Proposed Panama Canal treaties

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Title:
Proposed Panama Canal treaties hearings before the Committee on International Relations, House of Representatives, Ninety-fifth Congress, first session
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v, 571 p. : maps ; 24 cm.
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English
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United States -- Congress. -- House. -- Committee on International Relations
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Panama Canal Treaties   ( lcsh )
Foreign relations -- United States -- Panama   ( lcsh )
Foreign relations -- Panama -- United States   ( lcsh )
Panama Canal (Panama)   ( lcsh )
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federal government publication   ( marcgt )
non-fiction   ( marcgt )

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Includes bibliographical references.
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Also available in electronic format.
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CIS Microfiche Accession Numbers: CIS 78 H461-3
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Hearings held Sept. 8-Oct. 20, 1977.
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University of Florida
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All applicable rights reserved by the source institution and holding location.
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aleph - 024737135
oclc - 03912649
lccn - 78601185
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lcc - KF49
ddc - 341.44/6/02667307287
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PROPOSED PANAMA CANAL TREATIES












HEARINGS
BEFORE TME


COMMITTEE ON


INTERNATIONAL RELATIONS

.HOUSE OF REPRESENTATIVES

NINETY-FIFTH CONGRESS

FIRST SESSION


SEPTEMBER 8, 14, 15, 20, 26, 28, AND OCTOBER 11 AND 20, 1977


Printed for the use of the Committee on International Relations

























U.S. GOVERNMENT PRINTING OFFICE 98-991 WASHINGTON : 1978

For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402



















COMMITTEE ON INTERNATIONAL
C L E E N J Z A L C i c n i C a r a

L. H. FOUNTAIN, North CaroliaWLIA .BOOFED Mcia
DANTE B. FASCELL, FloridaEDADJ RWNKIlni
CHARLES C. DIGGS, Ja., Michigan ROBERT N. C. NIX, Pennsylvania DONALD M. FRASER, Minnesota J. HERB BENJAMIN S. ROSENTHAL, LEE H. HAMILTON, Indiana LESTER L. WOLFF, New York, JONATHAN B. BI AM, N York GUS YATRON, Psylvana T
MICHAEL HARRINGTON, Massachusetts W F. LEO J. RYAN, CaforniS CARDISS COLLINS, STEPHEN J. SOLAR, New York HELEN S. MEYNER, New J DON BONK-ER, Washington GERRY E. STUDDS, Massachusetts ANDY IRELAND, Florida DONALD J. PEASE, Ohio ANTHONY C. BEILENSON, Califrnia WYCH FOWLER, JR, Georgia E (KIKA) DE LA GARZA, Texas GEORGE E. DANIELSON, California JOHN J. CAVANAUGH, Nebaska

ROBERT K. BOYER, Staff Consultant GEORGE M. INGRAM, S2taff Consultat J. EDWARD Fox, HMnoritW Staff Conultant ROXANNE PERUGINO, Staff Assistant















CONTENTS



WITNESSES
Thursday, September 8, 1977: Page
Hon. Ellsworth Bunker, conegotiator for the Panamna Canal Treaties--. 3 Hon. Sol M. Linowitz, conegotiator for the Panama Canal Treaties_ 6 Herbert J. Hansell, legal adviser, Department of Stt~.-------9
Lt. Gen. Welburn Dolvin, member, U.S. Negotiating Team for the
Panama Canal Treaties-------------------------------------- 14
Wednesday, September 14, 1977:
Hon. Dean Rusk, former Secretary of State----------------------- 123
Hon. Henry A. Kissinger, former Secretary of Sae--------127 Thursday, September 15, 1977:
Dr. John Wasylik, national commander in chief, Veterans of Foreign
War's of the United States---------------------------------- 15
William J. Rogers, immediate past national commander, the American Lein------------------------163
Frank D. Ruggiero, national commander, AMVETS-----------------171
Dr. Robert P. Foster, chairman, National Foreign Relations Commission, the American Legion ------------------------------------ 175
Col. Phelps Jones, director, National Security and Foreign Affairs,
Veterans of Foreign Was------------------177
Tuesday, September 20, 1977:
Hon. Samuel S. Stratton, a Representative in Congress from the
State of New York ------------------------------------------ 181
Hon. Larry P. McDonald, a Representative in Congress from the
State of Georgia--------------------------------------------- 198
Hon. Philip M. Crane, a Representative in Congress from the State
of Illinois---------------------------205
Alfred Graham, president, Central Labor Union/Metal Trades Council, Canal Zone - - - - - - - - - - - 2
William Drummond, legislative chairman, Central Labor Union/ 2
Metal Trades Council, Canal Zone ----------------------------- 231
Monday, September 26, 1977:
Hon. Harold Brown, Secretary of Defense -------------------------237
Gen. George S. Brown, Chairman, Joint Chiefs of Staff-------240
Lt. Gen. Welburn Dolvin, member, U.S. Negotiating Team for the
Panama Canal Tray-------------------266
Wednesday, September 28, 1977:
Adm. Thomas H. Moorer, former Chairman, Joint Chiefs of Staff.-- 277 Tuesday, October 11, 1977:
William P. Stedman, Deputy Assistant Secretary of State for InterAmerican Affairs -------------------------------------------- 304
Rose Marie Aragon, Panamanian Committee for Human Rights--- 320
David Carliner, attorney for Rose Marie Argn---------326
Curtis Cutter, Legislative Officer, Congressional Relations, Department of Sae-----------------------328
Winston Robles, assistant professor of political science, Florida International University, and director of the Panamanian Committee for
Human Rights---------------------------------------------- 338
Rev. Leo T. Mahon, St. Victor's Parish, Calumet, Ill., former priest in
Panama ------------------------------------------------- 34
Thursday, October 20, 1977:
Hon. Cyrus R. Vance, Secretary of Stt-------------364
Hon. Ellsworth Bunker, conegotiator for the Panama Canal Treaties. 381 Hon. Sol M. Linowitz, conegotiator for the Panama Canal Treaties_ 382







IV

MATERIAL SUBMITTED FOR THE RECORD
Page
"Declaration of Washington ----------------------------------------- 15
Letter, arguments, and counterarguments on Panama Canal Treaty----- 22 Statement of Herbert J. Hansell, legal adviser, Department of State,
before the House Committee on Merchant Marine and Fisheries,
August 17, 26
Legal opinion of the Attorney General on the Panama Canal Treaties---- 28 1977 January-February issue of Freedom House --------------------------- 48
Exchange of notes, loan guarantees, credit papers, and related documents
concerning various U.S. Government' activities located in the Canal
Zone ----------------------------------------------------------- 62
Total amount of canal construction costs and total payments to Panama
by the United States --------------------------------------------- 116
Book value of the Panama Canal enterprise --------------------------- 119
Resolution No. 402, U.S. Sovereignty Over the U.S. Canal Located on the
Isthmus of Panama, submitted by Dr. John Wasylik, commander in
chief, VFW ----------------------------------------------------- 156
U.S. Government use of Panama Canal before, during, and after Vietnam- 217 List of U.S. facilities in Canal Zone to be relinquished and kept under the
treaty provisions ------------------------------------------------ 252
Estimate of cost of the canal to the United States during the Vietnam war- 270 Statement of Hon. William L. "Bill" Dickinson, a Representative in Congress from the State of Alabama --------------------------------- 272
Statement of Hon. John M. Murphy, chairman, House Committee on
Merchant Marine and Fisherie: ------------------------------------- 297
Data in support of the contention of the continuing importance of the
Panama Canal and Canal 303
Freedom House human rights rating on Panama ----------------------- 307
Freedom House's f formula for determining its human rights ratings 310 Press release from Freedom House "Urges Approval of Canal Treaties
Despite Panama's 'Deplorable' Human Rights Record," dated November 17, 312
Relationship between Torrijos and Qadhafi. of Libya ------------------- 316
Clarification of Cabinet Decree No. 343-Self-eensorship of the Panamanian media --------------------------------------------------- 317
Visa case of Leopoldo Aragon Escalona submitted by the Department of
State ---------------------------------------------------------- 328
Canal Zone police involvement in the capture and beating of Leopoldo
Aragon --------------------------------------------------------- 329
Documentation on the case of David 330
Excerpts from the testimony of Jerome J. Shestack, president of the
International League for Human Rights, before the Subcommittee on Foreign Operations and Related Agencies, House Committee on Appropriations, April 5, 1977 ------------------------------------------- 351
L.4 tter to Inter-American Commission on Human Rights, OAS, from
International League 6f Human Rights, concerning human rights violations in Panama ------------------------------------------------- 351
Press release of the Office of the White House Press Secretary on "Statement of Understanding," dated October 14, 1977 -------------------- 368
Telegram from U.S. Embassy to Secretary of State, dated September
29,1977 ------------------------------------ 368
"Panama: Escobar Tells Press of Carter-Torrijos Meeting," telegram to
Department of State dated October 1, 1977 ------------------------- 369
"Panama: Escobar Betancourt Holds Press Conference," telegram to
Department of State dated October 1, 1977 ------------------------- 372
Letter sent to Chairman Zablocki from J. R. Williams, president of the
Panama Canal Pilots Association ---------------------------------- 380
Letter to President Gerald Ford concerning ongoing SALT negotiations-- 385 Questions submitted for the record by Congressman Larry Winn, Jr. a-nd
responses by the Department of 388
APPENDIX
1. Staff summary of the issues, pro and con on the Panama Canal
Treaties ----------------------------------------------------- 403
2. Texts of treaties relating to the Panama 427







V

3. Agreement in implementation of article III of the Panama Canal P;ge
Treaty ----------------------------------------------------- 446
4. Agreement in implementation of article IV of the Panama Cana il
Treaty ----------------------------------------------------- 513
5. Statement of Understanding between the United States and Panama
regarding the Neutrality Treaty -------------------------------- 564
6. Remarks of Dr. Romulo Bethancourt before the Panamanian National
Assembly, from the American Conservative Union News, dated
September 7, 1977_-565















PROPOSED PANAMA CANAL TREATIES


THURSDAY, SEPTEMBER 8 1977
HOUSE OFREPRESENTATIVESI
COMMITTEE ON INTERNATIONALRELATIONS,
Washington, D.C.
The committee met at 10:25 a.m. in room 2172, Rayburn House Office Building, Clement J. Zablocki, chairman, presiding.
Chairman ZABLOCK1. The committee will please come to order.
The committee is beginning today the consideration of one of the most important-and controversial-matters before our Nation. The issue is whether the Congress should approve the proposed Panama Canal treaties and the legislation to implement them.
The President has made his decision and commitment. At a historic gathering last night, attended by many Members of Congress and an unprecedented number of Government leaders from Latin American countries, the President signed the treaties as Chief Executive of the United States. The President of Panama signed for his nation.
Now it is up to the Congress to decide whether the United States should ratify the treaties and enact the necessary implementing legislation.
Under our Constitution, only Senate action is required for congressional approval of treaties. However, where further U.S. legislation is needed to carry out any of the treaty terms, as in this case, the House must act on such legislation as well as the Senate.
The House International Relations Committee will be receiving part of the legislation required to implement the treaties. To understand fully what is involved, we will be looking simultaneously at both the treaties and the need for enabling legislation.
The Chair is hopeful that this series of hearings will be productive for the Congress, and for interested Americans everywhere, in bringing out the facts on this important matter.
We have scheduled distinguished witnesses who will testify before us over the next several weeks. We will hear from the present Secretary of State and two of his predecessors, from the Secretary of Defense and from the Chairman of the Joint Chiefs of Staff, from labor, business, and representatives of veterans' organizations and other leaders.
We will hear from both proponents and opponents of the treaties. Let me emphasize at the outset of these hearings that we are determined to be fair and thorouLrh in our deliberations on this issue and to allow both sides to present their respective arguments.
I can announce this morning that an additional witness, not previously listed, will be Adm. Thomas H. Moorer, former Chairman of the Joint Chiefs of Staff and former Chief of Naval Operations. Admiral, Moorer will testify on September 28.






