will have to guarantee the neutrality of the interoceanic canal so as to avoid creating any flimsy excuse for intervention."

Another controversial question deals with the meaning of a clause granting expeditious passage of U.S. warships and auxiliary vessels. Sen. Bob Dole (R-Kan.) quoted confidential cables last week as saying Panama

would not give preferential treatment to the Americans.

One Panamanian official said here, "How can we spell out preference for one nation if we want all nations of the world to sign a neutrality protocol" on the canal?

Escabar said in a recent speech that despite specific commitment. "we reached the agreement that the warships of the United States in times of peace and war and Panamanian warships—although we have none now by the year 2000 we might have some—have the right to expeditious passage through the canal. The understanding is that they will have the right to a speedy passage. The speediest passage possible."

Under the 1903 treaty, there is no priority, granted to any vessel and the Panama Canal Co.'s policy was to give preference to passenger ships. The only exceptions were made during the Cuban missile crisis in 1962, when U.S. warships were given preference.

## Church Suggests Panel Visit Panama to Clear Up Doubts

Sen. Frank Church (D-Idaho) suggested yesterday that concerns about the recently negotiated canal treaties.

Church proposed the trip during an interview on 'Face the Nation' (CBS, WTOP) in which he was asked whether it would be a good idea for the chief Panamanian negotiator to testify before the Senate about differing interpretations of some treaty provisions.

"I'd much prefer to see the whole Foreign Relations Committee, after we have completed our initial hearings and during the recess, to go to Panama," replied Church, who is acting chairman of the 16-member Senate panel.

That would give the lawmakers a "firsthand view" of Canal Zone defenses, he said, and they would try to get "some feel of the political climate in Panama and also the attitude of other countries" in the area.

## BYRD SEEKS ASSURANCES ON 2 CANAL-TREATY POINTS

WASHINGTON, Oct. 8 (AP)—Robert C. Byrd, the Senate majority leader, said today he could support the treaty relinquishing American control of the Panama Canal if there were assurances that the United States could defend it after the year 2000.

Mr. Byrd also said the United States must be certain that its ships would be given priority use of the waterway in time of war or national emergency.

"I would support the treaties if those two points are clarified to my satisfaction," he said at a weekly news conference. "But I have to qualify that 'yes.' There could be things we haven't foreseen."

Unless the Senate is satisfied on those two points, he added, "these treaties will never be ratified."

There are two treaties but they are considered indivisible.

Mr. Byrd said any pressure or threats from the Panamanians would be unacceptable. "If there was any effort to intimidate the Senate into voting for the treaty, that wouldn't set too well," he said.

The treaty, which give Panama day-to-day control of the waterway in the year 2000, must be voted upon by the Senate and adopted in a Panamanian plebiscite later this month before taking effect.

NEWS
from
U.S. Senator
Bob Dole

(R.-Kans.)

New Senate Office Building, Washington, D.C. 20510 (202) 224-6521

FOR RELEASE: FRIDAY A.M.'s

SEPTEMBER 23, 1977

CONTACT: JANET ANDERSON

BOB DOWNEN

DOLE OPPOSES PANAMA CANAL TREATIES IN PRESENT FORM: WILL INTRODUCE AMENDMENTS, RESERVATIONS

WASHINGTON, D.C. -- "I cannot support the two Panama Canal treaties in their present form. Both the basic treaty, and the treaty concerning permanent neutrality contain omissions and defects which make them unacceptable, in my opinion," Senator Bob Dole said in a statement prepared for delivery in the Senate Friday morning. "In order to focus attention upon these weaknesses, particularly for the benefit of forthcoming hearings, I am proposing two reservations and six amendments to the treaty language at this time." Dole plans to testify before the Senate Foreign Relations Committee on his proposals.

Dole will tell the Senate that his modifications would "better protect the nation's vital interests and substantially improve upon these documents. Specialists on the subject have identified these aspects as among the greatest weaknesses in the treaty proposals, although there are a number of other deficiencies that can and should be addressed."

"The people of the United States owe Panama no apologies for our involvement with the Canal. The generosity of our government in building the canal, in operating and maintaining it for 65 years, and in thereby enhancing the standard of living for Panamanians, requires no remorse on our part. Free of any implications of guilt, we should proceed to analyze the treaties in an objective and responsible manner."

Dole's proposals are outlined briefly below:

Amendments:

1) Guarantees the U.S. right to construct a new canal anywhere in Latin America;

2) Reduces U.S. payments to Panama by more than ½ the amount provided under the basic treaty;

3) Extends the period for transition of U.S. administrative and judicial jurisdiction over the Canal Zone from 30 months until at least January 1, 1990;

4) Guarantees the continued protection of political and civil rights for all those living and working within the Canal Zone area;

5) Guarantees the U.S. right to intervene militarily whenever we alone see a threat to the neutrality of the canal;

6) Guarantees U.S. warships the right of "privileged," first priority passage through the canal whenever the U.S. is at war.

Reservations:

1) The Panamanian government must make significant progress in observing the human rights of its own citizens during the future;

2) Both Houses of Congress must agree to the transfer of U.S. Canal Zone property before the basic treaty enters into force.

Attached is the full text of the statement Senator Dole will deliver during morning business Friday morning. Also attached is the language contained in his amendments and reservations.

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TO BE INTRODUCED BY SENATOR BOB DOLE

SEPTEMBER 23, 1977

AMENDMENTS TO THE PANAMA CANAL TREATY

viz: Paragraph 2 (b) of article XII is amended to read as follows:

(b) During the duration of this Treaty, the United States of America may negotiate with any third State for the right to construct an interoceanic canal through such third State on any other route in the Western Hemisphere.

viz: In article XIII, paragraph 4, strike out subparagraphs (a), (b), and (c), and insert in lieu thereof the following:

(a) An annual amount to be paid out of Canal operating revenues computed at a rate of fifteen hundredths of a United States dollar ($0.15) per Panama Canal net ton, or its equivalency, for each vessel transiting the Canal, after the entry into force of this Treaty, for which tolls are charged.

(b) An annuity of ten million United States dollars ($10,000,000) to be paid out of Canal operating revenues and as an expense of the Panama Canal Commission, except that such sum shall be reduced by the proportion which the number of days during the calendar year the Canal is not navigable bears to the calendar year.

viz: In the second sentence of the first paragraph of article XI, strike out "for thirty calendar months" and insert in lieu thereof "until such date as is agreed upon by the members of the Panama Canal Consultative Committee, but not before January 1, 1990."

In paragraph 2 of article XI, amend subparagraph (a) to read as follows:

(a) The authorities of the United States of America shall have the primary right to exercise criminal and civil jurisdiction over employees of the Panama Canal Commission who are citizens of the United States and their dependents, and members of the United States Forces and civilian component and their dependents, in the following cases:

In paragraph 2 (a) (i) of article XI, strike out "offense committed" and insert in lieu thereof "act or omission."

In paragraph 2 (a) (ii) of article XI, strike out "offense committed" and insert in lieu thereof "act or omission."

In the text following clause (ii) of paragraph 2 (a) of article XI, strike out "offenses committed" and insert in lieu thereof "acts or omissions."

In the annex entitled "Procedures for the Cessation or Transfer of Activities Carried out by the Panama Canal Company and the Canal Zone Government and Illustrative List of the Functions that may be Performed by the Panama Canal Commission," strike out paragraph 4 (b) and insert in lieu thereof the following:

"(b) Upon termination of the transition period provided for under article XI of this Treaty, governmental services such as:

"(i) Police;

"(ii) Courts; and

"(iii) Prison system.".

viz: At the end thereof, add the following:

ARTICLE XV
HUMAN RIGHTS

1. The United States of America and the Republic of Panama agree on the importance of maintaining and properly observing internationally recognized human rights, including civil and political rights, in the former Canal Zone and commit themselves to maintaining, observing, and protecting such rights during the duration of this Treaty.

2. The Panama Canal Consultative Committee shall report annually to the national legislatures of the two Parties on the maintaining, observing, and protecting of such rights.

3. The two Parties agree to permit unimpeded investigations of alleged violations of internationally recognized human rights, including civil and political rights, by appropriate international organizations including, but not limited to, the International Committee of the Red Cross, Amnesty International, the International Commission of Jurists, and groups or persons acting under the authority of the United Nations or the Organization of American States.

In article V, strike out the second sentence.

## RESERVATIONS TO THE PANAMA CANAL TREATY

viz: Before the period at the end of the resolution of ratification, insert a comma and the following: "and subject to the following reservations:

"1. that the Republic of Panama demonstrate, during the duration of this Treaty, significant progress toward observing the internationally recognized human rights of its citizens, including the right of free speech and the right to a fair trial; and

"2. that the Republic of Panama permit unimpeded investigations of alleged violations of internationally recognized human rights by appropriate international organizations including, but not limited to, the International Committee of the Red Cross, Amnesty International, the International Commission of Jurists, and groups or persons acting under the authority of the United Nations or the Organization of American States."

viz: Before the period at the end of the resolution of ratification, insert a comma and the following: "and subject to the reservation that before the date of entry into force of this Treaty, the Congress has adopted appropriate legislation to transfer the Canal Zone to the Republic of Panama, in exercise of the power of Congress under article IV, section 3, clause 2 of the Constitution, relating to the disposal of territory or other property belonging to the United States".

