Isthmian canal policy questions;

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Title:
Isthmian canal policy questions; Canal Zone--Panama Canal sovereignty; Panama Canal modernization, new canal
Series Title:
89th Congress, 2d sess., House. Document no. 474
Physical Description:
v, 523, xiv pages : illustrations, maps ; 24 cm.
Language:
English
Creator:
Flood, Daniel J
Publisher:
U.S. Govt. Print. Off.
Place of Publication:
Washington
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Subjects / Keywords:
Panama Canal (Panama)   ( lcsh )
Panama -- Panama Canal   ( fast )
Genre:
non-fiction   ( marcgt )

Notes

Statement of Responsibility:
Selected addresses, by Daniel J. Flood of Pennsylvania.

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
oclc - 00732709
ocm00732709
Classification:
lcc - HE537.65 1966 .F56
ddc - 386/.444
System ID:
AA00025649:00001

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UNIVERSITY OF FLORIDA L I B R A R I E S











89th Congress, 2d Session House Document No. 474







ISTHMIAN CANAL POLICY QUESTIONS


CANAL ZONE-PANAMA CANAL SOVEREIGNTY
PANAMA CANAL MODERNIZATION NEW CANAL




SELECTED ADDRESSES

BY

REPRESENTATIVE DANIEL J. FLOOD OF PENNSYLVANIA










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U.S. GOVERNMENT PRINTING OFFICE
67-943 WASHINGTON 1966





H. Con. Res. 925 Passed August 18, 1966






EIGHTY-NINTH CONGRESS OF THE UNITED STATES OF AMERICA


AT THE SECOND SESSION


Begun and held at the City of Washington on Monday, the tenth day
of January, one thousand nine hundred and sixty-six






Concurrent Resolution
Resolved by the House of Representatives (the Senate concur'ring),
That the document entitled "Isthmian Canal Policy Questions, Canal Zone-Panama Canal Sovereignty, Panama Canal Modernization New Canal", a compilation of addresses and remarks by Congressman Daniel J. Flood, be printed as a House document, and that an additional ten thousand five hundred copi es be printed of which seven thousand five hundred copies shall be for the use of the House of Representatives and two thousand five hundred copies shall be for the~ use of the Senate.
Attest:
RALPHa R. RoBERTs,
Clerk of th-e Homse of Rep resent atives.
Attest:
ExmRn T. Fii~ziER,
iSecretary of the Senate.
(nI)












FOREWORD


By HON. JOHN~ H. DENT, REPRESENTATivE FROML PENNSYLVANIA
Since World War 11 the history of the Panama Canal has been marked by a succession of crises as to the best means for providing increased transit facilities. The principal proposals for supplying such capacity are(a) Modernization of the existing Panama Canal by increasigits capacity and operational efficiency through h the major
modification of the 1939 third locks project (53 Strat. 1409) to provide a summit-level terminal lake anchorage in the Pacific end
of the canal to correspond with that in the Atlantic end; or
(b) Construction of a new canal near the present site in the
Canal Zone of sea level (tidal lock) design; or
(.c) Construction of a new canal at Nicaraguma or elsewhere.
Consideration of these and other vital questions of the greatest importance has been gravely complicated, as a result of noisy agitations and demands by Panamanian radicals as regards our authority over the Canal Zone and by a series of surrenders to Panama by the United States of important rights, power, and authority. These concessions include those provided by the 1955 treaty and subsequent executive actions, with some of the latter in direct conflict with the formally expressed intent of the Congress.
Understanding the nature of the Panama Canal problem in its broadest aspects, Representative Daniel J. Flood, of Pennsylvania, after thorough study of the subject, undertook in a series of illumin ating addresses and statements to the House of Representatives, to clarify the principal issues and to aid in the development of wise and just Isthinian Canal policies by our Government. His addresses, which are extensively documented and based upon years of observation as well as study, are, indeed, unsurpassed in our national history in expository content and value and have attracted the widest attention among thoughtful students of interoceanic canal problems.
Because of the crucial importance of making the information develojped in these addresses available, in convenient form, to the legislative and executive branches of our Government and the country at large, the more important ones are included in this document.
A comprehensive bibliography on interoceanic canal history and problems was included in an address to the House on September 2, 1964, by Representative Clark W. Thompson, of Texas, under the title of "Isthmiian Canal Policy of the United States-Documentation, 19 55-64," which, together with the addresses of Representative Flood previously mentioned, furnishes an exhaustive compilation of resource material on the subject.


















Digitized by the Internet Archive
in 2013












http://archive.org/details/isthmolOOu nit














CONTENTS


March 26, 1958: Panama Canal Zone: Constitutional Domain of the Page
United States --------------------------------------------------- 1
June 9, 1958: Panama Canal-Latest Developnien ----------------------- 22
July 23, 1958: Panama Canal: Object of Irresponsible Political Extortion- 51 February 25, 1959: Isthmian Canal Policies-A Challenge to the Con'-ress- 73 June 23, 1959: Panama Canal Zone Sovereignty ----------------------- 127
April 19, 1960: Panama Canal: Key Target of Fourth Front ------------ 135
April 12, 1962: Monroe Doctrine or Khrushchev Doctrine? -------------- 150
June 7, 1962: Isthmian Canal Policy-An Evaluation ------------------ 177
June 13, 1962: President Taft: Statement on Canal Zone Soverei- i-11 y arid Jurisdiction ----------------------------------------------------- 193
February 18, 1963: Panama Canal Procrastination Perilous ------------- 195
April 9, 1963: Congress Must Save the Panama Canal ------------------ 201
May 8, 1963: Panama Canal Questions: Immediate Action Required- - - 229 June 27, 1963: Crisis in Canal Zone: Panamanian "Ultimatum ----------- 242
September 26, 1963: Continued Liquidation of Panama Canal: Congress
Must Act ------------------------------------------------------- 269
October 22, 1963: Canal Zone Crisis: Plan for Action ------------------- 283
November 13, 1963: Canal Zone Crisis: Plan for Action-Supplementary- 290 December 10, 1963: Panama Canal Picture: The Real "Ugly Americans"
and Their Journalistic Boomerang --------------------------------- 298
February 7, 1964- Panama Canal-Employment of Aliens for Canal Zone
Police Tantamount to Treason ------------------------------------ 303
March 9, 1964: Panama Canal: Focus of Power Politics ---------------- 305
March 11, 1964: Panama Canal: Formula for Future Canal Policy ------- 345 April 7, 1964: Panama Canal Zone: Most Costly U.S. Territorial Possession ------------------------------------------------------------ 361
April 14, 1964: Panama Canal Crisis: Irresponsible Journalism ---------- 363 April 20, 1964: Panama Canal Zone: Highway Control Essential for
Protection ------------------------------------------------------ 370
May 5, 1964: Under Two Flags: Blunders, Confusion, and Chaos at
Panama -------------------------------------------------------- 376
May 21, 1964: Panama Canal and the Milton Eisenhower Paper- - - - 399 June 17, 1964: Canal Zone Police: Red Infiltration, Sabotage, and Terror- 409 August 12,1964: Caribbean Crisis: Continuing Storm Signs Demand Action
Against Further Perils ------------------------------------------- 415
April 1, 1965: Interoceanic Canal Problem: Inquiry or Cover Up? ------- 428 July 29,1965: Interoceanic Canal Problem: Inquiry or Cover Up?-Sequel-- 453 September 7, 1966- Panama Canal Problems: American Legion Adopts
Notable Resolution ---------------------------------------------- 517
September 29, 1966: Panama Canal: U.S. Sovereignty or Communist
Control? ------------------------------------------------------- 519
V














[From the Congressional Record, 85th Cong., 24 sess., Mar. 26, 1958]
PANAMA CANAL ZONE: CONSTITUTIONAL DOMAIN OF THE UNITED STATES
Mr. FLOOD. Mr. Speaker, for a number of years I have been privileged to serve on the Committee on Appropriations with assignments to subcommittees for the Department of Defense, the Department of Commerce, and related agencies. The last includes the Panama Canal Company and the Canal Zone Governm ent.
Thus, in the course of my duties, our subcommittee has encountered various problems relating to the Panama Canal and interoceanic canals generally, both in Washington and during visitations on the isthmus and in other areas of the world. To this study I have devoted much time and effort, and have made a number of statements to the House as well as to its legislative and appropriation committees ex- lf
pressing some very definite views on sgnificant phases of the Panama )
Canal question.
Since my first association with this subject, I have noted that ever present in the Isthmnian setup are the relations between the United States and the Republic of Panama. Though these in the main have been satisfactory, I have also observed that special situations affecti c the welfare of the Panama Canal enterprise periodically arise and that, accordingly, they require repeated clarification..
A recent incident in Panama, because of its grave implications, emphasizes that the Congress and the Nation should be informed further with respect to current hazards for this vital outpost of the United U
States.
What I say here today, I wish to assure our friends in Panama and in all Latin Amnerica, will be spoken with the utmost sincerity, good will, and affectionate esteem. I certainly would not advocate any policy except one of the fullest measure of justice and generosity for Panama;- and I feel that not only have we been just in our Panamanian relationsbut as hereafter shown, most generous, indeed.
However, I do believe that the time has come when extreme and radical demands for the surrender by the United States of all its power and jurisdiction in and about the Panama Canal require a frank expression of views by those in authority in the United States. To this end I venture now to address myself and request that there be no interruptions or questions propounded until I conclude.

CRISES AT SUEZ INTERACT AT rANAMA
Mr. Speaker,. the American isthmus is the crossroads of the Americas, and as such has -long been a topic, for extended debate in the Congress. The statesmen who preceded us here and who early in this century evolved the foundations of our interoceanic canal policies,
1






2 ISTHMA- CA POLICYQUSIN

have long sincepasdfoteScn.Nvrhlste etmnu ments of their endeavors in the form of the compiee aa _Pnm and the treaties under which it was montructed andhabenssqtenly maintained and oeae tl eanwt h xeto
tha crtin f hetreaty provisions have be geeosylieazd The Panama Canal is not the oniygetitrcancwtra. h long recognized the smahtcrlainhpbtenteetomgt interocean links and their mutual variances and inSlec-a.itr





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ISTHMIIAN CANAL POLICY QUESTIONS 3

"hue and cry" for the abrogation of U.S. ownership and control of the Panama Canal. The oniy questions were when and in what form would it next arise.
PROPAGANDA IN PANAMA REVIVED
Tn a historical sense it did not take long. On December 16, 19,57, before the Second Congress of Students in the City of Panama, Republic of Panama, Dr. Ernesto Castillero, Vice Minister of Foreign Relations of the Republic of Panama, in the principal address on that occasion, 'and in line with Communist declarations and policy, attacked the juridical basis of the U.S. sovereign control over the Canal Zone and its ownership of the Panama Canal. This he did in spite of the negotiation of the Eisenhower- Remon Treaty of 1955 now being implemented.
Featured by gross distortions and omissions, as well as nonfactual statements, the principal features of his address merit listing with brief comment. These are:
First. Assertion that Panama is the "titular sovereign" of thelo Canal Zone just as Egypt is over the Suez Canal-a gross misstate- 1
ment of the f acts. f
Second. Claim that under the 1936 treaty both countries have a "joint and vital interest" in the conduct of the enterprise-a statement erroneously implying joint sovereignty.
Third. Statement thiat the doctrine of the Suez Canal has analogies applicable at Panama and that this allegation has "impressed strongly world opinion because of the clear warning it involves"-an implied threat against the United States.
Fourth. Declaration that Panama is not receiving the benefits to '
which, as a partner with the United States in the canal enterprise, it is entitled-a non factual statement as Panama, under the treaties, is not a partner but a beneficiary.
Fifth. Assertion that, without going into "legalistic discussions or interpretations of previous treaties," Panama should receive half the gross income of the canal enterprise-a wholly absurd and unjustifiable claim that ignores realities. 4
Promptly accepted by the university student congress and backed by Aquilino Boyd, Panama's Minister of Foreign Relations, Dr. Castillero's proposals formed the basis of a, resolution by that body and were 1 published in the press of the world.
Creating a new wave of propaganda, immediately seized on, reiterated, and augmented by Communist agencies everywhere, this campaign is directed toward the total liquidation of United States sovereignty and control of the Panama Canal.
Tn this special connection, it is well to note that the proverbial practice of Communist forces is to spearhead subversion in the free world by means of student bodies. As evidence of such procedures,~ I have in my possession a picture taken on January 28, 1958, at the LUniversity of Panama. Mounted in large letters above the name sign of that institution, which is visited by thousands of tourists en route to various parts of the world, is the inscription, "el canal es nuestro"-the canal 118 ours.






4 I$TE.MIAN CANAL POLICY QUESTIONS

Do not these extrem~ists and radicals in Panama realize that tehg economic standards they now enjoy are prim.larily due to thecalan the beneficent policy of the United States toward Panama?Dote wish to kill the goose that lays the golden egg? Are theytrigo cause selection of a site outside Panama for a new canal 'totaecr of ever-growing trans-Isthmian shipping? Do they wish to destroy the best interests of their own countryV
These and other searching questions that could be preetedsugt that these elements should engage in extensive self -examination bfr embarking on their present hazardous course. It is indeed surpriig M\r. Speaker, that such troublemakers did not wait until the Unite States had expended vast sums on modernization of the existingcal and then agitate for taking over a far more valuable project.

ISTHMIAN AGITATIONS WIN WIDE PRESS COVERAGE
In order that accounts of these latest outcrys and demad l Panama may be readily available to the Congress, our peopean others concerned, I include to be inserted at the end of my remrs and commend for careful examination, a selection of clippings fo United States, and Latin-American newspapers.
ISTHEMIAN HISTORY WELL DOCUMXENTEJ)
What is the significance of this incident of December last when hg government officials of the Republic of Panama undertook toledi a movement designed to upset te juridical basis for the PanamaCaa enterprise and the equitable relations between the two counties well as to ignore and disregard recent treaty provisions? To aser these questions adequatey it is essential to know the diplomatic itr of the Republic of Panama as well as that of the Panama Canalth construction of which was under taken by the United States a mandate of civilization.
These subjects, as shown by an excellent documentation on the Itmian Canal policy of the United States, prepared by th e entea from Texas, Representative Clark WV. Thompson, and pu the Congressional Record of March 23, 1955, have been recorded in authoritative writig and addresses listed therein. These and many other statements pulshed in later issues of the Record are comended for peuaespecially by those concerned with the diplomatic features of the canal subject.
The situation at Panama has now become acute, and demads our prompt attention. In the light of asce rtainlable facts the stateet by these radical elements indeed constitute pure jingoism and impossible demands. Their rantings do a great disservice both to Panm and the United States and must be met forthrightly before theprsn crisis worsens.

PANAMfA CANAL-RESULT OF LONG-RANGE POLICY OF THE UN1ITED STATES
Because of the importance of the juridical base for the Panama Canal enterprise, in grasping the essentials of the current situation, I shall emphasize again what I said to, the House on May 29, 1957.





ISTIDLAN CANAL POLICY QUESTIONS 5

The legal foundation of our interoceanic waterway consists of three key treaties:
First. The Hay-Pauncefote Treaty of 1901 between Great Britain and the United States, which facilitated its construction and adopted the main points in the Convention of Constantinople of 1888 as rules for its operation, regulation, and management.
Second. The Hay-Bunau-Varilla Treaty of November 18, 1903, between the Republic of Panama and the United States. On the part of Panama, this treaty granted to the United States in perpetuity the use, occupation, and control of the Canal Zone for the construction, maintenance, operation, sanitation, and protection of the Panama Canal as if the United States were sovereign of the territory, and most significantly to the entire exclusion of the exercise by the Republic of Panama, of any such sovereign rights. power, or authority. On the part of the United States, the main point was that it guaranteed the independence of the Republic of Panama, which had just seceded from Colombia and whose existence as a separate nation, as will be disclussed later, absolutely depended on the United States recognition and success of the canal enterprise.
Third. The Thomson-Urrutia Treaty of April 6, 1914, proclaimed March 30, 1922, between the United States and the Republic of Colombin, the sovereign of the isthmus prior to the Panama revolution of
_November 3, 1903. That treaty aimed at removal of all the misunderstandings growing out of the political events in Panama in November 1903, restoration of the cordial friendship that had previously existed P
between Colombia and the United States, and definition and regulation of their rights and interests with respect to the Panama Canal.
The negotiation of these treaties, it should be stressed, was not accidental, but the result of long-range interoceanic canal policies of the United States developed over many years. Not only have the requirements of these treaties been carefully followed throughout the history v of the canal enterprise but, in addition, the treaties are now mentioned in Public 1aw 841, 81st Congress, approved September 26. 1950, popiularly known as the Thompson Act. This law specifies that the levy of tolls is subject to their provisions.
4a
COLOMBIA'S INTEREST PROTECTED BY TREATY
Because of the importance of the Thomson-Urrutia Treaty, and the fact that it is not as well understood as it should be, I shall summarize its principal provisions.
In article I, Colombia recognizes the title to the Panama Canal and Panama Railroad as "now vested entirely and absolutely in the United States of America, without any encumbrances or indemnities whatever." Furthermore, this article states that Colombia shall enjoy certain rights with respect to the canal, which include:
First. Transit through the canal of Colombian troops, materials of war, and ships of war, without paying any charges to the United States.
Second. Exemption from any charge or duty on the products of the soil and industry of Colombia passing through the canal, as well as Colombian mails, other than those to which the products and mails of the United States may be subject.






6 ITMNCNLPLC USIN
Third. ExemptioofComba ciizens rsigteCnlZn f rom, every oll, tax, or duty to whc the citizens o h ntdSae are not subjet
Fourth. Use of the Panm alodo n te alodsb
stituted theref or, in eventofitrutoofcnlraicorherns port of troops, materials of wa,produtsanmilof6obapy inig only the same chare anddte sar moe o sc4rnpr for the United States. In edition, ofcraets n mlye of the Colombian Government are~ entitled4t pasgonteriod under the same terms as those of he United Stats Fifth. Transport by the Panama Rail~rodfClmbacape troleum, and sea salt, in event of intoruto fcnltafc reo cha,.rge except actual cost of hadigadtrasotto ooece one-half the charges levied on siiar pout fteUie tts In article II, the United States agee to payColmi h mo $25 million, which was done. 'By article 1111, Colomi reognzdPnm sa needn a
tion with boundaries as derve fro th Cooba awo ue9 185.5, and agreed to conclude with Pnm rayo ec n
friendship to bring aotrglr dpoai eain ewe h
two countries. All thiswa acoplihd oehrwt rayare
ment between the two coutre as to a budry line. While Panama was ntaprytotitrayyeshgvethr grateful moral acquiescnebcueo h urml motn ee
fits she derived thererm
Thus, it is clear tha~t Coloba no~t onlyhasutnilrgtswh resectto the Panam Caal buCloatet neeti h otne
opration of the Panam Ralra, wihi idn nteUie Staes.Thrfrteaadnetothralodwudcsiue a violation of such tray inteirest-a fatta ihrohsbe vr looked or ignored.
PEAK OF UNIE STFATESISHANNFUCE1939
The Hay-Bunau-Varilla Treaty of 1903, coeig h esinb Panama of the Canal Zone to the United States and providnfoth construction of the Panam aawsngtae usatt h
Spooner Act of June 28, 192 ,which authorize acquisitionanpr ~petual control of, the CanlZn ocntuttePnm aa n
its perpetamaneacoeainsaiainanprtcoex elusively by the United States. From the legislative and diplmtchsoyo htea ti bn dantly clear that the purpose of both the Unie ttsadPnm was to establish and mitatinuopeesvrinyoe h aa
Zone by the United Stts o onyto suete ontuto n
p roper operation of the canal inpeetiyawsprvddnth Spoonor Act anid the 1903 treaty, but alo 4n mnark ti elt give absolute gu~arantee that Colmiwodnerbeaetoeset successfully its sovereignty over the Canal Zone, the PanaaCnl the Panjama Railroad, or 4h Rpbic ofPam.Moevraspviously stated, Ooloba by the reat~y polien12,flyrcg nized an cetdtes odtos





ISTHMIAN CANAL POLICY QUESTIONS 7

By such important and significant facts the vast differences between the Suez and Panama Canals are strikingly shown. The fledgling Panama Government of 1903, intensely desi ous of securing both life and freedom, found them in these treaty stipulations. Exc( pt for the cesarean operation known in history as the Panama Rei.-o.lution, out of which the independence of Panama resulted, and provisions, of the. Hay-Bunau-Varilla Treaty, the Republic of Panama could never have survived; in fact, could never have been created. Besides, the United States would never have undertaken construction of the Panama Canal in a region then justly described as "the pesthole of the world" and long characterized as a land of endemic revolution that had repeatedly required the presence of naval vessels to maintain freedom of Isthmian transit.
These points were fully understood at that time by both Panamanian and American leaders. They realized that political stability was imperative for the success of the canal enterprise-its construction, and subsequent maintenance, operation, sanitation, and protection. They also recognized that such stability could be obtained only by vesting completed and exclusive sovereignty in the United States.
TI-te great North American statesman who developed our Isthmian policies included such eminent leaders as President Theodore Roosevelt, John Hay, John Bassett Moore, Adm. John G. Walker, William Howard Taft, and Elihu Root. President Roosevelt always viewed the Panama Canal as the greatest accomplishment of his administration, and comparable in importance to the Louisiana Purchase. In essence, the results of their vision and efforts remained unimpaired until 1939-a period now recognized as the peak of U.S. influence on the Isthmus.
TREATY POWER UNDERMINES U.S. AUTHORITY
With the passing of the years after opening the Panama Canal to traffic on August 15, 1914, increasing demands on the part of the Republic of Panama for revision of major provisions in the treaty structure developed. Not until 1936, however, was the first important step made with the signing of the Hull-Alfaro Treaty, which, because of opposition in the Senate I was not proclaimed until July 27, 1939, just prior to the start of World War II.
The Hull-Alfaro Treaty-unlike the 1903 canal treaty-was negotiated without authorization or direction of the Congress. As understood by realistic observers at the time, it marked a weakening of the dike in the diplomatic setup of the Panama Canal, but witliout impairment of the fundamental principle of U.S. sovereignty over the Canal Zone and the canal.
To better understand its important provisions, it should be noted that in the 1936 treaty Panamanian leaders sought the abrogation of the guarantee provision of the 1903 treaty because they felt that their country's independence was secure following the 1922 treaty between the United States and Colombia by which Colombia had recognized Panama as an independent nation, and believed that the elimination of the guarantee in the 1903 treaty, which they came to regard as Panama's "Platt amendment," would add to their country's prestige.






8 ISTHMIAN CANAL POLICY QUESTIONS
While nowise abridging the sovereign authority of the United Sta;tes over the Canal Zone and canal, the 1936 treaty did surrender important rights and privileges of the United States granted by the 1903 treaty, as for instance, the right of eminent domain for canal purposes within the Republic of Panama, all without any consideration except that of token character. It raised the canal annuity to Panama from $250,000 to $430,000 to compensate for reduction of the value of the gold dollar.
The crippling of the accessory powers of the United States, however,- did not stop here. After prolonged secret negotiations started in 1953, the process was advanced much further in the EisenhowerRemon Treaty proclaimed August 26, 1955, also negotiated without the authorization of the Congress.
This treaty gave away additional and most valuable rights and properties of the United States, also with little more than nominal consideration. It further increased the canal annuity from $430,000 to $11930,000. The costs involved in these benefits to Panama will have to be borne either by transit tolls or taxes paid by American citizens, and may well jeopardize proposals for the amortization of the Panama Canal investment.
Certainly, the 1955 treaty was negotiated following long delibera, tions with the purpose and belief that the provisions would be accepted and relied on by both the United States and Panama for many years to come. Yet, the ink was hardly dry on that document before radical elements in Panama, echoing insistent Communist propaganda, have been, and are making the unrealistic and impossible demands to which I have now called attention.
To illustrate, it is well to note that the demand is being made that the United States pay to Panama one-half the gross revenue derived from the canal enterprise. These revenues during the last fiscal year were $50,774,000, but the net income was only $3,821,456, of which the present annuity to Panama of $1,930,000 is more than half. There is no wonder that the President of Panama promptly characterized this demand as unrealistic.
PANAMA RAILROAD LIQUIDATION NARROWLY AVERTED
Among the most unhappy features of the 1955 Canal Treaty was the surrender to Panama by the United States of valuable Panama Railroad pr perty in the cities of Panama and Colon, including the terminal freight yards and passenger stations worth many millions, but excepting tracks in Colon required by switching for the Cristobal piers. Not only that, the treaty even contemplated abandonment of the railroad itself, whicli had been acquired by the United States pursuant to both law and treaty, with adequate compensation. Moreover, this move was made with complete disregard of the treaty rights of Colombia as to the railroad.
A rised of the situation, congressional leaders intervened. Under the e direction of the distinguished Chairman of the Committee on Merchant Marine and Fisheries, Representative Herbert C. Bonner of North Carolina, pursuant to House Resolution 118, 84th Con Tess, that committee conilucted an independent inquiry into the railroad situation and submitted recommendations reversing those of the supervisory executive agency of the United States, the directorate of





ISTIMIAN CANAL POLICY QUESTIONS 9

the Panama Canal Company. to liquidate the railroad. An account of this inquiry will be found in House Report No. 2974, S4th Congress. The resulting reversal, by the Congress, of the decision of the directorate, and the continuance of the railroad, was fully justified: as has also been the subsequent operation of the railroad.
The wise action of the Congress in these premises, however, was too late to save the tremendously important and valuable terminal facilities of this historic and strategic rail line.
Where does this leave us ? Now, because there is no provision for replacement, we are going to have a transisthmian railroad without its originally designed and adequate terminal stations and yards. Unless Panama sells back these facilities to us-of course., at a tremendous price-new ones may well have to be constructed at our own expense.
Can you imagine, Mr. Speaker, anything more absurd, or more ominous for the future proper conduct of our Isthmian policies? With all the capable men of broad experience in this Nation available, as was well illustrated by the railroad inquiry, why can they not be used in such situations to protect the legitimate interests of the United States and those of Panama and Colombia as well?
To say the least, our Department of State was asleep at the switch.