2

We will do our utmost to be thorough in bringing out the issues and the facts surrounding the treaties-and we will be guided by what is in the best interests of the United States.
At this time I would like to briefly outline some of the questions on which we need answers, and I think the people of the United States -"-III require answers to better understand what our country's agreements and negotiations contain. For example, what is the extent of our military and economic interest in the canal?
How will our defense and national security best be served?
How can we best assure continued access to the canal by American ships, those of our allies, and by ships of all nations and the world generally?
What measures may be needed to secure the canal against sabotage or external attack?
What is the economic value of the canal to our commerce?
What is the cost to us of operating the canal under the present arrangement?
What will happen to canal transit costs under the, new treaties?
Can the Panamanians successfully take, over operation of the, canal by the year 2000?
What impact might the domestic political situation in Panama have on the canal operation under the present arrangement, and under the new treaties?
What steps need to be taken to assure fair treatment of present canal employees?
What are the possibilities for building a sea-level canal at some future time?
What role should Congress as a whole have constitutionally in regard to the new treaties and implementing legislation?
And from the standpoint of our relations with our Latin American neighbors and other nations around the world, what will be the results for the United States if we do-or do not-ratify the proposed treaties?
Before each member is a copy of the negotiated treaties, and related materials. May I also remind the members that their microphones are now controlled by the switches in front of them.
You push the switch forward to turn them on, to activate themso the sign in front of my switch says.
To begin these hearings, we are pleased to have before us the two principal negotiators of the treaties-Ambassadors Ellsworth Bunker and Sol M. Linowitz. They are accom anied at the witness table by Lt. Gen. Welburn Dolvin, a member N the negotiating team, and the Honorable Herbert Hansell, Legal Adviser of the Department of State.
Gentlemen, we welcome you to the committee. I want personally to take this opportunity to congratulate you for the efforts you have made and the success you have had in the treaties that have been negotiated. You may proceed with your statements, gentlemen, after which we will have questions, I am sure.
Ambassador Bunker.






3

STATEMENT OF HON. ELLSWORTH BUNKER, CONEGOTIATOR FOR
THE PANAMA CANAL TREATIES
Mr. BUNKER. Thank you, Mr. Chairman.
Mr. Chairman and gentlemen, Ambassador Linowitz and T greatly appreciate the committee's invitation to discuss; the new Panama Canal Treaties. This is our first app.-aranc,-e before a congri ,onal committee since completion of the new treaties, which were signed yesterday by President Carter and Pan ama's General Trrijos, a nd which will shortly go to the Senate for advice and consent to ratification.
The new agreements include the following documents:
The Panama Canal Treaty, with two implementing agreements concerning:
Canal operation-Agreement in Implementation of article III of the Panama Canal Treaty.
Defense-Agreement in Implementation of article IV of the Panama Canal Treaty.Treaty concerning the permanent neutrality and( operation of the Panama Canal.
Exchanges of notes concerning various U.S. Government activities currently located in the Canal Zone.
A note concerning loans, loan guarantees and credits to be provided to Panama to assist its economic development and to enhance its capability to contribute to canal defense.
In our opening statements Ambassador Linowitz and I will review a few of the most important features of these documents. I will outline the provisions governing canal operation and defense through December 31, 1999. Ambassador Linowitz will describe the neutrality treaty and the economic arrangements. Before taking up canal operations and defense, I want to make a few preliminary remarks.
Among the committees of the House, yours is the one most concerned with this Nation's interests abroad. Nothing could better serve the underscore of the new canal agreement to our foreign policy interests than the presence in Washington for' yesterdaN-'s signing- ceremony of Presidents or Prime Ministers from 20 countries of the hemisphere and of high-level representatives from 8 other Latin American nations.
For many of these countries, the canal is an iniport ant trade artery. For all of them, the extended negotiations for a new canal agreement have been viewed as a test of our willingness to (deal equitably with our Latin American neighbors. Two U.S. foreign policy interests are involved in the new canal treaties. Tihe first is our interest-for reasons of both trade and defense-in assured use of an efficiently operated and secure Panama Canal.
The second is our interest in cooperative and productive relations with Latin America. The nations to the south of us are important not only as neighbors sharing the same hemisphere but also as partners in trade and investment, sources of important raw materials, and as collaborators in building a secure, peaceful and prosperous world community.






4

FOur presidents of both political parties have recognized that the protection of our nation's interest -with regard both to the Panama Canal and to the hemisphere-required reform of the treaty arrangements governing the canal. We believe that the terms that have been negotiated fully meet the needs of the United States:
They assure the efficient operation of the canal.
They enable the United States to protect the canal.
They guarantee the canal's neutraRty permanently.
They provide an economic settlement that is fair and reasonable.
And they provide a firm foundation for long-term cooperation between the nited States and Panama.
Let me now describe how canal operation and defense will be carried out under the terms of the Panama Canal Treaty which will remain in force until December 31, 1999. The basic principle is that for the duration of the treaty --that is, for the rest of this century-the United States will retain control of operation and defense with Panama t Id g part in both activities. This arrangement will assure that the United States can guarantee the uninterrupted, efficient operation and security of the canal after the new treaty goes into effect.
It will also provide the necessary preparatory period for Panama to develop the capability to assume responsibility for canal operation and defense beginning in the year 2000. The key provisions axe articles III and IV of the Panama Canal Treaty.
In article III Panama grants to the United States "the rights to manage, operate and maintain the Panama Canal, its complementary works, installations and equipment and to provide for the orderly transit of vessels through the Panama Canal." Article III further lists a number of specific powers which the United States will have in order to exercise its responsibility for canal operation.
These include the authority to "make and enforce all rules pertaining to the passage of vessels through the canal," and "to establish, modify, collect and retain tolls."
In similar fashion, article IV which deals with defense matters, rovides that for the duration of the treaty, the United States "shall ave the primary responsibility to protect and defend the canal." The agreement in implementation of article IV sets forth the specific rights which the United States will, have in order to carry out its defense responsibilities. These include rights to "station, train, and move military forces within Panama."
Of special importance to canal operation and defense are the arrangements for use of lands and waters in the present Canal Zone. Under the new treaty the Canal Zone will cease to exist, and the territory included in the zone will. come under the general territorial jurisdiction of Panama. However, the United States will have access to and the rights to use all lands and waters needed for operation, maintenance, and defense of the canal through December 31, 1999.
The specific areas reserved for these purposes and the rights for their use axe set forth in detail in the two implementing agreements. The designated areas include the canal itself and related facilities, together with military bases for the use of our forces. To administer the canal, the United States will establish, under legislation to be sought from Congress, a U.S. Government agency, which will be called the Panama Canal Commission and which will replace the present Panama Canal Company.








Article III of the Panama Canal Treaty provides that the Commission will be supervised by a Board composed of five Americans and four Panamanians. The executive officers will be an Administrator and a Deputy Administrator. Until 1990, the Administrator will be an American and the Deputy a Panamanian. Thereafter, the Administrator will be a Panamanian and the Deputy an American. The Administrator, the Deputy Administrator, and all Board membersboth American and Panamanian-will be appointed by the United States.
Also affecting canal operation are the treaty provisions dealing with personnel of the canal enterprise. The basic guidelines on personnel are set forth in article X of the Panama Canal Treaty. In general, these are designed to allow present employees, both American and Panamanian, whose services will be required by the new Panama Canal Commission to continue working under conditions generally no less favorable than those which they currently enjoy.
For those who are displaced from their jobs, various procedures are provided to facilitate placement in other U.S. Government positions, to the extent these are available, and to assist in finding other jobs when necessary. In addition, the United States will provide a special optional early retirement Drogram, to all persons employed by the Panama Canal Company ind the Canal Zone Government immedi ately prior to entry into force of the new trea y.
The treaty also established guidelines for increasing employment of Panamanians at all levels in the canal enterprise m preparation for Panama's assumption of responsibility for canal operation at the treaty's end. The right to collective bargaining for canal employees is guaranteed. We believe these provisions will make it possible for the Panama Canal Commission to retain a qualified work force and widl provide fair treatment for existing employees.
In this connection, I think it worth noting that the AFL-CIO, which represents most of the United States and Panamanian canal employees, has endorsed the new canal treaties.
The treaty makes special provision to insure that environmental considerations are not overlooked. In article VI, both governments commit themselves to implement the treaty in a manner consistent with the protection of the natural environment of Panama.
The article also calls for the creation of the Joint Commission on the Environment which will review the treaty's implementation and will recommend ways to avoid or to mitigate any adverse environmental impacts which might arise from actions taken pursuant to the treaty. A separate exchange of notes will provide for continued operation of the Smithsonian Institution's Tropical Research Center which makes such a valuable contribution to our understanding of the natural environment of the canal area. The wildlife preserve on Baxro-Colorado Island will also be maintained.
Taken as a whole, the treaty provisions concerning operation and defense provide a comprehensive approach toward meeting U.S. interests in the near and long term. They build on the effective administralion and experienced personnel developed in 60 years of U.S. operation and provide a means to utilize these important assets under the new treaty.
The new agreements also establish an organized framework for development of an effective. Panamanian management that can carry






6

out canal operations after the year 2000. And they open the Way 'for modernization of the canal should that become necessary in the future.
That, Mr. Chairman, completes my statement. Ambassador Linowitz will follow.
ChairmanZABLOCKI. Thank you, Ambassador Bunker.
Ambassador Linowitz.