## AMENDMENTS TO THE TREATY CONCERNING THE PERMANENT NEUTRALITY AND OPERATION OF THE PANAMA CANAL

viz: At the end of article IV, add the following: "Nothing in this Treaty may be construed to prevent the United States of America, in accordance with its constitutional processes, from intervening militarily to maintain such regime of neutrality when determined to be seriously threatened by the President of the United States of America or, through the adoption of a concurrent resolution, by the Congress of the United States of America.".

viz: Before the period at the end of the first paragraph of article VI, insert a comma and the following: "except that the Republic of Panama shall, upon request, afford privileged passage through the Canal to such vessels of the United States of America during any period in which the United States of America is at war".

I N F O R M A T I O N

October 7, 1977

MEMORANDUM

TO: HAK

FROM: Peter PMR

SUBJECT: SFRC Panama Canal Hearings

I had lunch with Bob Dockery, SFRC staffer, to discuss arrangements for your testimony and to find out what questions the Senators were interested in. Some questions he thought were likely are at Tab A. He may come up with more.

Next week's schedule of hearings is at Tab B. Moorer, Zumwalt, and Maxwell Taylor will testify on Monday. (Zumwalt and Taylor are pro-treaty.) A group of Zonians will also appear Monday, whose performance Dockery thinks might well be embarrassing to the anti-treaty forces.

The SFRC seems to be aiming at bringing it to a vote at the beginning of the year. Dockery thinks the Committee may make a trip to Panama (and perhaps a few other countries) before Congress reconvenes, to "clarify" the remaining issues; then hold four days of wrap-up hearings, possibly recalling a few key witnesses. This also would be before Congress reconvenes; if would show the Committee's diligence and also focus public attention.

The Committee will try to clear the Senate calendar for the Panama issue. No other agreements or treaties will be reported as of the SFRC. Byrd has agreed to cooperate. Byrd is expected to be the floor manager. (Dockery says Byrd sees this as his chance to make himself a national figure.)

This procedure is designed to build up momentum for an early vote. It is obviously a gamble. If the vote is postponed, the Doomsday machine can't really be stopped, and the "momentum" will be dissipated.

POSSIBLE QUESTIONS

--Where do we go from here? How can we resolve the issues that have been raised, in a constructive way? In the Congress or with the Panamanians.

--What would be the consequences in Latin America and the Third World of a failure to ratify?

--How important is a "right to intervene?" Are we wedded to this phrase? Or is some other language possible?

--What is the significance of Torrijos' statement at the signing ceremony that the Canal was "under the Pentagon's umbrella?"

--How flexible is Torrijos on these matters of interpretation? How reliable is Torrijos over the short and long term?

JOHN SPARKMAN, ALA., CHAIRMAN

FRANK CHURCH, IOAH
CLAIRBONE PELL, N.Y.
GEORGE MC GOVERN, S. DAK.
HUBERT H. HUMPHREY, MINN.
HAK, IOWA
J. RIDEN, JR., DEL.
JENN, OHIO
J. GREGG (OIG) STONE, FLA.
PAUL S. BARGANES, MD.

CLIFFORD P. CASE, N.J.
JACOB K. JAVITS, N.Y.
JAMES B. PEARSON, KANS.
CHARLES M. PERCY, ILL.
ROBERT F. GRIFFIN, MICH.
HOWARD H. BAKER, JR., TENN.

NONVILL JONES, CHIEF OF STAFF
ADDER E. KENDRICK, CHIEF CLERK

United States Senate

COMMITTEE ON
FOREIGN RELATIONS

MEDIA NOTICE

Contact: Robert Dockery 224-4651
George Kroloff 224-5481

FOR IMMEDIATE RELEASE

October 7, 1977

TENTATIVE WITNESS LIST FOR PANAMA CANAL HEARINGS
OCTOBER 10-15, CAUCUS ROOM (318 RUSSELL SENATE OFFICE BUILDING)

The following is a statement by Senator John Sparkman, Chairman of the Senate Foreign Relations Committee, concerning the continuation of Panama Canal hearings, scheduled for delivery on the floor of the Senate today (October 7, 1977).

"Mr. President, the Committee on Foreign Relations will proceed throughout the week of October 10 with its consideration of the proposed Panama Canal agreements.

"As part of the Committee's continuing effort to hear all points of view on these very important, but highly controversial agreements, we will hear from a number of experts and public witnesses during the coming week. At that time, the Committee will receive testimony from retired military officers, residents of the Canal Zone, Latin America experts, labor officials, church groups, veterans' organizations and a variety of other groups and organizations.

"In particular, I want to mention that we will be hearing from two former Chairmen of the Joint Chiefs of Staff, Admiral Thomas Moorer and General Maxwell Taylor. We will also hear from former Chief of Naval Operations, Admiral Elmo Zumwalt. The Committee is pleased and honored that former Secretaries of State Dean Rusk and Henry Kissinger have agreed to express their views on this very important foreign policy issue.

"Mr. President, these hearings will be held in the Caucus Room in order to accommodate the public and the TV networks. I ask unanimous consent that a list of all witnesses scheduled to appear before the Foreign Relations Committee next week be inserted at this point in the Record."

Monday, October 10 - 9:30 a.m.

Admiral Thomas H. Moorer (Ret.)
Admiral Elmo R. Zumwalt, Jr. (Ret.)
General Maxwell Taylor (Ret.)

followed by

Panel of Canal Zone residents:

Mrs. Patricia Fulton
President, Pacific Civic Council

Mrs. Charlotte Kennedy
President, Cristobal-Margarity-Brazos
Heights Civic Council

Mr. Harold Green
President, Gamboa Civic Council

Mr. Louis Sattorosi
Vice President, Canal Zone Federation
of Teachers

Tuesday, October 11 - 9 a.m.

Panel of Latin American experts:

Professor Jorge Dominguez
Center for International Affairs
Harvard University

Dr. Abraham F. Lowenthal
The Woodrow Wilson Center

Professor Donald Dozer
University of California
Santa Barbara

followed by

Mr. Robert M. Bartell
Liberty Lobby

Franklin Delano Lopez, Chairman
Puerto Rico Democratic Party

Phillip Harman
Canal Zone Non-Profit Public Information Corp.

REPUBLICAN NATIONAL COMMITTEE

RESOLUTION CONCERNING
THE PANAMA CANAL

The Republican Party stands now, as always, for the maintenance of
a consistent foreign policy, rooted in the twin strengths of enduring principle
and superior defense capability. Concerned now that that consistency and
strength, so effectively supported by President Ford, is being diluted by the
present conduct of a fragmented, reactive, inconsistent and dangerously weak
foreign policy, the Republican National Committee wishes hereby to record its
opposition to President Carter's current course. Under his direction, U. S.
foreign policy has come to be viewed as dependent more on rhetoric than on rea-
son or national interest rightly understood. The test of effective American
policy is not how piously one's good intentions are phrased but how consistently
our actions yield progress toward peace, justice and stability.

President Carter's foreign policy, generally and in several specifics,
fails that test and compels this Republican National Committee vote of no
confidence.

One such specific is represented by Mr. Carter's proposed treaties
with the Republic of Panama, which, we believe, do cede United States' rights
of military security, do dilute United States power to develop unilaterally
a sea level canal, and do transfer authority to determine military priority
in time of war.

THEREFORE BE IT RESOLVED, That the Republican National Committee
opposes the ratification by the Senate of the Panama Canal Treaty and the
Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal
as proposed by President Carter.

Adopted at a Meeting of the
Republican National Committee
Held in New Orleans, Louisiana
September 30, 1977

THE WALL STREET JOURNAL, MONDAY, AUG. 22, 1977

Scare Talk and the Canal

By ROGER W. FONTAINE

Negotiators for the Carter administra-
tion have reached an "agreement in princi-
ple" with Panama on the "basic elements"
of a new treaty on the Panama Canal.

Although the exact language has not yet
been fully drafted, the main features call
for transfer of the canal and the 533-square
mile Canal Zone to Panamanian control in
23 years. The military presence of the U.S.
would end by the year 2000, after which we
would continue to have the unilateral right
to insure an open and neutral canal: This
latter provision clearly implies the right to
military intervention, although the Carter
administration does not like to use that
term. A major controversy will undoubtedly
flare up over this point.

But what is interesting about the proposed treaty is not its novelty but its utter familiarity to those who have had the patience to follow the negotiations over the last few years. The supporting arguments are also familiar, and they will now be echoed by most of our foreign policy establishment, including Gerald Ford and Henry Kissinger. Yet these arguments are still open to serious criticism, not, as our treaty pamphleteers would have it, the criticism of the uninformed, the jingoistic and the merely nostalgic.

Three scare arguments are especially
prominent, and need especially to be re-
viewed. First, that the canal is vulnerable
to sabotage. Second, that a full-blown guer-
rilla war might break out in Panama. And
last, that in such an event the United
States would be condemned by all of Latin
America, if not by the entire Third World.

The Carter administration, facing a sus-
picious Senate and public opinion, will
probably rely on these arguments in its
campaign for ratification. Suggesting that
the U.S. is being subjected to extortion by
tiny Panama is accurate enough, but the
truly important part of the equation is that
we Americans are engaging in acts of self-
extortion. We are frightening ourselves
with disaster scenarios which although su-
perficially plausible have never been thor-
oughly dissected.

Fear of Sabotage

First, the fear of sabotage. Although the
canal is and always has been vulnerable,
wrecking it is obviously to no one's advan-
tage, and least of all to that of the Pana-
manians. Since North American capital
would be required to restore operations,
Panama would remain as dependent as
ever on the United States. Furthermore, a
treaty which delays full control until the
year 2000 seems unlikely to stay the hand
of the young and impatient saboteur.