CANAL ZONE IS CONSTITUTIONAL TERRITORY OF THE UNITED STATES
The main lesson to be derived from the sustained surrenders of our Isthmian rights and prerogatives, all necessary for the proper maintenance, operation, sanitation, and protection of the canal, extends beyond the limits of the Canal Zone and reaches into the very foundation of our constitutional form of Government.
As previously set forth, the acquisition of the Canal Zone and Panama Railroad was accomplished pursuant to the Spooner Act of 1902 and the 1903 Canal Treaty, with adequate compensation accorded. The Panama Canal was constructed and has been subsequently managed pursuant to laws enacted by the Congress. Thus, the full force of our Government system is implied in the evolution of our basic Isthmian Canal policies.
Long recognized by some of our great statesmen as part of the "coast line of the United States," the Panama Canal has deeper significance of far-reaching character.
The Panama Canal Zone, Mr. Speaker, is not an occupied territory, as was once erroneously reported to the United Nations by our Department of State-see Senate hearings on interlocking subversion in Government departments, part 19, March 25, 1954, page 1364. Instead, it is a portion of the constitutionally acquired territory of the United States.
Of course, if for any reason the United States should wholly abandon the canal enterprise, it would not likely wish to retain any interest or sovereignty over the Canal Zone. In such case., Panama could doubtless repossess the zone area without objection. Hence, from a practical, realistic standpoint, what purpose can these continued demands for recognition of Panama's "titular sovereignty" serve except that of creating unjustifiable friction between the United States and Panama?





10ISHINCNLPLCQUSIN
Unfortunately, the surrenders culmiinatin~g in h ray ragmn still being implemeted--thiough they hae ntaroae o utrce from our rights of soveregty-have vioae h la netoso the Congress and rpeetatra oorntoa oe.Cr
tainly, the time has come when every Memb1er fteCng~ssol realize what has happened: Tat, in largemaue w aegvnaa our bargainin g power ini dealing withteRpalco aaai
regard to one of our most vitalnaialpseio. As has been clearly shown by numerous pressadidvda eot from the isthmnus, the instant situation is acute.Itprereslio will require statesmanship of the highest ore ontepr fbt the United States and Panama. This statesahitisrpeful urged, should recognize the basic elements tthat enter the ishin rb lem and not ignore them.
At this point, Mr. Speaker, I wish to emphasize ta hstai poiyof appeasementand gveaway did not oriiaewt h rsn
prevent this administration, or any thtfollows, fro aigpoe action to safeguard our national inteet now adin tefuue hs I would respectfully submit, will be best for? ousles,1etfo aa ma, and best for the world at large.
ISTHlMIAN HISTORY RUJST BE RESTATED)
What is the explanation for this strange cous feetMn could be advanced, but of themthmottligstegrsinrac of isthmian history that has developed since acquisito fth aa Zone in 1904 and starting construction.
gotten away from historical facts that underlie ortluirnpliis Nor do they realize that the Republic of Panamgrwotfthcal enterprise and not the canal project ouit of Panaa
When pondering these somber th~ou~ghts we muist cnetaeo o
to restore just and realistic thinking. In my opinionw sal ee regain our bargaining power with Panama until theeisacmpee fearless, and widespread restatement of some cold, hard fcso itr and a reappraisal of them. This is the only way wh4ereyw a produce men on both sides of the bargaining tbe whocnfil evaluate the respective rights, obligations, and rsosblt& involved.
Meanwhile, our colleges and universities and writrofhihesphere should delve into the subject from available soucsadsra the story of the eat waterway, of whihteceto fteR of Panama was but a single, thoughimotnepsd.IthMr Speaker, the press can render a great evcadaanIivt t
tention to the documentation on Isth ian Cnlplc rprdb Representative Thompson of Texas to befound i h eodo ac
2311955. 19 SU EZ AT PANA M

The Decembe 16 incident was no odnr atr otrdb
radical elements, smhih up i theGoen ntfPamad
conforming to the.rga of the itrainlCmuitcn
spiracy, it seems -aimed a~t lining up the nations of LtnAeiai support of Panama as was done among the Arab nation in suppr





ISTHMIAN CANAL POLICY QUESTIONS 1

of Egypt. In that light, it represents an issue that the great countries of this hemisphere and their leaders must eventually face, for they well know what the results would be should such a movement ever materialize.
The combined exercises of U.S. Armed Forces in the isthinian area, April 21-27, 1957,which were observed by the representatives of 20 countries of this hemisphere, eloquently served to emphasize that no Suez crisis will be permitted on the American isthmus.
With this feeling, I have every reason to believe that our friends to the south will wholeheartedly join. Surely every consideration for their own self-preservation at this critical time of penetration and subversion requires such a commonsense attitude.
NATIONALISTIC AGITATION AT rANAMA INVOLVES SERIOUS DANGIERIS
Mr. Speaker, notwithstanding the headlines of the press, the United States has many friends among the people of Panama. To them I would suggest that demands emanating from their midst for nationalization of the Panama Canal or confiscation of its receipts, instead of making a case for Panama, are actually spreading the fires for internationalization-the long-range Communist dream.
Such internationalization both Panama and the United States would
oppose. However, if brought about, how would Panama fare when A46
subordinated to an international body as compared to the benefits derived from the country that fostered its birth? The answer is obvious.
A further point concerning the current agitation at Panama with its increased demands is the effect it must have on the Congress and the people of the United States to give fuller consideration to the subject of an alternate isthmnian canal. This, as a matter of fact, S4
is now being studied under the direction of the Committee on Merchant Marine and Fisheries
Another observation about the situation at Panama concerns its relations with Colombia. If Panama, by sustained diplomatic maneuvering, can seriously weaken the treaty structure andsecure abrogation by the United States of its key provisions, Colombia can do likewise. Then, because of the absence of any guarantee of Panamanian independence, what would be the outcome?
This would depend on what policy the United States might adopt, which no one can foresee. Certainly, our Nation cannot afford to accept grave responsibilities in the absence of adequate authority. To state the matter candidly, Panama, through securing abrogation by the United States of its guarantee of Panamanian independence, has succeeded in removing the greatest legal barrier to its eventual reabsorption by Colombia.
Also, may I ask, because of the abrogation of treaty provisions. guaranteeing the independence of Panama, what would be the result if the United States should surrender all its power and authority as to the Panama Canal and Canal Zone? Would revolutionary practices immediately spring up in Panama as they did before U.S. occupation of the Canal Zone? And would Colombia reassert her former sovereignty? In the light of history, what is the answer? How the Communist world would revel in such a situation and how they would strive to exploit it.
Certainly the Panama Canal problem is so complex in character and so far reaching in its ramifications and consequences that it behooves
67-843--66--2






12 SIINCNLPLCQUSIN







In view of all theplmnsthtetr picture, the American people ps oetligqetos h a u Dparmentof Statepwue its purln oiyfexemcnes Sion and appeasemen~t in daigwt aa rssoe do

radicalT demands oteeteit nPnmWyde tnttk a vigorous stand for the legitimate rights ofoucunrtexris of which-I rep0&t--18 best tol o h ntdSaePnand Latin America, but also for the eniewoladepclyth maritime nations with vsesta rni h aa n aet a tollsV
The more the Diepatent of Saeporsiaetemr motant itis for the Congres whihi h~liaeatoiy omk t own declaration of poiyinth rmstotaecalyhttee will be no further cazsi h sccnltetadta ti o going to stand for further liqudtoso ..pwradatoiyi and about the PanamaCaa.Eeylgladmrlcnirtou and the necessities f or stailitydmnstathsbdoe
To these ends, I urgeyoppasgofHueCnretRslu tion 205 of the present Cnrstetx fwihflos Whereas there is now benstogyugdicetiqarrsfthwrl the sreder, by the UntdsaewtotribsmntfthPnm' Canal to the United Nation or to some ohritrainlognzto o the own~ership and operation h caa;an Whereas the United States, at teexpes ofts apyr ndudr n f ully relying on, tet gemns osrce h aaadsneiscm pletion, at large expedture, a anandadoeae tadpoie o its protection and defense; and Whereas the United States, foloigtecntuto ftecnl a ic maintained, operated, andI proetdiinsrccofmtywhteayeqrments and agreement, and hasthsmditfewtotrticonr famtien, for the shipping of the entire word an; ncneuneo hcwt respect to the canal and the Canal Zneeyjs n qial osdrto favors the continane of the UnitdSae nteeecs faltergt n authority by treaty provided, an i the icag fteduisb rayiposed: Now, therefore, b~e it
Resolved by, th~e H~ouse of Represenaie TeSnt ocrigTa 1 it is the sense and judgment of the Cnrs fteUie ttssol oI any wise, surrender to any govrmnoratoiytsjidcinoe, d
conrolofthe Canal Zone, a.nd its onrhp otomngmnmitnne
opeatinand protection of the PanamaCnl nacrac iheitn ray provisions; and that (2) itis to tebs neet-o nyo h ntdSae, ,but, as well, of all nations andpepe-htalteowrd isuhrty d obligations of the United States in tepeie ecniudI codnewt existing treaty provisions.






ISTHMAN CANAL POLICY QUESTIONS 13

is foreseen by Panama's Vice Minister of Foreign Relations Ernest Castillero.
Speaking before a student congress yesterday, Dr. Castillero said the enforcement of the Rem6n-Elsenhower treaty is proving that "that treaty is far from being the ideal solution" of the differences between the two countries.
Castillero, a student leader in his university days, delivered the principal address at the adjournment session of the II Special Congress of Students.
He devoted a large part of his address to a review of the achievements of the student movement since 1943, when it came to the fore in Panama's national life. The closing portion was devoted to foreign affairs, and specifically to the Panama-United States relations.
He said, in part:
In November 1956, on the occasion of the United Nations General Assembly's debate on the Suez Canal crisis, the Foreign Minister certified before the entire world that the Panama Canal is built on Panamanian territory, that Panama is the titular sovereign of the Panama Canal Zone, just as Egypt is over the Suez Canal, and that it has granted to the United States of America only the rights, power, and authority necessary for the specific purposes of the maintenance, sanitation, operation, and protection of the canal, an enterprise in which as' Af stipulated in the treaty of 19l3, both countries have a joint and vital interest. Likewise, he set forth there, for enforcement at a future time which is not f +
foreseeable now, the doctrine that the Suez Canal has analogies of various types lf
with the Panama Canal, a statement which while rejected by the United States, has impressed strongly the world's opinion because of the clear warning it involves.
In these circumstances, there is special significance to the complaint, supported daily by new facts, that our country is not receiving the benefits to which we in fairness are entitled as partners, with the United States, in the canal enterprise.
Inasmuch as the enforcement of the Rem6n-Eisenhower treaty is showing that that treaty is far from being the ideal solution for these differences, it would t
not be strange if strength should be gained by a trend of opinion which maintains that Panama must arrive at an arrangement with the United States to receive half the income of the canal, without going into legalistic discussions or interpretations of previous treaties.
The Rem6n-Eisenhower treaty was signed in 1955.


[From the Panama (Republic of Panama) Star and Herald of Dec. 19, 1957]
PROPOSAL O.N CANAL SAID "UNR0ALSTJC"
President Ernesto de la Guardia, Jr., feels that the idea of a 50-50 split of the Panama Canal's income with the United States is "not too realistic."
He indicated that since operating expenses and tolls are determined by the United States, Panama then would run the risk of getting nothing if the canal operations failed to show a profit.
Vice Minister of Foreign Affairs Ernesto Castillero, addressing a student meeting suggested such an arrangement for the future, saying that the present treaty is far from being the ideal solution to PanamaUnited States differences over the waterway. He referred to a split not of profits, but of income.
The presidential press office authorized the following statement in behalf of President de !a Guardia.






14 ISBINCANAL PLC USIN
Teidea, i my opnois not toorelsinamcasortngxpss
of the canal being established in the Canal Zone adtlsbigfxdb h Congessof the United States, we would run the rs htteoeaino h waterway would leave nothing. Even now we are striving for better salaries for>?nmna mpoesi h
expenditure that would necessarily affect the erig rmtecnltafc After Vice -Minister Castillero's address, the ainlSuetCn gress approved a resolution calling on thePrsdnadthFoeg Minister to undertake negotiations with the United Sttsfr$hrn the canal's income.
I~n Washington some State Deparmn ofiiltpeae upie at Castillero's statement, points out that anetrayicasnth canal annuity from $430,O00 to $1,93,000 ws wre uti95


[From the Panama (Republic of Paaa mrcnofDc 3 97
REPUBLIC OF PANAMA STUDNTS WmN CANANAioA5z
The Panama Students Fedrtion (FEP) maei lartdyta the nationalization of the Paam Canal is theiltimt i fPnm
suets and the people.
A communique isse yFPPeietAde .Csil n
Press Secretary Humet A. Bruit adngtain ie tgt

Canal tolls is onlyterimdaeam The communique further sttdthat the E wolcntueo fight for a revision of exsigPanaina-United Stesraisunl 1our glorious national emblfieswt all issvrinmjsyoe the PanamaCal.
Today's communique was the aftrmth ofarsltonapoe by an FEP congress,asigtePeietadheFrgnMi to negotiate a 50-50 division of Panm aa noe The resolution was preetdadapoe meitl fo
closing address by Deputy Foreign Miitr EnsoCsilafr mer student leader, who said hewolntbesriedfatedtward negotiating a 5 ecn hr ncnlpoissol anfre
The idea was lae randed as rest baspkmnfoPeident Ernesto de la Guardia., Jr.





(ByMasalBne)
PANA-MA CITYPNMDcme 0A otrhaagisatd in Panama for an incraeithanulicmrcivdbteRpublic f rom the Unie Stae o s ftePnm aa ra
At present Panama receives $1,930,00eOeaGrm teUie States. This ismoetadobeteaonpadauly2yar ago and was agreed upon in a treaty sge yPeietEsnoe and the then President of Pam, JoeAtnoRm.






ISTHMIAN CANAL POLICY QUESTIONS 15

This increase in payments has not prevented further demands, however. Deputy Foreign Minister Ernesto Castillero recently, in a spechbefore a university student congress, demanded that the United Sttspay Panama 50 percent of the gross income from Panama Canal tolls. His proposal was promptly drafted into a resolution and passed by the student organization.
Canal tolls bring in well over $50 million per year and this would, mean that, under Mr. Castillero's proposal, Panama would collect more than $25 million. There was no suggestion by the Deputy Foreign Minister that Panama should foot any of the canal expenses nor finance the present defense organization by the U.S. Air Force, Army, and Navy.
Panamanian officials complain that the Republic receives less than 4 percent of the total income from canal tolls. The U.S. answer, however, is that while gross income from canal tolls was $88,677, 449 in 1956 (highest in peacetime history), the net income after paying operating expenses was $4,179,464. And, they add, there were no charges made for the large defense forces maintained in the Canal Zone by the U.S. military services. The latter costs are classified information. t
Even Panama's conservative President, Ernesto de La Guardia,li agrees that a 50-50 split of the gross income from the Panama Canal is unrealistic and has said so publicly. But his words have not stilled nationalistic elements in Panama.
What concerns many serious-minded Panamanians and United States officials is that Panama, to use their own words, "may be cutting its own throat" through the continual nationalistic blasts at the United States.
They point out that early in December 1957 a subcommittee of the
House Merchant Marine Committee, headed by Representativeu Leonor Sullivan, Democrat, of Missouri, visited Panama and held public hearings in connection with the Panama Canal operations. One of the things they learned was that the Panama Canal is fast reaching its capacity and that either the present canal will have to be expanded 3 or a new, sea level canal constructed. Either will be a multi-billiondollar project.
No report will be made by the subcommittee until next spring. H-ow-4 ever, the members took time to visit several sites that have been proposed for the construction of a new sea-level canal. Their interest centered, according to Representative John J. Allen, Republican, of California, on a route through Nicaragua. The United States holds perpetual rights to construct a canal through that country if and when a new one is needed.
So far, Gov. W. E. Potter, who heads the Panama Canal Company, the wholly U.S. Government-owned organization that operates the Panama canal, has made no public comment on the clamor here for increased income for the Republic of Panama from the -canal.
But many observers forecast that when the Board of Directors of the Panama Canal Company meet here late in January, the issue may bo brought up and a statement issued. However, observers here point, out that any change in the present status of payments to Panama for the use of the 10-mile-wide, 40-mile-long strip of land will have to be approved by the U.S. Cong ress.








16 1IS CANAL POLICY


NEW PANAMA CANAL NATIOHALIZAnoqDrmO
(By Edward Tomlinson)
The Government and the public in thiscount rad
for an all-out hemispherewide campaign for na

B* U.S. officials here in Washington don't like to
Bu te dea has been snowballing in the mnso~f Pnmnino
ticians and nationalists every since Abdel Nasser took away with it.
PLAN FIGHT
Now, the university students, who always have spear U.S. sentiments in Isthmian Republic, have until "our glorious flag flies in triumph over the Canal
The students have received the tacit blessing of the
Foreign Ministry, as well as outstanding leaders ofthconr cld in the majority of living former Presidents.
Eorts to wrest complete control of the vital waterway Yankees in nothing new, of course. Back in the 1930*s tion for the internationalization of the canal flourished. of the movement said the big ditch should belong to allIt was abandoned after the Roosevelt administration to of revisions of the treaty in favor of Panama in 196
Another wave of nationalism swept the country after Wor and anti-U.S. demonstrations become so vile that forces abandoned all wartime bases throughut thReulcIn14 widespread demands for more treaty reviin weremae
As a result, in 1955, we upped the annuity from $5,0 o$,
930,000, turned over vast amounts of Canal Zone prert ement of Panama and made many other con in
Leaders of the campaign bluntly say that ultimate does not preclude demands for more and more treat meantime. Among immediate additional dema dyb
whooped up, is an equal division of canal revenues.
ox4
DIVISION NOTE
Note they want the revenues divided equally, not just Nothing is said in the new propaganda about taking out other hugecosts of operating, maintain sal enterprise. The 1957 annuity amounts to more than hlf fth net income of $3,821,456.
Let no one think this campaign can be shrnged off, is atin,weak country. Egypt also is atiny weak cuty u
backed by the whole Arab world in its Suzvnreitbcma formidable power t be reckoned with. The P tremendous support from other Latin Americ nati







ISTHMIAN CANAL POLICY QUESTIONS 17
[From the Christian Science Monitor of Jan. 18, 1958]
PANAMA FACTION BIDS FOR CANAL REVENUE
(By Ralph K. Skinner)
PANAMA CITY, PANAMA.-What amounts to a national campaign for a 50-50 share in the gross revenue of the Panama Canal is being conducted by powerful groups in Panama.
The drive criticizes the United States for never having given Panama a fair share in the enterprise in which they claim they are partners.
The campaign, well financed and skillfully directed, gets prominent attention in newspapers here.
It is causing difficulties to Panama's capable President de la Guardia who is endeavoring to improve the already harmonious relations with the United States.
Observers see two major reasons behind this campaign. First, a few rich individuals and politicians are afraid that in a period of political calm like the present the scrupulous De la Guardia adminis- lot
tration might investigate their private empires and take away some 4"
of their privileges. 1i60
ANTI-UNITED STATES AGITATION
Their aim is to use the press and radio to so stir up the people that they will agitate against the United States, demanding concessions impossible of attainment. This puts pressure on the President to comply with the demands of the Panama people. Thus, this reasoning goes, Senor de la Guardia has not the time to investigate activities of the instigators of this stratagem. f
Also, this same pressure for impossible demands against Washington may tend to damage the President's good contacts with the U.S. Government.3
Rumblings in the press, quoting utterances of ambitious officials, would seem to indicate that Panama ardently wants either nationalization or internationalization of the Panama Canal. 4
Neither is correct. The last possibility just does not exist. There never will be internationalization of the great waterway if Panama can prevent it, this correspondent has been assured. Local sentiment is summed up in a statement in a local paper which said that Panama does not need more people eating at its table.
Briefly, every dollar coming in would be welcomed, but no sharing of any largesse is contemplated.

LACK NEEDED KNOW-HOW
And what about nationalization? There is no doubt that Panamanians would welcome eagerly the canal's income and the flattering sense of possession of such a valuable property. But, individually and nationally, they shudder at the thought of trying to operate it. They do not have the know-how. Neither do they want the responsibility.










So all the ulbloaotitraialztoorntoaiain is seen to be solely for political or cnmcraos-ete ohme the present amnsration in PaaaotopesrthUnedSts into more handout benefits to this cutywihcam atesi status in the Panama Canal. Setting off current agitation inPnm a ttmn aet university student group by Dr'. Eret atleo euyMa ister of Foreig Relation.H adPnmnassol siet
50O50share ofthe revenue of tbePnmaCnl It appears that either Dr. ateomd h ttmn o p
pla luse value or because he had bee asked to icuei nh' ak
Cerainy, it became clear he hbad not give it mc huh eas when asked if he referred to the grossor tentrvne ftePnm Canal, he did not know. Finly esi ewsrfrigt h
gross ($50,74,000 for the lJastsalea)
PLAE UP INPRS
The Castillero statement was edie ntepes oeppr playing up the idea of getting mor mnyfrmteUidSaes which currently pays $1,930,0 to Panama as a nut ela millions of dollars in salaries to Panamanian workranmoeil lions in purchases from Panama. Immediately, Senor de la Guardia. pointed out thatsuhaugeto was unreal. Ak busnessmani, tePreietke htgvn wyhl
the gross revenue of thecnlwudnt ev ud o tencsa salaries and expess hl h rsdn osdrdtepooa

in ers f getting somehn o o~ig
Almost immediately, however, theMnse fFoeg eain
young, attractive AquilinoBodanonehebcdDr stco'
statement.
This sassing the President is understandabeolbcasSnr Boyd is young, impetuous, and aspires tobe Peiet isl i90 This was his bid for the nationalistic vote i h uueeetos


It is recalled that Senor Boyd alopripaeinteuvrsy roundtable conference on inteiroceani canal atsrn nPnm City. Reportedly ,this confernewsognzdt mars h
United States by haing oeg ain elr t ramn fPn
ama "unfair." Te conference bakieanwsafaco
A recent article typical of certain aniUS ttmnssy the Foreign Minister and PepuyFrinMiserflcdth"jt and legitimate aspirations" of h aaainpol.Tewie added that teetwo ofcials havesi ulcywa h epeo
Panama have ben thnino yeas
The article endswit nedaysaeettht lhuhteato
munist Partyher if bysodoing Pnm ol e utc ot
claims.







ISTHMIAN CANAL POLICY QUESTIONS 19

[From the Americas Daily, Miami Springs, Fla., Jan. 1, 195R]
UwimED STATES NOT CONCERNED ABOUT PROPOSAL or, PA N-AM\rA'S STUDENTS
WASI.NGTON, December 31.-U.S. officials have refused t o comnment on the proposal of the National Student Congress of Panama that Panama be given half of the gross revenue from. the Canal Zone.
Officials pointed out that the United States and Panamia renegotiated their treaty in 1955 and both sides appeared to be satisfied with the provisions. Under the revised treaty Panama's annual share of the net profits of the canal was set at $1,930,000.
Under the proposad plan Panama's share during the fiscal year 1957 would have been $25,387,249. SA spokesman for President Ernesto de la, Guardia, Jr., described the proposal as "unrealistic." He said that since the Canal Zone Government establishes the costs of operation and the U.S. Congress sets the transit tolls, "we could be faced with a situation whereby the operation of the canal produced nothing."
.The spokesman pointed out that Panama was seeking better wages for Panama citizens working in the Canal Zone.