STATEMENT OF RON. SOL M. LINOWITZ, CONEGOTIATOR FOR THE PANAMA CANAL TREATS
Mr. Li-.,,OWITZ. Mr. Chairman, members of the committee, first let me express my appreciation to you for scheduling these hearings and focusing attention on an issue which is one of the most important certainly confronting the American people today.
As Ambassador Bunker has indicated, for more than 13 years, under four presidents, the United States has been seeking to find the basis for a new treaty with Panama to replace the outmoded treaty of 1903. It has been a long and arduous road beset with many obstacles and frustrations. Last evening we came to the end of the road. The President of the United States, on behalf of this country, signed two new treaties with Panama to replace the 1903 treaty.
These new treaties, we believe, represent a. fair and equitable basis for dealing with the issues which have been the cause of so much dissension and hostility over the years. And they do so in a manner which fully protects our interests, properly recognized Panamanian aspirations, and does us credit as a great democratic country.
As you know, President Ford has joined President Carter in announcing his full support for these two treaties, and they have been joined by a number of other leaders of both parties. They recognize that in ihese new treaties the United States has finally realized the result of such great effort by Democratic and Republican administrations alike to achieve a fair and reasonable new treaty arrangement which permits us to act the way a great nation should act.
Ambassador Bunker has outlined a number of the major features of these new treaties to you, and I would like to follow by describing several others. As you know, the new Panama Canal Treaty provides the basis for assuring to the United States continued access to a canal which is open and secure. Under the new treaty, U.S. Forces will have the primary responsibility for maintaining canal defense until the year 2000. But the United States will have very important rights extending beyond that date.
The separate treaty on the permanent neutrality and operation of the Panama Canal, which will take effect simultaneously with the new canal treaty, commits the United States and Panama to maintain a regime of neutrality of the canal. Under the rules of neutrality set forth in the treaty, the canal is to be open without discrimination as to conditions or charges of transit. A special provision authorizes United States and Panamanian warships to transit the canal expeditiously in both peace and war without being subject to any restrictions as regards means of propulsion, armament, or cargo.
The treaty gives the United States the right to assure that the canal's permanent neutrality is maintained and places no limitation on our ability to take such action as may be necessary in the event






7
the canal's neutrality is threatened or violated. It also prohibits any foreign country from operating the canal or stationing troops in Panama after the year 2000.
It is most important to stress that unlike the treaty governing canal operation, the Neutrality Treaty is of indefinite duration and calls for the maintenance of the canal's permanent neutrality. The Neutrality Treaty will also apply to any other international waterway that may be built in Panama in the future. In short, the Neutrality Treaty provides a firm foundation for assuring that our long-tern interest in the maintenance of an open, accessible, secure, efficient canal is preserved-now and in the future.
In order to emphasize the importance of the regime of neutrality to world shipping, there is a protocol to the Neutrality Treaty which will be open to accession by all countries of the world. The signatories to this protocol will, in effect, endorse the Neutrality Treaty by specific ly associating themselves with its objectives and by agreeing to respect the regime of permanent neutrality of the canal both in time of war and in time of peace. The instruments of accession will be deposited with the Secretary General of the Organization of American States.
Now, a few other comments about the Panama Canal Treaty itself and those aspects which Ambassador Bunker did not allude to.
Now as to the economic terms of the new canal agreement: At the start of these negotiations, both countries agreed-in the 1974 Kissinger-Tack statement of principles-that Panama should receive a "just and equitable share of the benefits derived from the operation of the canal in its territory." Consistent with this principle, the United States maintained during the negotiations that payments to Panama should be drawn entirely from the canal revenues-that is, that the payments should reflect the canal's economic value as measured by its revenue-generating capacity.
The agreement which has now been worked out has two components. First, payments to Panama, to be financed entirely from canal revenues, will be provided for in the new treaty. And a package of loans, loan guarantees, and credits outside of the treaty and subject to existing statutory procedures is also planned. Payments to Panama from canal revenues to be provided for in the new treaty will consist of:
A fixed share of tolls amounting to 30 cents per Panama Canal ton. We estimate that this will yield about $40 million per year.
A fixed payment of $10 million per year, also to be drawn from canal revenues.
And third, and only if additional revenues permit, an additional sum of up to $10 million per year.
The economic development program outside of the treaty consists of loans, loan guarantees, and credits extending over a period of 5 years which will include the following components-all designed to support Panama's economic development.
Up to $200 million in Export-Import Bank credits.
Up to $75 million in AID housing guarantees.
A $20 million Overseas Private Investment Corporation (OPIC) loan guarantee to Cofina, the Panamanian national development corporation.






8

Let me be very clear about this. None of these loans, guarantees and credits will require appropriations from the Congress. I want: to stress, however, that the disbursement of funds under these Tograms will be subject to all the procedures and criteria which normauy apply to each of the programs involved.
In addition, the United States is undertaking to provide to Panama up to $50 ndffion in foreign military sales credits over 10 yeaxs to assist it in devel m*g the capability needed to exercise its responsibilities for canalolefense under the new agreement. We believe that the economic settlement is fair, reasonable, and appropriate. We am convinced that it is a good investment toward establishing a new relationship with Panama that will protect our long-term interest in the canal. And it will not involve any additional burden for the American taxpayer, since it can be financed from canal revenues.
The canal treaty also grants to the United States certain rights in connection with adding a third lane of locks to the canal, or possibly construction of a sea4evel canal in Panama. Under the treaty, we have the right to construct a third lane of locks if we should choose to do so at any time during the treaty
With respect to a sea-level, canal, the United States and Panama commit themselves jointly to study the feasibility of such a canal, and if they agree that such a canal is necessary, to negotiate mutually agreeable terms for its construction. Panama agrees that it will not negotiate with any other country for the construction of such a sealevel canal and the United States undertakes not to negotiate with another nation for a sea-level. canal in any other country in the hemisphere.
As was clear last evening during the treaty signing ceremonies, these new treaties will have profound significance throughout the hemisphere and they have the full approval of all the countries of Latin America. It has been apparent for years- that the countries of Latin America have regarded the Panama Canal issue not as a bilateral matter but as a problem involving the United States on the one hand and all Latin America on the other.
At the beginning of this year the heads of state of eight countries wrote to President Carter urging him to give highest priority to the resolution of this important issue which so strongly affects our relations with our neighbors to the south. So, in going forward with these new treaties and their ultimate ratification, the United States will be 0 enIng up a new era in its relationship in this hemisphere. Beyond tKat, we believe that these new agreements present us with a rare opportunity to demonstrate to the world how a large nation and a small nation can settle their differences amicably and with mutual respect and enter into a lasting partnership of which future generations w '11 be proud. Such a treaty wiH bear witness to our intention to build a balanced, constructive and lasting relationship among the countries of the hemisphere and around the world.
As a last word, it is fitting to go back to Teddy Roosevelt, with whom all this started I think he put it very well.
We have no choice as to whether or not we shall play a great part in the world. That has been determined for us by fate. The only question is whether we will play that part well or badly.
Thank you, Mr. Chairman.-








Chairman ZABLOCKI. Thank you, Ambassador Linowitz. On behalf of the members I thank both of the Ambassadors for their excellent statements.
At the very outset let me say I would agree with you that the treaty signing ceremonies obviously indicated the profound significance throughout the hemisphere that the treaties have full approval of the Latin Americans. However, I can't say that has similar approval in this country, in many segments of the country, so we will pose many questions. Let me at the very outset further state that my first question will be primarily on procedural matters.

NEED FOR IMPLEMENTING LEGISLATION
For example, what parts of the treaties are not self-executing and will, therefore, require implementing legislation and, further, we would like to know when will the executive branch send up its proposed implementing legislation?
Mr. LINOWITZ. Mr. Chairman, Mr. Herbert Hansell, who is the legal adviser to the State Department, is here with us and I wonder whether he could first address himself to that?
Chairman ZABLOCKI. Yes, sir.

STATEMENT OF HERBERT 3. HANSELL, LEGAL ADVISER, DEPARTMENT OF STATE
Mr. HANSELL. Thank you, Mr. Chairman.
There are a number of major subject matters under the treaties on which legislation will be required for implementation of the treaties and the various related agreements. The most important areas would include, first, provisions relating to the new relationships with Panama and the diplomatic aspects of the treaty.
Second, the organization and activities of the new Panama Canal Commission, including the regime for collection of the tolls and payment of the various stipulated amounts to be paid to Panama. The objective here is to establish a self-sustaining entity that will generate revenues sufficient to meet expenditures and rather extensive legislative provisions will be needed with respect to this subject matter.
Third, all of the provisions that will be needed relating to terms of employment, and employment practices, for the new Commission and the special provisions for current employees that are provided for in article X of the Panama Canal Treaty.
Fourth, adjustments of the jurisdictional provisions applicable to judicial and law enforcement functions during the transitional period following the entry into force of the Panama Canal Treaty.
And, fifth, there are a number of other amendments to existing legislation that will be needed by the transfer of jurisdiction to Panama.
Those are five principal areas, Mr. Chairman, that will be dealt with in the proposed imp lementing legislation.