Second, guerrilla warfare. The specter
of another Vietnam is an effective weapon,
no doubt, in persuading a war-weary
American public to surrender its rights on
the isthmus. But the extent of the problem
remains to be analyzed properly.

The potential does exist for small urban

terrorist squads, recruited from Panama's
large student population, to make lightning
raids into the zone. They might stage rob-
beries, kidnappings and assaults on police
or civilian functionaries in the zone as well
as in Panama itself. U.S. military and po-
lice units would find it tempting to chase
these raiders back into Panamanian terri-
tory, thus provoking nationalist outcries.

Yet a truly serious insurgency is unlikely. Panama is not Vietnam in size or resources, nor does it have a nearby neighbor willing to aid the "liberation struggle." Furthermore, the Panamanian chief, General Omar Torrijos Herrera, is unlikely to provide the training and logistical support necessary to transform urban terror squads into full-fledged rural insurgents. Declaring war, even sub rosa war, on a superpower is still a dicey business.

Moreover, Gen. Torrijos may well find
it more in his interest to stamp out, than to

The argument for a
new treaty on the Panama
Canal relies on disaster
scenarios which, although
plausible at first glance,
have never been thoroughly
dissected.

encourage insurgents. The regime remains
extraordinarily dependent on foreign in-
vestment, foreign banks and, yes, foreign
tourists—none of whom would enjoy work-
ing and playing in Belfast-style surround-
ings.

Finally, Gen. Torrijos is even less likely
to enlist outside material support, even
from such friends as Fidel Castro and
Muammar Khadafy. The risks are too
great and these gentlemen have too many
other preoccupations. The Cuban leader,
moreover, knows very well that Latin
American guerrillas have an extraordinary
rate of failure. Their only hope would be to
wear down U.S. public opinion through a
sustained campaign of terror, not a wholly
irrational hope, but far from the worst-
case scenario of the treaty's supporters.

The third major pro-treaty argument is the fear of alienating world opinion, a familiar scenario which arises whenever there is a question of using force to insure American interests. Ambassador Sol Linowitz, one of the treaty negotiators, has even stated that the new treaty will "prove" us magnanimous to a skeptical (third) world. Yet if this world is not convinced of U.S. benevolence after our rebuilding of post-war Europe and our billions of foreign aid dollars to scores of underdeveloped countries, one more act of charity will not convince it. This treaty might just as well reinforce the notion that America is acting, not from generosity, but from weakness.

To criticize this argument is to question
the notion that what others may think must
control our policy. No serious man should
be concerned with critical opinion of Pan-
ama emanating from Conakry or Kam-
pala, or much less Moscow.

Yet Latin America is a somewhat dif-
ferent case since, with the exception of
Cuba, none of its countries are our sworn
enemies. The depth of our ties with this re-
gion is matched only by those with Western
Europe. Yet even though no Latin Ameri-
can regime publicly supports the United
States, the depth of pro-Panamanian feel-
ing varies considerably from country to
country. It is strongest in Venezuela, Col-
ombia and possibly Mexico; it is weakest
in the southern cone of South America. For
example, Brazilians, heavy users of the ca-
nal, have privately expressed deep misgiv-
ings over Panamanian control.

Only Five Nations

Despite Gen. Torrijos's numerous meet-
ings with regional leaders, the last one
held in Bogota early this month, he has
managed to get the collective support of
only five other nations.

Moreover, a surrender of the canal is
not likely to gain us lasting respect or af-
fection. And why should it when the ob-
vious way to deal with us is to make more
demands in as unfriendly a fashion as pos-
sible?

Beyond these arguments, our reluctance
to hang on to the canal reflects a sense of
uneasiness, of guilt at maintaining what is
so glibly described as a "colonial enclave."
Our presence simply can't be squared with
the radical anticolonial (to wit, antiwest-
ern) sentiment that is now the common in-
tellectual coin of the globe.

Yet it must be pointed out that Panama
has benefitted mightily from a resource
that it alone could not exploit. It is a fact
of life that the canal is a major interna-
tional waterway that simply cannot be op-
erated, much less defended, by one of the
smallest countries in Christendom. That it
would strike many as arrogant to state
these facts is a mark of the extent to which
we have absorbed the doctrine of Interna-
tional egalitarianism. National duty is not
easily transferred nor fundamental geopol-
itical facts altered by political bombast.

The United States must retain the ma-
jor role in running and defending the ca-
nal. It is still open to question how pre-
cisely to define that role, as well as the na-
ture and extent of Panama's contribution.
What should not be open to debate is the
right of this country and the other users to
an open and secure passageway between
the planet's two principal oceans.

In spite of the attempts to secure ratification through scare arguments, this treaty does not fit these requirements.

Dr. Fontaine is director of Latin Ameri-
can Studies at Georgetown University's
Center for Strategic and International
Studies.

INTERNATIONAL

REAGAN ON THE CANAL

In his Washington hotel suite, Ronald Reagan discussed the Panama Canal treaties in an interview with NEWSWEEK'S Gerald C. Lubenow. Excerpts from their conversation:

LUBENOW: What bothers you most about these treaties?

REAGAN: The fatal flaw is the risk they contain for our national security and for hemispheric defense. No one can guarantee that we can keep this waterway open to the world without the right of sovereignty, which we are giving away.

Q. Since the canal is the lifeline of the Panamanian economy, wouldn't it be economic suicide for Panama to close it?

A. That's true. But are they in a position to defend it?... We're turning one of the world's most important waterways over to a country no one can believe. How can a country of 1.7 million [people] guarantee it will remain open?... Who knows how hostile [the Panamanian] administration will be? We know their relationship to Cuba. We know the Russians were there in July, offering to buy 50 million tons of sugar at double the world price. If they decide to throw in their lot with the Soviet Union, [then Russia will be] the influential power over this strategic waterway. Isn't confrontation with the Soviet Union what we've been trying to avoid?

Q. What other problems do you see with the treaty?

A. It can't live up to the promises it makes. Once the United States has begun a phased withdrawal from the canal in the face of trouble, it doesn't do any good to say we can always go back in... The fact is that once we say we will give up the canal, if they decide not to wait those 23 years, we will be like Britain and France in Suez. Rather than send troops back to enforce some clause, we will say, "Why bother? We are going to give it up anyway."

Q. Is the Panama Canal, as some people suggest, more trouble to the U.S. than it is worth?

A. The canal is of inestimable value, commercially and militarily. It is 8,000 miles and 30 days shorter than going around the Horn ... In any

situation that involved a conflict in both oceans, the President, as Commander-in-Chief, would find it very advantageous to have that canal.

Q. Why, then, is this Commander-in-Chief—along with three presidents before him—willing to give up that advantage?

A. Because they've taken their counsel from the State Department. The move to do this started some years ago in our own State Department. They are the ones who talked about the last vestige of colonialism and imperialism. Lyndon Johnson was the one who put us in a box when the [Panamanian] riots occurred in

1964. He said the Panamanians should receive sovereignty and the right to operate the canal within a specific time. Once your head man makes that kind of admission, your negotiators aren't negotiating. It's already been given away.

Q. You've dismissed the support for the treaties by the Joint Chiefs of Staff as an inability to speak their mind. Do you think that's fair?

A. It's true. And I don't mean it as a derogation of them. Our military has always respected civilian control. The Joint Chiefs either go along with the policy set by the Commander-in-

Chief or they have to resign. So there's a question whether we are hearing their best military judgment on this.

Q. Are there any parts of the 1903 treaty that should be renegotiated?

A. There are many things we can do to improve the relationship, meet some of Panama's complaints and ease the situation. It wouldn't hurt, for example, to turn Panamanians who break the law over to Panamanian courts.

Q. But hasn't it come to the point, historically, where Panama's major concern is simply the American presence?

A. How do we know we are hearing what the Panamanians want? We are talking with a man who has seized power at the point of a gun.

Q. But if we can't trust the word of their leader or accept him as their representative, how can we have any kind of treaty with Panama?

A. There are alternatives, things we can do for [Panama] that will benefit the people more than turning over the canal. We can do a lot more than we've done to help them develop their resources. We could have a fairer sharing of tolls and build a third lock, which would speed transit and increase tolls.

Q. Are you concerned that there might be violence in the Canal Zone if these treaties are not ratified by the Senate?

A. I'm not sure there won't be if they are passed. We've already seen some dissident groups saying they won't be satisfied as long as there is a single American left in the Zone. We're talking about a declining presence over 23 years. There's as much chance the canal will be sabotaged if the treaty is signed as there is if it isn't.

Q. Are you opposing this treaty as forcefully as you might? Are you concerned that if the treaties are defeated in the Senate, you and other conservatives will be held responsible for trouble in the Canal Zone?

A. That never entered my mind... I'm going to do all I can to persuade people these treaties are not good for the U.S. For 60 years we've made the canal available for all the shipping of the world. Never for profit. Never amortized the original cost of the canal. Why is that such a bad thing? What have we done that is so wrong?

Mark Godfrey—Magnum

Reagan: Worries about Russia and a 'fatal flaw'

50

Newsweek, September 19, 1977

-1-

THE MacNEIL/LEHRER REPORT

Air Date: August 17, 1977

Transcript of "Panama Canal Treaty"

Copyright 1977, Educational Broadcasting Corporation and GWETA

JIM LEHRER: Good evening. Another one of those epic struggles for hearts and minds is under way. It's over the Panama Canal treaty, and it should be a lulu before it's over. The hearts and minds belong to the people and the Senate of the United States. On one side is President Carter, who has the ultimate to lose -- his prestige and credibility -- so he's pulling out all stops to get that two-thirds vote required for Senate ratification. Two early laying of the hands of non-partisan fellowship have already paid off. Yesterday former President Ford endorsed the treaty, today former Secretary of State Henry Kissinger gave his blessing.