[From the Americas Daily, Miami Springs, Fla., Jan. 29, 1958]
PANAMA TIRED OF TREATMENT AS JUNIOR PARTNER, ARIAS DECLARESUNITED STATES-PANAMA WORKERS SHOULD GET SAME PAY
NEW ORLEANS, January 28.-A former Panama President said his 44
nation is tired of being treated like a junior partner in the Panama 1
Canal project. 1
Ricardo H. Arias, now Panama's Ambassador to the United States, said "Panama has not gotten the benefit it should have from the canal." He was here today to address the Mississippi Valley World Trade Conference.
"After all, it is a partnership 'arrangement; we provided the land,
and the United States the know-how to dig the canal. But. Panama- 4
mian workers, toiling side by side with workers from the United States, doing identical jobs, got less money than those from the United States,'' said Arias.
Arias said he hoped Congress would equalize the pay of United States and Panamanian workers in the Canal Zone. Such'a bill passed the Senate last year, but died in the House.
Arias said an equalization of pay would help quash the feeling among Panamanian students that the canal should be nationalized. He said he did not think talk of nationalization would hurt the bill's chances in Congress.
"You cannot tell a man doing the same j~ob as the next fellow that he's going to get less pay," Arias said. Panama is tired of being treated like a Junior partner."
Arias served as President of Panama until 1956. He said he doubted the United States would dig a canal through Nicaragua because of dissatisfaction with the Panama situation.










[From the SrpsHwr esaes
PAINAxA Sw~s Up ~rp To TAK VRTH AA

(By Edward Tomlinson)
PAWAXA Cmry February.-Nationalist poiiin ndtepesa calling for' "eual partnership in the operationoftePnmCal, while svrlwl-raie rusaedmnigotih
nationalization. elognze rip r
Newspaper editorials, colunadseilrtcsfalawyt Uncle Sam for "humiliating tretet fPnm.E irfr
to the "United States-dominated canal"athtiprilsi enterprise."
University students, always the tol or dupe of oiia gttr rant against "North American descation of u ainlitgiy A huge banner on the university ground faig thmahiwy leading from the airport proclaims that"Tecnli us1 Significantly this catch phrase is muc ieteBaiinCmu nist sloaan. 'The oil is ours, aie at U.S.oicmpneoertg in Brazil1 .
Canal treaty revisions made by the Eisenhoweradisttonn 1955 have brought numerous financial and economic bnft oPn ama. The yealy paymnwarasdfo$4000t$19,0. We returned to Panama $25 million wot of raestein oln n Panama City. Panamanian citizenswokninteCalZear now required to trade in Panamaninsoe nta o h oecm missaries. But the newspaper La Nacion still call it'"h ruu lent treaty."
A columnist in the same paper says Jnay2,teanvrayo the signing of the document, "should be declae adaofntnl mourning."
Many of the newspapers do not even cnweg h eaiyo h Panama Canal Company, the U.S. (lovermn agnytatoeae the waterway. An editorial page column in La Eteltems m portant newspaper in the country, calls on the Gvrmn fPnm not to deal with the Company on the grounds tha "i sntauiia Thej~ Panama Govermet officially is behind hs9ap h
Under Secretary of Foreign Affairs, Ernesto ailrhsfiefo a 50-50 sharing of the cnlrevenue. Not theprftmidyuTh present annuity alreadyaonstmoetahllhenulnt profits. He wants halthgrs revenue,annosrigfth expenses of operation.
The campaign is bigsepdu oels h yptyadsp
port of other Latin Aeia onre.TeUiest fPnm
isastaging an international seminar ofhsh er ecnmss1ocn sider the scope of thetray
establish diplomatic and trade relations~wt ocw asoecl
umnst "f anama sol euedpoai n rd iswt
Russia, we would get sputistrcosanmchey.Angwh







ISTHMIAN CANAL POLICY QUESTIONS 21

every machine would come a Russian technician, and every technician would be a Communist."
In short, "If the Yankees won't turn the canal over to us, let's go Communist."
PANAMANIAN JINGOISTS IGNORE FACTS OF HISTORY
Mr. Speaker, the extreme lamentations in the various outcrys from the isthmus cannot remain unchallenged. All the world should know that Panama emerged as a sovereign nation under the protection of the United States, and that under this sponsorship it has grown and prospered, as was clearly foreseen by the founding fathers of that Republic.
In the field of international relations it has been signally honored. Its statesmen have been members of important international commissions. Its flag now flies on hundreds of merchant vessels in various waters of the world.
Under these circumstances, Mr. Speaker, it is high time to ask if the reckless demagogs and jingoists of Panama are going to cast down the ladder whereby their country rose to independence and eminence, or will the better judgment of its more thoughtful citizens, who are mindful of historic facts, prevail?





.4
'1







,IJ












[Fromn the Congresonal Record, 85th Cong., 2d se, June 9,198
PANAMA CANAL-LATEST DEVEOPMET
MNr. FLOOD. Mr. Speaker, almost 2 years ago a metn" of tePei dents of the American nations at Pa~inma City, Republic o aaa July 21-22, 19L56, attracted world attention onthIsmuofPn a and the great canal project on which the economic wellbigo h Republic of Panama largely depends. While public inteetwstu f ocused toward the West, events of f ar greater signifiac eei h making in the INear East.
Four days later, on July 26, what till thenhdbencsirda geopolitical impossibility occurred-the nationlzto yEyto the Suez Canal. Officially indorsed by theGoen ntfPam, this seizure of the Suez Canal started a chin of eet fetn h Panama, Canal that has never ended, a situaio that I hv ace closely.
Though I addressed the House at considerable length on Mrh2 and April 2, 195-8, on the vitally important question ofsoeigt over the Canal Zone and Panama Canal, subsequent and motrai events recently occurring on the isthmus together withstemnso Panamanian leaders, now dramatized by the bitter experiencsoth Vice President of the United States during his visits in LatinAmrc in early May, impel me to address the House further on this key ee ment in our Isthmian Canal policy.
RECENT ISTHMIAN REACTIONS TO THE SOVEREIGNTY QUETO
What are the events on the isthmus following my April 2adrs that first attracted world attention? The first occurred on April 3, when the Liberal Party ofPam, in order to put President Ernesto de la Guardia, Jr., "nthe so, announced plans for a petition to the Government of Panama askn for rights to explore for oil and minerals in the Canal Zone.Whe requested to comment on this demand, I stated that suc usin were legal and I hoped that constituted Panamanian authoritewol know how to deal -with them.
A second event was the publication in the Estrella de Paaao April 18, 1958, of a statement by Senor Don H. D. Aleman, Jr., chairman of the foreign relations committee of the National Assml of Panama. Some of its most significant points are smmarized~: F irst. Revealed that Panama now has in prearton a"ht Book" to present to world opinion its views on the sovereignty qus tion.
Second. Stated that Panama would be ready at any tim to sb mit this question to proper internation courts for settlent Third. Demand a larger share in toll receipts of thePamaCnl 22





ISTHIAN CANAL POLICY QUESTIONS 23

Fourth. Quoted an April 18, 1906, statement by former Secretary of War William H. Taft out of historical context in justification of Panamanian views on the Canal Zone sovereignty question.

AMBASSADOR ARIAS HIGHLY CRITICAL OF U.S. GOVERNMENT
A third episode occurring in the United States was a major political address by Senor Don Ricardo M. Arias E., Ambassador of Panama to the United States, on April 29, 1958, at the Edmund A. 'Walsh School of Foreign Service of Georgetown University in this city. A grandnewphew of Tomas Arias, one of the founding fathers of the Republic of Panama who, on December 4, 1903, signed the Panamanian certification of the Hay-Bunau-Varilla Treaty, Ambassador Arias should be well acquainted with isthmian history. I have the address of Ambassador Arias, which was placed in the Record of May 28 by Represenltative Adam Clayton Powell, Jr., of New York. Its text, I assume, is correct.
While Ambassador A._rias' Georgetown University address contains
much that is historically valid, it also features many statements andlo interpretations that certainly can be challenged. However, since a 0
detailed analysis would be too lengthy for our purposes today, I must Ir
limit myself to key points. j
In line with the lead from Sen-or Aleman at Panama, Ambassador Arias likewise took up the sovereignty question and made this significant revelation:
The foreign policy of my country during the last -0 years has been to exert every effort in order to obtain at least for Panama conditions similar to those granted by the United States to Colombia in January 1903.
For this objective, he added:
I am sure that in the end Panama will attain her purposes. Highly critical of the U.S. Government to which he attributed bad faith, the'address went far beyond an objective historical discussion of the foreign policy of the country to which he is accredited. Thus, I must question the propriety of its delivery in our midst for propaganda purposes. For the present, however, I shall only call attention thereto with this comment: if conditions were reversed and the U.S. Ambassador to Panama had made a similar public utterance critical of Panama, his recall would have been demanded immediately by the Panamanian Government.
CRISIS AT PANAMA CLEARLY FORESEEN
That events on the isthmus were heading toward some incident affecting the efficient operation of the Panama Canal has long been evident. In early March of this year, I -warned proper authority of this possibility, specifically mentioning that radical Panamanians might attempt to raise their flag in the Canal Zone. Also in my address to the House on April 2, 1 emphasized that we should not wait until some tragic incident occurs to spur us to action.
Now, Mr. Speaker, was I unduly apprehensive of the situation so extensively presented and documented in my two addresses? Far from it. Subsequent developments on the isthmus, which are now re-






24 ITMANCNLPLC USIN
vealed in the light of trgi expernes oftampal Peidnti Lm and Caracas as parts of wel-plandcmagsaantteUie States and for the overthrow of constitutionalgoen ntiPam, have already occurred; and the end, I fear, is not yet.
PANAMtANIAN FLAG-RAISING INCIDENT IN CNLZN
In a carefully organized raid into Caal Zone o a ,15,cle "NertionSovereignty," Panamanian U~niversitysuet lne
72 anamanian flags at 'various locations, incldn1infotfth canal administration building-an eventuality ta oea n a sought to prevent by timely notice. It is significant to note that the raid of lgpatr acopne by Panamanian nesaer photographers whtokpcueofsm of the flag railsings, which were published inPamawtreodc tions in other countries. Though it aperthtsmofhseigl provocative incidents were witnessed-bCalZoepictisndd strange that no arrests or detentions were maefrtsebwh o
the peace and the trespassers were allowed tolevthCalZoewh out obstruction.
This flag-planting demonstration, Mr. Sekr, wasntasml matter that can be dismissed as mere student pak retuiss Instead, it was a calculated move in worldwide psychogiawrfe of communisti(- pattern against the Unite Saes. It popl e
ceived extensive coverage in Latin America and alsoQnteSve press. No doubt it will be exploited to temxmmavnaeo those seeking to wrest control of the canal enterisfomteUtd States.
The only action taken by Canal Zonepoiewstcletthfag and give tem toPanuamana fiil h eundte oteSu
dents. Had the conditions of thie fa-ri s inienbenirvrs order, with North Americans mnvadnthReulcoPamas participants in such provocations, autoiesfPamawudhv dealt with them with the utm~ost vigor.

5IQUNITEDC STTE

The significance of the flag-raising iniidenti h anlZng well covered in the press, was instantly recognized in teUie tts The Panama Canal Society of ahntn ..,cmoe fsr
viving builders and others long associate with the canalenrpi, members of th red Forces and Foreig7 evc h aes.endt

prompt action.
On the occason ofits 23 na meeigi h ainsCptlo
May 10, 1958? the soit nantbepora eoe oadsuso
of the administration ofthPaaaCnludrheRogizin Act of 1950-Thompson at-dpe eouin htsrnl en

by the Congress with rsetto the prsn*iutina aaa
The resolution follos







ISTHMIAN CANAL POLICY QUESTIONS 25

RESOLUTIONS OF THE PANAMA CANAL SOCIETY OF WASHINGTON, D.C., RE, HOUSE CONCURRENT RESOLUTION 205
Whereas at the 23d annual meeting of the Panama Canal Society of Washington, D.C., held on May 10, 1957, it adopted by unanimous vote, resolutions declaring that the Congress should, -by formal action, reaffirm the long established and practiced policy of the United States in holding that it exercises complete and exclusive sovereignty Over the Panama Canal and the Canal Zone, in perpetuity, under solemn treaty provisions, for the maintenance and operation of the canal and the government of the zone; and
Whereas there was introduced in the House June 6, 19,57, by Congressman Daniel J. Flood, of Pennsylvania, House Concurrent Resolution 205 providing "That (1) it is the sense and judgment of the Congress that the United States should not, in any wise, surrender to any Other government or authority its jurisdiction over, and control of, the Canal Zone, and its ownership control, management, maintenance, operation, and protection, of the Panama Canal, in accordance with existing treaty provisions; and that (2) it is to the best interests--not only of the United States--but, as well, of all nations and peoplesthat all the powers, duties, authority, and obligations of the United States be continued In accordance with existing treaty provisions"; and
Whereas recent unfortunate and highly provocative incidents occurring in Panama and the Canal Zone, furnish added and imperative reasons for the adoption of the indicated House concurrent resolution : Be it therefore
Resolvedr by the Panama Canal Society of Washington, D.C., at its 23d annual ik
meeting held in Washfingt on, D.C., May 10, 1958, as follows:
1. That it respectfully urges upon the Congress the wisdom and grave importance of adopting House -Concurrent Resolution 205 as early as may be possible. IJ
2. That copies of these resolutions of the Society be furnished to the Congress, the press, and other Panama Canal societies.

DISORDERS SPREAD TO TERMINAL CITIES

The Isthimian disorders, however, did not stop with the flag-raising
demonstration in the Canal Zone. On the evening of May 5, university students, emboldened by their flag-raising triumph in the Canal Zone, I
marched on the presidential palace in Panama City to demand theI taking of immediate steps in 'behalf of Panamian sovereignty. It was I
on this occasion that President Ernesto de la Guardia, Jr., yielding toI their demands, announced his intention to ask that the Panamian flag fly over the Canal Zone.
In this connection, it should be noted that of t'he flags returned from
the Canal Zone 59 were carried -by the students to the palace. It is indeed unfortunate that the Government of Panama apparently fobllowed the lead of radical and heedless students in the formulation of 4
its foreign policy -with respect to the canal.
Encouraged by what 'appeared to them as a further victory, the radical elements in Panama promptly turned their guns on their own Government. Amidst scenes of wild disorder Panamanian students marched on the palace demanding dismissal of the Minister or Education and improvement of education facilities in public schools. Serious rioting in Panama City broke out on May 20, and spread to Colon the next day.
After 6 days of street fightingand bloodshed, requirin 'g use of the National Guard, President de la. Guardia claimed a, decisive victory in suppressing the uprising that he considered had aimed at overthrowing his government. He also stated that though not implicated in the beginning of these troubles, Communist leders and fellow travelers hiad taken part.






26ISHINCNLPLCQUSIN

more wounded, Mr. Speke, took paei h aaaintria cities of the Panama Cnl lotwtiasoestrwo h aa
itself. That this state of disreisacnnugpoesishwnb the f act that at this moment in Pnm iyteeaeimrdi h National University, which has somesrneimntsm 0 ti dents besieged by h Panamana ainlGad These situations justify and empaieocagnthwsdmfte f ramers of the Hay-Bunan-VarilaTetwihadgnedote United States th~e right and auth omiti ulcodri h cities of Panama and olon an twi
the instance of Panamna,habensbeutlarotdtrug treaty provisions.


Let us now return tothe quiono oeegtyrie ybt
Chairman Aleman and Ambsao raswih sbe oef
tively propagandized by the flgidesih CnlZn. ti oh ing, newv. instead it is mierel~yth"zmiofaolisuhths been periodically drage out of its tm.Hwvr eas hs officials have brought it up, I feltaitsinubtonomneo set the record straight -with material thatthyinrdoovlok. In anote dated May 25, 1904 rmSertryo ovrmn
Thomas Arias, one of the revolutionary jutof10,adesdo Gov. George W. Davis of theCnlZn, ertr rismd h
following statement:
The Government of the Republic ofPanm cosdr htuonteecag of ratifications of the treaty for oeiga neoenccnlars h shu of Panama its jurisdiction cesdorthzn. Although the earliestAmrcnofcaswrsrulusicmpy ig with treaty provisions, teRpbi fPnm a nyafw
months old when its leaders, folwn h oeofSceayAis presented the sovereignty quesint ..ofcas nacmrhn sive reply to the Panamanian Govrnent onOcoe2419,thti still classic-Foreign Relations, 190,pgs6360Sceayo State Hay asserted that "the getojc ob copihdb h
treatyv is to enable the United 8ae ocntuttecnlb h x penditure of public funds of the Unie ttsfnscetdb h collection of taxes" and that "thpoiinfteUiedSasisht the words 'for the constructo, maineacoeain aiain

the gat, but are -a declaration of teidcmn rmtn h e
&lic o Panaa to~ make the rn"o h aalZn oteUie
Sttsinpeetiy

Canl Zne, hedeclare that such soveeg s"eitzdb t w

wch oenydcae n ul polie ytet tpltos





ISTHMIAN CANAL POLICY QUESTIONS 27

honorable a position, in order to engage in an endeavor to secure what at best is a 'barren Scepter.'

SECRETARY, TAFT EMPHASIZES U.S. ISTHMIAN POLICY, 1905-06

Later, on April 18,1906, when testifying before the Senate Committee on Interoceanic Canals-hearings, volume III, page 2527-Secretary of War Taft, when commenting on article III of the Hay-BunauVarilla Treaty, stated:
It is peculiar in not conferring sovereignty'directly upon the United States, but in giving to the United States, the powers which it would have if it were sovereign. This gives rise to the obvious implication that a mere titular sovereignty is reserved in the Panamanian Government. Now, I agree that to the Anglo-Saxon mind a titular sovereignty is like what Governor Allen, of Ohio, once characterized as a barren ideality, but to the Spanish or Latin mind poetic and sentimental, enjoying the intellectual refinements, and dwelling much on names and forms it is by no means unimportant.
Prior to that, on January 12, 1905, Secretary Taft, when discussing the question of jurisdiction in a report to President Theodore Rossevelt, wrote:
The truth is that while we have all the attributes of sovereignty necessary in the construction, maintenance, and protection of the canal, the very form in which these attributes are conferred in the treaty seems to preserve the titular sovereignty over the Canal Zone in the Republic of Panama, and as we have conceded to us complete judicial and police power and control over the zone and the two ports at the end of the canal, I can see no reason for creating a resentment on the part of the people of the isthmus by quarreling over that which is dear to them but which to us is of no real moment whatever (hearings before Senate Committee on Interoceanic Canals, 1907, vol. III, pi. 2399).
This was a courteous effort of Secretar y Taft to sooth the sensibilities of our Panamanian friends but never with the thought or purpose of surrendering the actual, necessary, and exclusive sovereignty of the United States over the Canal Zone and Panama Canal as clearly provided by the 1903 treaty, and as has been interpreted, asserted, and maintained by the United States through all the years of canal history. Certainly, Mr. Taft, as Secretary of War and President of the United States, never directly or indirectly urged or practiced any departure from the well-established policy of the United States with respect to its complete and exclusive sovereignty over the, Canal Zone andI the Panama C anal.

SECRETARY HUGHES REINFORCES OUR POSITION. 1923

When the subject of sovereignty in the Canal Zone came up again in discussions with Dr. iRicardo J. Alfaro,, Minister of Panama to the United States, Secretary of State Charles Evans Hughes, on October 15, 192, stated:
The grant to the United States of all the rights, power, and authority which it would possess if it were sovereign of the territory described, and to the entire exclusion of the exercise by Panama of any such sovereignty, is conclusive upon the question you raise. Th 'e position of this Government upon this point was clearly and definitely set forth in the 'note of Mr. Hay to Mr. cld Obaldia of October 24, 1904. (Foreign Relations, 1923, vol. II.)
Secretary Hughes reiterated this stand on December 15, 1923, in a conversation with Dr. Alfaro, declaring with a refreshing degree of






28 ITMNCNLPLC USIN

candor that the US.Goenet"olner cdifomt6 tion which it had taken in the note ofSerty in10.7s



Goverdnet udnt anQ olfo ntrit n icusofetn


in myl are to lth hue oanarc Zone uneratil5II8,th1r one90 as if sit wer ired o te CnlZn adtih etrx escrion aysoderied fir auhrt onteoutofsnaa

toy waCs paboltienflty or thePnmninGvrnett epc n Arcan admenistraboth no mrattrwamtws n reieto n ertr othe, grnto surrether an1 atohs ihswhc h ntdS a acquites wnerte treaid of "drig03. ~ Towhis ould edd thr cometta twudb nhnalo then prsn ay ha posin l atuthoresothUnedSastoak arconrory ofition ih~oh

InthyeadrestotheHoseo Mvach is,98 1dsrbd h aa Paneamai connecttionl wcitd terioyo h nie ttshc hescrbetin aos derived rmacposdcmntto n aa i couryI is aperien esiure tosrs gi htth rmrfte10 Zonaleay, bnth efvnm of h nte tts nehtte oprTe thentPanama Canal. Zone fuor casal auss wa aeInpr pteuited Tats wodnt ratisefiany thbtec1903 trot proiddha anuities ofr th e indid soy "drn thlieotisc vnin, shi ould e modifite orcange. h rat lo otiedpoi fiors for~ aichanei4ttso h euli fPnm hog t world woulrad frlturn ndalcotnenis nIn teulihcfteprpcieta.s o osbewa slf o Zonam ncneto ihiscam f"iua oeegt, hc

has ee iul deibe ySceare fSaeasaaslt






ISTKMAN CANAL POLICY QUESTIONS 29

cidents from the flag-raising in the Canal Zone on May 2, on through the assaults on the Vice President at Caracas on May 13, and the serious disorders in Panama, May 19-21, 1958, cannot be viewed -as isolated occurrences, for they are alike and have the same common denominator. All were perpetrated by so-called university students, all had trained leaders, and all were executed with the ruthless skill and precision characteristic of the Red pattern.
Of these disorders, those affecting the operation of the Panama Canal, though less publicized, have the greatest significance. The aim has been to drive the United States from the Isthm us of Panama; and if this should fail then to utilize the canal for the purpose of fanning to flame anti-American feeling throughout Latin America.
The time for our Nation to make its position clear is long overdue. The trend of events over a long period makes our course unmistakable. Every day that passes stresses the'urgency for a strong policy declaration by the Congress that there will be no further changes in the basic canal treaty setup and that the United States is not going to stand for further liquidations of its power and authority in and about the Canal Zone. Temporization on the subject helps neither Panama nor the United States.
To protect our interests in the current situation with respect to the lf Panama Canal, we have adequate legal means under solemn treaty lf
obligations.