IMPLEMENTATION OF MILITARY AND ECONOMIC ASSISTANCE PACKAGE
Chairman ZABLOCKI. At this point, Ambassador Linowitz has stated that the. $50 million in foreign military sales credits will not require










legisation that will have to come to Conges

contiuatioioiOFICis ecssrbi orerthaehegemnts far as OPIC's guwxanteeualonthtterayicudsWud you ageewith that?
Mr. HANSEL. Wehabendsigihnocorinrftg leiltion to ieent the treaties, b~etwe h rvsosIhv described and those actions thtwudb edd ihrsett h
economic package. The hope is with respect to th ecooi akg that no congessoa approrainwolbeedd.Treil presumably some legislative activity that might be rqie n
I dn' thnkwehave focused on tha precisely as yet. Chairman ZABLOCKI. Is it not necessrhwvr htyud
focus on that?
Mr. HANSELL. Yes, indeed. Chairman ZABLOCKI. Furtherore, the exctivebac a o
anticipated that Congress will act prior to theraictonfth treaty?
Mr. HANSELL. I believe that is right, Mr.Cara.W ohp
to be able to submit the proposed implementing legislto aihi period of weeks becase itwilleacopensvpakgoflilation and clearly will tak a great dal of tie of theaprrit congressional committees, but we would not anticipate ththelgs lation could be enacted or eve acted on definitily ro t h ratification by the Senate.
Chairman ZABLOCKI. I have just one frhr reltdqeto.I the statements made by both of the Ambasaos h ntdSae
pledged its efforts ouside the treaty to arrange fran ecnmcpo jram of loans, guarantees and credits~ for Pamamonigt approximately $375 million. Is this pormi n a idt h implementation of the treaty? I am thinking of the Sinai accords we haare toanthnw were told later as to some of the economc andmitaysitnc programs that were apparently tied in withthsColasilr situation he interpreted as existing in this case? Mr. HANSELL. These are not commtments in a otatulsne The documents themselves will be submtted tothe cmitea soon as the copies have been made, but theseartobefrs 'dpendent of the program with respect tothtrais Chairman ZABLOUKL. And inuno way tied tothimlenaonf the treaty?
Mr. HANSELL. No, sir.
Mr. LI1NOWITZ. Mr. Carn, there is no directcontinbta part of teenegotiatos we yae, ofcorebenarefth discussions which have been gigon between the representatives Panamaand otheragnisoouGoenetanthraladhs been transmitted a letter frmte Sceayo ttotepoe
Panamanian officials indicating our intention to use our bestefot

have discussed.
Chairman ZABLOCK1. Thank you. M iehseprdadInt there is a roilcall vote. We willcotneuilhesodbl.Ifom






11

of the members want to leave now and come back it is the hope of the Chair we continue our hearings. I understand both Ambassadors have to leave by 12 or shortly thereafter.
Mr. LINOWITZ. If we could, Mr. Chairman, for a meeting with the Chiefs of State.
Chairman ZABLOCKI. Mr. Fountain.
U.S. GAINS FROM THE TREATIES
Mr. FOUNTAIN. Thank you, Mr. Chairman. Mr. Ambassador, I have just a couple of questions. What does America get in return for this enormous financial consideration we are giving to Panama?
Mr. LINOWITZ. The most important thing we get, sir, is the enhanced assurance of a continued open, accessible, secure, and neutral canal.
Mr. FOUNTAIN. That is the main thing?
Mr. LINOWITZ. Yes, sir. The reason we went into the Panama Canal at all was to have an accessible, open canal to meet our needs. It is the judgment of our highest defense officials and Joint Chiefs of Staff, those most concerned with our security, that our security will be enhanced, not only preserved, by insuring that the canal remains open, accessible, secure, and neutral under the provisions which have been worked out in these treaties.
Mr. FOUNTAIN. That accessibility is guaranteed to be kept open mutually between the two countries for how long a period of time?
Mr. LINOWITZ. Permanently, sir.
U.S. MILITARY STATUS UNDER TREATIES
Mr. FOUNTAIN. What about our military situation there? How long will we have military bases?
Mr. LINOWITZ. Until the year 2000.
Mr. FOUNTAIN. And then we give up those bases?
Mr. LINOWITZ. At that point no other country will have troops or bases in Panama.
Mr. FOUNTAIN. But we give up our bases?
Mr. LINOWITZ. Yes.
Mr. FOUNTAIN. We move all of our troops out?
Mr. LINOWITZ. That is right; there will be no troops there.
Chairman ZABLOCKI: Mr. Winn.
Mr. WINN. I would like to reserve my time, Mr. Chairman.
Chairman ZABLOCKI. The Chair would suggest that we now recess and come back in 5 minutes.
[Whereupon, a brief recess was taken.]
Chairman ZABLOCKI. The committee will be in order. Mr. Derwinski.
Mr. DERWINSKI. Thank you, Mr. Chairman. I would hope, because of the limited time our distinguished diplomats have, that perhaps at some later time in the year they might return. I am sure there will be more exhaustive questioning.
Chairman ZABLOCKI. There is nor question we will have the Ambassadors as well as executive branch witnesses whenever necessary.
Mr. DERWINSKI. My first question is, Ambassador Bunker: Have or will all agreements related to the canal been made public in the process of congressional deliberations?

98-991-77-2






12

the a not have. ben mae public as oftodybthewf e
made public.
PROCEDURE TO ESTABLISHIING PANAMA CANAL COMMSIN
Mr. DERwINSKI. I direct myself specifically to some of the poit in your statement. Amibassador Bukr on page 7, youponeou that the board members of the neweniytadnserhecal both American and Pamni, wilb poe y toe admiiste
States. Do I assume that men the Pnmnaswl upyals of names from which their members swill be drawn?~ Mr. BUNKER. Yes; that is correct, they willsupytenm.
EMPLOYEE RIGHT TO STRIKE
Mr. DERwINSKi. Then I noted further in your st ate tta h right of collective bargaining f~or canal epoesis gaate.Wa about the questions of the right to stie, the quesino aa m ployees' right to strike? Is that in any way involved?
FINANCIAL REQUIEMNT OF' THE TRETY
Then, Ambassador Linowitzyomaerfrn, itthfcand I quote you-"It will not involvean adiinlprdn h
American taxpayer since it can be finaned rmcnlrvne. o are referring to the economic settlement. Yet in an earlier >staeet you made ref erence to the f act that Panm would reeie a additional sum up to $10 million if canal revenues permit. Now, if revenues do not permit~ this $10 million, at that pointwol appropriations from the United States be called for?
Mr. LIN owITZ. No, sir; that additional $10 million is not acmt ment; it is there if the canal earns the money. If it does note there is no obligation to Panama; and the only limitationontais If there are surpluses in future years, then that surplui a eue to make up the deficit. Other than that there is no obigatotod anything about making that payment to Panama,
SEA LEVEL CANAL
Mr. DERwINSKI. Now may I mnove on. to the issue of ngtain for the construction of a possible sea level caal You statAbs sador Linowitz, that Panama agrees it will not negotiatewt n other country for the construction of such a caa and4ht h United States undetakes not to ngtia~te with any other nain
Doesn't that put si a situation where the Panamnashv h
veto power if we reach some decision at some point w a o practical purposes bild a canal elsewhere? We have agree ne this treaty not to negotiate with another country.
Mr. LINOWITZ. To the same extent we have a veto power aint their undertaking to n~egotiate with any other country. note words, the correlativity of responsibility is to deal only wihne another in the constuction of a sea lee canal inthWeer Hemisphere.






ia1

And in that regard may I just say, sir, that when the study was made in 1970 regarding the feasibility of a sea level canal, the recommendation was: If it were to be built at all, it be built in Panama.
Mr.. DERWINSKI. Dr. Romulo Bethancourt is the head of the Panama negotiating team that concluded this agreement with you.
Mr. LINowITZ. Yes, sir.

PANAMANIAN NEGOTIATOR DISPUTES U.S. RIGHT TO INTERVENE
Mr. DERWINSKT. I have a copy of his statement he made to the Panamanian Assembly a few weeks ago, and I am quoting from that statement: "We are not giving the United States the right of intervention."1 And he goes on to say that, "What we are giving is assurance that the canal will be permanently neutral."
Now, how does this square with the argument that we will have the assurances that the canal will be maintained, will be free for our use and will be protectable?
Mr. LINOWITZ. 'The neutrality treaty specifically says that the United States and Panama agree to maintain the regime of neutrality established in this treaty which shall be maintained in order that the canal shall remain permanently neutral notwithstanding the termination of any other treaties entered into by the two contracting parties.
Interpretation of that language, which the Panamanians know and which they understand, is that we will be in a position to take such action as we may deem necessary in the event of any threat or attack upon the neutrality of the canal.
Mr. DERWINSXI. Thank you, Mr. Chairman.
Chairman ZABLOCKI. The Chair would like to state that, as is the custom when there is a matter of such vital interest to a particular subcommittee, as a courtesy to the subcommittee chairman, he will be recognized out of order. Mr. Yatron.
Mr. YATRON. Thank you very much, Mr. Chairman. Ambassador Linowitz, or Ambassador Bunker, our Subcommittee on Thter-Americana Affairs of the International Relations Committee just completed a 14-day study mission to South America. We visited six countries; we met with five Presidents out of the six countries as well as other leaders from each of those countries.

LATIN AMERICAN SUPPORT FOR TREATIES QUESTIONED
We were told by the State Department prior to going on our trip that all of these nations were very strongly in favor of the treaty; and it is at least my impression, although I believe others share this feeling, that at the completion of our mission, of all the leaders we spoke to, including the Presidents, not one of them spoke very strongly in support of the treaty. Would you care to comment as to why you feel that they took this attitude?
Mr. LINOWITz. It simply doesn't jibe with our impression, with our information and with the results of our own discussions. We know that there are some leaders of Latin American countries who would be disturbed if today we were to undertake to transfer control of the canal to Panama. They don't feel the Panamanians are ready to undertake operation and they have some questions as to whether this would be the right course at the moment.






14

We have not talked to any leader of any Latin American country who questions the need for our recognition of the sovereignty of Panama or the desirability of reaching an agreement, as we have, for turning over the operation and control of that canal toPanama.
TOLL INCREASE
Mr. YATRON. As I said, not one of them said they were opposed but no one spoke very strongly in favor. As a matter of fact, in one count I believe they were concerned about the increase in tolls, and in eaZ instance our delegation had to bring up the subject of the Panama Canal.
Mr. LINOWITZ. Let me say, on the tolls issue-because that may be one of the things you are alluding to-there are some countries in Latin America who have expressed their opinions at the OAS as being concerned about the effect of a toll increase, surmising correctly that some toll increase will be put into effect under the new treaty. But when they understand that the United States is going to be responsible for setting tolls as part of its operation, management and control of the canal under this treaty, then they recognize that their concern has been dealt with.
I don't know whether your trip, sir, was contemporaneous with or preceded the agreements we reached.
Mr. YATRON. It was before, or just about the same time.
Mr. LINOWITZ. We do know that the reaction we have had has been uniformly approving of the treaties as we have finally reached them.