The other side is also mobilizing. Their biggest gun, Ronald Reagan, fired his first shot yesterday. After getting his call from President Carter, Reagan told CBS News that he doubted there was anything that would change his opposition to, as he put it, "giving away that canal and our right of sovereignty." Even before Reagan's comment the American Conservative Union and other conservatives had announced a major advertising and politicking campaign to encourage defeat of ratification.

It may be a short fight or a long one, depending on if the Senate takes it up in September or waits until after the first of the year. But either way, it holds promise of being one of those fights to remember. And tonight, with the leader of the anti-treaty forces and two members of the administration's treaty negotiating team, a glimpse of what lies ahead.

Robert MacNeil is on vacation, and sitting in New York is Charlayne Hunter-Gault, a reporter for the *New York Times*. Charlayne?

CHARLAYNE HUNTER-GAULT: Jim, after thirteen years of sometimes tense, often bitter negotiations, what has emerged is not one but two treaties, both compromises. Minor details are still being worked out, but in the broad outlines it is clear that the compromises add up to a gradual phasing out of U.S. control over the fabled Big Ditch. The treaties involve control, accessibility, security, operational efficiency and money. One treaty calls for gradual transfer of control of the canal from the U.S. to Panama within the next twenty-three years, by the year 2000. The other treaty, which is to be agreed upon by all western hemisphere nations, gives the United States authority to guarantee the canal's neutrality and accessibility beyond the year 2000. That means that if the safety of the canal is ever threatened the United States is free to intervene militarily. It is also up to the United States to decide when during the life of the treaty it wants to remove the fourteen military bases in the Zone.

Half of the 648-square-mile Canal Zone area will be handed over to Panama as soon as the treaty goes into effect. American citizens may continue to work in the Zone, enjoying the rights and privileges of any overseas U.S. government employee, but within three years they will be subject to Panamanian law. And during the transition period the U.S. will be training Panamanians, who now make up about seventy percent of the canal's work force, to take over canal operations.

-2-

Money was a major sticking point, and while Panama got less than it asked for, it got more than it's getting now -- $2.3 million a year. The proposed treaty calls for up to $70 million annually in U.S. payments to Panama. The money would come from canal tolls. Although not provided for in the treaty, the U.S. has also agreed to a number of arrangements for aid that will assist Panama's military and economic development. Jim?

LEHRER: There is no one in the U.S. Senate more identified with opposition to a new treaty than Senator Strom Thurmond, Republican of South Carolina. Senator Thurmond introduced a Senate resolution in 1975 urging the U.S. to maintain and protect its sovereign rights over the canal. Thirty-eight Senators, enough to block a treaty, supported him then. He's now chairman of the American Conservative Union task force to defeat ratification.

Senator, you are determined to defeat this treaty. Why?

Sen. STROM THURMOND: I don't think it's in the best interests of our nation. Panama is a very weak, unstable country, and I don't think it could protect the canal. And the twenty-two years are going to pass mighty quickly. The moment the treaty is signed, sovereignty then will go to Panama. Therefore we will not have the rights then that we would under the present situation. Torrijos, the head of the Panamanian government, who was not elected by the people, who is a dictator, is very close to Castro in Cuba. He has visited there and conferred with him, conferred with him about this treaty and other matters; and Castro, of course, is a figurehead of the Soviet Union. And I would fear, if this treaty gets in the hands of Panama, after several years it may end up in the hands of the communists. I think that's very dangerous; we cannot take the chance. We must protect the security of the United States and the free world.

Under the neutrality treaty, which would take effect after the basic treaty expires in the year 2000, then we could not protect this canal from our enemies. We will not be able to close it. We can close it now to enemies in time of war. If this treaty is ratified we would be unable to close it. That is a very vital matter.

LEHRER: You mean the neutrality treaty, which would guarantee the United States the right to maintain neutrality, but it would not give the United States the right, say, to keep out Russian ships. Is that what you mean?

THURMOND: That's right; in time of war. And suppose we did have a war with the Soviet Union -- I hope we never have it -- but if we did, the Soviet ships would be allowed to go in there, the same as our ships. And this canal is very important. In the Vietnam War I believe about seventy percent of the war goods went through this Panama Canal. It was very vital and essential. It will be vital and essential in other matters. Then, too, oil will be coming down from Alaska. Now, if this treaty goes through, thirty cents a ton -- and that's based on space rather than pounds -- will have to be paid to Panama for the use of that canal, and it's estimated that it will cost the United States about $70 million a year. Twenty-two years is over a billion and a half dollars that we would have to pay Panama. Now, we bought and paid for this canal and the territory in the first instance.

LEHRER: Back in the early 1900's.

-3-

THURMOND: That's right, in a treaty in 1903. We built the canal; we now have an investment in it of about $500 or $600 million -- including the cost of security and everything, about seven billion dollars. And I don't see the sense of turning it back to Panama, or turning it over to Panama -- they have never had control of it. In fact, the country of Panama was formed when this canal treaty was signed back in 1903. There wasn't a Panama; it was part of Colombia. So we really had to bring Panama into being.

LEHRER: Well, Senator, what about those who say -- particularly in the administration -- that there could be trouble, there could be violence in Panama if you are successful in your campaign to defeat this treaty?

THURMOND: Well, there was some trouble back in 1964; there hasn't been any for thirteen years now. But are we going to succumb to that? We own the Panama Canal. It ought to be called the United States Canal in Panama. It's not Panama's canal, it's the United States' canal. And the idea of saying that we're just going to give up and throw up our hands and be blackmailed into turning it back, to me is ridiculous. Would we do that with Florida? Would we do that with Alaska, or any other state of this nation?

LEHRER: And you see it the same way, that this is like the Louisiana Purchase, or...

THURMOND: It's our territory. It's ours.

LEHRER: I see. Senator, two years ago you had thirty-eight of your colleagues who went with you on the resolution...

THURMOND: Actually, I believe about thirty-nine. We had thirty-seven to start, and two additional added.

LEHRER: How many do you have now?

THURMOND: Well, I haven't checked lately. A good many of those who signed in have left the Senate -- resigned or didn't run again, or some reason -- and I haven't made a check as to the exact number today.

LEHRER: You think the Senate number is similar, though?

THURMOND: We have picked up some of those new ones who came in, and I would think we have enough to defeat the treaty, unless the administration brings unusual pressure upon the members of the Senate.

LEHRER: All right, we want to get to that in a minute. Thank you, Senator. Charlayne?

HUNTER-GAULT: As Jim mentioned earlier, two members of the U.S. delegation to the treaty negotiations are with us in Washington. One of them, staff coordinator Richard Wyrough, is the State Department's senior advisor for treaty affairs in the Office of Panamanian Affairs. Before joining the Department in 1974, Mr. Wyrough spent twenty-four years in the Army. Mr. Wyrough, there seems to be some question over who owns the canal. Who owns it, the U.S. or Panama?

RICHARD WYROUGH: The United States owns the canal, Charlayne.

-4-

(c) (to)

As Senator Thurmond says, we did build it after we acquired rights over the Canal Zone by the Treaty of 1903.

**HUNTER-GAULT:** What is the purpose of this rationale to get the treaty ratified so quickly?

**WYROUGH:** The purpose of these two treaties and the supporting agreements, on which agreement in principle was announced last week, is to continue to protect this very important interest which we have in the Panama Canal. That is to say, we have to look at this problem and to decide what it is that is important to the United States. And what's important is that we develop arrangements that keep this canal open, safe, efficient, secure to all the ships: to our ships, both naval and commercial, and to the ships and vessels of all the world. And we think that the most effective means of achieving this goal of ours is by means of negotiating a new treaty that is more acceptable to the people of Panama than is the existing treaty.

**HUNTER-GAULT:** How do you answer the critics who say that the Panamanians are not capable of running the canal, that they couldn't run it efficiently and they couldn't protect it?

**WYROUGH:** Charlayne, I would remind everybody that by the terms of the treaty that were announced last week what we will be doing is operating and defending the canal ourselves through the remainder of this century. And then afterward we will be entering into a regime with Panama under which the canal's neutrality will be guaranteed on a permanent basis.

**HUNTER-GAULT:** Why does the United States need to be involved with the canal at all? Isn't it obsolete as far as our own vessels are concerned -- aren't most of them too large to even get through the Zone?

**WYROUGH:** It is correct that many of the so-called "supertankers" and our large nuclear carriers are too large to pass through the canal. And for those vessels, and for our Navy, which has task forces built around these carriers, the canal is less important today than it was in earlier years. But we recognize the continuing importance of the canal for other ships, and it is for this reason -- it is because we recognize the importance of the canal -- that we are attempting to negotiate a new arrangement, one of partnership between ourselves and Panama, that will better assure our interest.

**HUNTER-GAULT:** Just one last question: in your view, what happens if we fail in this effort, the United States fails to negotiate the proposed treaty in the Senate?

**WYROUGH:** I would anticipate that failure to this effort would considerably increase the difficulties which we would face in continuing to operate the canal in an efficient basis.