TREATYMAKING REQUIRES INFORMED NEGOTIATORS
In view of the attitude evidenced by certain Panamanian officials 4
and provocative actions by radical elements using Panama as a sanc- 4
tuary for hostile propaganda against the United States, will not 1
searching queries naturally arise in the minds of American taxpayers 1
concerning our relations with Panama? Will they not ask why should I
our tax money be used to finance such a tropical luxury as a $23 million proposed toll-free bridge at Balboa, replacing adequate free ferry service? Will they not also ask why they should bear the cost of ceding to Panama, without adequate consideration or provision f or alternative facilities, of the terminal yards and passenger stations of A
the Panama Railroad? Will they not inquire into why the Hotelr Washincrton in Colon should be given to Panama without compensa- 0
tion or replacement? Of course, they will ask these embarrassing questions about our conduct of Isthmi an aff airs, and many more.
Obviously, the present situation is not a sudden development. As shown in my previous addresses it goes back to the Ilull-Alfaro Treaty of 1936-a treaty negotiated about the same time that the United States recognized Soviet Russia.
Featured by a serious weakening of U.S. rights and authority in the Isthmian area but without changing the fundamental provisions for the perpetual grant of the Canal Zon for canal purposes, the process of erosion was advanced in the 1955 treaty.
While the explanations of this deteriorating situation are complex, an examination of available records discloses that Panamanian negotiators overmatch United States negotiators. The Panamanians were f ar better informed and the Americans appear to have been uninformed professional appeasers.











to t os teIthmianarea is a1go hthsbenln e~
with treaty obligations should suchacitesbprmtdtonve the CnlZone, as was clearly foeeLyte auhrefte10 tratboth inPanama andinteUieSaesTh drfdte

witnese in the na Zone and in tetria iis nyb re
dom from political considerations of anyconrcastbly th
Canal Zone guaranteed. To that end, Iurge withll theL foc tm omadtepop passage of House Concurrent Reouto 205~ oftersn oges In order that the Congress and1 th peqpl have some of the documentation. on whichmyraksrebsd quote a selection of news stories fro anmnan atnAercn and United States newspapers, as folws:
[From the Panama American of a ,98
STUDENTS PLANT 50 REPUTBLIC OF PAAALASI CNL OE
RAID DEsIG.NED To RAFR OEEGT
Panamanian university students, launhng 0prto ovriny claim to have planted about 50 Panamanian flags on theCnlZe today.
The Students' Union issued a co muique syingthsudnswr instructed not to violate any Canal Zone trfiruentoetrmltary reservations, and to respect theUntdSaeflg The communique described the rada ymoi c amda e
affirming Panamanian sovereignty over the CJanal Znadcligt national and internationalatetoprbmsewenPaaad the United States concerning the canal. None of the students was picked up by theZnpoi. An official spokesman said the Paaninfrgnoicws"osidering the delicate situation" whctesudnsadrae. Canal Zone officials had no commet. Canal Zonians in general took tewhole affar as a&oe Places in which the flagsweepatdicudthCnlZoese of the Fourth of July, the Prad, the Tatcher Ferry,aninfotf the Administration Building. The flag in front of the Admnsrto uligwspatdb group of five students traveling i an antmbie In full view of thebuligsatnsewht-oarokrshy tried to plant one flag firmlyithcetrotegascrlebte main door.
The mast of the students' fa rkbtte mngdt tc h
stump into the turf beforetaigoft e
The ana Zoe co ondut atthesu~ig wlkedove camly resectfully folded the faadto tit i ~ieboh
In oherplaces the suet lcdtefass neueyta h
fell to the ground. Americanobevrmnflfth aeri






ISTHIMIAN CANAL POLICY QUESTIONS 31

which the Stars and Stripes are never permited to touch the ground. commented that the students did not seem to have much patriotic respect for their own flag.
Students Union President Carlos Arellano Lennox, in a manifesto to the people of Panama, declared that statements by Congressmen and certain organizations in the United States have revealed an intention to establish a U.S. colony or protectorate in the Zone.
The manifesto said that Operation Sovereignty was intended to demonstrate the feeling of Panamanian students in favor of a fundamental revision of the treaties between the United States and Panama. Such a revision would seek to realize Panama's rights and demands.


[From the Panama Star and Herald of May 3, 19 58]

REPU-BLIC OF PANAM-NA FLAG~ PLANTED IN CANAL ZoxNE BY STUDENTS IN SURPRISE MOVE
The Panamainian flag was planted in the Canal Zone by Panamna University students yesterday morning in a -well-planned surprise operation that created -what the foreign office ter-med a "-delicate situation."
Thirty-nine flags were removed by the Canal Zone police from
various spots in Akncon and Balboa.' A student spokesman said 72A flags were used in the operation and indicated the same banners were planted in spots not readily visible to police.
The incident brought immediate diplomatic repercussions. Robert Acly, Counsellor of the U.S. Embassy in Panama, called on Foreign Minister Aquilino Boyd at noon yesterday. There -was no announcemnent if a formal protest was lodged.
An embassy spokesman said: "The embassy is a-waiting a full report
from the Governor's office in the Canal Zone. Tn the meantime, we are 1
watching the situation -with interest. There will be no further comment pending the receipt of the report."
The Panama Foreign Office said:
The Foreign Office is considering the delicate situation which has developed 4 as a result of the symbolic act which took place this morning when a group of youths belonging to the Union of University Students of Panama raised the Panamanian flag in the Canal Zone.
A Panama Canal spokesman said: "The action is ridiculous and not worthy of official notice."
There was official concern that the incident might be followed by new demonstrations within the Canal Zone that could result in violence. The operation, named Operation Sovereignty in a University Students Union announcement, was carried out at 10:15 a.m.
Groups of students-handpicked for the operation-were posted at the sites which had been chosen for the flag-planting. At 10:15 a.m. (their watches had been synchornized prior to the operation) each group moved to its assigned post, planted the flags and left. Their instructions were to offer no resistance in the event of arrest, to keep away from military reservations and not to run. (All of the men participating in the operation) (some young wome-n took part









At least two of the groups wereacopnebyhtgmer


aethd*q bfr operation was baredot

odert tam o rcalin, announcingmtat the PesdnilPamth the Fi orepoAfart omitte o the NainlAsebygorpr tath yrtion Buldng At in 1015arried fou. Aenoterufsuet roe on tefttry) avnde tn sd barygtePnmiafl. tookveir ctrei wtih, adnucn sthahpration had jutnee Thrreoutnetact
Tha Heights rordt one polic wshaeig cme frmteAdiita tudnt guisaid Athey:1 wak.)ormnwle t h etro h Thsse ffapne d in front of the mnsrtinBidn, lne h brnd o thsue~ bisty) an fetheoe ytefa hl it thk ther flctus wtrte me tato ofligintebckrud inhe. Udrou teeh flakt anuietfdatoblendet Lia Heoght Road, (Z fonetoiesi h e a;amme of the Balboat Proaidi they alnkesi) ofThe dlrig plant ildng, and th buling a fgo ult lt There otere repos ofr mther ofcescoh-nbesrd1 y1 incer U~rzand onahe mlain wa letinuhrpnatwth Alle o ic h epre-taohr flags were lntd soolosed0o Na oaet were, I ae infoto in abaSrvc etr 'l h cao hae been dtaied A u reietiale a,6osrnipn tet rested srcul court beending n nfoto h ii far Thmede ererer other banet~neplneatheCisegdn neCroz al thana ntmai ty- ogfr i ooian erRd


m fan



inePana, saild he oeraio whargied ditorin hepeace.






ISTHMIAN CANAL POLICY QUESTIONS 33

is a weak country, there is a vigilant youth ready to affirm Panama's rights whenever necessary. He reiterated the students' dema nd that Panama receive a fair share of benefits from -the Panama Canal. (In a formal statement earlier, the University Students Union reaffirmed its goal for a fundamental revision of the Panama Canal treaties.)
The student president pointed out that students went into the Canal Zone not to haul down any flags, but to plant the Panamanian flag.


[From the Christian Science Monitor, of May 3, 1958]
PANAMA ADVISER AIRS VIEWS
(By Ralph K. Skinner)
PANAMA CITY, PANAMA.-Diogenes de la Rosa, top economic adviser to President de, la, Guardia of Panama, has frequently been termed, "the leading Marxist intellectual in Latin America."
Apprehension has been expressed here and abroad about the influence of Sefior de la Rosa on the President's thinking and resultant decisions. lf
Asked concerning his Marxists beliefs, Senior de, la Rosa answered, "I am a Marxist but not 'an orthodox Marxist. I don't accept the whole system. I believe it represents a good method to study the social phenomenon but it is not for me a dogma."1
One matter on which Senior de la Rosa is especialy vehement is that 4
he is not a Coimnunist. Asked if communism as practiced in the Soviet Union would be beneficial for Panama, he replied, "Absolutely 4
not, I do not believe communism 'meets the basic problem in -human needs. It does not do so in Russia and it would not do so in Panama. Technologically and economically, communism accomplishes much. But the Russian man does not live better because of communism."
Se -nor de la Rosa added that he did not believe that complete acceptance of Marxism would be beneficial to the people of Panama.

POWERS EXCEED POST
Officially, Diogenes de la Rosa is Executive Director of the National Economic Council of Panama, reporting directly to the President. But he is more than this. He assists President de la Guardia in the preparation of major speeches and determination of policy.
He said:
I gather the facts and assemble the information and the President writes the speeches. I also draft laws and executive decrees. I make investigations for the President in everything but political matters. I do not mix in politics at all.
The adviser revealed that the President uses him as go-between and mediator between the executive power and certain groups. For example, he acted as go-between enabling President de la Guardia to make a special, unannounced arrangement, with the student federation at Panama University aimed at keeping the students under control.
Those who oppose Sefior de la Rosa's important post contend that the President must mi-ake decisions based of ten on facts submitted by his adviser and that these facts may contain some imparta-






34ITH Iiii IiA PLC'USIW
ion i o deI oas-auaifr3 er ncranM
pi lo op ies. ''''' '' ''' i'' "'"
Preidn dei Iaiiiiiii Guaria reet h cuain gis hsidia
an d hei n si u a io s t a t h is th in k in g is g u id ed b y S efi o r d o Ia R o w ,. i~~iiiiiiii i ,,,, .. ..
Nevertheless, .... is knw thatliiiii ..... Prsdetisigiito teMax
ist background of de Ia Rosa and, privately, does not deny it; that theiii Pres, ,,,,,,ii Hiiiident, consiiiiiiiiii ii der Sefo de Ia oa' auet im -sana vse a iiiiiiiiigsh negative asetadta h eietcnieshm
self capaiiii of isiiiiaiiiiingi outi any posil intepoltios.......osa
p rep a re rep o t n d a ....................................................
It isrmrdta ihntePesdn' w aie n le
whrsm usinte he xctv' bliyt itnus e
tn hsoncnlsosadtoeo eird aRs.O ore
pato hsmyb trbtdt hesrn eluy eeo e-o
dIaRs'unusindiec wih...Pesdet Sefio deIaRoa' .ffc.l..........o te aam Gven
metara a en poetdb gosnPnma ei rs
entl atednga...oi.oncli.uaeaa O hshesi

Thr sacnieal lnfra nerto fteeooyo h eta




ISTHMIAN CANAL POLICY QUESTIONS 35

Sefior de ]a Rosa, who considers himself an objective observer of the United States, spoke of United States failure to get close t( the people of Latin America. He said the United States is losing the battle for public opinion in Latin America because it lacks a IJSVC11(logical penetration into the consciousness of the Latin-American countries.
Sefior de la Rosa is sometimes accused of being pro-Soviet and antiAmerica. Asked about this, he replied:
That is not so. I am an enemy of the Soviet. I am not unfriendly to the United States. I criticize and oppose certain policies of the United States. I consider certain of these policies detrimental to the interests of my counry and to all of Latin America. But I am not a foe of the United States. He indicated that the policies he opposed were economic. He said he strongly believed that the United States was restraining trade in Latin America.
ECONOMY C AID SOUGHT
Sefior de la Rosa says he believes the United States should give more economic aid to Latin America, and less military equipment.
Panama's present problem, he said, is the need to create an economy.
He says, "To me, that means we need capitalism and not socialism. {10
Socialism cannot solve the problem now and capital is needed. However, with capital I am seeking far better Salaries for laborers and a ,
raising of the standard of living. This adds up to a progressive Psi
capitalism." *Getting this capital is not easy. Native Panama investors will not put their money in low-return farming and betterment projects and low-cost housing, he said. Sefior de la Rosa stated that the state would have to provide the funds for agricultural aid. educational aid, improved sanitation, and public health, more and better roads, and the like. But the state lacks fhnds.
A foreign loan is being contemplated at the present time. The sum of $30 million at this time would meet Panama's pressing needs and permit great progress to be made, the financial adviser considers.
The higMy publicized demands of certain Panama politicos for 50 percent of the revenues of the Panama Canal, and other such fanciful proposals, do not arouse much interest in Sefior de la Rosa.
What he would like to see is a definite program by the United States r|
to aid Panama with a stated sum of monev each year for several years. This would enable setting up programs to accomplish some lasting *
good, Sefior de la Rosa told this correspondent, and added that he has a plan for it if the funds are forthcoming.

[From the Washington Evening Star of May 6. 1958]
PANAMA SEEKS To FLY HER FLAG OVER CANAL
PANAMA, May 6.-President Ernesto De La Guardia, Jr., says lie is going to ask the United States at once to let the Panamanian flag fly over the Canal Zone.
The President sent that word out last night to a student demonstration demanding that Panama reassert its sovereignty rights over the






36ISHINCNLPLCQUSIN
Canal Zone. The UtedSaehprtsteuaewyadcnrl the zone 5 miles wide on ec ieo tudrapreullae
of the Panamanian a theyhdpatdtvriuponsnte

Canal Zone authorities returethflgtohePnmiagvrmernt.


PANAMA WILL~ MOVE FRFA oFYI OEPEIETm WORDn AT STUDI@NTDEOSRT0VUJEsr ~DNSPRD CARING FLAGS PATDI OE ANR EuNDYSRA
President Ernesto de la Guardia Jr~., etwr oasuetdmn stration last night that hisadiitainwludeakim daey the necessary steps to have -h aaainfa li h aa oe The message was convyebyCro rla ZL intf the university students uin rmtebloyo h'reieta Palace as President delGuristobedehm

strators because of a ore hot A group of about 10 univeststdnshdpredali'aog the entire length of Central Aveu otePeieta aae a ing the Panamanian bneswihte lne nvrossositl
Canal Zon~elas trdy

Fifty-nine fags weertre odyb aa oeatoiist a Panamanian offil an WrIntr eieedt h nv'.r.st
ceived the flags at theBlolii tto' rmCp.Gdi al district commader. h euno h lg a euse nisr1

Student PeietAeln enx
opposite teFrinMnsrbidn.Mrhn ihu folc

start of thirmacbubytetmthyrahdteowon m ion~ they were a the edvft.I~ fvhceadteaeu a clear of traffic.
The flag-bearing studentsweepeeebyacrvnosvnvhicles, including n qipdwt odpaesoe hc ata airs and typicalPnmnamuiwspayd There was appasfrmbloisadfothsieakfrte marchers.





ISTHMIAN CANAL POLICY QUESTIONS 37

The conference lasted about half an hour. On the street, the demonstrators chanted for De la Guardia to come out and an announcer called on the President "to do your duty and salute the flag."
The Chief Executive came out on the balcony with the student delegation. Arellano Lennox, addressing the demonstrators, who had n joined by several hundred citizens, said the delegation had informed the President that the youth of Panama demanded that before any bases are granted for intercontinental missiles the Panamanian flag should fly in the Canal Zone.
This was a reference to a recent request by the United States for a survey of hilltops in Panamanian territory for use as radar sites. The results of the survey have not been disclosed.
Arellano said the President was told also that the youth demanded that before any more concessions are made to the United States, Panama's rights in the Canal Zone be recognized. He added that it was Panama's duty to help hemisphere defenses, but that did not mean submitting to more humiliations.
As Arellano concluded his brief report, the demonstrators took up a chant for President de la Guardia to speak.
Arellano announced that the Chief Executive excused himself from speaking because of a hoarse throat. There were boos from the crowd. Arellano signaled for silence and added that the President's message (1
was that starting today the Government will undertake the necessary investigations and steps to have the Panamanian flag fly in the Canal Zone. There was applause.
The President immediately withdrew inside, followed by the student delegation. The demonstrators on the street began dispersing.
The demonstration was orderly. There were scattered cries of "Down with the Gringos!" __[From the Panama American of May 6, 1958]
UNITED STATES-REPUBLIC OF PANAMA FLAG NEGOTIATIONS EXPECTED IN WASHINGTON SoON
Panama will shortly open negotiations with the authorities in Washington with the aim of authorizing the flying of the Panamanian flag alongside the Stars and Stripes in the Canal Zone, it was believed in well-informed circles today.
Such negotiations would be the logical next step following President Erensto de la Guardia, Jr.'s assurance to Panama University students last night that his administration will seek to have the Panama flag flown in the zone.
It was understood that during negotiations leading up to the 1955 Remon-Eisenhower treaty the United States declined a Panamanian proposal to the same effect and that ships entering Canal Zone ports and transiting the canal should fly the Panamanian flag at the foremast along with the Stars and Stripes. It is customary for ships entering port to display the flag of the country in which that port is situated.
The university students paraded through Panama City to the Presidencia last night proudly bearing the 59 flags which earlier yesterday






38 SEMINCNLPLCQUSIN


wh enretundfo teCnlZn.Te eetefasteSu
students w e vhyPi


aenhsrplafterwrs wnteoeith Oprto Seei ny onThe paaealcon entral Prvienue enetttepesdnilplc


ghre student and t del
Arlan enn~ox the nma one ofnh lg otePrsdn sagf

fo speaomtu to th
gaheig fstdet adote elwthe Prsdntspomsto eo thate~h lgo the Panama flag on h aa oe gr.te to theaUniteaoi sfferigfoharesexudhmel Those an oeeta the P ahrinta
S i tes

flying of the flag was greeted e The students were applauded tral Avenue by pipe who gathered onbloisangteruef the parade.
The demonstrators dispersed at the


[P~rm the Panama Star an Head-fMa ,98
REPULC OF PAM~A STARTS MACHNR O LGNGTAIN' ADVISORY BODY ASKED) To TELL BES PROC-IIDWIN STRUCTs FORIGN~ MNISTERm To SEE ADVIC OM AIOA CTNCIL OF FE ..
The Panama G}overinent yetraseinmiothofcala' chinery for formal negotiatiosWtthUnedSastoavte

i f raised in the Canal Zone.
A similar .. Pam

The official announceetsi rsdn ret el uriJ~ instructed the F~oreignOfc ocnsl ihteNtinlCuclo Foreign Relations over te bs a oapoc h eoitos The eight-man couil isc It includes two former peietDs iad .Afr n 1r mxod io Arias-and four fre oeg iitr h aebe lsl connected with past negotiain ihteUie tts

students' demonstrationththsamnsrtowuludeakimediately the steps nees7thaetentolfaglwnite Canal Zone. Last Friday,unvriysuetpltd59Pamin flags in the Canal Zone asasmoiattorfimth unX' soveregntyoverZ the 0sqaemlsoPaanintrtryn

them Mondy night to the preinialplae






ISTHMIAN CANAL POLICY QUESTIONS 39

The announcement issued by the President's press office following a Cabinet meeting yesterday said:
Complying with instructions from the President of the Republic, Ernesto de la Guardia, Jr., the Minister of Foreign Relations, Aquilino Boyd, this morning addressed the chairman of the National Council of Foreign Relations to advise him of the desires of the National Government to undertake negotiations with the Government of the United States of America looking toward the raising of the Panamanian flag In the Canal Zone and to seek, through the advice of that body, the most convenient approach to those negotiations.
How long the Council of Foreign Relations would take to report back to the Foreign Ministry on the flag question was not known.
Observers recalled that among the proposals submitted by Panama during the 1955 treaty negotiations was one which called for ship's transiting the Panaxna Canal to carry the Panamanian flag and for raising it at the canal terminals. Negotiators for the two countries did not reach agreement on the proposal.


[From the New York Herald Tribune of May 7,19581
PANAMA: A MATTER oF FLAG
PANAMA.-The government of President Ernesto de la Guardia, Jr., lift
holds that American rightsin the Canal Zone are restricted mainl to the operation and defense of the canal, but opposition parties and p3lic clamor are pushing him to take an even stronger stand. The other night about 100 students joined by citizens, marched on the presidential palace in a demonstration called Operation Sovereignty. De la Guardia pleaded sore throat, didn't show. But yesterday he moved to swing support behind his position; he said he will ask the United States to let the Panamanian flag fly over the Canal Zone. The situation was brought to a head by a U.S. request to put radar installations in Panamanian territory.

[From the Americas Daily, Miami Springs, Fla., of May 8,1958]
LATIN AMERICAN NFws IN BRmF-PANATTVIA WANTS HER FLAG FLYING IN CANAL ZoNF,
PANAMA.-It is expected that soon the Government of Panama will start negotiations to have its national flag wave at the side of U.S. flag in the Canal Zone.
These negotiations will follow the statement of President Ernesto de la Guardia, that his Government wishes to hoist the Panamanian flag in the Canal Zone.
The students had organized a demonstration to the presidential palace carrying 59 Panamanian flags they had hoisted last Friday in the Canal Zone in an att they called Sovereignty Operation.
In this capital it is recalled that in the negotiations of the treaty of 1955 with the United States, Panama asked for a Similar stipulation, and that the ships crossing the canal should hoist the Panama aian flag, but the United States rejected the proposal.











Letfac it. The Redsmaeudutdl ntemrc t a
-over~ our free Amrcas-Btidooialanbyfrefamsf

democracy not alone for its owngrantinbtfrllhe mim nations of this heispeeadfroraleovsadesntmn that the United Stae of Aeia cnbc h .wigfre.o e

wars. It may welltak more tha l forAeiwtgt~ obc
Russian commnunismn which is ovosyo h ac so oa. And the Russians mean business hyko h oe fWne publicity; also the power of bullying small nations intfalninie with them; also that of infiltration fo ihn The Communists oftdycncmadmcho h a atae
and no one knows how much of te NearEatplshtsrwin African Continent. It is cald h akCninn eas h a
jority of its people are drk skinned. As eas ti tl oltl civilized save..in a, oprtvl e pt yteFec etes

We also know thtther~e areCmuitpategttigtruh

senit in acOtion rightheeiPaaaThdotnsmuhd b

Msow line is whollylien to l forfe mrcs -1o u
nations have fough for theefedmanwothmbfrc f
arms. By the sametoewewlfihfrtemain The Moscow intrusion is worldwide. 0nyyseda h.Sa and Herald featured-and well it did in the piningth acta rioters had sacked and burned th U.S. lbrayi ert h rq pipeline was blown up as rioting fared in Lbnn And the secondary headline reotdtaanrmbsrehuig for the downfall of the poWsengvrmn.Ta swa
Communist infiltration means. How much further wanndowofteefeAmrcsed before we stand up adtrwotteedsoa iieswoaes basely abusing the boom ofhoetctznhpinaoswoefrdomt was bought at h ihcsfseabodadtas The citizens of ourfreAeiadontdsreoejythfedomt our f oref athers bought in1 blood if thy the dsedns fhre of the independence, d o ls ak naltecutiso u
Americas and trwteCmuitaiaosot




President Ernesto de la Guardia rsi etra ewscn cerned over the activities of agtator woin reality watnoefth nation's problems settled.






ISTHMIAN CANAL POLICY QUESTIONS 41

He made the statement after referring to "student movements which are developing now in some sections of the country."
The Chief Executive did not elaborate on this reference in his speech which lie delivered yesterday in Ocu at the dedication of a Government-built rural housing project. Two recent student movements which drew national att _ntion were the planting of Panamanian flags in the Canal Zone by National University students and a parade by high-school students from Aguadulce to demand. completion of a new ,,Z!Cllool buildii-qr.
I cannot close my remarks-the President said in his prepared addresswithout stating, in connection with recent student movements which are developing now in some sections of the country, that I have not cast aside the dreams of national redress and redemption from my formative years in the National Institute. That I still dream of a just, prodigal, rich, noble, and great fatherland. That is my dream as a citizen and my dream as Chief Executive. And if I suffer the agony of fighting realities which tend to destroy that dreamvested interests that operate openly or surreptitiously, that resort to bribery when they cannot disconcert and confuse public opinion through well-known press organs; the deep political decomposition of the country which contaminates from the popular strata to the highest officials; the stateof excitement of the popular masses which turns them into victims of maneuvers by agitators who in reality want no problem settled because they would then lose the basis to satisfy their vanity and their lust for the limelight while I suffer the agony of fighting against these realities, which cannot in any way be blamed upon students, yet I do not lose breath, nor does my will falter, nor my dream diminish for a just, prodigal, rich, noble, and great fatherland.
In his speech the President emphasized that while problems of every nature grow throughout the country, the means for solving them still are inadequate. He stressed that it was necessary to plan for the country overall and not just for particular communities.
I myselfhe addedfeel at times that my capacity for waiting disappears in the face of messages and messages which demand administrative action to solve 1,000 difficulties which embitter the life of the Panamanian family and narrow its horizons and I cannot help but deplore in such cases the lack of means for rendering help. But no one is unaware that ours is a country of scarce and limited economic resources.
He called for a "deep sense of responsibility" on the part of the
"mortgage the future by acting senselessly in people in order not to
the present."

[From -the Washington Evening Star of May 20, 1958]
PANAMA STUDENT CLAsHKiLLs 11 INJURIES 62
PANAMA, May 20.-A high school youth was killed and 62 persons were injur d in demonstrations against Panama's education minister yesterday.
President Ernesto do la Guardia, Jr., blamed the clash between the students and national guardsmen on political opponents who he said used the youth as a shock force against his government. He agreed to meet tomorrow with student leaders to discuss their demand for removal of three guard commanders. The students promised an orderly f funeral. today for the youth who was killed.