PANAMA CANAL COMMISSION TO BE SUPPORTED BY CANAL REVENUES
Mr. YATRON. The Panama Canal Treaty provides for the creation of several bodies entrusted with the implementation of the treaty, namely, the Panama Canal Commission, the Panama Canal Consultative Committee, a combined board or joint commission on environment and training employees, Panama employees, and will these be agencies supported by U.S. tax dollars?
STATEMENT OF LT. GEN. WELBURN DOLVIN, MEMBER, U.S.
NEGOTIATING TEAM FOR THE PANAMA CANAL TREATIES
General DOLVIN. No, sir, those are organic parts of the new entity. The Canal Commission will then be supported out of toll revenues as an expense of doing business. It is possible that you might have some Government official who might at some time sit in one of those, but in general the answer to your question is no.
Mr. YATRON. 1 have one further question, then I am sure my other colleagues have other questions.
U.S. DEFENSE RIGHTS UNDER NEUTRALITY TREATY
Article IV of the proposed neutrality treaty states that the United States and Panama agree to maintain the regime of neutrality estab-









listed in this treaty which ,Iiall be mainfiiined ill or(ler tliit Ole cintil Shall remain permanently neittrall notwif 11"hind the 1"'"Tilill'Itioll of
aDv other treaties entered into by f 1i o cwl f r, c t I I o o;i
boes this mean that the ull;fod Sttlt(' ; llzl- 1! 1 ri'(-dit till(]or tll(,
treiitv to defend the canal
LINOWITZ. Yes, Sill 111loyliN-Ocally i cIII if", vw) fllzlt i- tho" case. May 1, in response( to Your (1,11AN11, r. )'Itl wl' '11),mt
the, ittitude of the other L:itin Anivrlczm' l ctill to \'olll' (Ittentioll th"It i,(, 4er(IaNT before tbe ok The I rt,(It ie-' ('N el'V coliliti-v
h(TV S_101iie(l a de0wit I ion of \Vzi Imi-ion' ill -111cil ;-I- ho I 11""Idk of these countries they note(] dizit the P'llizini'l T:'-'I,(Y, vl-hl(Ji
does the soverci,2';11,N 0 f t !,-' ROI)III,"'C
takiticr into ticcount w1i,"A tll(,.v silid7 "'tth'ifleill of the" 11"it(II a In, Ijor step lw ) rd -At-ell(rdiell'ilf" o" ]I, Olo 11,
the NVestern 11nali-I)IIIAT On ta bz,',I- of (-wynmn -md
muttial respect i'or tl.(,
recoraizing the iinportmce foi- '1wro'1'-i)1wre ir -d wo;-d co?,ill',(T(111 navl ation have ItIn ai*ni.-l,?,'(,in(,ji-, fol. 11111J111,
bjlltN, tind neutrality of tho can d reconi oil?- protound satlisf,101oll at the ,vni,tture of these treaties.
,A1 YATRON. Thank N ou.
AIr. LiNOWITZ. I am just told 25 of 26 countries.
1\11'. YATRON. Were 1)1'eSClit? entered the text of
Mr. LiNOWITZ. YeS, Would it be useful if I e
this (leclanition in the ,cor("
CIII(MrRIM-1 ZABLOCKI. Without objection.
[The text of the declaration follows:]
DECLARATION (1:1 WASfTINGTON
W e, th o" ,, ()i wr ()f flip
Americ'141 mid OWVMM -'.- fw. thf,
\V 1 I 1 T) 1,'! 11 1'
on thk day o" tli, Tit, J- ,! I I'- .
operation, m Wk1c11' 1' Ice ativi ol, (h" 11lizil lb (-"mh-r !
1999, and the ity coilcerniji- tti mmicnt 11"Ilt 1 11'1 'Ind operation of G : of P.maT,,rt '111d
Panama Cr.;ial 1),) ,h concluded h% he Unlt(, t
States of ill with the Joint tho two
countiWs of April 3, 19(1-1, n(,-r(-d under tho of the Council ()f the OAS;
Noting th ti di Pan.mui (':innI Treat y 1- !)"I' ('d (m tho of tho
sovereif,,-,itY of tile R ,I)IO)"Ic ()L P'111"1111:1 W"or the tot:ili1v ()r Tllititom l t"': it()!. Y i0l' 'Consid(,rin,,, ()f fb Rm -im 111,1" top
towar(l. 0 Ow .: 'l 11('111,-I)l1cre
on a f co.-ni no;,, and muttill for til"'
an(-] iiidependeiioe of ever
R( cogiiizingthfjiwpoi
of arrangeineiit. for assurin- uie continuing .1 )';AV '111 t o" I lie
Panama Ctiial;
Record our profounfi ati- f:wfion ,it, fho tho pi( lw)t of th('
Unite(l States of America an(t i tie Ch 6o\ of ho Plilwlwl
Canal Treaty of 1977 and the Treaty Coiwerimig flrit Pei-inanent Neuti-alitv iii t Operation of th(, Panama Canal.
Hecho en Wa,. hington el 7 de septiembre de 1977 en nombre de.
Fait a Washington le 7 september 1977 au nom.
Done at Washington on September 7, 19'77 in the name of.
Realizado em. Washington a 7 de setembi-o de 1977 no nome de.








SIGNERS OF' THE DCLARATIN OFWAHNGO

Bolivia-President~ Banzer. Brazil-Vice President Dos Santos. Canada-Prime Minister Trudeau. Colombia-President Lopez Michesn Costa Rica-President Oduber. Chile-President Piuochet. The Dominican Republic-President Baager. Ecuador-President Poveda. El Salvador-President Romero. Grenada-Prime Minister Gairy. Guatemala-President Laugerud. Guyana-Deputy Prime Minister Reid. HIaiti-Foreign Minister Brutus.
Honura--CiefofState egr
Jamaica-Foreign Minister Pattesn Mexico-Foreign Minister Roel. Nicaragua-President of National Congress Hueck. Paraguay-t'resident Stroessner. Peru-President Morales Bermudez. Surinam-Ambassador Karamat. Trinidad and Tobago-Ambassador McIntyre. Uruguay-President Mendez. Venezuela-President Perez. Mr. FRASER. Thank you, Mr. Chairman.
General Torrijos i his statement last~ night1niatdtatoeo
the concerns of Panama was that the United States ih e bet intervene. This would seem to be c~onsistn with the saeetta you are making today. To the extent that such a rgtt nevn exists, and I suppose it exists only to defend the neutrality o h canal, and for no other purpose, that autoriy is tobefudi article IV of the Treaty on Neutrality. Am I right about that? Mr. LiNowITZ. Yes, sir.
Mr. FRASER. There is no other lagae about tha nta ra
Mr. LfiNOWITZ. It is that article rea in the construcino e neutrality agreement. You see, there is a reference to thereie6 neutrality and the regime of neutrality is spelled out as oe n secure and later on in terms of efficiency and accessibility.,

U.S. DlEFENSE RIGHTS UNTILi THEYER20
Mr. FRA&SER. The impression that I have is ta ewe j n
the year 2000 there isn't really much to be cnendaotwt respect to the arrangements. Tat is, the United Statesmanis control of the canal and can maintain defense focsutlheya 2000. Geeally, it seems tome that toecnendaotteft of this canal have no cas for concern in tha perod.
It is the status of the canal after the year200wihIasmop
ponents of the treaty will agerepresents a surne of ourclis our sovereignty, or whatever they tikwe have oe h.cnl
when we in effect turn it over to the Pnmnas
Is this your own sense of! the pltclstain hti sfo h
year 2000 on where the arumn wlceter?
Mr. LINOWITZ. One of our biggest problems has been to be sr
that the people understand what is in the treaty and you are absolutely






7 17

right, when they understand for the next 23 years we will continue to have the responsibility for Operation, maintenance, and defense of the canal,, then their only focus is what happens after the year 2000, and that is where the terms of the Neutrality Treaty are indeed of
importance.
In that connection, may I just say that I have here the language or
I believe it is an accurate translation of the language used by General Torrios, last night in the course of his remarks after the signing, and
he said:
We have agreed upon a Neutrality Treaty that places us under the Pentagon's
defense umbrella, a treaty which if not administered judiciously by the future
generations could become an instrument of permanent intervention.
Mr. FRASER. By the United States, presumably.
Mr. LINOWITZj Yes, Sir.
Mr. FRASER. I read that a journalist immolated himself in front of
the American Embassy in Stockholm. I gather that his main concern was that the Panamanians didn't get enough out of the treaty, as I
read the news accounts.
Mr. LINOWITZ. Yes, sir, Mr. Fraser, that opinion I must tell you
is shared widely in some corners in Panama and in some other places.
We have already received a number of indications that we may have been too tough on some of these provisions. We don't think so. We
think we were fair, but that opinion has been asserted.

HUMAN RIGHTS SITUATION IN PANAMA
Mr. FRASER. It is clear that General Torrijos runs a pretty tight
* country; there are no political opposition parties permitted. I think in
the past he has exiled some of his opponents. Reports of torture are not prevalent in recent years and some of the more violent abuses we find in some countries have not been present in Panama in recent
years, as far as I understand it.
Mr. LINOWITZ. That is correct.
Mr. FRASER. On the question of the political nature of the regime,
General Torrijos is not likely to continue to govern for 23 years.
Nobody knows what kind of regime may come into power., I hope that under the President's declared determination, we will give support to any democratic tendencies that may appear in that country.
Although I am a strong human rights advocate, I am not clear
about the argument being made that deprivation of human rights should cause us not to negotiate. Is that an argument we should
be listening to?
Mr. LINOWITZ. The facts on that are very clear.
Mr. BUNKER. Well, I think there have been some violations of
human rights in the past. Most of these took place I think before 1970 when Torrijos was consolidating his power. Amnesty International, for example, stated this in its report in 1973, but in 1975 it did not mention Panama at all, and the report which the administration took to the Congress on human rights, in May, I believe, of this year indicated that there was no evidence of any systematic violation of
human rights in Panama.
Chairman ZABLOCKI. Mr. Winn.
Mr. WINN. Thank you, Mr. Chairman.