**HUNTER-GAULT:** Jim?

**LEHRER:** The U.S. negotiating team also included a military advisor, Lieutenant General Welborn Dolvin. General Dolvin was appointed deputy negotiator for the Defense Department in October 1975, after his retirement from the Army earlier that year. He is a veteran of World War II, Korea and Vietnam. General, first some of the national

-5-

security points raised by Senator Thurmond. He says under the neu-
trality treaty that the United States could guarantee neutrality
but that in time of war could not keep out enemy ships, such as
Russian ships, was the example I used. Does that concern you from
a military standpoint?

Lt. Gen. WELBORN DOLVIN: No. It is true, as Senator Thurmond has said, that the treaty calls for neutrality and therefore the opportunity for ships of all nations, including ships of war, to go through the canal. But it is a choke point; you have to approach the canal and get into it and get out of it, and we have confidence that our Navy can prevent any ships of belligerent nations from either arriving or suddenly getting away if they did traverse the canal.

LEHRER: All right. As Charlayne said at the beginning, there
are fourteen U.S. bases down in Panama, and I think the number is
about 9,500 American troops, isn't that correct?

DOLVIN: Probably 9,000 American troops.

LEHRER: All right. What happens to them under the treaty?

DOLVIN: We have negotiated an arrangement whereby we retain all the bases that we need in order to carry out our primary defense responsibility of defending the canal. I wouldn't want to go into precise details of that arrangement, but....

LEHRER: They can stay there for twenty-three years?

DOLVIN: That is correct.

LEHRER: And the option rests with the United States?

DOLVIN: The option of what bases we keep and the level of troops
that we maintain there rests with the United States.

LEHRER: What about after the year 2000?

DOLVIN: After the year 2000 we do not have any right to maintain troops in Panama, that Panama would maintain their own troops; however, our neutrality guarantee would permit us to take whatever steps we deem necessary...

LEHRER: Including landing Marines, or whatever?

DOLVIN: Well, we're not precluded from taking whatever steps we deem necessary to...

LEHRER: From a defense-military standpoint, do you agree with the assessment that even with 100,000 troops that the canal could not be adequately defended as it stands now from saboteurs and that kind of thing?

DOLVIN: The case there I think should be phrased a little bit differently. It's not so much a question of defending it, but you cannot defend it and at the same time use it. It goes through fifty-one miles of probably the roughest terrain you can imagine: jungle, water. And the Canal Zone is only five miles on each side. So it's

-6-

not possible to guarantee the defense of it and still use it. And
that has led the Joint Chiefs of Staff to come to the conclusion
that a better arrangement can be made whereby we have a friendly
Panama which would assist us in this defense. You recognize that
probably the greatest danger is one of internal, or sabotage; and
a friendly Panama would greatly facilitate the defense of the canal.

LEHRER: What about the Senator's point about the present government of Panama and its ties to Cuba and its ties to communist countries? Does that concern you from a defense standpoint?

DOLVIN: Well, I'd like to defer on the political side, certainly, to Dick Wyrough. But I would comment, from a defense standpoint, that we've heard a lot about this and Senator Thurmond has brought it up, but we have no concrete evidence that there's any communists of any importance in Panama. We have no evidence that there are any Cuban uniformed military in Panama at all. Now, from a political standpoint I defer to Mr. Wyrough of the State Department.

LEHRER: I think Charlayne wants to pursue that now with everybody. Charlayne?

HUNTER-GAULT: Senator Thurmond, let me just ask you. You talked about the threat to our national security. Do you see the abdication of U.S. control as a severe threat to our national security in light of what has been said?

THURMOND: Yes, I do. I feel that we must control the Panama Canal and maintain sovereignty if we're going to protect it. The moment this basic treaty is signed the moment sovereignty passes from the United States to Panama. And you know what sovereignty means: as long as we have sovereignty we can have control and we are safe, but once we give up sovereignty we can't tell what will happen. Twenty-two years is going to pass mighty quick, and then this canal will be entirely under Panama. We will not even have troops there, unless there's some arrangement made later to that effect.

Now, I'm very concerned about the security of it, and I hold
in my hand here a letter signed to the President of the United States
by four of the greatest living military people. They're all former
Chiefs of Staff or Chief of Naval Operations: Robert B. Carney,
George Anderson, Arleigh Burke and Thomas Moorer. They wrote this
letter to the President, and this is their individual and their
joint views. I shall not take the time to read it, but I shall
just quote two or three excerpts from it.

"The ownership and sovereign control of the canal is indispensible during periods of tension and conflict. Sovereignty and jurisdiction over the Canal Zone and canal offer the opportunity to use the waterway or to to deny its use to others in war time. The loss of the Panama Canal, which would be a serious setback in war, would contribute to the encirclement of the United States by hostile neighbor forces and threaten our ability to survive.

"It is our considered" -- and this is their opinion -- "it is our considered individual and combined judgment that you should instruct our negotiators to retain full sovereign control for the United States

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over both the Panama Canal and its protective frame,
the United States Canal Zone as provided in the exist-
ing treaty."

That's exactly what was not done here. We do not maintain con-
trol and sovereignty. Sovereignty will pass the moment the treaty is
signed, as stated by these great military leaders today who are no
longer under the pressure of the President; they have retired, they
are able people, and they are in a different category today from
people who are still in uniform. They can express their views ful-
ly and freely without coercion or fear.

HUNTER-GAULT: General Dolvin, what do you have to say about that and the position of the present Joint Chiefs?

DOLVIN: Charlayne, I would only say that the canal is of strategic military importance. Its advantage really lies in the economy and flexibility that it provides us to accelerate the shift of military forces between the two oceans. As to Senator Thurmond's reference to the Chiefs of Naval Operations, I really have no comment other than to say that it does not reflect the views of the current Chiefs of Staff.

HUNTER-GAULT: What about the possibility that something would happen after the United States had pulled out? Would it be militarily feasible for us to go back in at that time, and even politically feasible in this post-Watergate era?

DOLVIN: Yes. The defense of an installation or a locality does not necessarily have to mean that you are sitting there or have forces in position. It could be defended in that fashion providing that the proper political decisions had been made.

HUNTER-GAULT: But is there any plan for that? I mean, has that been thought out in terms of the present stages of the negotiations and the content of the treaty?

DOLVIN: No, and I would not want to really get into that level of detail at this time.

HUNTER-GAULT: All right. Jim?

LEHRER: First of all to you, Mr. Wyrough, and this question that we began with the General on a response to the Senator's concern about the communist influence in that government in Panama.

WYROUGH: I would have to disagree with the observation that there is a considerable amount of fear to be had over the relationship between General Torrijos and Castro. It is correct that General Torrijos paid a visit to Castro -- to Cuba -- in January of last year. It was a short visit, there has not been any visitation since. But there are other heads of state of friendly governments who have paid visits to Cuba without the kind of suggestion that has been advanced. The Torrijos government is a government that enjoys very wide popularity in Panama. It has been in power since 1968; it is in many respects a populist government, and it certainly reflects the views of the overwhelming majority of the Panamanian people and the other countries of Latin America.

-8-

LEHRER: In other words, it's not a concern.

WYROUGH: Not a major concern in comparison to the concerns which motivate us toward a new treaty.

LEHRER: All right, gentlemen, in the few minutes we have left
let's turn attention specifically to...

THURMOND: I'd like to answer him if you don't mind.

LEHRER: Sure.

THURMOND: I think our friends in the State Department are just
in error as much on this as they were in helping Castro to come to
power in Cuba.

LEHRER: Do you want to respond to that, Mr. Wyrough?

WYROUGH: I think that I've stated my views.

LEHRER: All right. Senator, to the nitty-gritty of the Senate
now. What besides newspaper ads is your task force going to do? I
mean, what kind of campaign are you going to mount? We've seen what
the President has done the last two or three days. How can you coun-
ter that?

THURMOND: Well, the task force of the ACU will run ads in papers, it will send out speakers, it will crystallize public opinion in every way it can over the country -- to inform the people, that's the purpose. Now, a recent survey taken by Opinion Research indicates that seventy-eight percent of the people of this country are opposed to turning over the canal to Panama, and we feel that that truly represents the thinking of the citizens of this nation. And we want that opinion to be reflected in the votes that are cast by the Senators when the time comes.

LEHRER: Do things like the endorsement of President Ford and Secretary Kissinger, plus the statement by Senator Goldwater that he was not going to oppose ratification -- do these kinds of things hurt your effort?

THURMOND: They may hurt some, but I don't think they will hurt to a great extent. I think President Ford was influenced by Dr. Kissinger, and I think Dr. Kissinger was influenced by the State Department, which for years has favored turning it over; going back to the sixties under Lyndon Johnson and on up until now they've been trying to get a treaty presented to the Senate.

LEHRER: Are you concerned about the other question that's been raised, that if this treaty is not ratified that it will pull the credibility rug out from under the President in his dealings with all countries in the world, including Russia, from this point on?

THURMOND: I think it's the duty of the Congress to do what they think is best for the country. The President is one man; we are all individuals, too, and we have our views on these matters. And if there's joint responsibility, that's the reason the Senate has to ratify a treaty. The government can't enter into a treaty alone. They merely submit a treaty for ratification. The Senate

-9-

makes the decision.

LEHRER: Is time on your side or against you? Do you want a vote in September right after the Senate comes back, or would you rather wait till January or February, as has been suggested by the Majority Leader, Senator Byrd?