42 SEMNCNLPLC QUSIN






Manuel~GURD Arazdid f onuson




The students hre tnsa h urse -datce hmwt
!iiiii~ ll,





o llunees canremeptroldtesho fergadmnwr ih


dantrthe cityh of Colont where ritr tre artioa ihosns jndi n th high sl i ol u










yon raz unrlwul eorel Itdmned the ofaicerA'

rtuevladrpaethorgnlsent demedert duation
MiirVictor Juliao ndied

Thea ofdet f a ccung to. pmiowt o rpel qipn n



[Frm te Wshngtn Pst TmesHerldof May 22,198 colon.A Riois SPREAD To COLON .......................................................................................g h t t oii~
the city of Colon, where rioters stormed national guard headquarters iiiiii
w it h s to n e s a n d b o t t le s S ix g u a r d s m e n a n d a b o y a n d g ir l w e re .......................
% in ju r e d .~~!iiiiiiiiii iiiiiiiii!iiiiiii!!ii~i~i~iii~~iiiiii~i% iiiiiiiiiii~iiii~~~i ii~~ ~lii T heiiiiiil~i d e m o n s r a to r s w ho'"i~iii~~i .......... n o n stu d en ts 7 i ............................. .a ft................................o... ........

massiiil meeting.....r...stu..t...ad.rt..d.aut..ities.h..ad.not.in
igatedii thei~ attck Ato iihv lmdms ftetobeo




i~ico ia andi theenaioa guar comner.Teyacs


Juliao of fa~iili ilingt qupad tfchosprpry

[i Froml the Wsiin gtnPst&Tms ead fMy23 98
T:oops BATTLE SN PE~i:iiiiiii;i~ii ~s !iiN 2 Crnmsi iii-9 !iiKmuw, 61 HURT IN PANA31A~i:ii ii~: i~ii~iiii~iiiiiiii
iiiiiRiar m G i O ovma n nNiTiiii DicL m s STATE OF SIEGEiiiiiiiiii ~~!!~iiiiii iiiiii ii!!i iiiiiiiiiii !!!ii~!! ~liiiiii~i!ii
"iiii~iiii21(By ,i iLis C N oi)ii
"PANAXAi iii~Coly, My 22.Panam Iiiii troopsi batt!l e desrutie ioer andsnpes.ody..dbotle.u..udntdeonsrao..hrean.. C o lo n ....................






ISTHMIAN CANAL POLICY QUESTIONS 43

Nine persons were killed and at least 61 injured in hours of fighting here between national guardsmen and rioters who went on a rampage of destruction.
The Government claimed snipers killed the victims.
There were no reports of casualties at Colon, second largest city in the country, at the Caribbean entrance to the Panama Canal.
Other sections of the country w ere reported quiet.
The riots came in the midst of the threat of a general strike at midnight Thursday. The Government met that threat and the accompanying riots with declaration of a state of siegre-modified martial law.
There were reports the afternoon opposition newspaper Nacion was forced to close and its editor, Manuel Madia Valdes. was jailed.
National guard headquarters said National University students arranged for a truce to evacuate students massed in the National In stitute before the troops moved in to clear out snipers.
At Colon, students concentrated in a high school building and troops gave them an ultimatum to move out in groups of three to surrender.
The strike was called after several days of student demonstrations
demanding the ouster of Education Minister Victor Juliao for alleged failure to correct bad school conditions. lv
Af ter national guardsmen fired on students Monday, killing one youth, the students expanded their demands to include the firing of three national guard chiefs. President Erniesto de la Guardia, Jr., ref used to yield to all the student demands.
The Government charges that political foes of De la Guardia are inciting the students to demonstrate. The students deny it.
No opposition figure has been named as a leader.


[From the New York Times of May 26, 1958]
PANAMA REGIME CLAIMS A VICTORY-COU-NTRY CALM AFTrER 6 DAYS 1
oiF RIOTS-PRESIDENT SAYS STUDENTS WERE DUPES 1
(By Paul P. Kennedy) 1
BALBOA, C.Z., May 25.-President Ernesto de la Guardia, Jr., claimed a decisive victory today in the Panamanian uprising.
He said the victory had been achieved without a res ort to excessive force. He conceded however, that negotiations with students who had barricaded themselves in the National University were at a stalem-iat e.
Panama has had 6 days of street rioting and bloodshed. The demonstrations led by students began last Monday.
The President termed the demonstrations "a direct attack to overthrow my government." He said the students had been used "as a catalytic."
"Without knowing it," he said, "they played into the hands of those attacking me."
Seflor de la Guardia acknowledged the validity of criticism that his government had been soft.
"I must confess that, what I wanted to demonstrate as tolerance wvas taken by the public as weakness, which had something to do with the
S67-843---66--4






44ISHINCNLPLCQUSIN

declared.
He said he doubted that Communit hdbenbLlcae8i~h upslgs at the bgnibutht teha oei a""H singled ouit two student laes oia aalsadAde:'*Cn tubl, saing th former was aComnsadthlteraflw

send alistof student dmnsls ihadh a gedwt the deads as basis for' cofrne1wt1tdnlaesti
Instead of seeking confeecs ecagd h tdnscm,:u with three new dema~nds. esoe orsodnsalte.fo the students making the new dmns They called for the release ofallprosjie uigtedm' strations, the end of the stateo egadretbiheto h rights of labor and students..The President said he waswilntorlaellbthsecrgd with crimes of violence. Thsinldpesscardwthnpng liesaid.
He added that he wouldaretMetrn hergt flbi n students, but these had tobecaiidFoexmlhsitw bridges were burned during teritnadsuetrghso"'t cover that.
He said he had refue al ead htVco .JlaMn
ister of Education, and three top officers of the nationagurbeds missed. He added that he would rtain Col. Bolivar Valaio he of the national guiard, who histr wll gieapoietpae


[From the Panama American of MIay 22, 198
GUNREiu CLOSE TO CANAL ZN-7 DEI60OU-DDA T-ET

Panam" City was a battlerudaantdy There were 7 killedanatlat6wonebyaryfeno. The government hasupnecilrgh. Firing was heaviest aon eta vneadteNtoa n WVhe'reas in Monda'ssimsigwtthstdnsheNioa
Guard confined theifrecifyttergsgeasodyilsan submachinegu fire col ehadtruhu h iy Canal Zone Policeman Richr .Meao uya h edo J.Street, was injured when a bule oigoto aaarpe across his back aottewit i odto sntsros nte

Spent bulets wer on ntepagon fAno col h
school was promptl clsdfrtedy uil h ienPnm

are ein ket attheschol ill omene omesto et hem






ISTHMIAN CANAL POLICY QUESTIONS 45

Cristobal High School, in Panamanian territory in New Cristobal, did not open today. Students were informed of this previously.
Today's -fighting is in part a sequel to the expiration at midnight last night of an ultimatum to President Ernesto de la Guardia, Jr., from the students demanding that he fire Education Minister Victor N. Juliao, National Guard Commandant Col. Bolivar Vallarino, second in command Lt. Col. Saturnino Flores, and third in command Lt. Col. Timoteo Melendez.
LJong before the shooting started Panama City was locked up tight this morning. Students roamed in bands through an early downpour to enforce their call for a general strike.
Other bands blocked roads coming into the city, and in several cases gave motorists a rough time.
Bomberos manned the ambulances which screamed to and from Santo Tomas Hospital. Lucio Paz, Jr., 15, was shot in the chest while standing in IDe Lesseps Plaza. He was taken immediately to Gorgas Hospital, where he was pronounced dead on arrival.
A squad of armed motorcycle policemen roamed the city this morning removing improvised barricades set up across several streets. The policemen sporadically fired shots into the air as they moved about the city, but as soon as they moved on, the students replaced the barricades. 4I *1
One hour later the first clash between students and the National Guard since last Monday, when the police were called off, occurred around 9 a.m. today when students started'smashing the plate-glass windows of the Caja do Ahorros (savings bank).
Student Miguel A. Batista, reportedly a policeman's son, was critically injured by a bullet in the abdomen during the clash. Another student was hospitalized with severe cuts from broken glass and a third was hit with a rifle butt wielded by a policeman.
Reports from Colon this morning indicated that students stoned the home of Gov. Jose M. Gonzalez during the morning hours and roamed the city forcing business places to close.
In the trouble areas of Panama City, armed National Guardsmen restored order after brief skirmishes withi the students.
However, they refrained from approaching the area of the National 4
Institute, in accordance with instructions issued by their superiors. I
Nevertheless, the National Institute area took on the appearance ofr a battleground as snipers took potshots at the students both outside of the school building and in the open patio inside.
Students took refuge behind automobiles to escape flying bullets, apparently fired by hih-powered rifles from some distance away.
Several of the students in and around the institute were injured by snipers' bullets.
It was reported late last night that antistudent groups armed -With blackjacks and iron bars roamed the center of the city itching to clash with the students.
Early today delegations of students departed for the interior of the Republic to gather support for a general student strike in support of their demands for Juliao's ouster.
It was not known whether the strike called for midnight tonight, but already in effect, will also be aimed at the removal of the three police commanders, as had been originally demanded by the students.






46ISHINCNLPLCQUSIN Ire ace ed ts m g te s
cused politicians. of oei ng tol sell them' arms ..... co n si ment.




Aesos areuto he am ffr l proseneigthtainahs ote buivld wef benterheho ocaldwaos Whileast ee namt Cit y esppran n rdostto wa th or th
....,low ing cofrec with student leadersyesterday afternoon the'









Pidente sugsedtaomcmisinb fom opiedo i



susa suggested te i pfs t mands on th~e afterdo dcto swl stoeseigrmvlo Pesr r resent. e c
t r m t t he s t Na
Thf prpya wa ejce.gtwahnerto the omm

Overs fon the eieca
i s gru gaine adeet si etaog;wsrpre oU' be abu 1,0 ytetm trahd ahda lz.A ac
-NinlcmroCetaAvnemaesuetfomdacro-t protect....chers.
Attepaate eeadesdb lt aulSua og

idnid Co mns hsas eitrda tdn tteuie'
sity. (Sousa made a lo~~~~~~n g rpt usaafwyasaoadhdbe see haagun stdet gruso usa.





STHMIAN CANAL POLICY QUESTIONS 47

At the Carcel Modelo (city jail) inmates set up a din of shouting shortly before midnight. They were quieted by hosing down and by tear gas.
A number of bands roamed the streets during the night.


[From the Christian Science Monitor, of May 31.1958]]
STUDENTs HARIss GOVERNMETr-RIoTS -NEUTRALIZE PANAMA GAINS
(By Ralph K. Skinner)

PIAxA CIr,. PANAMA.-Panama's President de la Guardia is frustrated and saddened by anti-American riots of students he had given credit for being more mature.
If, as appears likely, Ernesto de la Guardia, Jr., remains in the presidential chair after the current period of rioting, pillage, killing. and national disturbance is ended, it will be a hollow victory.
This reform-seeking President has seen all the accumulated good of
his 17 months in office dissipate in the midst of stupidity, hate, cupidity. and political treachery which has engulfed this capital city and other sections of Panama since Monday, May 19.
The biggest mistake of this forward-looking president may have been his endeavor to give recognition as adult thinkers to an undisciplined mob of students who took advantage of his good intentions and trusting nature.
For years the students' traditional interference in politics has caused enmity between them and the national guard, Panama's combination army and police. e
STUDENTS WON IN 1947
In 1947 violent student coercion, led by adults, forced the National
Assembly into unanimous rejection of a U.S. request for military bases in Panaraa.
Students thought themselves influential until Col. Jose A. Rem6n became President. He told them to keep out of politics or he would close the schools. He meant it and the students realized it. They withdrew from political activity. f
Under President de la Guardia, the students have become noisy and demanding again. This is due to three themes which are being dinned by interested parties into every Panamanian, but especially the student groups.
These are:
1. Every Panamanian has the right to expect great and unending benefits from the Panama Canal, in which Panama is a
self-asserted "equal partner."
2. If Egypt could nationalize the Suez Canal, Panama should
aspire for nationalization of the Panama Canal.
3. It is patriotic and proper to denounce U.S. treatment of
Panama during the past 55 years.

TREATY CLEAR
TIs perverted campaign is receiving great support from certain politicians and publishers here. And, when all propaganda tunes run






48ISHINCNLPLCQUSIN



saying that the Unte Sate exercises th se svrinyafi were sovereign. But soapboxortsdn'quethteay


he thought the guard was too rough with tesuet.H losi that the general public dsrs fsuetpltcigwsufar The President said the fuitureoftentnwa headsftee To accomnplish this, he sent negtaost h tdn edrpo, posing that he wouldorethpoienttmoettesunsoncdition~ that the students ol esn n esoal nterattd to law and odr


Students Union, confirmed ta h rsdn a rpsda x



It is believedta h rsdnilodrt h ainlGadt
give afree handt h tdnsadntt etannrmnadete brought about much of th tragedy ththsfloedyn rel Guardia still has rfsdt ~warsso tdn gttr n e
cisive though forceful hlinofsuetaac. The precise spark wih ltthePanama cn in suha bodih


Led by conniving politicos, the public gvtesuet uhapoa ationfrmh.

PARADEBRKNU





but tos prsnt thertrcivthm When the studets trie to paaeyvrnit aNtoa ur






ISTHMIAN CANAL POLICY QUESTIONS 49

with rocks. Many oni both sides were hurt and one student was unintentionally killed by a blow on the chest.
Immediately the students called a strike, demanded the ouster of the three commanders of the national guard and of the Minister of Education in the Cabinet. When the President did not accede to their demand, they cried for his ouster.
Since then there have been days of rioting, store windows broken throughout the shopping district, pillaging, sniping by many individuals, and burning of automobiles and the usual stupidities perpetrated by mobs.
There have been about 9 deaths and some 60 injured, according to official censored reports.
The Government imposed a curfew from 10 at night to 5 in the morning after suspending civil rights for up to 30 days. There is press and radio censorship. Only administration radio stations are broadcasting. For a few days there was no public transportation and every store in the city was closed.
As this is written, there is a continuing state of upset. The Government and national guard hold control of the city, but the students are barricaded on their university campus clamoring for a general strike throughout the country.

JUMBLE OF CAUSES Ip
The causes of all this form a jumble. It appears that the student agitation which started it all was precipitated by headstrong, misled, arrogant students trying to run a national government, which, in10 turn, thought it was controlling the student tempers through nego- 4
tiation. 1
Agitators jumped quickly into the breach in the wall of national calm made by the students. There may have been a handful of Coinmunist leaders, but the majority were not, as seen by capable observers.
The majority were paid agitators, hired snipers, troublemakers, 3
hoodlums, paid by political interests to harass, at the least, and, at the most, overthrow the administration of President de la Guardia.
Sef-nor de la Guardia has tried to institute reforms; he has endeavored i to stop the two-handed dipping into the Government treasury which has been traditional here. Even more, he has attempted to break up the vested interests and special privileges of a few family hierarchies, long established.
ARIAS HTAND SEEN
The current fracas has brought to the fore the name of Dr. Harmodio, Arias M., brilliant lawyer, ex-President, financial tycoon and publisher, and probably Panama's most adroit behind-the-scenes politician and power manipulator, according to reliable sources.
According to intimates, President de la. Guardia considers Dr. Arias responsi ble for much of the agitation presently upsetting this country.
A city improvement plan proposed by President de la Guardia would run a highway directly through an unauthorized giant shrimp plant in which the Ilarinodio, Arias interests are controlling. The







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[From the Congressional Record, 85th Cong., 2d Sess., July 23, 1958]

PANAMA CANAL: OBJECT OF IRRESPONSIBLE POLITICAL EXTORTION
Mr. FLOOD. Mr. Speaker, in the course of my previous addresses to the House on the Panama Canal, I have developed at length the pattern of demands that have been so strenuously pressed by extreme and radical elements in the Republic of Panama. Yet, their full scope was not publicly revealed until the recent visitation there, July 12-16, 1958, by Dr. Milton Eisenhower as special representative of the President of the United States.
Published after arrival of Dr. Eisenhower, the demands include not only the officially expressed views of the Panamanian Government but also those of Panama University students. The latter call for what is termed a "fundamental revision" of the basic canal treaties.
Though not reported comprehensively in the press of the United States the story of the Eisenhower mission has been well covered in the press of Panama and summarized in news stories in a few U.S. newspapers by informed American correspondents resident on the isthmus. These accounts I have now had an opportunity to study, and shall include in my remarks so that they may be examined by all in authority.
It is pertinent here to state that when the late President Jose A. Rem6n, of Panama, was confronted with political interferences on the part of university students, he took effective measures to keep them out of politics. Yet, recently in Panama, even during the visit of Dr. Eisenhower, university students have been injecting themselves not only into matters of domestic concern but, as well, into questions of foreign policy affecting the relations of that country with the United States. 'To describe these demands with candor, they constitute irresponsible political extortion. If acceded to they can only produce new demands for greater extortion.
Though the range of the demands is extensive, there are three of special significance, emphasied in the Spanish press of Panama:
One. Closing down fall business activities in the Canal Zone.
Two. Flying of the Panamanian flag in the Canal Zone and on vessels in transit.
Three. Adopting Spanish as the official. language in the Canal Zone.
As to the operation of business enterprises in the Canal Zone, these are absolutely essential for Panatma Canal and other U.S. personnel, including the Armed Forces.
The flying of the Panamanian flag in the Canal Zone and on vessels in transit would constitute a symbol of sovereignty that does not in fact exist. If this demand were ever acceded to, it would be followed immediately by others for mineral, oil, and gas explorations, farming,






52 IT2INCNLPLC USIN

and miscellaneous business entepiea ela o eteetof81 lands in the Canal Zone noti a~ctual usefrcnlo ees upss In this connection, Mr. SpeaePeietTfbExcivorr of December 5, 1912, pursuant to the Pana-maCal tof12an in conformity with treaty, declaredth,All land and land under water witithliisoteCal dii*ncsary for th onsrction, maintnneoprtortcinadsnttonf the Panama Cnl
Title to all such land was aqie yteUie tts aigh Canal Zone a Government reservation. Eveycniraoneqrs the continuation of this poiyntol o h bs neet fPn ama hut also for the future wel-en fIh-ra rjetfo hc Panama derives the maor part ofisicme utemoe ihu
this authority of theUntdSaeovrteCalZeitwudb impssble to operate the Panama Canal. As for the third point, th poa foradpigSnshste official language of the Canal Zone is oviously deindtfocou North Americans from employeti h aa nepie t fet
however, would not stop there fo anysuhlnagreiemt would necessarily apply to civilian emplyefteAmdFre engaged in protecting the canal. In eithrcsiwolinode security situations too complicated tocopend The Panama Canal, Mr. Speaker, is an neoaicpbcutly operated by the United States puruntolwadrey.Iis. business proposition entirely ditntfrmteRpbiofPna for the benefit of world comre Assuhimstb eena
f rom. becoming the victim of furte poiiaetrin Because many Panamania leaders, when preetn ghi aehv repeatedly quoted former Secery of War WlimH atoto historical context, I wish to set thereodsaihast athsexc views on the sovereigntquestio we. In an address on the {) m aa ordlvrdinNwOlas February 9, 1909, when he wasPrsdn-lcofteUidSae, he included t~he following saeet It is said that the Lord looks fe hlrnadduknmn el hn we ought to include the United Saeto fteHyHr~nTet of 1903 had been confirmed bythCoobaSetafilrtodwic aroused our national indignation, we wouldnohaebnatllitefvrbe position we are now to comlt thtcnl Because under the treatywt aaaw r nite oeecs l h sovereignty and all the rights ofsoveegtyhtw ol xriei ewr sovereign, and Panama is excluded frmexringayihttohectay of those conceded to us. N hatmybewicls ruetbtId o care whether it is or not. We are there. We have the rightogvr la strip, anid we are going to gvern i.And witottergttoentesrp wihu h oe t oieiadwithout the power tomaetelwinht strip bend, all of them, tothcosrcinothcalwwudnthvebn withn 2or 3or 4yearsi hrl, ofwhr wetaei h osrcin Now, Mr. Speakr, those unqualifed wrso rsdn-lc at wh, sSecretr of Warhadbe ofotdwt aaains
wri n a demandar evn mr plcbetdyta hywr hn First,%bcause o 0yaso nepeainadapiaino h
policy thus defined byh eietTf n ecuetePnm aa
is now one of the two principal commercial crossrod ftewrd





ISTBHIAN CANAL POLICY QUESTIONS 53

Once again, Mr. Speaker, I wish to emphasize the urgency for a congressional policy declaration on the Panama Canal sovereignty question, for which purpose I introduced in the last session House Concurrent Resolution 205, the text of which was last published in my remarks in the Record of July 15,1958.
In order that the story of the Eisenhower mission to Panama and its impact as described in the Latin American press and as interpreted by resident North American reporters maybe adequately recorded, I include as part of these remarks the following selected news stories:
[From the Star and Herald, Republic of Panama, of July 14, 1958]
REPUBLIC OF PANAMA FLAG ISSUE LAID BEFORE DR. EISENHOWER-DE
LA GUARDIA CITES NEED OF EcoNomIc Am--3-HoR WORK SESSION HELD BY TEAMS OF PANAMA AND UNITED STATES OFFICIALS SUNDAY
AFTERNOON
President Ernesto de la Guardia, Jr., told Dr. Milton Eisenhower yesterday that flying the Panamanian flag in the Canal Zone would contribute to a better moral climate for cooperation between Panama ,
and the United States. fie
The proposal was made by the Panamanian Chief Executive at a 3-hour work session which he and his advisers held with the brother of the President of the United States at the Hotel El Panama. Dr. Eisenhower is in Panama on a fact-finding mission for his brother which will take him to Central America and Puerto Rico.
A communique issued by the presidential press office listed, in outline
form, a wide range of subjects discussed at the conference 'between .
President do la Guardia and Dr. Eisenhower and their high-level ad- q
visers. The topics were listed under three main headings: Contrac- I
tual relations between the United States and Panama; creation of a 0
better moral climate of cooperation between the peoples of Panama and ,
the United States; and problems of economic and social development of Panama. I
The Panama Government's announcement did not give details of the discussions, nor did it even suggest what was the reaction of Dr. Eisenhower and his advisers.
Dr. Eisenhower himself declined to give any details of the discussions, saying only that the Panamanian officials "presented their views on a great many problems" and that there would be "more to follow" when he goes deep-sea fishing with the President tomorrow.
He said that when he has completed his study tour of Central America he expected to make recommendations to his brother. He indicated these probably would be an extension of the recommendations on U.S. policies which he made in a report on his South American tour in 1953.
President de la Guardia's reference to the flag issue recalled that there has been agitation recently in Panama-particularly by students-for flying the Panamanian flag in the Canal Zone in recognition of Panama's claim of sovereignty over that strip of land.
Previous requests by Panama along that line have been turned down by. the U.S. Government. The last time the question was formally raised was during the negotiations for the Rem6n-Eisenhower treaty of 1955.







54 ISTI-nHAN CANAL POLICY QlJklg nOWS

On May 2, the University Students' Union carri6d out '110pefttion Sovereipty" in the Canal Zone. It consisted of planting arotM Panamanian flags in Canal Zone territory. At a student demonstration- in connection with that operation, President de la Guardia pledged that his administration would take the matter up officially with the United States. The matter was referred to the liational. Council of Foreign Relations and yesterday's proposal by the President was the first official mention of the issue since that time.
The communique did not give details of the President's proposal. In listing the points which the President submitted to Dr. Eisenhower, the communique said:
B. Creation of a better moral climate of cooperation between the peoples of Panama and the United States. The national flag of Panama in the canal zone and the adoption of Spanish as the official language.
The text of the communique issued by the, presidential press office is as follows:
In an atmosphere of the greatest cordiality, the President of the Republic and members of his cabinet reviewed fully with Dr. Milton;S. Eisenhower and his party, the relations between Panama and the United States for the purpose of arriving at means of strengthening them on thebasis of the gains made along that way up to the present, particularly in connection with the approval by the Congress of the United States of the laws required for the implementation of the 1955 agreements, in which measures the action of President Eisenhower has been decisive.
Immediately after that, the President of the Republic submitted to Dr. Eisenhower the following points:
A. Contractual relations between the United States and Panama.
1. Fair interpretation of the agreements in force.
2. Guaranteeing the Canal Zone market to Panamanian commerce and industry. Purchases by the Canal Zone in Panama (Items 8 and 9 of the Memorandum of Understanding Reached). Cessation of economic activities other than those connected with the purposes for which the Canal treaty was
signed.
3. Rates for supplying water to Panama.
4. The single wage scale.
5. Refund of import duties on liquors sold to the Canal Zone.
B. Creation of a better moral climate of cooperation between the peoples of Panama and the United States. The flag of Panama in the Canal Zone and the adoption of Spanish as the official language.
C. Problems of economic and social development of Panama.
1. The United States should have primary interest in Panama's development of its full economic possibilities as the only means of meeting the needs
and requirements of a rapidly growing population.
2. The Panamanian State and its obligations with regard to economic
development and the furnishing of education, health and social improvement
services.
3. Mutual advantage for the United States and Panama from a plan for
cooperation and economic aid, on an emergency basis, in some cases, and on a long-range basis, in others, for the immediate improvement of the unemployment situation and for enlarging and strengthening the basis of Panamanian economy.
4. An economic cooperation plan.
With respect to the economic cooperation plan, the President of the Republic divided it into two parts, one referring to funds for an emergency program and the other to long-term measures connected with the future development of the country. The President of the Republic submitted to the consideration of the visitors various projects prepared by the National Governm some of which were examined in detail and all of which awakened such interest that it wasagreed that they would be discussed more fully before Dr. Eisenhower's departure.