ROLE OF THE HOUSE OF REPRESENTATIVES IN PROPERTY TRANS-FEA ISSUES
I would like to get some clarification if I may on the jurisdiction,
and I think that you are aware of some of the problems that face Congress. Under article IV of the Constitution, section 3 clause (2),
reads as follows, and I quote:
Congress shall have power to dispose of and make all needful rules and regulations respecting the territory property belonging to the United States..
The question is, how does the administration view the power and
the ricrht of the House of Representatives and its constitutional prerooative on property transfer as it relates to the Canal Zone and the
present treaties?
Mr. HANSELL. If I may respond to that.
The provision that you have quoted from article IV, of course,
exists in the Constitution contemporaneously with the treaty power of article 11, and under the treaty power disposition of property belonging to the United States may be by treaty-signed by the President and ratified by the Senate. There, are concurrent means under the Constitution for transfer of properties-the treaty power and the
legislative authority.
In connection with the Panama Canal transaction which is, of
course, a treaty transaction, all of the arrangements, and the basic terms of these arrangements, are spelled out in the treaties and it has, therefore, been deemed most appropriate that the full terms of the
transaction be accomplished by treaty.
Mr. WINN. So it is the intention of the administration and those of
you involved in this trea I ty to go the treaty direction and ignore the, power to dispose of and to make the rules and regulations by the
Congress?
Mr. HANSELL. I can't accept the term "ignore." The judgment has
been that this is appropriately a transaction to be completed by treaty in all of its major aspects and that, of course, very much includes the property aspects of the transaction.
Mr. WINN. But the fact that the announcement was made after
Congress was out of session and, in fact, you brought all of these Pan American countries in here for the signir g before you ever came to Congress for any authorization, whether it be funding or whether it be the disposal of the Panama Canal property, to me means that you
are ignoring the constitutional rights of the Congress.
Mr. HANSELL. Well, it certainly was not intended to be a matter of
ignoring. This has been a matter of tradition, practice, for many decades. Property has been transferred by s Government under the treaty power as well as by legislation. The negotiations, which the Ambassadors can speak to better than 1, have been going on for many,
many years.
Mr. WINN. I realize that.
Mr. HANSELL. And this issue has been discussed in hearings over
the years. I have test ified both on the Senate and the House side on
this very question several times over the last several months.
LEGISLATION REQUIRED TO IMPLEMENT TREATIES
Mr. WINN. Let me switch subjects, then. In addition to the funds
that Panama will receive exclusively from the canal revenues, what



L






19

part of the proposed economic program of loans and loan guaratees and credit will require congressional legislation?
What I am trying to figure out is why you are even up here if we are not going to be involved.
Mr. HANSELL. On the question of legislation, generally, maybe I can deal with that as I did a few moments ago. There are a great many aspects of the implementation of these treaties that will require legislation. In response to the chairman's
Mr. WINN. I heard that.
Mr. HANSELL. All of which will appropriately be the subject of legislation.
Then in this connection I simply want to be sure that we understand that the economic development program is separate from the treaties and separate from the negotiations of the treaties, and as Ambassador Linowitz indicated, was the subject of parallel discussions. Those items would follow the normal procedures that would apply in connection with Export-Import Bank credits, AID housing guarantees, OPIC loan guarantees.
The items that make up that package would be developed in accordance with the usual procedures applicable to those transactions. Those are separate from the treaty implementation program.
Mr. WINN. Well, then, these proposed loans and guarantees and credits do conform with congressionally mandated standards?
Mr. HANSELL. Absolutely.
IMPACT OF CONGRESSIONAL DISAPPROVAL OF TREATIES
Mr. WINN. For economic and military assistance?
Mr. HANSELL. Yes. There would be no change in the conventional procedures applicable to those programs.
Mr. WINN. All right. Since it is a separate issue, what if we don't do it, what if we don't approve?
Mr. HANSELL. As Ambassador Linowitz indicated earlier, the undertaking was to use our best efforts to endeavor to provide these guarantees and credits. If in its wisdom the Congress were not to enact whatever would be needed with respect to that they would not be effectuated.
Mr. WINN. You could start out on two skis and end up on one.
Mr. HANSELL. Those are not an integral part of the treaty package.
Mr. WINN. Thank you, Mr. Chairman.
Chairman ZABLOCKI. The Chair would like to announce that the Ambassadors are due at 12 o'clock at a luncheon meeting. They have agreed to come back at 2 o'clock. The committee will, therefore, reconvene at 2 p.m.
[Whereupon, at 11:45 a.m. the committee recessed, to reconvene at
2 p.m. the same day.]
AFTERNOON SESSION
[The committee reconvened at 2 p.m., Hon. Clement J. Zablocki, chairman of the committee, presiding.]
Chairman Zablocki. The committee will please come to order.
The Chair will now recognize Mr. Hamilton.
Mr. HAMILTON. Thank you very much, Mr. Chairman.
Mr. Ambassador, I first of all want to commend you for what I think has been an excellent negotiating job. We are very pleased that you are here this afternoon.






20

IMPACT OF FAILURE TO RATIYTETE
First, I would like to ask~ you what you th~inkwolhapni you don't get this treaty ratified? Mr. LiNOWITZ. There would be profound 4isa n l
through Latin America. Their expectatin havnbenridad agreement having been reached oni a mutually fair treaty it shadt predict what form that disappointment might take. It~ wqudb eiu and could lead to some outbursts that would bevrydmgigi the years ahead.
Mr. HAMILTON. What do you mean by outbursts? Doyothn there may be violnce ini the Canal Zone and in Paaa Mr. LiNowITZ. We certainly can'tdimsthtpsblty Mr. HAMILTON. In anty event, there is much les ieiodohs kinds of things happening if you have the treatythniyodn' have it?
Mr. LINGWITZ. There is no question at all about tat.

FINANCIAL ASPECTS OF TREATY NEOTIATION
MVr. HAMILTON. I had some questions aboutthfiaclases
about it that are not clear to me. You stated iyoursttmet Ambassador Linowitz, that none of the loans, guarateesancrdt will require appropriations from the Congress. I cnundesadta with regard to the Export-Import Bank's credits and housn ur antees and the OPIC, but you also state in your statemn htw undertake to provide Panama up to $50 milon in foreign mltx sales credits over I1) years.
It is my understanding that that would require an apporain and, therefore, I don't understand your statement wihrgadt not requiring any appropriation. Mr. LINowITZ. I understand your not understanig thestemn because as it now reads it is not accurate and I wanted to tl o n the chairman in response to your earlier inquiry that is tu.Wa happened was that, first o all, as you may know' in thels e days we have been a bit occupied if I may say so. The two prgah have been transposed on page 5. The paragraph starting it'h words "None of these loans" should come ahead of thepagrh which now precedes it starting with the words "In adto"
In other words, the $200 mlin and $75 million and the $0mlin OPIC and the $50 million foreign military assistance fit witi cret statutory program
APPROPRIATIONS REQUIREMENT
Mr. HAMILTON. Do I understand that under the prentrayth
only appropriation we nwmake is th $. million for Panama?
Mr. LINOWITZ. Yes, sir.
Mr. HAMILTON. And under the new treatis if ratifed, teol appropriation would be for' the foreg iiayslscei tm
Mr. LiNowITZ. In all casestearcuenpogms
Mr. HAMILTON, Is it you anticiation that the eecutiebac
will ask the Congress to rovide tht authority in thicl179






21

Mr. LINOWITZ. I don't know, but I think so, sir. That hasn't been yet worked out, but my guess is it would be.
Mr. HAMILTON. NOW, with regard to the payments to Panama, it seems to me to be a kind of unusual arrangement. You have got a fixed share of the tolls, which amounts to 30 cents per Panama Canal ton. You think that would yield $40 million a year. On top of that you have another fixed payment of $10 million per year. On top of that you have got another $10 million if the canal revenues permit.
My first question is why that unusual kind of a structure for your tolls? The second question is, the Panama Canal has been losing money in the last few years. How are you going to get this $40 million or $50 million out of that?
Mr. LINOWITZ.Well, let me take it a step at a time. There are three different stages, three different elements. The first one is wholly uncertain. The 30 cents per ton we can't be sure of exactly how uch that will net and so that we now estimate maybe $40 million a year; it may be less, may be more. The one certain figure is the $10 million, which is a fixed expense.
Mr. HAMILTON. But that will certainly come out of canal revenues, there is no chance that will come out of appropriations.
Mr. LINOWITZ. It saysm. the agreement it comes out of canal operations, and the third would permit Panama to earn more if the canal earns more.
Now, that means, as I testified earlier, in a given year there might be no funds at all available for that purpose, but there may be in subsequent years a surplus which could be used to make that up, but there is no obligation as to the second $10 million.
INTEREST ON U.S. INVESTMENT
Now, if the canal, as you say, lost money, how are you going to be able to make these payments? First of all, I want to call. your attention to the fact that from the beginning we have been including as an expense for it in connection with the operation of the canal an amount which we labeled as interest on our original investment. Thus far, we have received interest, so-called, on the original investment. That is being paid now at the rate of about $16 to $20 million per year as an annual payment to the United States labeled interest.
Mr. HAMILTON. That goes into the General Treasury, the general revenues of the Goveimment?
Mr. LINOWITZ.Yes, they do. So that is a resource for some of these payments immediately as a possible source of payment.
NEED FOR INCREASE IN TOLLS
Second, we do contemplate a toll increase will be necessary, and that toll increase we haven't yet decided on. It hasn't been decided what the exact figure will be, 1;ecause it depends on such things as the availability of Alaskan oil and so forth, but it will probably be around 25 or 30 percent.
Mr. HAMILTON. Is it your anticipation that there will be any authorizations necessary in the Congress other than for the foreign military sales credits as a result of this treaty?
Mr. LINOWITZ. No. Sir.








22

Ml'. ITAMILTOT. NOW, Mr. Ambassador, I happened to hear your
final statement at the White I-louse the other day when you were bt-iefing the West Virginia and Arkansas groups. During the course of that statement you set out your responses to several common arguments that are made against the treaty.
All I would like to ask you to do for the record-you don't need to do
it now-simply state these arguments and the counter arguments in writing to the committee so that we have them as part of the record.
Those arguments were, first of all, giving up sovereignty, the ownership argument; second, our security is endangered by this treaty; and third, we are put at an economic disadvantage, I think is one argument used against the treaty and finally, that we are dealing with a dictator in Panama. I think your responses to these arguments would be helpful
for us to have in the committee record.
Mr. LINOWITZ. Thank you, sir. I will submit them.
tThe information follows:]

LETTER, ARGUMENTS, AND COUNTERARGUMENTS ON PANAMA CANAL TREATY
Washington, D.C. September 9, 1977.
Hon. CLEMENT J. ZABLOcKr,
Chairman, House International Relations Committee.
DEAR MR. CHAIRMAN: During the Committee's bearings yesterday, Congressman Hamilton asked me to supply for the record a statement of the four frequent concerns about the new Panama Canal Treaty arrangements which I had
mentioned in r-cent briefings and my comments about those concerns.
I am pleased to enclose the statement which Congressman Hamilton requested,
and I hope that it will be useful to you and to the members of the Committee.
With best wishes,
Sincerely,
SOL Al. Li--NOWITZ.