THURMOND: I'm not too sure which is better -- I haven't gone into that, but I would think there ought to be enough debate at least so that people of the country can learn the issues, can learn just what they are. And I want to say further that not only do they want to turn this canal back...

LEHRER: We're out of time, Senator; I'm sorry. Gentlemen, thank you very much. Good night, Charlayne in New York. Other news permitting, we'll be back for a look at the Alabama judge President Carter has picked to head the FBI. I'm Jim Lehrer. Thank you and good night.

# Task Force on the Panama Canal

Washington, D.C.

Fred Schlafly, Chairman

August 5, 1977

Dear Friend:

President Carter has declared he will give away the Panama Canal before the year is out.

If you agree with Mr. Carter, stop reading my letter right here. But if you feel, as I do, that <u>the surrender of this uniquely American possession would be a tragic and horrible mistake, please read on.</u>

Here is Mr. Carter's incredible plan:

* Sign a treaty with the unelected dictator Torrijos this year.

* Aim an intensive so-called "information" barrage at the American people.

* Give a dramatic "fireside chat" at just the right moment to sway the public into going along with <u>the most monumental give-away in U.S. history.</u>

* Stampede the U.S. Senate into approving the Canal treaty.

I feel strongly, as I feel certain you do, that we cannot and must not allow this surrender to take place.

For the last 2½ years, ACWF's Task Force on the Panama Canal has been exposing the fallacies of such a tragic and unwarranted surrender.

<u>We are now at an absolutely critical point.</u>

Just how determined President Carter is to turn over the Canal can be seen by his reaction to the Panamanian demand that in addition to the Canal, we give them $1 billion now and another $4 billion over the next 20 years!

The President did not dismiss this absurd demand out of hand, as he should have, but stated that what the U.S. needs is a "new Panama Canal" across Panama or Nicaragua -- at an estimated cost of $7 billion.

The President means business. He has assigned his top aide, Hamilton Jordan, to ensure that he gets the two-thirds Senate vote needed to ratify a new treaty.

## Members

(Partial Listing)

Dr. Walter H. Judd

Dr. Lev E. Dobriansky

Dr. Stefan T. Possony

Mr. David Keene

Mr. Lee Edwards

Mr. J.A. Parker

Mr. Paul Bethel

Rev. Raymond de Jaegher

Mr. Ronald F. Docksai

Gen. Daniel Graham
(USA-Ret.)

Mr. Marx Lewis

Dr. Robert Morris

Adm. John S. McCain, Jr.
(USN-Ret.)

Mr. Ron Pearson

Dr. David N. Rowe

Dr. Edward Rozek

A Project of the American Council for World Freedom

-2-

I have been privileged to serve as chairman of ACWF's Task Force on the
Panama Canal. I am proud of the many educational programs and projects we have
sponsored to inform the American people about the Canal.

It has been an honor to cooperate with so many distinguished Americans
like Sen. Strom Thurmond of South Carolina and Rep. Daniel Flood of Pennsylvania
without whose dedicated leadership the Panama Canal might already be in the
hands of the Marxist dictator of Panama, "General" Omar Torrijos.

All the arguments are on our side.

The surrender of our Panama Canal will require the United States to replace
its one-ocean navy with a two-ocean navy. This will cost many billions in taxes
and require five to 10 years in construction time. Does anyone think Congress
should impose this very heavy tax burden on the American people in order to give
a Marxist dictator our great national resource at Panama?

Torrijos had Panama borrow $20 million in January 1972 and $115 million
in October 1973, and the Panamanian government is now insolvent. The money can
be repaid only if the U.S. surrenders its canal and gives dictator Torrijos the
millions he is demanding. Why should negotiator Sol Linowitz, a former director
of the Marine Midland Bank, a large lender to Panama, demand that American tax-
payers repay uncollectable loans to Marine Midland and other banks?

We have taken the facts to the American people. Task Force informational
projects have included:

. The national poll by Opinion Research Corporation of Princeton, N.J.,
back in 1975, revealing that 75% of the American people want the U.S. to retain
control and ownership of the Canal.

. The Inter-American Conference on Freedom and Security, at which Latin
American leaders said emphatically they did not want Panama to control the
Canal -- because of its pro-Castro dictator Torrijos.

. The publication of Isaac Don Levine's widely heralded book, "Hands Off
the Panama Canal," which documents the Soviet connection with Panama and shows
how we can use the Monroe Doctrine to keep control of the Canal.

. The distribution of solid factual documents, ranging from Dr. James P.
Lucier's "Panama Canal: Focus of Power Politics" to the 24-page Congressional
reprint, "Why the U.S. Should Maintain Control of the Panama Canal."

We have continued our informational campaign this year. In April, we com-
missioned Decision Making Information of Santa Ana, Calif., to conduct another
national survey about the Panama Canal.

DMI reported that by a margin of 5 to 1, Americans continue to favor U.S.
control and ownership of the Canal.

We sent the poll results to Members of Congress, the national news media,
veterans, patriotic and fraternal organizations, and other concerned Americans
across the country.

And yet all this is not enough. These next few months are absolutely

-3-

critical, so critical in fact that we have added the word, "EMERGENCY," to our
Task Force name.

We are indeed in an emergency. Despite our work, and that of outstanding
national organizations like the American Legion and the Veterans of Foreign
Wars, we may lose the battle.

The Giveaway Lobby knows that right now a new treaty would not be approved
by the Congress. But they plan to use the next few months to turn public
opinion and Congress around.

Sol Linowitz, a foreign agent for Marxist Chile in 1972 who is now negotiating our new treaty with Panama, has said flatly:

"The grim fact is the American people are not yet ready to support a new treaty. They are grossly uninformed about it."

So Mr. Linowitz and other members of the Giveaway Lobby intend to spend
time, effort and lots of money to "inform" the American people that the time
has come to turn over the Canal to dictator Torrijos.

Which means that you and I must redouble our efforts.

We need your help, your financial help, right now, today.

We will have to spend at least $85,000 between now and October to counter-
act the massive propaganda campaign of the Carter administration with the
truth about the continued U.S. need for the Panama Canal and the indisputable
fact that the American people are overwhelmingly opposed to any giveaway of
the Canal.

If you agree with me that we cannot allow the Panama Canal, on which we
have spent $7 billion of American taxpayers' money, to be given away, here
is what you can do:

1. Write, telegram or telephone your two Senators and your Congressman (202-224-3121), telling them how you feel about the Panama Canal.

Both the Senate and the House must vote on this question because the
Canal is U.S. territory and under our Constitution, the House must approve,
by a simple majority, any transfer of U.S. territory.

2. Send your tax-deductible contribution today to the Emergency Task Force on the Panama Canal.

Most of you, I know, will not be able to give more than $25, $15, or
$10. Send whatever you can -- no contribution is too small.

If you can give more -- $50 or $100 or $1000 -- now is the time to send
it.

I come to you now because I know you are a patriotic American who will
respond in an emergency.

And that, my friend, is what we are confronted with -- a true emergency.

Daniel O. Graham
Lt. General, USA retired

Dear Friend:

I'm very disappointed that you have not responded to Fred Schlafly's appeal for the Emergency Task Force on the Panama Canal.

I was hoping you'd support our Task Force at this critical moment when the future of the Panama Canal is in serious jeopardy.

As the former director of the Defense Intelligence Agency at the Pentagon, I feel strongly that it would be irresponsible for a great power like the United States to turn over to a basically unfriendly and unstable government control of this waterway which is vital to the entire Free World's commerce and security.

It just doesn't make sense. What next? Will we turn over our naval base at Guantanamo to Castro?

Please, won't you reconsider? Help us defeat the Giveaway Lobby and stop the surrender of the Panama Canal. Send whatever you can to the Emergency Task Force on the Panama Canal.

TABLE OF CONTENTS

Volume I

Question

CANAL DEFENSE:

1 Specific United States Rights

2 Vulnerability of Canal to Sabotage

3 Defense of the Canal without Canal Zone

PERMANENT NEUTRALITY:

4 Neutrality Regime

5 Defense Rights after 1999

6 Need for United States-Panama Agreement on
Measures taken

7 Defense of Canal Against Panama

8 Possibility of GOP inviting USSR or Cuba to
Run Canal

9 Possibility of Inequitable Rules after 1999

10 Priority Transit of United States Vessels

11 Effect of Neutrality Protocol

12 Protocol as Endorsement of United States Action

TERRITORY AND PROPERTY:

13 Treatment under Treaty

14 Value of United States Assets in Canal Zone

15 Compensation to United States for these Assets

IMPLEMENTING LEGISLATION

16 Implementing Legislation for Property Transfer

17 Role of Congress

18 Content of Implementing Legislation

19 When will Implementing Legislation be Submitted?

20 What appropriations will be in Implementing
Legislation

21 Implementing New United States-Panama Relationship

22 Legislation Needed to Establish the Commission

23 Appointment of Officers and Directors

ECONOMIC PACKAGE FOR PANAMA:

24 Payments to Panama

25 Need for Appropriations

TABLE OF CONTENTS (CONT)

ECONOMIC PACKAGE FOR PANAMA: (CONT)

<table><tr><td>26</td><td>Financing Payments from Canal Revenues</td></tr><tr><td>27</td><td>Toll Increases and Traffic Levels</td></tr><tr><td>28</td><td>Impact of North Slope Oil on Canal Revenues</td></tr><tr><td>29</td><td>Other Economic Benefits</td></tr><tr><td>30</td><td>Relationship of Treaty to Other Benefits</td></tr><tr><td>31</td><td>Why not Included in Treaty</td></tr><tr><td>32</td><td>Total United States Aid to Panama 1946-1976</td></tr></table>