ISTHMIAN CANAL POLICY QUESTIONS 55

The work session at the Hotel El Panama was attended by:
In the Panama team: President de ]a Guardia, Foreign Minister M1ual Moreno, Jr., Minister of Government Max Heurtematte, Minister of Finance Fernando Eleta, Minister of Public Health Heraclio Barletta, Minister of Agriculture and Commerce Alberto Boyd, Minister of Education Carlos Sucre, Minister of Public Works Roberto Lopez, Comptroller General Roberto Heurtematte, Ambassador to Washington Ricardo Arias, and Administrative Assistant to the President Inocencio Galindo.
In the U.S. team: Dr. Eisenhower; Roy R. Rubottom, Assistant Secretary of State for Inter-American Affairs; Dempster Mcintosh, Managing Director of the Development Loan Fund; Tom Coughran, Assistant Secretary of the Treasury; Samuel C. Waugh, President of the Export-Import Bank; United States Ambassador to Panama Julian F. Harrington, and Lt. Col. Vernon Walters, who acted as interpreter.
Dr. Eisenhower and President de la Guardia were together for 41/2 hours in a meeting that started with a luncheon in a private dining room of the Hotel El Panama and then moved to the presidential suite. Three hours of that time were devoted to a discussion of Pana- ovt ma's problems.
Dr. Eisenhower's official program for Sunday started at 10 a.m., with a courtesy call on President de la Guardia at the Presidential Palace. The automobile ride along Central Avenue was uneventful. There was scattered applause at some points. Some spectators complained that the official motorcade traveled too fast.
In the Yellow Hall of the Presidential Palace, Dr. Eisenhower presented De la Guardia with a glass cigarette box and ash tray, a gift from President Eisenhower.
Then Dr. Eisenhower went to the Canal Zone to call on Gov. W. E. Potter (who had returned from Washington at 6 a.m, Sunday) and Lt. Gen. Ridgely Gaither, commander in chief of the U.S. Caribbean Command.
Governor Potter said Dr. Eisenhower asked for background information on some questions he expected would be raised at his meeting last evening with representatives of Canal Zone non-United Statescitizen labor unions. These included housing and wage rates. Potter said Dr. Eisenhower also made an inquiry on a Panamanian complaint about the importation of beef in the Canal Zone. The Governor
quoted figures of 1 million pounds of Panamanian beef purchased annually by the Canal Zone as against 50,000 pounds of imported beef.
General Gaither said he and Dr. Eisenhower discussed the weather in Baltimore. Both are Baltimoreans.
The afternoon was devoted to the work session, which was followed by the conference with the labor delegation.
In the evening, Dr. Eisenhower and his daughter, Ruth, were guests of honor at a dinner tendered in the Balboa Room of El Panama by President and Mrs. de la Guardia.
Dr. Eisenhower's program for today will be announced this morning. It is known, however, that he will make a trip through the Panama Canal accompanied by Roberto Heurtematte, Panama's Comptroller General, and Ricardo Arias, Ambassador to Washington.






56ISHINCNLPLCQUSIN



Zone officials a seven-pointmeoadmlsigweantrtet

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posed of officers of locals 90and 907 AFItCOatheUSEmsy residence where he is staying during his vsti aaa Elimination of the segr tion that still eit ntezn a n

You gentlemnDr. Eisenhower told the grouprealize you cannot change the minds of all the people at oneie. The local-rate labor delegtsas rsne hi i o 0
percent wage hike to mthta eetyaaddtecasfe ii
service employees. They iaeewihteplcofixnwgs based on the area of rcutment. They deridthmteunos low-cost housing poet
The group whccaldoDrEiehwricueW.HSnli,

of local 900; Alfred J.Mripeiet-flcl9;JoedlaRs Castillo and Ricardo Martin. Dr. Eisenhower was oopnebyUdrSceayfSteRy Rubottom; Dempstier McIntosh,MaaigDrcoofteevlp meant Loan Fund Croation; U.S.AmasdrtPnmaJln F. Harrington, and Robert Cox, labor attceofheEbsy The labor group later said it had reeved tefollwn ttmn f rom an Embassyreesnai: Dr. Eisenhiower, as proa ersnaieo h rsdn fteUie States, has invited you into his temporary homne in Paaato dsuspolm with him and to assist h~im in hi ft-fnigmiso.Crtiloofiilo employee of the U.S. Govermentwolateptdtrcinnyayfm this effort either now or in thte fture. The seven points submitted by the labor ru oD.Esnoe were

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ISTHMIAN CANAL POLICY QUESTIONS 57

5. The eimination of neregation that still exists in the Canal
Zone.
6. More support to Panamanian unions in the Canal Zone, by
U.S. Government agencies.
7. We in'sist that Panamnanian workers in the Canal Zone should
have representation on the Canal Zone Board of Appeals.
Text of the unions' statement on the conference with Dr. Eisenhower is as follows:
AFSOME, AFL-CIO International Representative William H. Sinclair said last night that he and other union officials who met with Dr. Milton Eisenhower and members of his delegation were very satisfied with the cordial manner and friendly atmosphere in which the conference was held.
Harold W. Rerrie, chairman and spokesman for Local 900 at the meeting, expressed great satisfaction in meeting with Dr. Eisenhower and the opportunity afforded to the Canal Zone noncitizen labor groups, to present their views on a number of issues.
Both Sinclair and, Rerrie agreed that Dr. Eisenhower expressed great interest in the low-cost housing project being sponsored by the international union for noncitizen workers of the Armed Forces and Canal Company government. Dr. Eisenhower said that he had already received some information on the acute housing situation in Panama and was apparently definitely pleased with the Jift
efforts being made by the labor unions to help find a permanent solution to this lw
tremendous problem.
Dr. Eisenhower said he know president Arnold S. Zander personally, which 4
led union spokesmen to believe that the highest sources in Panama, the Canal 14
Zone, and the United States will give full backing to the union's housing program which is scheduled to get underway as soon as the AFSCME's housing adviser arrives on the isthmus later this month.
The question of a 10-percent wage increase for noncitizen workers in the Canal Zone, which was denied by the Canal Zone Administration recently, was also raised at the conference where union officials brought Dr. Eisenhower up to date on the steps already taken by the local unions in the zone and the international union in Washington.
This and other matters raised at the conference by spokesmen for local 907 would be taken under advisement, Dr. Eisenhower said. He will discuss a number of the-issues with local officials in the Canal Zone, then make a full report to I his brother, President Dwight Eisenhower, when he returns to Washington.
Spokesmen for local 900 and the international union were very firm in pointing 1
out to Dr. Eisenhower that they want to see a labor man on the Canal Zone Board of Appeals. The House of Representatives recommended in H.R. 6708 that Canal Zone Panamanian employees be represented on the board.I
Sinclair and Rerrie insisted, however, that they did not want anyone on the 44
board who would be a "yes man," but they wanted someone instead, preferably from noncitizen labor unions, who would stand up for the rights of the workers on all issues.r
Sinclair and Rerrie told Dr. Eisenhower they wanted a labor man on the board because if he did not do a good job they would want to remove him, right away.
The labor spokesmen were very elated, however, over the great interest Dr. Eisenhower expressed in connection with the low-cost housing project which is a pon fsueltv importance to the local union's and international union's


REPUBLIC OF PANAMA STUDENTS REITERATE INVITATION

The University Students Union of Panama yesterday wrote Dr. Milton Eisenhower, reiterating its invitation for a meeting in the National University.
The union's letter was in reply to a, communication from Dr. Eisenhower which turned down the students' demand that any meeting with him should be held in the university.





58 ITDINCNLPXC USIN


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ISTHMIAN CANAL POLICY QUESTIONS 59

the meeting. At the head of the table was an empty chair with the sign "Mr. Eisenhower." The student delegation was composed of Virginia Ramirez and Ricardo Quiroz, of the UInion of High School StuLets; Julio Rovi and Carlos Arellano, of the University Students Union; and Blas Bloise, of the Federal Council of the Students Federation.
At noon yesterday, about three score students carrying posters demonstrated peacefully opposite the U.S. Embassy office building which is in a different scion of the city from the Embassy residence'. One poster said: "Milton Go to the United States of America." Others dealt with Panama's claims of sovereignty over the Canal Zone and with student demands for a 50-50 split of canal revenue between the United States and Panama. Still others made reference to allegations that the U.S. Armed Forces in the Canal Zone supplied arms to the National Guard during the disorders last May in which several students were killed.
The demonstrators dispersed 45 minutes later without incident after being informed by a National Guard officer that neither Dr. Eisenhower nor Ambassador Julian F. Harrington was in the building.
At that hour, Dr. Eisenhower was on a trip through the Panama
Canal. He told newsmen last night that "if I had been there, I would (V '
have invited them to send a delegation in and discuss all they wanted l
to discuss."
Dr. Eisenhower has been on the isthmus since Saturday. Panama is the first stop in his study mission which will take him through the Central American countries.
The impasse with the university students about where to meet has
been the only incident in his Panama visit. Of the students' refusal '4
to visit him at the Embassy residence because it is foreign territory, Dr. Eisenhower said yesterday: 14
If I took the same attitude, I would not have come to Panama. I have dis- 1
cussed problems with various groups. Any delegation which the students may have sent would have been received as cordially as any of these groups. Dr. Eisenhower declined to comment for publication on Panama's touchy proposal to have the Panamanian flag flown in the Canal Zone, but he said that in the discussions Sunday with President Ernesto de la Guardia, Jr., there was no suggestion of the revision of any of the treaties between Panama and the United States.
A student statement of topics which would have been discussed with Dr. Eisenhower listed the "Thndamental revision" of those treaties as the main item. It gave the following as the "minimum aspirations" of students:
1. Express reaffirmation by the United States of the sovereignty
of the Republic of Panama over the Canal Zone territory.
2. Liquidation of the Panama Canal Company because it is a
violation of the terms of existing treaties between the two
countries.
3. Substitution of the term "in perpetuity" in the 1903 Canal
Treaty by a period which will be in keeping with the principles
of international law.
4. Sharing on an equality basis of economic benefits resulting
from the canal enterprise.

67-S43-66--5






60 ISTEMIAN CANAL POLICY QUESTIONS
5. Express recognition of Panama's civil, penal, fiscal, and labor
jurisdiction over nonmilitary affairs in the Canal Zone.
6. Elimination of discriminatory policies in the Canal Zone.
7. The free use by Panama of the terminal ports of Balboa and
Cristobal.
8. Enforcement in the Canal Zone of the principle of equal pay
for equal work.
9. Preferential use of the Canal Zone market for Panamanian
industry and commerce. Elimination of private commercial companies in the CanaJ Zone.
10. Raising of the P amian flag in the Canal Zone and recognition of Spanish as official language.
11. Elimination of U.S. -Dosta.2ye stamps and exclusive use of
Pananianian postal service ifil the Oanal Zone.
12. Reft m-d of the rentals collected by the United S*tes on
land formerly owned by the Panama Railroad Company.
Under the heading, "Specific -Items To Be Discussed With Dr. NElton Eisenhower," the students listed the followilw
1. Release of Lester Greaves, who is serving a 50-year penitentiary term in the Canal Zone on a. charge of rape.
2. Elimination of military training lor the National Guard,
which should be limited only topolice functions.
3. Nonrecognition by the United States of dictatorships.
4. Greater cooperation between the United States and Latin
American countries to enable the latter to create their own
economy.
5. Hemispheric solidarity on a basis of equality and mutual
cooperation.
6. "Cessation of provocative and offensive acts on the art of
Canal Zone residents and members of Congress of the Wnited.
States against national dignity."
7. Ratification of the stand of the National Cbngress of Students for the nationalization of the canal.
Student spokesmen at the university contrasted the attitude of Dr. Eisenhower a university man, of refusing to come to the campus with that of Vice President Richard M. Nixon who braved stones to talk with South American students.
Dr. Eisenhower's discussion with Panamanian officials will continue today during an all-day deep-sea fishing trip to which President Ernesto de la Guardia, Jr., has been invited.
He and the President met for 3 hours Sunday to discuss a wide range of problems. These referred to relations between Panania and the United States and to economir, aid. Of his discussions with the President, Dr. Eisenhower said yesterday:
We had a most helpful visit with the President and we will continue it tomorrow (Tuesday) during the fishing trip. A large part of the diwussion dealt with Panama's economic situation and with plans of the Panamanian Goveniment which would call for Immediate short-term and long-term help.
Some of the Panamanian Government's proposals, Dr. Eisenhower declared, may be "quite li ible" for private financing.
tti e Med, "that other pro* ects will be developed
have no doubt", he I
with a view to obtam' dit from other sources, such as the ExportImport Bank, the Deve opment Loan Fund, or the World Bank."






IST-IIAN CANAL POLICY QUESTIONS 61

He remarked that he considered "the presentation by President De la Guardia and his associates thorough and well thought through." He added that he thought that those projects which would require credit "all would be repayable."
Dr. Eisenhower said that most of the subjects of discussion dealt with the aspirations of the Panamanian leaders to better the economic conditions of the people.
Today's fishing trip will bring to a close Dr. Eisenhower's official visit to Panama. He leaves early Wednesday for Tegucigalpa, Honduras, where his arrival is scheduled for 10 a.m.
Dr. Eisenhower spent practically the entire day yesterday in the Canal Zone, observing the operation of the waterway and visiting military installations.
He first stopped at Miraflores locks, where Gov. W. E. Potter and Marine Superintendent W. S. Rodiman acted as tour directors. The party then traveled to Pedro Miguel to embark on the canal tug (Culebra for a 3-hour trip through the cut and across Gatun Lake.
Lunch was served aboard the tug.
From the Gatun boat landing, Dr. Eisenhower and his party were taken on a tour of Army installations which included the U.S. Army Caribbean Latin American School at Fort Gulick, the Jungle Warfare Training Center at Fort Sherman, and the historic Fort San Lorenzo.
Dr. Eisenhower's party consisted of 26 persons. Guests included Roberto Heurtematte, Comptroller General of Panama; Fernando Eleta, Minister of Finance, and Ricardo Arias, Panamanian Ambassa- P 14
dor to Washington.
At a briefing for newsmen later, a Panama Canal spokesman said 0
the canal trip afforded an opportunity for Dr. Eisenhower and Governor W. E. Potter to discuss items pertaining to the Canal Zone which were raised by President de la Guardia at the work session Sunday with Dr. Eisenhower.
The spokesman said Dr. Eisenhower showed considerable interest in the mechanics of the waterway and that he was impressed by the durability of the 50-year-old waterway.
An Army representative said Dr. Eisenhower expressed interest in the activities of the Latin American School to acquaint Latin American officers with U.S.-style democracy.,
The party returned to the Pacific side by military plane at 4 p.m.
The meeting with University Rector Jaime de la Guardia was next 4
on Dr. Eisenhower's schedule.
In the evening, U.S. Ambassador and Mrs. Julian F. Harrington tendered a dinner in honor of President de la Guardia and Dr. Eisenhower. This was followed by a reception for 100 additional guests.

[From the Panama American of July 14,1958]
RiEiut-c OF PANAMA STUDENTS PICKET UNITE STATEs EMBAsSYQUIT WHEN ToLD EISEHOWER, HAIARiNGToN TRANsrrwG CAWAL
About 50 Panamanian high school students picketed the U.S. Embassy in Panama City this afteroon carrying placards proclaiming "Milton, the Canal Is Ours," "50 percent of the Canal"(a reference










National Institute.

Ha.rrington. A national gard rowi car deahntldbMj. wished. Carrion alsotodtethtEsnoeadHrigonwe

Meanwhile, University Student UninpeietCalsAeln


campus of the atnmu nvriy rlaoanucd Eisenhower will not be there. nEbsysoksa none



tmtEiseower n thea ..Emasrrmdne nL r E Willam aMitnthsengt, togethoer with de themaee a

The stants Caad toha tugr reful tee Ensnowrtera Gated, alo otheraosontefcthtteEbsyeidces toethnial Unitte ts a e FinPaaaiaerioy EieowrandHrrint, toehehinyh anlZneGv William .~ Ptter ariedrcoCp.W.SnoiEsn sherdaughdtor iutth whoC~T isatn shsofiilhseso i Tonigt ip Mrs ister Mr.Hringtonrfohr miemboerfteEsn doe tea nd depreaeGaives of th danali bras wer aboard, tomorroennwter isnhercnlbtenPdo ~ullc~.'n from As o h rpweeRcroAraPnm'sAbsao





ISTHMIAN CANAL POLICY QUESTIONS 63

carries on the closed-door session which ran into 90 minutes overtime at El Panama Hilton yesterday.
The U.S. team at yesterday's session consisted of Eisenhower, Harrington, Assistant Secretary of State for Latin American Affairs, Roy R. Rubottom, Assistant Secretary of the Treasury Tom B. Cougliram, Export-Import Bank President Samuel C. Waugh, and Development Loan Fund Manager Dempster McIntosh.
At the table for Panama were President de la Guardia, Panamanian Ambassador to -the United States Ricardo M. ("Dicky") Arias, Foreign Minister Miguel J. Moreno, Jr., Treasury Minister Fernando Eleta, Minister of Government and Justice Max Heurtematte, and Comptroller General Roberto Heurtematte.
Other members of the de la Guardia cabinet sat behind the Panama team.
An official Panamanian Government statement later announced that President de, la, Guardia presented the following points to Eisenhower: A. Contractual relations between the United States and Panama.
1. Fair interpretation of the agreements in force.
2. Guaranteeing the Canal Zone market to Panamanian commerce and industry. Purchases by the Canal Zone in Panama (Items 8 and 9 of the4
Memorandum of Understandings Reached). Cessation of economic activities other than those connected with the purposes for which the Canal Treaty
was signed.(
3. Rates for supplying water to Panama.
4. The single wage scale.
5. Refund of import duties on liquors sold to the Canal Zone.
B. Creation of a better moral climate of cooperation between the peoples of Panama and the United States. The flag of Panama in the Canal Zone and the '
adoption of Spanish as the official Language. 4
C. Problems of economic and social development of Panama.
1. The United States should have primary interest in Panama's develop- 4
ment of its full economic possibilities as the only means of meeting the 0
needs and requirements of a rapidly growing population.
2. The Panamanian State and its obligations with regard to economic development and the furnishing of education, health, and social improvement
services.
3. Mutual advantage for the United States and Panama from. a plan for
cooperation and economic aid, on an emergency basis, in some cases, and on a
long-range basis, in others, for the immediate improvement of the unemploy-oi ment situation and for enlarging and strengthening the basis of PanamanianI
economy.
4. Anu economic cooperation plan.
The Panamanian Government statement said Mr. de la Guardia divided his economic cooperation plan into two parts.
One part referred to funds for an emergency program, and the other to long-term measures connected with the future development of Panama.
Arellano Lennox said today that the reference to the flying of the Panamanian flag in the Canal Zone was just what the uniVersity students had in mind when they launched "Operation Sovereignty," the flag-planting foray into the Canal Zone May 2. He added that a Panama University student convention 2 years ago had resolved that Spanish should be the official language of the Canal Zone.
A tudent spokesman also denied that the university students intended to exploit Eisenhower's refusal to meet them in the university.
The spokesman said:.
To exploit implies the use of coercion to force the acceptance of our ideas. This would mean conducting the student movement along lines contrary to the













prinipte ot in deoti studenizto. eet suhodut paner that th n v edst itdns Unob i e dyCmuitpicpew


thmana ne a s pl-u ih gis h omuitpiooh n gis eiveryhn thf L eas otaiaiaim The recent isse fred UniersiyVicanwpprpbihdb thsentdti s Wiliam, decrbe thd ~e eetGvrmn fPnm puicaton M cartin prsmbyinrpytcagstatteei

ermnt, Cn Z intesuetmvmn.Tekoldeecpsn snetrut re bvoed Ma xsst efon eidt peieta byii ten cu bets as toeec oPesdnilAvse ig sd

Thernisenhower suppotme nt otra iegetetipato






wh as one wsp roal i etn tL r awt ersna






ISTHMIAN CANAL POLICY QUESTIONS 65

hower, "it was well known that the minds of all the people could not be changed at one time."
Sinclair said today that Eisenhower told union leaders that final passage of the single wage bill is only a routine matter now.
Sinclair added that he and other members of the labor groups were very pleased with the cordial and friendly atmosphere 'n which the conference was held.
Rerrie exTressed great satisfaction in meeting with Eisenhower and members his delegation and the opportunity afforded to the Canal
Zone noncitizen labor groups to present their views on a number of issues.
According to Sinclair, Eisenhowerexpressed great interest in the low-cost housing project being sponsored by the International union for noncitizen workers of the Armed Forces and the Panama Canal Co. Eisenhower said he had already received some information on the acute housing situation in Panama and was apparently definitely pleased with the efforts being made by the labor unions to help find a permanent solution to this tremendous problem.
In a statement issued by Sinclair he said:
Union leaders felt particularly happy over the fact that Eisenhower knows AFSCME President Arnold S. Zander personally, which made them feel that the highest sources in Panama, the Canal Zone, and the United States will be backing the housing project, scheduled to get under way with the forthcoming arrival of Martin Frank, housing adviser to the union, and Thomas Morgan, international director of organization for AFSCME.
Rerrie informed Eisenhower of the actions taken locally and in Washington in connection with the unions' bid for a wage increase of 10 percent, equal to that recently received by United States citizens employed in the Canal Zone and particularly since the single wage bill will not provide for any overall wage increases for the vast majority of workers who will remain on locality rates. '44
According to the statement: 44
Sinclair and Rerrie were very firm in pointing out to Dr. Eisenhower that they 41
wanted to see someone representing zone workers appointed to the Canal Zone I
Board of Appeals as set forth in the suggestions made by members of House Committee on Post Office and Civil Service in H.R. 6708. They stated that they did not want to see a yes man appointed to the Board, but instead they wanted someone, preferably a labor man, placed on the Board who would stand up for the rights of the workers at all times, and be removed in the event he fails to do so. The union officials said the White House will hear a great clamor if this important suggestion made by the House of Representatives is bypassed.
Other matters raised by spokesmen of local 907 in connection with discrimination, support of labor unions in the zone by Government agencies the fixing of wage rates and adjustment in the single wage structure, would be discussed locally and a full report on the entire conference will be made to President Eisenhower, Eisenhower said.
Another important issue in which the local unions are now interested cover the reduction or elimination of a 30-percent tax levied against aliens receiving civil service retirement benefits was not discussed at the conference yesterday, but was referred to the Foreign Minister for him to take up with Eisenhower, inaqmuch as this would involve a tax treaty or convention between the two Governments.
The Foreign Minister promised to discuss the matter with Eisenhower and take the necessary steps to seek an agreement which would benefit all those employees who will be covered by the civil service retirement benefits in the future and those who are already receiving such benefits.
Social highlight of yesterday's schedule was a dinner given by President do la Guardia at El Panama-Hilton last night for Eisenhower and a total of 57 guests.






66 ISTIEMAN CANAL POLICY QUESTIONS

Eisenhower had entertained the President and his cabinet at lunch.
The Panama Canal tugboat Culebra, which is often used to toke tourists on sightseeing tours of the canal, was decked out like a Mississippi riverboat to receive the distinguished passengers.
She was all gleaming brass and fresh paint and under the canopy on the afterdeck, green canvas chairs were set out together with tables decked with shining silver coffee pots and refreshments.
The Eisenhower party arrived on schedule at 9:15 a.m. in a motorcade of black official cars which drove down onto the wharf by Pedro Miguel locks where the Culebra was waiting.
Potter had arrived a few minutes earlier and was the first to greet Eisenhower and his daughter, Ruth, at the gangway.
Eisenhower, wearing a sports shirt and a panama hat, lost no time in getting aboard and was moving around chatting informally with the other guests as the tug steamed away up the canal in brilliant sunshine.