CONCERNS FREQUENTLY EXPRESSED ABOUT THE PANAMA CANAL TREATY ARRANGEMENTS
1. Won't a new treaty mean surrender of U.S. sovereignty over the Panama Canal?The simple answer is that the United States has never had sovereignty. The 1903 Treaty specifically gave the United States certain rights and authority which it would have "if it were the sovereign." Obviously, these words would not have
been necessary if the United States were in fact intended to be sovereign.
Before the ink was dry on the 1903 Treaty Secretary of War William Taft
wrote to President Theodore Roosevelt asserting that the treaty "seems to preserve the titular sovereignty over the Canal Zone in the Republic of Panama."
A treaty of friendship entered into between the United States and Panama in March 1936 referred to the Canal Zone as "territory of the Republic of Panama under the jurisdiction of the United States." In 1946 John Foster Dulles, as U.S.
Representative to the United Nations, acknowledged before the General Assemblv that Panama had never ceased to be sovereign over the Canal Zone.
Z The Supreme Court has dealt with the issue several times, but always for a
limited, specific purpose. Thus, in the earliest case of Wilson v. Shaw in 1907, the Supreme Court held that for the purposes of the validity of U.S. expenditure of funds to construct the canal, the zone was U.S. territory. But in 1948 the Supreme Court described the Canal Zone as "admittedly territory over which we do
not have sovereignty."
It is important to recognize the difference between the rights acquired with
reference to Panama and the territory acquired in the purchase of Louisiana or Alaska. In the Louisiana Purchase, the United States was explicitly granted full sovereignty over the "territoi-y with all its rights and appurtenances." In the case of the purchase of Alaska from Russia, the United States was similarly ceded all territory. In both cases it was a transfer of land; in neither transaction was provision made for a continuing annual payment or for a continuing relationship on the matters covered by the agreements, as is true in the Panama Canal Treaty.






L






23

It is worth noting that U.S. citizenship is not granted to children born of nonU.S. parents in the zone. The zone ports are considered foreign ports; for the purpose of transporting the U.S. mail. Imports from the Canal Zone into the United
States are treated exactly the same as imports from foreig n countries.
The simple fact is, therefore, that while we have exercis-ed virtually complete
jurisdiction over that part of the Panamanian territory which comprises the Canal
Zone, we have never had actual sovereignty and do not have it today.
2. Will a new Panama Canal treaty prejudice our national security?-Thc truth
of the matter is that the greatest danger to our security interest in the Canal would be an effort to maintain and continue the present status. While the canal remains an important defense asset according to our Department of Defense, it is no longer vital, clearly -no longer as useful as it once was for the shifting of combat forces. Larger warships and merchant tankers are unable to pass through the canal. Alternative means of transportation have been developed which compete
by lowering costs to make land or air transportation economically viable.
But an open, secure, and efficient canal is still of importance to the United
States and the world. And in our negotiations we have worked closely with the Department of Defense and the Joint Chiefs of Staff to assure that our national security interests will not in any respect be prejudiced under the new treaty arrangements. They have assured us that the kind of treaty we have agreed upon
will not only preserve our security interests, but indeed enhance them.
3. Will the new treaty seriously affect U.S. commercial inleresis?-While the
use of the canal commercially is still significant, obviously its importance has diminished considerably as world commerce patterns and technologies of shipping have changed. Today larger vessels cannot use the canal. In percentage terms, the canal is much more important to various countries of Latin America than it is to us. Today approximately 8 percent of total U.S. exports and imports by value pass through the canal each year. About 7 percent of the U.S. seaborne trade traverses the canal. To a substantial extent, therefore, the canal, though
still important, is obsolescent.
4. Is the present Government of Panama the one with whom we should be negotiating?-The fact is that for years now the Panamanian people have been pressing for a new treaty. For over 12 years we have been engaged in negotiations. The present head of government, General Omar Torrijos, is commited to try to work out a new treaty with the United States. And in doing so he is fully supported by the people in his country and following in the footsteps of every Panamanian head of state since 1903, irrespective of any ideological
differences.
Chairman ZABLOCKL. Your time has expired.
I want to associate myself with the observations of the gentleman Itfrom Indiana, being present at the same briefing. I think it would be
very helpful if you have a transcript of what you said at the White
House.
Mr. LLNOWITZ. I will get it, sir.
Chairman ZABLOCKI. Mr. Solarz.
Mr. SOLARZ. Thank you, Mr. Chairman.
Let me say, first of all, I think both of you gentlemen have performed
a profound and historic service to the Nation. I think you can take real pride in having played such an important role in making this
agreement possible.
Having paid my tribute to your good works, I hope you will forgive
me if I now ask you a couple of questions which I think are going to come up during the course of what will undoubtedly be a very
heated debate in the Congress and in the country.

ROLE OF THE HOUSE OF REPRESENTATIVES
As I understand your constitutional interpretation of th-e authority
of the House in this matter, outside of the $50 million for the foreign military sales to Panama, the House itself wvili have no other specific







24

opportunity togeinoteatIbeivthtyucnndhtte
property and the other matters like te PCgaate o~
reqie specific legislation by Conres
as M in Has was sayingthtraypoiefrtanerfte
property n self-executing manner which dos not rqiesprt
legslaionbut separate legisation will bereuedfravityo
purpsesin connection wit the implemetto oftetray
Mr SOLR.&Z. Such as?
Mr. LINOWITZ. Setting up the Canal Cmiso hc sgigt
run the canal, policy with respect totolpicwthrseto employee relations and so fort~h. So teewl eavr infcn
opportunity for the House ofRersnaistobcmivledn legislation designed to implement what the treaty clsfr
IMPACT ON TREATIES OF CONGRESSIONAL REJECTION OF 1NPEETN LEGISLATION
Mr. SOLARZ. Supposing the treaty were approved by theSea, but all of these ancillary pieces of legislation to which you rfre and I think for the record it would be useful if you coul ivejda this point a complete list of what action will be requie ybt Houses-were unable to obtain the approval of the CogesWul Panama at that point be justified in saying that we haven'tlvdu to our paxt of the bargain and the treaty was no 1ogrvaio would the treaty remain mn effect? Mr. LINOWITZ. I don't know because so many of thesematr involve agreements reached with respect to how the traywilb carried out and implemented.
For example, the setting up of a commission, to use the caseinpnt we have solemnly agreed there will be a omsinfnneebr, five Americans, four Panamanians, all to be appointedbyteUid States. If the Congress in legislation were to abandon ttapoc and suggest, let's say, all Americans, I should think that woudhv a very significant impact on whether the treatyr itself were acetbe SolIthink that the composite of all these issues which theHoswi deal with will be central to the implementation of tetreaty.

FORMAT OF IMPLEMENTING LEGISLATION
Mr. SOLARZ. How many differet items of legislation will be>rqie to secure the approval of the Congress once the treaty itefhsbn ratified?
Mr. LwOWrrZ. I don't know whetherthtasbewokduhs it?
Mr. HANSELL. We would contemplate one legislative pakgbeg submitted to the Congress that would encompass all of thevaiu submattersthat mgt be del withand Iinpehsyoma not have been here earlier in the haigthis morning whenween through the list of some of the areas tat would berequie hc we would hope one comprehensive leisltie enactmn wolcve all of the various submatters.
Mr. SOLARZ. An omnibus bill? Mr. LINOWITZ. Yes, sir.






25
AUTHORITY TO TRANSFER U.S. PROPERTY
Mr. SOLARZ. You have a legal opinion, I gather, which justifies your conclusion that the House does not have in this instance authority over the transfer of American property in the Canal Zone?
Mr. LiNOWITZ. No, it is not that the House does not have authority, we do have both legal opinion on behalf of the Department of State and also an opinion from the Attorney General, both of which we would propose to submit for the record, that the transfer can constitutionally and legally be effected via the treaty power, that it is a concurrent authority with the power of Congress.
Mr. SOLARZ. I am sure as you know there are going to be some powerful voices here in the House contending that the Constitution requires the approval of the Congress as a whole for the transfer of property. How do you intend to respond to that concern?
Mr. LINOWITZ. Well, I think in the manner in which we have dealt with it thus far, that is, while we respect those who hold that view, we can only conclude that they are w-rong; that is, the treaty power does fully authorize transfer of property. The decisions of the Supreme Court we think are quite clear, and the Attorney General concurs in that judgment, that the transfer of property by the United States can be effected by the treaty power as it has been historically in various instances.
So we would propose to submit the treaty for ratification including the proper transfer provisions.
Mr. SOLARZ. Since the House will have the opportunity by refusing to give its assent to the other parts of the package to which you referred, thereby retaining the potential for disrupting the arrangement, it seems to me it might make sense for you to reconsider your position on the transfer of property. One can easily envision a situation whereby a measure of ill will is generated by those who perceive this to be an unseeing effort on the part of the administration to deny the Congress its constitutional role in the transfer of property. I think it would be unfortunate if the response of the House to the package as a whole were jeopardized by virtue of ill will that was generated on the particular point.
Mr. LINOWITZ.Mr. Solar, let me see if I can briefly and clearly answer that whole point.
The issue is whether or not there is authority. Clearly the Attorney General and the legal authorities have decided that there is appropriate authority within the treatymaking powers to transfer this property. The question was then raised as to which legal device is the best course of procedure to be followed in connection with this treaty arrangement. The decision has been taken after careful examination that the best course is the self-executing power and to transfer property on that basis. I think our position is that we are clear enough on our
9 ound we axe perfectly willing to stand on it, and believe it is in the est interests to proceed on that basis. ChairmanZABLOCKI. Your tinie hits expired.
Mr. Buchanan.
Mr. BUCHANAN. Thank you, Mr. Chairman.
If I may pursue that point just a little further. Is it the interpretation of the Attorney General and of the State Department that










shall have power to disposeofadmkalnefu l3adrgla


definition ofCogesoriityucotnintawhlthssapwrstatedrpower in atceIV, scin3, clue2, in diinthrto
canactas ou reacting in ti ntne
Mr. HANSEL It is th atr r uhnn h raypwr
which existsunearil11othCosiuinisaspaegat of power to the Preint with tecnurneo w-hrso h

Sreret tasfe prery


the record both the opino oefthe Attre Geraanacoyf my statement delivered before the HouseCmite nMrhn Marine and Fisheries on August 17 whih set fot theleaopnn of the Department of State? Chairman ZAB3LOCKL. Witotojcin [Mr'. HanselI's statement ad AttonyGnrlBl' pno
follow:]
STATEMEILNT OF~ HERBERT J. HA&W8KLL. LEGAL AVsR EATETO TT BEFORE THE HOUSE COMMITTEE RCANMRIENDFs ,AU
GUST 17, 197

the PanamnaCanal negotatosI refrto tequsinowhtepretyfte United States in the Canal Zone mybe dsoe fb ray rwehrlgs lation is reurdfor such a dipstion. Bcueti omte avrih responsiilty for the amnsrto ftePnm aateCnlZn n
its waters, II apprecate that the~omte aaatcritrs nti ea question and Iwish todiscs i fulywihyu


matters as U.S. defense activities in Panama, organization adfntoigo
navigation.I diin pcfclgsainwl erqie oipeetmn aspects of the new relationship, including the etbiheto e aa

While it isclear tha exensv mlmniglgsainwlerqiew are not able yet to mk pcfcpooascnenn h otmltdlgs

have a major role in the action n mlmnainofaynwrltosi

proper Te ub of the problems 4 the intreainothtetypwrcus
(Art. 4, 3,el. 2).
Article 2, 2, cl.2, dealingwihtepwrofhePsdnsae: "He shall have Power, by and ihteAvc n osn fteSntt make Treaties, provided two thirds of the Sntors pent co u, Article 4,13, cl2 prvids


any Claims of the UntdStates, or of any particular State."