OPERATION OF CANAL UNDER NEW TREATY:

33 United States Control after 1990

EMPLOYEES:

<table><tr><td>34</td><td>Displaced Employees</td></tr><tr><td>35</td><td>United States Citizens Subject to Panamanian Law</td></tr></table>

MISCELLANEOUS:

<table><tr><td>36</td><td>Environmental Considerations</td></tr><tr><td>37</td><td>Expansion of the Canal</td></tr><tr><td>38</td><td>Torrijos Government</td></tr><tr><td>39</td><td>Human Rights</td></tr><tr><td>40</td><td>Differences between new Neutrality Regime and Present Regime</td></tr><tr><td>41</td><td>Other Agreements Affected by Treaties</td></tr></table>

<table><tr><td>42</td><td>Intelligence Activities</td></tr><tr><td>43</td><td>Reaction of Hemispheric and leading Maritime Nations</td></tr></table>

# TABLE OF CONTENTS

## Volume 2

### Implementing Legislation

44. Appropriations

45. Property Transfer

46. Procedures for Setting Tolls

### Economic Package

47. Total cost of Payments to Panama

### National Guard

48. National Guard Participation in GOP

49. National Guard Role in Canal Defense

50. Cuban Military Assistance

51. National Guard Purchase of Armored Vehicles

### Human Rights

52. Human Rights and Canal Treaties

53. U.S. Policy on Human Rights

54. U.S. Pressure to Improve Human Rights Situation

55. Whereabouts of the 1976 Exiles

56. Statements by Panamanian Exiles

### Government of Panama

57. Treaties and U.S. Approval of GOP

58. Drummond Case

59. Communist Influence in Panama

60. Soviet Role in Panama

61. Panama-Libya Relations

62. Stability of Torrijos Government

63. Panama Press

64. Panamanian Legislative Process

65. National Legislative Council

### Panamanian Economy

66. Effect of Treaty on Torrijos Government

67. Panamanian Economic Situation

68. Treaty and Panamanian Economic Problems

69. USG Loans to Panama

70. Nationalization of U.S. Investments.

TABLE OF CONTENTS

Volume 3

A. Economic Aspects of Treaty

88. '$.30 per ton

89. Why Indexation

90. How will Indexation be applied

91. Wholesale Price Index Adjustment

92. Second $10 million

93. Canal Operating Costs

94. Canal Company Borrowing Authority

95. Federal Financing Bank Funding

96. Are Payments Economic Assistance

97. Military Base Payments Elsewhere

98. User Consent

99. Compensating Payments to Users

100. Strength of Market

101. Value of Property Turned Over

102. Appropriation Required

B. Panamanian Economy and Debt

103. Will it be Strong Enough for Canal Operations

104. FMS Debts

105. Repayment of Obligations

106. Bail-out for U.S. Banks

107. Debt to Panama Canal Company

C. Legal Aspects of Treaty

108. Expeditious Passage

109. Understandings or Reservations

110. Nationalization by Panama

111. Neutrality Relationship with UN Charter

112. Neutrality Relationship with Hay-Pauncefote Treaty

D. Sea-level Canal

113. Treaty Article

114. Canal Outside Panama

E. Miscellaneous

115. Payment to Private Landowners

116. Moises Torrijos' Involvement in Drugs

117. Will 20% Reduction Affect Operation

118. Canal Importance to US Maritime Interests

119. US Businesses in Canal Zone

120. Availability of Documentation

TABLE OF CONTENTS

Volume 4

A. NEUTRALITY TREATY

121. Escobar Statements: "Intervention",
Priority Transit

122. Escobar Statements: Closure due to
Unprofitability

123. War Powers Act

124. Use of Non-Panamanian Troops to Maintain
Neutrality

125. Transit by Ships or Cargos of Potential
Adversaries

B. PAYMENT FOR PUBLIC SERVICES

126. Specifics of Agreement

127. How Much Saved

128. Cost to Panama

129. Net Financial Gain to Panama

130. Payment During Transition Period

C. OTHER ECONOMIC MATTERS

131. Current Projections of Canal Revenues

132. Why Canal Paid No Interest to Treasury
Before 1951

133. Replacement Cost of Canal Zone Installations

134. Status of $15-Million Housing Investment
Guarantee Now Under AID Consideration

135. How Much of Canal Cost Recovered by
U.S. Treasury

D. SEA LEVEL CANAL

136. Escobar Statements: U.S. Option To Build

E. ENVIRONMENTAL ASPECTS

137. State Department Action on Environmental
Affects

138. Environmental Considerations in Negotiations

139. Assessment of Impacts on Panama

140. Environmental Impacts of New Treaty

F. MISCELLANEOUS

141. Areas where U.S. has Land Use Rights

142. Do the Treaties Represent a U.S. Retreat?

1

Q: What specifically are the defense rights the United States will have under the Panama Canal Treaty?

A: Under the Panama Canal Treaty, which will last until the year 2000, both the United States and Panama "commit themselves to protect and defend the Panama Canal."

The Panama Canal Treaty specifies that: "Each Party shall act, in accordance with its constitutional processes, to meet the danger resulting from an armed attack or other actions which threaten the security of the Panama Canal or of ships transiting it." Moreover, the Panama Canal Treaty provides that, for "the duration of this Treaty, the United States of America shall have the primary responsibility to protect and defend the Canal" and that Panama will participate increasingly in Canal defense. The Treaty thus provides a basis for defense of the Canal by the two countries acting in cooperation with each other, while establishing a United States right to act unilaterally if necessary to carry out our primary responsibility for defense. Base rights and the legal status of defense personnel in Panama are also provided for under a Status of Forces Agreement similar to those we have with our other allies throughout the world. Although we have made a commitment to endeavor, to the extent possible, not to increase the number of United States troops in Panama above existing

levels in normal times, there is no limit on our ability
to deploy such additional forces as we might consider nec-
essary in the event of an emergency or threat to the Canal.
Even after the year 2000, the United States will remain in
a position under the Permanent Treaty of Neutrality to assure
the maintenance of the permanent neutrality of the Canal.

NOTE: See also question 5 for discussion of Canal
defense in the post 1999 period.

9/20/77

Q: Much has been made of the risk of sabotage or other violent action against the Canal if we maintain the present treaty. But the Canal will be just as vulnerable under the new treaty. Is there really any reason to believe that the potential danger will be less?

A: The physical vulnerability of the Canal will be the same after the treaty. But the political and psychological climate which determines the likelihood of violence should be much improved if a new treaty goes into effect. This is because the new treaty gives Panama a role and a substantial economic and political stake in efficient canal operation. It eliminates the aspects of the United States presence in Panama which have provided the basis for popular discontent in the past.

9/20/77

Q: How will we be able to operate and defend the Canal when we lose control over the Canal Zone?

A: While the Canal Zone as such will cease to exist at the Treaty's start, the United States will continue to have access to and the rights to use all land and water areas and installations necessary for the operation, maintenance and defense of the Canal during the Treaty period. We will also have all other rights necessary to carry out the activities required for the operation, maintenance and defense of the Canal. The principal difference between the existing situation and that which will obtain under the new treaty is that our rights will be defined functionally rather than geographically. In other words, under the 1903 Treaty, the United States has all rights it would possess if it were sovereign within the Canal Zone, and exercises certain of those rights in order to operate and defend the Canal. Under the new treaty, the United States will have the rights necessary to operate and defend the Canal, but will not be responsible for overall governmental administration of a piece of territory. Thus, while U.S. rights will be more specifically or precisely defined under the new Treaty, they are no less valid or enforceable than the rights we possess today -- rights established by treaty.

9/20/77

GUARANTEED ACCESS (NEUTRALITY)

Q: How do we know that we will be able to use the Canal after the Panamanians take control at the expiration of the new treaty?

A: Panama and the United States will maintain a regime providing for the permanent neutrality of the Canal including non-discriminatory access and tolls for merchant and naval vessels of all nations. Panama's economic and security interests in keeping the Canal open to vessels of all nations are at least as strong as our own. Since the Canal was constructed, Panama has consistently taken the position that it should always be open to ships of all nations because, in their view, to refuse access to a particular nation would risk retaliation that could adversely affect Panama. Moreover, the Neutrality Treaty specifically provides that United States and Panamanian warships will be entitled to expeditious passage of the Canal at all times. Our freedom of action to maintain the Canal's neutrality is not limited by the Treaty. As General Torrijos said in his signing statement:

> "...we are agreeing to a treaty of neutrality which places us under the protective umbrella of the Pentagon. This Pact could, if not administered judiciously by future generations, become an instrument of permanent intervention."

9/20/77

Q: It is clear that the United States and Panama "shall maintain" the Canal's permanent neutrality. But does the Neutrality Treaty actually give the United States the right to defend the Canal after 1999?

A: Yes. By the Treaty's terms, the United States commits itself to ensuring - to maintaining - that the Canal "both in time of peace and in time of war... shall remain secure and open to peaceful transit by the vessels of all nations..." That is a commitment which might require protecting and defending the Canal. Nothing in the treaties limits United States freedom of action to take the measures which we consider necessary to maintain the Canal's neutrality. As General Torrijos said in his signing statement, the treaty of neutrality places Panama "under the protective umbrella of the Pentagon." Thus, it is quite clear that both sides interpret the Treaty as providing a basis for United States defense of the Canal even beyond the year 2000.