[From the A-mericas Daily, Miami Springs, Fla., of July 15,1958]

U.S. MISSION GETS PANAMA's ECONOMIC PLAN

PANAMA.-The Presidential Office published last night the following communique on the conference held yesterday between the U.S. mission presided by Dr. Milton Eisenhower and a group of Panamanian officials presided by President de la Guardia:
In an atmosphere of the greatest cordiality, the President of the R ublic and the members of the Cabinet extensively revised with Dr. Milton Ei=WeT and his group the relations between Panama and the United States, with the aim of finding ways to strengthen them, on the basis of the progress made to date, in particular regarding approval by the United States Congress of the laws necessary to bring into effect the agreements of 1955 measures in which the intervention of President Eisenhower has been decisive. Immediately after, the President submitted to Dr. Eisenhower the following points:
Paragraph A. Treaty relations between the United States and Panama.
1. A fair interpretation of agreements in effect.
2. Guaranty of the Canal Zone market for Panamanian commerce and
industry.
3. A rate for supply of water to Panama.
4. A single wage scale (in the Canal Zone).
5. Refund of import duties for liquors sold in the Canal Zone.
Paragraph B. Creation of a better moral climate of cooperation between the peoples of Panama and the United States. The flag of Panama in the Zone and adoption of Spanish as the official Ianguage.
Paragraph C. Problems of economic social development:
1. The United States must take primary interest in the development of
all Panamanian economic possibilities as the only way to face the needs and
demands of her population, which is rapidly increasing.
2. The Panamanian state and development, rendering services its obligations regarding economic iii education, health and social improvement.
C. Reciprocal convenience for the United States and Panama of a plan of cooperation and emergency economic aid in some cases -and at long term in others, to improve immediately the situation of unemployment and to expand and strengthen the foundations of Panamanian economy. The President submitted to the consideration of the visitors several projects drafted by the National Government, some of which were examined in detail and all of which awakened interest, to the point that it was agreed to discuss them more thoroughly before Dr. Eisenhower's departure.






ISTHMIAN CANAL POLICY QUESTIONS 67

[From the Christian Science Monitor of July 15, 1958]
PANAMA 'VIEWS ExpLORED-DR. EISENHOWER FISHES
(By Ralph Skinner)
PANAMA CITY, PANAMA.-In a double sense, it was a fishing expedition.
U.S. Government planes flew Dr. Milton S. Eisenhower and his party with Panama President de la Guardia and advisers to an island in the Pacific off Panama.
There a Panama Canal tug and two launches, plus U.S. Army launches took Dr. Eisenhower and the Panama President fishing.

PANAM1A VIEWS PRESSED
As they fish, they will discuss the problems of Panama, economic and otherwise, continuing a discussion started July 13 with their staffs participating. It was to be a real sport-shirt conference without interruption except possibly when marlin or sailfish took the trolling bait.
The party was to stay overnight on the boats and return to Balboa early July 16 when Dr. Eisenhower is scheduled to leave for Honduras.
Since July 12, Dr. Eisenhower has been getting a thorough immersion in Panama's problems as presented by representatives of the ruling families here who also are Panama's top government officials.
All his information is presented from a strictly Panainianian viewpoint. Even during his visit July 14 in the Canal Zone, Dr'. Eisenhower was accompanied by top Panama politicos.
One of them is Finance Minister Fernando Eleta, who has visited the Dr. Eisenhower home in the United States. The last time was only 3 weeks ago. Minister Eleta, entertained Dr. Eisenhower on the
evnig of his arrival and is considered a personal friend. There is some worry expressed by Americans here that Dr. Eisenhower may become so saturated with Panama propaganda that he cannot, make a proper evaluation of the U.S. view in controversial matters. Others discount this by pointing out Dr. Eisenhower's astuteness and recalling that he is here for the purpose of learning Panama problems-r
-which are basically internal ones.Co

SPECIAL PROBLEMS RISE
Panama has presented such problems as flying the Panama flagr and making Spanish the official language in the Canal Zone. These are sops to students and nationalistic groups.
Panama's real need is money and plenty of it. A desperate need exists for a solution to the unemployment problem, low-cost housing, agricultural impetus, feeder roads, and rural development.
A'new approach to the U.S. relations with Panama is long overdue, some think.
NEW APPROACH FAVORED
Perhaps Dr. Eisenhower, through his recommendations to his brother, can suggest a monetary gift to Panama in a decent, orderly fashion in some form of foreign aid. But it should be completely






n8

divorced fo aaaCnloeain n hudntb ada
blackmail to stop Paaastrasonainlznornentoaiing thecaaosresay

Zon shuldnotbe subject to such cntn aasetnrmd h
subject of demands as was done July 13 bevr eeblee r Eisenhower rebuffed students whoarontydmdethte should come to theircapsnttletrthmbtolienote. He invited them to sent representative t akt i tteAeia Embassy but they refused.


Immature students have cusedcosdrbetuleheadn July 14 paraded with crude placards calling on "Milton" og oe to note that the canal was Panama's, an~d ta hydmne0pr cent of Panama Canaleangs Extreme security precutions reportedly eceigtoefrte15 meeting of 20 American pesiens indctdcocr o D.Esn
hower's safety which did not make for godpublicreainhr. Indifference to the iehwrvsthsmrkdtegnrlattd of the people of Paaaimligtathviiwstoherin hierarchy. People in thestethvthatiuewcolntar less when the Eisenhiower party drive hog h aiaKiy There is no opposition, just indiffrne



MORE PANAMADEA~ I)EYIEsBOHE ~t ~uBE

(By Edw. Tomlinson)
PANAMA CITY, July 18.-As a resl of Dr. Mitn iehoe' visit here the seeds of future trouble over thPamaCnlav been sowed.
Dr. Eisenhower referred tois trpas a "td iso"adsi anything he discussed with oficals would be reotdt i rte and other Washington authorities only as an expesiofanamanian Government "~aspirations" Hardly had the doctor and his party left teisthmus, hwvr when some extreme Nationlsspse h odUceSmi o
committed to ngtiate withPaaacneignwtrtydmds

life of thisstaeiwtray


Only in the lat10days the U.S.Cnrs$prprae 2 ilo





ISTKMIAN CANAL POLICY QUESTIONS 69

A few days later legislation was completed which makes the wages and salaries of Panamanians working in the Canal Zone equal to those paid U.S. citizen employees.
At the urgent request of Isthimian merchants we have refused Panamanian employees the right to trade in Canal Zone commissaries and shops. We also upped the annuity which we were paying the Republic from $430,000 to $1,930,000. And we turned over to the Republic approximately $25 million worth of land and real estate in the cities of Colon and Panama City.
Apparently these concessions were considered chickenfeed.
We now are called on to discontinue all commercial activities in the Canal Zone. This would force 40,000 U.S. employees and their families to purchase all necessities, from food to medicine in the Republic.
Politically, they insist that the United States raise the Panamian flag in what one fiery student described as equal majesty with the Stars and Stripes over the zone, the canal and all ships passing through.
Among other things, they also think we should agree to compel our citizens and officials in the zone to forget English and speak Spanish exclusively.
In the original canal treaty of 1903, the Republic of Panama granted the United States in perpetuity all rights, power, and authority within the zone as if the United States were sovereign of the territory. We have refused to change that document.
As the current Panamanian politicans see it, we have in effect agreed
to discuss modifications of this agreement. They argue that Dr. Eisen-hower came as special ambassador representing the President and that he heard highest Panamanian officials outline what they expected-and they point out these requests were put in an official communique. 1
Next day Dr. Eisenhower himself praised President de la GuardiaI for what he called a well thought out program. So far as the generalI public, particularly the Nationalists, are, concerned this sounded like a commitment for future negotiations. The crusading students aren't going to let them forget it.

[From the Christian Science Monitor of July 19, 1958]
44,
JUST BEGINNING?
MILTON EISENHOWER S'ruuY MISSION-THEm 21-DAY VISIT OF THE4 PRESIDENT'S BROTHER To CENTRAL AMERICA INCLuDES FISHING IN ECONOMIC WATERS AS WELL AS PANAMA BAY
(By Ralph Skinner)
PANAMA Crry.-Ahnost all day Tuesday two fishermen sat side by side in special swivel chairs on the stern of a U.S. Army launch. Watching baited lines twist and jump through quiet waters of Panama Bay, the fishermen discussed United States-Panama relations and the solution of Panama's problems, which are almost entirely economic.
The fishermen were Dr. Milton Eisenhower on a 21-day factfinding mission through six Central American nations, and Panama President do la Guardia.
The big topic was money from the United States and how to blow some strong winds on the Panamanian economic doldrums.






70 ISTHMIAN CANAL POLICY QUESTIONS

The money was requested on a repayable loan basis. Finance Minister Fernando Eleta told this correspondent no gifts or grants were requested by Panama, although, of course, they wouldn't be refused.
Interrupting piscatorial discussions was the word that American marines had landed in Lebanon. U.S. Under Secretary of State Roy R. Rubottom and Panama Foreign Minister Miguel J. Moreno flew back to Panama City immediately.
Immediate result of the 3-day visit, as seen by Finance Minister Eleta in an exclusive interview, is the better comprehension by Dr. Eisenhower of localized problems confronting Panama in relation to the Canal Zone. The Canal Zone Governor is under the Defense Department and not the State Department. Senor Eleta wants more Canal Zone purchases directed into Panama to bolster its economy and underwrite expansion of cattle, dairy, and agricultural industries. He emphiasized Panama will not abuse the captive market it desires.

PANAMA SATISFIED 7'
Panlama officialdom is "quite satisfied" with the attention given Panama demands and proposals by Dr. Eisenhower and his team.
Panama expects priority to be given its needs and requests on account of the Eisenhower visit and expects that the United States will make feasible financing of Panama projects presented.
Senor Eleta, identifying Dr. Eisenhower as one of President Eisenhower's most trusted advisers, considers his recommendations will carry great weight. His authoritative opinion will be heard not only by his brother but by all in the U.S. Government concerned with Panama's future.
Senor Eleta is a personal friend of Milton Eisenhower and has visited his home many times. He expects to make repeated trips to Washington, pushing continuance of financial negotiation with the United States.
Senor Eleta said, "We want to get started on financial negotiations as soon as we can." The Finance Minister said most of the immediately realizable Panama projects should be underway by the end of this year. Long-range projects will be taking longer but all financial arrangements are expected to be accomplished prior to the 1960 termination of the de la Guardia administration, although actual projects may be incompleted by then.
MIDEAST SEEN BOOST
Senor Eleta sees the Middle East crisis as aiding Panamanian chances of getting aid. Raw materials and oil from Latin America are becoming more essential to the United States and emphasize the need of better Latin-American relations.
Senor Eleta said, "Obviously the only true friends the United States has, aside from the NATO block, are the Latin nations." Senor Eleta, said Panama's definite planned projects are ready to start immediately on receipt of U.S. f und s. Great emphasis was put on hydroelectric power, even more than on education, low-cost housing, feeder roads, or agriculture. Senor Eleta said, "I believe wealth, productivity, and the standard of living is directly proportionate to electric power per capita any country generates."






ISTHMIAN' CANAL POLICY QUESTIONS 71

Whereas students talk unceasingly of the sovereignty of Panama in the Canal Zone, Senor Eleta said not one word was mentioned in the Eisenhower discussions on this topic.
More important, lie indicated, is for Canal Zone Govemor Potter to be relieved of the necessity to show a profit on Panama Canal operations, enabling him to give more impulse to the Panamanian economy, while he allegedly is sacrificing to get a profit for his canal operations.
Panama complained about the high cost of water sold by the United States in the Canal Zone to the Panama, Government for resale to private citizens. Panama, makes a, profit at the present rate but wants a bigger profit to finance sewerage systems and other public works.
Intensification of point 4 activities here was requested from Dr. Eisenhower. Furnishing U.S. funds for contemplated projects is not enough, as Panama's people must 'be educated to use the projected facilities.
The background furnished the Eisenhower team of U.S. leading lending orgLdzation officials included a statement that the population is increasing -at a faster rate than the gross national product, with per capital income lower than in 1953. Sixty percent of Panama's popu- ;Inv
lation is under 25 y ars and a great number under 15. Dependency on lift
the family breadwinner is too high. The ratio between Government fiscal income and the grossnational product is 20 percent, indicating people are taxed so heavily that reproductive capital is not being accumulated for further investment.
Senor Eleta said:
We cannot by ourselves in Panama solve our economic problems, which in time become social and political problems. The United States, needing political stability in Panama, -should have a primary interest in development of Panamanian economic possibilities.
Dr. Eisenhower's contacts here were limited to American officials
and ruling families of Panama. Senor Eleta summed up the attitude a I
of Panama's average man to the Eisenhower visit as "intense, expectation of what will result from the visit."
Monday's setting sun backlighted La Cresta Hill, where Dr. Eisenhower waited at the U.S. Embassy residence for a student delegation, I
which never came since they had requested him to meet them in the 4
valley below.
Panama newspapers which front paged the Panama President's proposals to Dr. Eisenhower one day, on the following day front paged the students' minimum demands on Dr. Eisenhower. The students are desirous of dictating U.S. foreign policy and demanded U.S. intervention in the Panamanian Government, among other things. Mirroring current preoccupation with what students think, a Panama Cabinet Minister said, "I think it would have been a good thing if Dr. Eisenhower had met with the students."
NO CRMCISM
Asked if any criticism of Dr. Eisenhower was voiced in Panama during his stay, Seflor Eleta said:
None. Dr. Eisenhower carried himself cordially and amiably and with the dignity always characteristic of himself and hisfamily.






72 SEnNCNLPLCQUSIN


Observers wondered if Dr. Eihowrenrse n rtclcls
Panamasussecfamrusncetre-lagiutrlmto,


canme airborne for Honduras, the questionarshomuhteecl lection of the Panama visit can withstadteipcofhvyseules in five countries to be visited and remain ii n ia o e porting to the President.
Backed by intimate proa eain ihD.EsnoeSfo Eleta sayshle isunafraid of this. Said -eirEea Panama's position is so clear, so logical, eveyhn ilb l ih.W x tracted ou conversations and seta summary t rsdn iehwr











[From the Congressional Record, 86th Cong., 1st Sess., Feb. 25, 1959]
ISTHMIAN CANAL POLICIES-A CHALLENGE TO THE CONGRESS
Mr. FLOOD. Mr. Speaker, in previous addresses to the House on the Panama Canal, I have dealt at length with interoceanic canal p roblemis, especially the diplomatic and juridical, following the Suez crisis in 1956. Two recent events have again attracted world attention to the isthmus.
The first was a Panamanian enactment signed by President Ernesto de la Guardia on December 18, 1958, which declared the extension of Panama's territorial waters from the internationally recognized 3-mile limit to a 12-mile limit; the second, the refusal of the Panama National Assembly to reconsider this action as requested on January 9, 1959 in sm
a note by the U.S. Government. The first was treated by me in an lv
address to the House, also on January 9,1959.
Certainly, a matter so charged with serious implications as control lf
of the approaches of the Panama Canal, which are essential for its lf
successful operation and protection, cannot remain unchallenged and Ip
unclarified. They require a further statement so that the people and the Congress of the United States, all maritime nations, and various interests that use the canal, may be better informed.
In approaching this complicated subject, I wish to stress that the issues are fundamental, and challenge the right of the United States to meet its treaty obligations. Thus, they transcend all personal or political considerations and must be considered on the highest plane 0
of statesmanship. Also, I desire to emphasize that, as regards the 14
Republic of Panama an its people, I hold both in the highest esteem, 1
and count many Panamanian citizens as valued friends of many years standing.I
To this task of clarification, I now address myself.I
UNITED STATES REACTED PROMPTLY '
'When reacting to the ex parte action of Panama allegedly extending its maritime jurisdiction surrounding the Canal Zone, what position did the U.S. Government take? cw
The note delivered on January 9 by our Ambassador to Panama contained the following significant points:
First. Stated that the United States considers the action of the
Republic of Panama regrettable in view of a forthcoming international conference to consider the width of territorial seas.
Second. Expressed the view that there is no basis in international law for claims to territorial seas in excess of 3 nautical miles, and that there is no obligation on the part of States adihering to the 3-mile limit to recognize claims of other States for
greater widths.
73





74 IST2MEUAN CNL PLC USIN

Third. Requested the Govermet of Panm orcnie t
action and reserved its rights in thearafecdbytePn
amanian eatet
.Fourth. Based the rights of the UntdSaeonriceXI
of the 1903 Hay-Bunfu-Varilh. Treaty.
Because of the imotac ofthspoionIsalquei:

public of Panama shall, without tecneto h ntdSaeafe n right of the United States under h rsn onetoo ndraytet


dogting anbec mater henin


wThe stmaing dotitraypoiiniclaanunmgos.I Stshl ineater soliato thogvnlaea cioyPnm dirotrinte ci any manne thihtpweadauhrtyoh bitedw rtaesad onl.hpigwthrsett hePnm aa

dasconfoThisg to be wrlwie 4osiaoilpormo omns orn aginIs h ntetts

s pcold ea~ inetd r paeb ayn dqaeyfmla wih Idthiana loatihsoy fral e-tb teUie onte Janua e 13, 1959,aft colinyladtpcioiosadftl irecniroan rebat.isnded sihatian thttanmqicl dfitsritcies dofains aton t 12mle lmt rhn


toal negative bodies of th olIi aF o) as bei wobliemyppr orisujtfabetemtt




casemobly reitsgleades tof mee Udntey Steraetigorhtrc





ISTIIAN CANAL POLICY QUESTIONS 75

and juridical objections that have been repeatedly made on the floor of the louse and published in the press of Panama. Rather, they have ignored or attempted to confuse these statements of facts.
UNDERLYING PANAMANIAN OBJECTIVES REVEALED
Of far greater significance, Mr. Speaker, than either the formal actions or failures of the National Assembly on the indicated occasion, was the revelation, in the heat of the 4-hour full dress debate preceding adoption of its resolution, of the principal underlying political aims of certain Panamanian leaders.
Deputy Aquilino Boyd, a former Foreign Minister of Panama, and now 'a candidate for President, made the following points:
First. Demanded that Panama receive half of the gross revenues of the Panama Canal.
Second. Asserted that the Panama Canal is now surrounded
by 9 miles of exclusively Panamanian waters in which Panama
can exercise definite acts of sovereignty.
Third. Enumerated these alleged acts of sovereignty as follows: j
(a) Requiring the display of the Panama flag on vessels
entering Panamanian waters.
(b) Exercising of vigilance over shipping to maintain in- (' "g
trnal security. !
e Regn l ing fishing activities.
)Trying of persons for offenses committed on board *
ships in Panamanian waters.
(e) Requiring foreign war vessels to comply with Pana- 10
manian navigation rules.
(f) Enforcing customs, fiscal and sanitation regulations. 1
Imagine sanitation regulations to be enforced by Panama. God 4
help the Canal Zone--God help Panama-God help everybody. You i
will have yellow fever and malaria once more devastating Panama V
and Central America and the southern United States. We want to help these people with our foreign-aid programs and with our point 4 programs. That is one criticism I have had of our foreign aid profram and point 4 programs-every dollar of which I have supported rom the very begiming. Not enough goes to Central and South A
America and to the Caribbean. It should be better handled and more should go to them. Let us teach these people how to help themselves so that they can handle their sanitation problems for their own welfare and for the welfare of the world. But, they are not yet ready. This is not paternalism-this is true friendship to our neighbors to the south. My heart is with them. My heart is with them but not with this cheap demagoguery. Why the best way in the world to be elected justice of the peace in Panama City is to stand up and to say, "The canal is ours. Give us the canal." How can you lose?
Deputy Alfredo Aleman, Jr., though less definite than Boyd, suggested that Panama may, first, charge vessels entering Panamanian waters for costs of aids to navigation; and, second, enforce Panamanian labor laws on Panama-flag vessels entering Panamanian waters.
Is that not a nice way to destroy the American merchant marine? That is the way to get elected, Mr. Speaker. I need not tell you, but if you have any doubt, read this.
67-843--66-6






76 SDINCNLPLC UMN

would ipsiftevlidity of itsencmtwrevrcoed.

tions as it is to all who are informed on the prolmoftePna Canal.
Should Candidate Boyd's insistenceon5pectofhegssaul


by te overburdened IMerican txae rwrd6iig ihps
silelquidation of the tire canletepieJi ato ln
selves in proposals thataraboueyidclsanasr. Furthermore, Mr. Sekr nve fteasrin n ead
listed above and f acts esewhiere deveodintsadrsIum ht if Panama has any enmNo1,hinointeUtdSaesbu among its o'wn radical leaers who, o oiia datgse il ing to bring their country to the biko iatr

PANAMA CA1WAL, A MNAEFRCVLZTO
Mr. Speaker, for a number of yasIhv evdo h omte on Appropriations with assignments to subcmitefoth prment of Defense, the eateto omre n eae gnis The last includes the PaaaCn CmnyndteaalZe Government. Hence, I have lived wt h aa iuto vraln period of timne. VisitingthCaaZoeoofialdyonaumr of occasions and reading widely inishanitoyIhvemda number of predictions in the t.
*It is indeed a sterile satisatotomthtllyferhvebn justified in what has beensaporsiedtrorto n izma liquidation of U.S. rights with rsett h aaaCnl Often have Ipnee h uhcniin snwpealsol ever have beenalwdtdeeoatticrsrasowodshpng I have come to theory defiiecnlso htte r o cietl but the result of a sustieefotialogrnepgamnwhc the United States hasunotntlfaldoealngprdtomt its treaty oblgtosi saf eurigsm seta etrsi aae mnent of the getwaterway.
civilizationi" It is up toustmesruptthtrstadntfi







ISTHMIAN CANAL POLICY QUESTIONS 77

waters," is to the "entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power, or an'tority' ; and that the treaty set up provides likewise for exclusive U.S. control over the maritime approaches from one high sea to the other as essential for free and open navigation and for efficient canal operation.
In 1903, when the Hay-Bunau-Varilla Treaty was ratiied by Panama, and the United States, the limits of the territorial waters of the Republic of Panama and Canal Zone were coterminous. No, subsequent international agreement has changed those limits. To be valid, any change in them must be authorized in treaty or other convention in which all affected parties participate. Moreover, even if Panama could, by legislative action extend its jurisdiction over the sea approaches to the canal, immediately the provisions of articles II and 11II of the 1903 treaty would become operative and apply to these approaches, which would become portions of the Canal Zone with exclusive jurisdiction for canal purposes vested in the United States.
At this point, I quote text of the indicated articles II and III of the
1903 Hay-Bunau-Varilla Treaty, which are commended for careful f
study:
ARTICLE UI
The Republic of Panama grants to the United States in perpetuity the use, occupation and control of a zone of land and land under water for the construction, maintenance, operation, sanitation, and protection of said canal of the width of 10 miles extending to the distance of 5 miles on each side of the center line of the route of the canal to be constructed ;the said zone beginning in the Caribbean Sea 3 marine miles from mean low water mark -and extending to and across the Isthmus of Panama into the Pacific Ocean to a distance of 3 marine miles from mean low water mark with the proviso that the cities of Panama land Colon and the harbors adjacent to said cities, which are included within the boundaries of the zone above described, shall not be included within this grant. The Republic 3
of Panama further grants to the United States in perpetuity the use, occupation and control of any other lands and waters outside of the zone above described 0
which may be necessary and convenient for the construction, maintenance, opera- 1
tion, sanitation, and protection of the said canal or of any auxiliary canals or 1
other works necessary and convenient for the construction, maintenance, operation, sanitation and protection of the said enterprise. I
The Republic of Panama further grants in like manner to the United StatesI in perpetuity all islands within the limits of the zone above described and in addi- 41 tion thereto the group of small islands in the Bay of Panama, named Perico, 1
Naos, Culebra, and Flamenco. ARCL

The Republic of Panama grants to the United States all the rights, power, and authority within the zone mentioned and described in article II of this agreement and within the limits of all auxiliary lands and waters mentioned and described in said article II which the United States would possess and exercise if it were the sovereign of the territory within which said lands and waters are located to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power, or authority.
Special attention is directed to the last sentence of the first paragraph of article 11.
Thus, Mr. Speaker, the recently attempted surrounding of the Panama Canal by Panama is not only a violation of international law but a clear transgression of existing treaties that must not be countenanced. Therefore, the prblem is one of juridical character in which the rights of the United States and world shipping must be protected. The De-






78 SB A CAA:PLC QUSIN





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SVETY ISSU ELLE XA M AND BUID

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ad acqued wroderth tret n of c ofpblciteet


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ening of oSiti a.In 190h 0 Itman are, a s mamd.ySce tar of War and President-elect Taft, respeciely. In.......wa
bur+++:+'++i+iiiiiie by Secretary ofi State Hughes.