9/20/77

Q: [ONLY IF ASKED]

The Neutrality Treaty provides that the United States and Panama "agree to maintain" the regime of neutrality established in the Treaty. Does that mean that they both must agree on the specific measures to be taken to maintain the Canal's neutrality?

A: The Treaty provides that the United States and Panama "agree to maintain" the Canal's neutrality. This general formulation naturally permits the parties to agree on specific measures to maintain the Canal's neutrality. But it equally permits either Party to decide upon and to take the steps it decides are necessary to defend and protect the Canal in order to maintain the Canal's neutrality. The Treaty does not provide that Panama and the United States "jointly agree to maintain" the Canal's neutrality. Where the Treaties contemplate joint action by Panama and the United States, they so specify - and they do not here.

9/20/77

Q: What if the threat to or attack upon the Canal's neutrality comes from within Panama? Can the United States defend the Canal against Panama?

A: The United States anticipates no need to defend the Canal against Panama or elements within Panama. Panama has the paramount interest in keeping the Canal open to world shipping, and we have every confidence in Panama's commitments to the maintenance of the Canal's neutrality: But in the most unlikely event that Panama were to be unable or unwilling to uphold its commitment to maintain the Canal's neutrality, the right of the United States to maintain the Canal's neutrality would remain. The United States would be entitled to act accordingly.

9/20/77

8

Q: What if a Panamanian Government which comes to power wishes to invite Cuba or the USSR to send advisers to operate the Canal or to establish military bases in Panama?

A: Under the Panama Canal Treaty, the United States, until the year 2000, will operate the Canal and it is the only foreign power entitled to maintain military bases in Panama. After the termination of the Panama Canal Treaty, the Neutrality Treaty provides that only the Republic of Panama shall operate the Canal or maintain military forces, defense sites and military installations within its national territory.

9/20/77

Q: What if, after 1999, the rules and regulations governing conditions of transit through the Canal, or tolls, are not in fact "just, equitable and reasonable," as the Neutrality Treaty provides they shall be? What can the United States do about it?

A: The Neutrality Treaty specifies that the rules and regulations that may be applied are "limited to those necessary for safe navigation and efficient, sanitary operation of the Canal." These rules and regulations are a key part of the regime of neutrality in which the United States has a continuing interest under the Treaty.

Therefore, we would take whatever action we consider to be appropriate if just, equitable and reasonable tolls and conditions of transit should not be maintained.

Q: What action might that include?

A: I would prefer not to get into a discussion of hypothetical cases. I wish to emphasize, however, that the treaty would not limit our options.

9/20/77

Q: Does the Neutrality Treaty grant to the United States priority, of a perpetual character, for the transit of the Canal by United States war vessels and auxiliary vessels?

A: The Neutrality Treaty provides that United States war vessels and auxiliaries "will be entitled to transit the Canal expeditiously," a right accorded also to Panama but to no other State, in recognition of the importance of multiple contributions of Panama and the United States to the Canal. This means that United States naval vessels will always be entitled to transit the Canal without delay.

9/20/77

11

Q: What will be the effect of the Protocol to the Neutrality Treaty?

A: Any State that accedes to the Protocol acknowledges the regime of permanent neutrality for the Canal established by the Neutrality Treaty and associates itself with the objectives of that regime. Such States recognize that the maintenance of the neutrality of the Canal is important to the peace and security of the Western Hemisphere and to the interests of world commerce; that the regime of neutrality which the United States and Panama have agreed to maintain will ensure permanent access to the Canal by vessels of all nations on the basis of entire equality; and that that regime shall constitute the best protection for the Canal and shall ensure the absence of any hostile act against it. Such States agree to observe and respect the Canal's regime of neutrality in time of war as in time of peace and to ensure that vessels of their registry observe the applicable rules.

9/20/77

Q: [ONLY IF ASKED]

By acceding to the Protocol, does a State endorse the
right of the United States to maintain the neutrality
of the Panama Canal by whatever measures the United
States deems necessary?

A: By acceding to the Protocol, a State acknowledges and agrees to respect the regime of permanent neutrality of the Canal established in the Neutrality Treaty. Acceding States thus have an interest in the neutrality of the Canal. But the Protocol does not address the question of how the U.S. and Panama will maintain the neutrality of the Canal.

9/20/77

13

Q. How does the Treaty deal with U.S. territory and property in the Canal Zone?

A. Territory

The 1903 Convention did not cede the Canal Zone to the United States. Rather, it granted the U.S. "the use, occupation and control" of the Canal Zone and the right to take any actions it could take if it were the sovereign in that area. Our use of the Canal Zone, including an exercise of jurisdiction there, is based on those treaty rights. The new Canal Treaty terminates the 1903 Convention and provides a new grant of rights to operate and defend the Canal, including the rights to use specified land and water areas and installations which are necessary for those purposes. Our rights to use these lands, waters and installations will terminate at the end of the century when Panama assumes full responsibility for the operation of the Canal.

Property

In our view, the United States has title to certain real property in the Canal Zone; while other real property in the Zone has remained public lands of Panama which we have had the right to use under the 1903 Treaty.* On the other hand, Panama has long disputed that we have title to any of the land in the Zone.

15

Q: What compensation will the United States receive for these assets?

A: The treaty does not provide for monetary compensation to the United States for the transfer of these assets. The United States has never operated the canal for monetary gain. Our objective has been to assure the continued efficient operation and maintenance of the canal.

We will continue to benefit from our investment even after Panama assumes operation of the canal. The improved prospects for stability under the new treaties will also make our investment more secure.

September 24, 1977

16

Q. Will legislation be required to implement the treaty provisions transferring U.S. interests in the Canal Zone to Panama? Doesn't Article IV of the Constitution give the Congress exclusive responsibility for the disposition of U.S. territories and property?

A. As you know, we have had extensive discussions with various Congressional committees on this Constitutional question. Our position consistently has been that a treaty written to be self-executing can transfer property of the United States under domestic law without implementing legislation.

Under domestic law, Article IV of the Constitution provides that the Congress shall have power to dispose of property belonging to the U.S., but it does not provide that that power is exclusive of the treaty power. It is well established that treaties may be concluded on any subjects appropriate for international negotiation, and that the treaty power extends to all areas within the legislative authority of Congress that are not expressly reserved by the Constitution to the exclusive jurisdiction of Congress. The drafting history of the Constitution makes it plain that the framers understood that U.S. territory and property could be disposed of by treaty, and the Attorney General of the U.S. has provided a formal opinion confirming this conclusion.

The property transfer provisions of this Treaty have been written to be self-executing. Thus, when this Treaty is ratified by the President upon the advice and consent of the Senate, its provision concerning the transfer of U.S. property interests in the Canal Zone will become the supreme law of the land, in accordance with Article VI of the Constitution.

9/20/77

17

Q: Shouldn't the Congress have a role in implementing the Panama Canal treaty? Even if not constitutionally required, shouldn't the House have a voice concerning the disposition of U. S. property in the Canal Zone as it has in the past?

A: We are satisfied that the established constitutional process for treaty ratification, which requires the advice and consent of two-thirds of the Senate, will insure full consideration of the views of the American people and of their elected representatives on this particular question. The Congress, however, will have a major role in the establishment of the new U. S. relationship with Panama.

For example, legislation will be required to implement a number of provisions of the new treaty and Congress will have continuing legislative responsibility with respect to U. S. rights and responsibilities under the new treaty. In particular, Congress will be called upon to enact legislation establishing the Panama Canal Commission which is to replace the Canal Zone Government and Panama Company, and it will have continuing authority over such matters as tolls policy, employee benefits and relations, and the financial aspects of canal management.

9/22/77

18

Q: What will be included in the implementing legislation?

A: There are several major areas in which legislation will be required for the implementation of the treaty and the related agreements. These areas are:

1. Organization and activities of the new Panama Canal Commission, including the regime for the tolls and payment of the stipulated sums to the Republic of Panama.

2. Provisions relating to employment practices of the new Commission, as well as special provisions for current employees as provided in Article X (10) of the treaty.

3. Adjustment of the jurisdiction of U.S. courts and law enforcement authorities following the entry into force of the Panama Canal treaty.

4. Provisions relating to the diplomatic aspects of the treaty. (See question 21)

9/20/77

Q: When will the implementing legislation be submitted to Congress?

A: We are now in the process of preparing implementing legislation and expect to have it completed within the next several weeks.

Q: When would the legislation need to be enacted? Would ratification be delayed until its enactment?

A: We would need prompt Congressional consideration of the implementing legislation. Congressional action would become particularly urgent when and if the Senate gives its advice and consent. Enactment would be desirable well before the treaty enters into force. The treaty would take effect six months after the exchange of the instruments of ratification.

9/22/77

Q: What appropriations or other financial support would be authorized in the implementing legislation?

A: We would hope that Congress would establish the new Panama Canal Commission as a self-sustaining entity, and that accordingly no appropriations would be required for the canal's operation, including payments to Panama under the treaty.

However, we believe the new Commission should, as a matter of prudent management have the contingent authorities similar to those of the present Canal Company to borrow from the Treasury or seek authorization for appropriations to cover any operating deficit.

September 24, 1977

Q: What kind of provisions would be needed to implement the new relationship with Panama and the diplomatic aspects of the treaty?

A: As contemplated in this early working stage, these would include provisions for according diplomatic privileges and immunities under Article VIII of the treaty, the appointment of persons to the diplomatic consultative and coordinating committees under the treaty, and similar matters.

9/20/77