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degre.o cado andi v)'!igor)+ thtteUiedSae wul ee e
f ro m th e p o sitio n w h ic h it h a d tak en in th e n o te o f S e c reta ry H w y iR)) ) )))))))) ))))))))))))))) )))))) )))))))) j)))))))))))))))))))))))))))))))))))) jj))))))))))))))))j))))))jj~~))))))) jj)))))))))))))))))))))))))))))j) ))jj) ~ ))jj~)))j )))))jjjj~~))))j 1904. Thiiisd Goenmn col init, an oldntetrint any...s cuso afcing isf i gh to... delwt h+aa Zn ne ril
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t a r o f=~iiiiiii+ S t a te ............. t oiii+++i ....................u r r en.............d er.... ............++ = i~ += +++=+i .............. iii+ ............. a n .......... o fi++ +++))II ................. r ig h ts+++++ w h ich.... .. the+ + U n it e d .. .............................
had acquiii)ired unerth. .etyof193



The inhrn agr ini th ition atPnmihuhnoie.
erally recognized yet in+= + + F+ + the+ Un i+Iite Stts embte nesodother mar~+ iiim naios Iaditiont h nie ttsohrget
ma iie nation haeadesdntso poett aaia h
U nite i ngdom,+iis iiiiii + iii~iii Japan and i Fra ce I....... B u ar m r ............................................. ............. these problem s,+' th n p o le n ov r m n s
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ening of our pos+it++ion+ + inteItma ra l hs neet okt





IST-HMIAN CANAL POLICY QUESTIONS 79

the Congress for leadership in protecting the Panama Canal enterprise, for they know that to yield in principle will be fatal.
Another important consideration that should be kept in mind is that the extremely radical agitation hostile to the United States which obtains in Panama may be well calculated to induce among Panamanians, employed in the Panama Canal and U.S. defense organizations on the isthmus, a like hostility. 'Where will all this lead? Conceivably out of the large number of Panamanians employed under the recent treaty stipulations some might be brought to a similar viewpoint with resultin~g injury to the United States. If, for instance, any such Panamanians with communistic leanings, should decide to sabotage the canal or defense installations, the United States would be in a large measure powerless to prevent it.
Therefore, Mr. Speaker, how important it is that Panama as well as the United States should undertake no decisive step affecting their mutual relations except with advance notice and full discussion. The action of Panama in undertaking, in the absence of such notice, to extend in arbitrary fashion its sea limits is certainly not to be commended anywhere at any time-especially so where the welfare and I
destiny of nations are involved.
"iMILK COW") DIPLOMACY STARTED AT PANAMA

When viewing the, tremendous foreign aid programs of the United States today, many have wondered when and where they started. They were not launched with the Marshall plan in 1947, at Yalta in 1945, nor at Teheran in 1943, but for Panama in 1936.
On March 2 in that year, with the signing of the Hull-Alfaro, Treaty,
was started a process of Isthmian surrenders by our Government that '
has not yet been officially ended. It was further advanced in the 1955 Eisenhower-Remon Treaty, ratified by the United States without adequate public discussion and debate.
The results of the ensuing relinquishments have been withdrawal of important canal activities to the limits of the Canal Zone and impairment of some of them in it, but without surrender of the fundamental principle of exclusive Canal Zone sovereignty.
Perhaps the 'most notorious treaty action was that concerning there strategically important Panama Railroad, which, without authority of the Congress, was slated for liquidation.
As one who participated in blocking that effort, I speak with the background of personal knowledge. Imagine this, Mr. Speaker. While the treaty power was giving away the highly valuable terminal yards and passenger stations of that railroad, the Congress was saving its main line from abandonment. Now we are goingr to have a rail link without its adequately planned terminals. Can you imagine anything more ridiculously inept?
Altogether, events at Panamia bringc to mind the fact that InI the times prior to the secession of Panama in 1903 from Colombia that Panama, because of its transcontinental railroad and resulting income, was long looked upon as the "milk cow" of Colombia.
Conditions have now changed. The Panama Canal, through our diplomatic failures, has become the "milk cow" of Panama; and the United States, the "milk cow" of the world.






80 ISTMEIAN CANAL POLICY QUESTIONS
PANAMA CANAL NOT A RELIEF AGENCY
Among the striking evidences of our extremely generous policy* in Panama were the 1955 treaty provisions for donations of valuable pro rti (more than $25 million) i the cities of Colon and Panam to the Republic, without any but token consideration, also for rai the annuity supposed to be paid by the Panama Canal Company $4301000 to $1X01000.
The impact of these and other gifts on the operation of the Panama Canal will be felt for many years. In a diplomatic sense they mean that the canal enterprise, an interoceanic commercial undertaking, has been used as an international relief agency. This confusion of a vast business project with foreign relief i unbelievable, for business and foreign aid are separate functions and should be kept, so.
Fortunately, the Congress has taken the first step toward correcting this error, with legislation transferring responsibility for the additional $1,500,000 to the annuity from the Panama Canal Company to the Department of State, which was responsible for it. This transfer, though just so far as the Department of State is concerned, remains a charge against the United States and must be borne by our taxT)ayers.
As an independent interoceanic public utility under the President, the Panama Canal operations must not be confused and weakened through ill-considered policies of placation, for it is not a local project for local political exploitation. Instead, it is one required J;Y. law, pursuant to treaty, to be self-sustaining with tolls that are "just and equitable" for the transit of vessels of all nations on terms of equality.
These, Mr. Speaker, are prime responsibilities of the United States f or the implementation of which the Congress is the final authority.
PANAMA NO LONGER POSSESSES MONOPOLY OF CANAL ROUTES
Many explanations for the extreme and radical demands concerning the Panama Canal, emanating from the isthmus and elsewhere, may be given. But one of the most potent factors underlying them is the erroneous assumption in Panama that no other location exists for another Isthmian Canal-an assumption that is responsible for the bold, radical, and ever-increasing demands put forth in behalf of Panama.
During the crucial years of Panama Canal history, 1902-06, when the great decisions as to the choice of route and type of canal were made, Panama was undoubtedly the best choice from every control ling point of view, especially operations, engineering, and economy. Without question, the proper decisions were made, and many years of successful operations fully justify them.
But limitations that then. applied, especially *in engineering, no longer hold. All major engineering problems were solved long ago and now there are other routes competitive with the Panama route. for major increase of interoceanic transit capacity.
Made even more competitive by the effects of the 1936 and 1955 treaty factors at Panama, together with extreme demands and actions in that country, some of these routes may be passing the Panama route in desirability from several important standpoints, including a more





ISTHMIAN CANAL POLICY QUESTIONS 81

satisfactory political climate--a determining factor, other things being equal.
At this moment, Mr. Speaker, pursuant to authorization of the House of Representatives, a distinguished Board of Consultants, under the direction of the Committee on Merchant Marine and Fisheries is delving into the question of a canal at another location to take care of the greatly increased isthmian traffic of the f uture. Thiese_ unjustifiable occurrences in Panama will doubtless cause this Board to search, with the utmost zeal, for another route.
To say the least, the current absurd and reckless demands under radical leadership at Panama may well force the. United States to the. alternative of another transisthmian waterway in preference to submission to the prohibitive costs inevitably involved in these demands.

UNITED STATES NOT THlE "tCOMMON ENEMY"1 OF PANAMA
Among the most gratifying of my experiences in connection with the canal question. are the many assurances of support., from various parts of the nation and from the isthmus. I am especially happy to state also that much of this support comes from thoughtful Pana- 4 o
manianis, among -whom the United States has many understanding friends. They very definitely do not approve of the extreme agitations and unrealistic demands affecting the Panama Canal that have been made since the 1956 Suez crisis. They know the history of their country and that their independence grew out of the canal enterprise. They appreciate that their nation's Welfare depends on the efficient operation and management of the Panama Canal under the control ofthe United States. They also know that the United States is not their "common enemy" but their true and tested friend. 14
Unfortunately, the actions of some of their heedless leaders and 1
agitators seem more determined to follow the example of Egypt in theI Suez crisis and Communist leads rather than the real interests of their country. Their official actions present grave questions for thie United States that must be adequately met.
RADICAL DEMANDS FOSTER DRIVES FOR INTERNATIONALIZATION

The vast majority of the North American and Panamanian people look upon the Panama Canal as an ageless institution. But this is not true. Those who know its history understand that were the United States ever to withdraw from the Panama Canal, the results would, indeed, be tragic for Panama and world commerce.
Attacks on U.S. jurisdiction are not new. They trace back to discussions in 1917 in Petrograd between the Red Guard and John Reed, a notorious American CommuniSt newspaper reporter now buried in the Kremlin. During recent years an important factor in the agitations and disorders that have occurred on the isthmus has been their communistic pattern and design. In fact. international communism in. 1956, following the Suez crisis, opened its agitational camnpaignl aimed at wresting control of the Canal Zone from the United States by means of agents trained at the State Collegre for Political and Social Science at Prague, Czechoslovakia.






82 rs=ma" CANAL POLICY QUVSTIONS

Indeed, it is most, extraordinary that a few U.S. citizens, including several in high stations in life, have, since 1956, urged intemationalization, a proposal that conforms to the long-range Soviet program that is so hostile to the United States. It is significant, however, that these leaders have never advocatM nationalization by Panama. I hope that they and all others with similar views will study the isthmian question in all its phases. Then they should be able, to form judgments based upon political realities an(! not idealistic theory or wishful thinking.
The (yreat mass of the American peo le, especially those who have served -with the Panama. Canal organization or in the Armed Forces in the isthn-iian area and know the problems at firsthand, undoubtedly favor continued U.S. control. The radical demands in Panama hence cannot in any way serve to benefit that co'Lintry, but they do aid and abet proposals for internationalization now being strenuously agitated from Communist sources. Such event, I know from a large correspondence, thoughtful. Panamanians and Americans do not wish to occur. Significantly, it -may be added, there have been no Communist proposals for nationalization of the canal by Panama.
Hence, all these radical and impossible demands in Panama can have but one result, that of helping to dig the grave of the, Panamanian Republic. The retirement of the United States from control of the canal would certainly be fatal to Panama-fatal not only to its economy but also to its independence. It must be obvious, Mr. Speaker, to all thoughtful Panamanians, as well as North Americans, that though radical elements may be planning murder, they are actually preparing for suicide.
MUTUAL UNDERSTANDING NOT A OXE-WAY PROCESS
Mr. Speaker, when the 1955 treaty with Panama was concluded, the people of the United States assumed that it would demonstrate the mutual understanding and cooperation of the two countries for many years to come. This was accompanied by the specific provision that neither the 1903 nor 1936 treaties with Panama, nor the 1955 treaty, may be modified except by mutual consent.
How generously the United States has met its isthmian obligations is a matter of record. Some of them have been authorized by law; for example, the $20 million bridge across the canal at Balboa. This project, for which bids were to be opened on February 11, if built, should improve economic conditions at Panama during construction and later serve the hinterland of the Republic. some of whom are
But how well have certain Panamanian leaders,
in high stations, met the basic treaty obligation of mutual understanding and cooperation? The answer to this, Mr. Speaker, is also a matter of record-hostile agitations and propaganda against the United States, which has been repeatedly presented to the Congress in documentary form. Yet so far, the United States has taken no adequate action.
This treaty of 1955, Mr. Speaker, was designed to compose the economic and other relationships between the United States and Panama for the foreseeable future. Undoubtedly, this was the intention of the





ISTELMIAN CANAL POLICY QUESTIONS 83

treatymakers of both countries. Yet as soon as the United States implemented the treaty provisions, these radical demands in Panama arose and the recent assembly action was taken. By the same token, we can certainly expect that,, if all the radical demands in Panama are granted, even greater and more preemptory ones are to be expected. This is certainly not the process of mutual understanding contemplated in the 1955 treaty.
In view of all this, will not the questions arise in the minds of U.S. taxpayers:
First. Who must bear the ultimate cost made necessary by that treaty, including the $20 million bridge at Balboa, where an adequate free ferry provided by the United States has long been satisfactorily functioning?
Second. Why should we be taxed to meet these costs wbeii they fail to achieve the intended purpose of good will and mutual understanding on which they -were based?
In this connection, I may say, that my correspondence voices strong demands that the Balboa -bridge project be suspended until the attempted encirclement of the Canal Zone by Panama is rescinded.
:18THMIAN CANAL POLICIES A CHALLENGE TO THE CONGRESS
Mr. Speaker, from what has been said here today it is clear that the isthmian question is headed toward even graver developments than have so far transpired. These are not the words of a prophet, but deductions enabled by close observation and study, and the realization of what occurred in 1958 when riots, taking place during students demonstrations against the Panamanian Goverment, were responsible for the deaths of many Panamanians. Current reports of expected revolt in Panama, coupled with finding of arms caches in that Republic, and other recent revolutionary events in the Caribbean, presage future grave incidents which, in tragic consequences, may make those of May 1958 appear insignificant.
The history of the isthmus is complicated and not understood as it should be. either in Panama or the -United States. Its problems are grave; and they can be surmounted only if dealt with promptly and effectively.
AT r. Speaker, the situation with respect to the Panama Canal is indeed of the gravest character. Those in charge of the Communist movement in Latin America, and especially in the Caribbean area, have undoubtedly focused their conspiratorial activities on the Panama Canal with the purpose of causing the destruction of amicable relations between the United States and Panama, with complete liquidation of U.S. controls over the canal itself.
VVhile I would not charge that the Government of Panama is one of communist character, yet it is undoubtedly true that overall Communist purpose is to subvert any government -where situations present themselves as fertile fields for communistic endeavors. Tliev are always fishing in troubled waters and, with the devil's cunning* are usually able to capitalize on situations thus created. Therefore, it is but natural that the Soviet Government should properly "recognize" the ex parte territorial declaration by Panama touching the matter of sea approaches to the canal. So far as I know, Panama made no






84 ITIINCNLPLC USIN

appeal or gave any ntc oayitrainlbd rt h ra

"mutualunesadnancoprto"tashudpealSml


muist recall that in 1958 in Venzeaadjs o nCbocre
of summary executions in the latter country htwr hcigt h people ofal lands o osiuinllbry nygvrmnso a
cn igace and prosperity.
We may well expect other cnusosi h aiba ra s pecially in the littoral nationsofteAriaishundts
readess of whether therearanbaijutfciosThovos Communist objective is th aiiesprtono h w osso the United States by Communist cnrle onrea lutae by the recent Communist efr nGaeaa To meet these situations, i sncsayt nesadteise

requires mnof exceptional qualiiain.Te tfiue nsm important isthmian policiesarfrgtng.Ievysnehy constitute a~ serious calnet h oge As to the basic question offuturmaoinessoftnitcp?as peviously satea inuir notati4newa ymno
to discussions of svrinyadjrsito vrteCnlZn n Panama Canal, that matter is now bkefrthCogesiHue Concurrent Re~solution 33, 86-th Congrs.Ti esr ol e affirm our long-establised and patcditminplcesre notice, that this Nation willJotneiscnro vrtePnm Canal, and counter temovemetnocnvrignthIsmu of Panama.
Mr. Speaker, the UnitedSttsinsmofisplcehslad the part of "Uncle Sap" "1geog.Tetmehscm orsm its historic role of'"nl a aoe hug eeosi t oi cies, was firm i the proteto fteNto' utitrss As partial documentation uo hc oeo h oeon e marks are bsd ne ev codd nld oyo os







ISTH1MIAN CANAL POLICY QUESTIONS 85

Whereas the United States, at the expense of Its taxpayers and under, and fully relying on, treaty agreements, constructed the canal, and since its comipletion, at large expenditure, has maintained and operated it and provided for its protection and defense; and
Whereas the United States, following the construction of the canal, has since maintained, operated, and protected it in strict conformity with treaty requirements and agreements, and has thus made it free, without restriction or qualification, for the shipping of the entire world; and, in consequence of which, with respect to the canal and the Canal Zone, every just and equitable consideration favors the continuance of the United States in the exercise of all the rights and authority by treaty provided, and in the discharge of the duties by treaty imposed: Now, therefore, be it
Resolved by the House of Representatives (the Senate concurring), That (1) it is the sense and judgment of the Congress that the United States should not, in any wise, surrender to any other government or authority its Jurisdiction over, and control of, the Canal Zone, and its ownership, control, management, maintenance, operation, and protection of the Panama Canal, in accordance with existing treaty provisions; and that (2) it is to the best interests-not only of the United States, but, as well, of all nations and peoples-that all the powers, duties, authority, and obligations of the United States in the premises be continued in accordance with existing treaty provisions.


[Department of State press release, Jan. 10, 1959] lv

UNITED STATES DELIVERS NOTE TO PANAMA ON 12-MinE TERRITORIAL SEA LAWpa

Our Ambassador to Panama delivered on January 9 a note to the Panamanian Government in which the United States stated its nonrecognition of the provisions of the recently enacted Panamanian law providing for a 12-mile territorial sea and reserved all of its rights in 4
the area which is the subject of the law. The text of the U.S. note is 1
as follows:I
EELENCY: I have the honor to refer to your note No. 1096, dated Decem- aI
her 23, 1958, transmitting a copy of Republic of Panama Law No. 58, of December 18, 1958, which has as its purpose the extension of the territorial sea of the Republic of Panama to a distince of 12 miles from the coast. I have been instructed to state that the U.S. Government considers this action of the Republic of Panama is regrettable in view of the recent action of the United Nations General Assembly in voting overwhelmingly to call an international conference to consider the breadth of the territorial sea and fishery? matters.
It is the view of my Government, as expressed at the United Nations Law of f
the Sea Conference and on previous occasions, that no basis exists in international law for claims to a territorial sea in excess of 3 nautical miles from the baseline which is -normally the low-water mark on the coast. Furthermore. in the U.S. view there is no obligation on the part of states adhering to the 3-mile rule to recognize claims on the part of other states to a greater breadth of territorial sea.
'My Government hopes that the Government of Panama will find it possible to reconsider its action and awaits the further consideration of the question of the breadth of the territorial sea by the international community. In the mneantimle the Government of the United States reserves all of its rights in the area which i." the subject of Republic of Panama Law No. 58 of December 18, 1958.
Accept, Excellency, the renewed assurances of my highest consideration.
The Departmient wishes to point out, in view of the many inquiries, that this new Panamanian law cannot affect the rights of the United States with respect to the Panama Canal. Article XXIV of the con-








vention of 1903 btwenth Uite ttsadPnma eaigt~h Nochangeether intheGovrmn tor inthlasndreisofheRObe




[From CnrsialInformaion ueu ahigoDC, e.4 99
Following today's session ofthHosMecataxnCmi' matersthat shudbe loked ino a. trendtoadteoslsecoftepeetPnmCaaanthery

zation of existing facilities andthposbendfradioalratraiv facilities. In this connection the cmitescrdtesrie fagopo the foremost engineers in the Unite States to exmne testainadmk recommendations for future action, eiter by way ofipoeetofteeitn canal, the constructin of a new oe rbt.Drn h atCnrs hs engineers, as a board of consultant to h omtehv xmndeitn engineering data onth$0-odd routspooentvrou ie o aa
sultants has visited and inspected tepsntcana n aiirzdtesle with the construction and operating prbeienvovd A peiiayrpr covering recommended imeit-ipoeet eure ocniu h fiin opraionu of the caa, pendnacopeesuy


the middle of this year. The importance of the work of this board cannot be oeretmtdsnei tafcexpected by 1970. In view oftetm eurd o niern n gress be provided with workbeiesfrftr xaso nteeris possible time.





(By EarlHrding, viceprsdnNtoaEcomcCuil


The great American i veawayr series did notstrwihheMsal



politicalstduinWsigoonSpebr1,wePaa'sebases outside of our 0mlxiePnaa aa oe






ISTUMIAN CANAL POLICY QUESTIONS 87

That planned fumble cost American taxpayers much more than the million-plus dollars in rental paid to the Panama Government during World War II for permission to plant our guns, build our roads, landing fields, bomber bases, and nearly 400 buildings on Panama's pasturelands and in her swamps and jungles adjacent to the Canal Zone.
WORSE THAN PROFLIGACY
It took endless negotiating to obtain the permission-where we formerly had the right under the 1903 treaty which F.D.R. abrogated-to use Panamanian territory for defense purposes. Finally our Army was forced to withdraw in 1948 and abandon buildings and improvements which had cost well over another million dollars to create.
The giveaway of money to Panama was in the pattern of national profligacy set by F.D.R. and not yet abandoned. But giving away our treaty rights to protect the lifelne of our national defense was in the pattern F.D.R. set when, without consulting them, he gave away the territories and liberties of Poland and China. 4I
And now, if Panama's desire for still further concessions is not satisfied, pressure in behalf of Panama such as Alger Hiss in 1946 brought ,I to bear through the United Nations, may take the form of demanding internationalization of the Panama Canal.
Just as Communists have infiltrated inside and outside the Canal Zone, so have exaggerated ideas of supernationalism taken hold in Panama. Since the United States created the Republic of Panama in 1903, a generation of Panamanians has been schooled to believe in the fiction that their "founding fathers" actually won the independence.
Of course, Panama history books haven't told Panamanian youth that only a handful of conspirators, most of them employees of the Panama Railroad, then owned by the French Panama Canal Company, 6
knew that a revolution was planned. i
A DELUDED GENERATION
If there is to be straight thinking on the coming agitation for more 4
concessions to the Republic of Panama, some of the forgotten or half- p
told history should be recalled now. It will be needed to offset the screams of "aggression" and "infringement of sovereignty" which will be turned on again, as they were in 1947 when rioting students terrorized the Panama Legislature to vote down an extension of U.S. leases on defense bases.
Panama, formerly a Province of Colombia, was created in name, and in name only, an independent nation by acts of the United States. Our responsibility was officially denied until the truth was uncovered. Then Theodore Roosevelt admitted "I took Panama and let Congress debate."
Concealed documents, uncovered in Panama in 1909, disclosed that preliminary financing had been arranged in a New York bank and that American warships were to be on both sides of the isthmus. American marines prevented the landing of Colombian troops. The total casualties of Panama's soul-stirring war for independence were one Chinese onlooker and one donkey.










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ISTMLLAN CANAL POLICY QUESTIONS 89

Senate opposition delayed our ratification of the 1936 treaty until July 1939. This treaty gave Panama an entirely new status.
Article I of the 1903 treaty was eliminated. It read: "The United States guarantees and will maintain the independence of the Rel)ublic of Panama."
The old treaty granted to the United States "in perpetuity the use, occupation and control" not only of the Canal Zone but als<) ofany other lands and waters outside of the zone which maybe necessary and convenie-nt for the construction, maintenance, operation, sanitation, and protection of the said enterprise.
And further, under the old treaty, Panama granted to the United States
all the rights, powers and authority within the zone and within the limits of all auxiliary lands and waters * which the United States would possess if it were sovereign of the territory within which said lands and waters are located, to the exclusion of the exercise by the Republic of Panama of any such sovereign rights, powers, or authority.
All that was abrogated in the following clause of the 1936 treaty, which is still in force:.
The United States of America hereby renounces the grant made to it in
perpetuity by the. Republic of Panama of the use, occupation, and control of lands ft: and waters, in addition to those now under the jurisdiction of the United States of America outside the zone * which may be necessary and convenient for Ila
the construction, maintenance, operation, sanitation, and protection of the Panama Canal or of any auxiliary canals or other works necessary and convenient for the construction, maintenance, operation, sanitation, and protection of the said enterprise.
Then, having abandoned our rights to defense bases outside the Canal Zone, the United States agreed with Panama, in article II of the 1936 treaty, that "if, in the event of some now unforeseen contingency" land outside the Canal Zone should be needed, the two governments,will agree upon such measures as It may be necessaryto take in order to insure the maintenance, sanitation, efficient operation and effective protection of the canal, in which the two countries are jointly and vitally interested.
The U.S. Government's right of eminent domain in acquiring property within the cities of Panama and Colon which might be needed for 14
canal operation was renounced.
Also eliminated was the right of the United States to maintain public order in Panama if the Panamanian Government couldn't do so,
And the annuity.of $250,000 aid by the United States for use of the canal strip was increased to 930,000-on account of the Roosevelt devaluation of the dollar.
The 1936 treaty made many other concessions to Panama. It restricted residence in the Canal Zone to American civilian and military personnel, established corridors within the zone for Panamanian convenience, and prohibited now private enterprises in the Canal Zone.
The effect of the 1936 treaty's ratification in July 19339 was summarized in such headlines as "The United States 'in Panama Pact Quits as Guardian, Becomes Neighbor-New Treat Ends the Right of Intervention, Substituting Bilateral Cooperation.'






90 ITMA AA OIYQETOT




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