27

1 first note that nothing in the language of the two clauses limits the treaty power with respect to dispositions of property. Nor is Article 4 with respect to disposition of property exclusive. As Mr. Justice Field stated in Geofroy v. Rig gs,1 "the treaty power, as expressed in the Constitution, is in terms unlimited except by those restraints which are found in that instrument. . ." But there is no restraint expressed in the Constitution with respect to dispositions of property. The property clause in Article 4, like most of the clauses granting legislative powers contained in Article 1, provides that "Congress shall have power," without any qualification indicating exclusiveness against the treaty power.
Today the rule is firmly settled that the treaty power extends to all areas within the legislative authority of Congress that are not expressly reserved by the Constitution to the exclusive jurisdiction of Congress. Under Article- 6, cI. 2 of the Constitution, all treaties made under the authority of the United States which are self-executing take effect as the law of the land.
The Constitution, of course, contains some provisions which limit the treaty power with respect to specific subjects. Principal distances are Art. 1, 7, cl. 1 and Ai t. 1, 9, cl. 7. The former clause provides that "all bills for raising revenue shall originate in the House of Representatives." The second clause cited ordains that "no money shall be drawn from the Treasury, but in consequence of appropriations made by law." Hence it is recognized that treaties may neither impose taxes nor directly appropriate funds.
The property clause in Article 4, however, contains no language that would exclude concurrent application of the treaty power. In fact the placement of the property clause in Article 4 of the Constitution (which deals with federal-state relations), rather than in Article 1 (which deals with the pcwers of Congress), provides further evidence that the property clause does not restrict the treaty power. As the debates in the Constitutional Convention of 1787 show, the property clause originated in conjunction with the grant to Congress, in the preceding clause of section 3, of the power to create new states in the territories ceded to the United States. The powers of Congress enumerated in cl. 2 of that section were added to establish federal authority over these territories and other property belonging to the United States, while preserving the claims of the states and the United States in disputed matters. The drafting history of that clause shows no indication of any intent to restrict the scope of the treaty power.
It is also significant that the property clause in Article 4 links "the power to dispose of" property closely to "the power to make all needful Rules and Regulations" respecting the Territory and other property belonging to the United States. These two categories of Congressional power are closely related. The applicability of the treaty power for one of these categories should be the same for the other. It is well settled that the treaty power can be used to make rules and regulations governing in the territory belonging to the United States, even in the District of Columbia.2
The power to dispose of public land and other property belonging to the United States by treaty is also supported by judicial deiin n long standing practice.
The most familiar judicial statement of the power to transfer rights in land by treaty was made by Mr. Justice Clifford in Holdn v. Joy: 4
"...it is insisted that the President and the Senate, in concluding such a treaty, could not lawfully convene ant that a patent should be issued to convey lands which belonged to the United States without the consent of Congress, which cannot be admitted. On the contrary, there are many authorities where it is held that a treaty may convey to a grantee a good title to such lands without an act of Congress conferring it, and that Congress has no constitutional power to settle or interfere with rights under treaties, except in cases purely political."
Similarly in Jones v. Meehan,5 Mr. Justice Gray stated:
"It is well settled, that a good title to parts of the lands of an Indian tribe may be granted to individuals by a treaty between the United States and the tribe, without any act of Congress, or any patent from the Executive authority of the United States." 6

1133 U.S. 258 at 267 (1890).
*Goefroy v. Biggs, 133 U.S. 258 (1890).
Holden v. Joy, 17 WAIL. (84 U.S.) 211, 242, 243 (1872); Geofroy V. Biggs, 138 U.S. 258, 267 (1890); KisourS v. Holland, 252 U.S. 416, 433 (1920) ; Asalcura v. Seattle, 265 U.S. 332 341 (1924) ; Santovhncenzo v. Egan, 284 U.S. 30, 40 (1931) ; Reid v. Covert, 354 U.S. 1, 16 (1957).
'Holden v. Joy, 17 WaIL. (84 U.S.) 211 at 247 (1872).
*175 U.S., 1 at 10 (1899).
*175 U.S. 1 at 32 (1899).

98-991-TS-3












Although thwras inhtescaeweecnldditIdanrb 'h
otuprmoert hase ktaen te byorme oe fteUie ttstmk
treaties ort tex ia trbewsLeteno tntothsae e treaty pcieo theUitdStts Tee h pee

authorization.
Precedents supprting~ the poe odipsofrpetbyrayalnca be found in the boundarytete ihnihoigpwrepcal ntete, ties between the United Sae n ra rti f14 n 86frtelcto
which effectuated the cession of Foiaaddtrie h onayws.o h Mississippi, ceding landsaimd by th UinitedStesothSpnhsiefte bound~ary.
I would like to call yorseilatnintthtraywhMxcof193 and the treaty with Mexico of 1970. Both of teetete rvddfrhrc tification of the river chne and the csino ad hc ol aete left on the other sieofthe canl Other recent examples of tete rnfrigo rvdn o h rnfro real and pesnal property are the treaties between te Unie ttsadHn durxas of 1971 recognizing the oeegt fHnuasoe h wa sad
and the treaty betweenthUntdSaeanJaaof17frte tu'o
Jaa f the Ryukryu and Daito Islands Bohtete nlddpoiin for the transfer of real personal prptyblnigothUiedSas or its agencies. The terms of the treate ihrtaserdtepoet itcl or agee upon h transfer of property.Thtrnfsweemdwioump6

In the history of transfers of poet oPnm ehv a ie rcie Property has been transerred by eeuieareetipeetdb on
Resolution, by treaty proiigseiialfoleilto;ndnatIs" e
isace by treaty alone. Hlowevr in th islto mlmntn h15 Treaty, Congress recognized the vai4 o ovyncsmd yoprto o the Treaty.
Thusi, Mr. Chairman, for all o hs esnw ocueta h osiu
tion permits the trains of prpryblnigto teUntdSae d&th
treaty power.
concurs in the concuns Ihaeepesdhrtoy.TeAonyGnrl has prvided a formal written opiinstigothsves ihyu emsin
Mr. Chairman, I submit a coapyo thatopnnfrthrerd

answer any quetions. Thank you vr much frti potnt oApa'



OFIC OOF TH TORE ENRw

The -Honorabl the SERTR FSAE

in connection with the negotiation of a new Panamna Cnltet,,aqeto involving the treaty-making power of the President and itsreaintth or of Congress to dispose of territory or property belogn!t hUie The question is whether a treaty may dise o trioy rpoet eogn



The Constitution provides that the President salhavpoetomkftAs
with the advice and consent of the Senate, if two-thirds oth parsJkent

U.S. v. 43 Gallous of Wliaeyi, 93 U.S. 188 at 197 (1876).







29

concur (Article 11, section 2, clause 2); and it provides further that treaties made under the authority of the United States shall be the "supreme law of the land." Article VI, clause 2.
At the same time, the Constitution gives Congress a number of specific powers that bear upon matters commonly subjected to the treaty power. I need mention but a few: pursuant to Article I, section 8, Congress has power to regulate foreign trade, to provide for the protection of rights in useful inventions, to make rules governing captures on land and water, to establish a uniform rule for naturalization, and to punish offenses against the law of nations; and, of course, pursuant to Article IV, section 3, Congress has power to dispose of territory or property belonging to the United States. Moreover, there is authority for the J)rOpo.ition that Congress has general power, quite apart from these specific powers, to enact legislation relating to foreign affairs. United States v. Curtiu-Wright Export Corp., 299 U.S. 304 (1936); Perez v. Brownell, 356 U.S. 44 (1958).
A question that arose very early in our constitutional history was whether the existence of these congressional powers limits the power of the President and T he Senate to make law by treaty.' If a treaty touches a matter that Congress hapower to regulate, can the treaty be given the force and effect of law, in and of itself, if Congress has not enacted legislation putting it into effect? The que tion you raise is one aspect of that general question.
II.

I shall make two observations with respect to the general issue. First, from the earliest days of the Republic the decisions of the -)upreme Court hzive provided convincing support for the proposition that a treaty, unaided by an act of Congress, has the force and effect of law even if it touches a matter that is within the higislative jurisdiction of Congress. Indeed, the Court has held that a treaty, of its own force, may supplant prior acts of Congress to the extent that its enforcement miiay require that result. Cook v. United States, 288 U.S. 102 (1933).
The seminal case, United States v. The Schooner Peggy, 1 Cranch 103 (1801), was decided in an opinion by Chief Justice Marshall. During the undeclared naval war with France, Congress enacted a statute that authorized the President to grant commissions to public vessels, with instructions that they should vize armed French vessels on the high seas, bring them to our ports, and subject them to condemnation in the courts of the United States. Act of July 9, 1798, c.LXVIIf, 1 Star. 578. In 1800 the American ship Trumbull, sailing under a commission issued pursuant to the statute, seized an armed French vessel, the schooner Peggy,
and brought her to port. A proceeding was then instituted against the Peggy; and after a sentence of condemnation was entered in the court below, an appeal was taken to the Supreme Court.
During the pendency of the appeal President Jefferson, with the advice and consent of the Senate, concluded a treaty with France. The treaty provided, among other things, that vessels that had been seized by either nation should be "mutually restored' if they were not yet "definitively condemned."
Thus, when the case of the Peggy came before the Court, the question was whether the treaty controlled the disposition of the prize. If it did, the schooner was to be restored to France. If it did not, the schooner was to be condemned, under the statute; and the proceeds were to be distributed equally between the United States and the officers and men of the Trumbull.
The Court held that the treaty controlled. It was a law of the United States, not by virtue of any act of Congress, but by virtue of the command of the Constitution itself; and it had intervened during the appeal to change the statutory rule that had governed the decision below. Because the sentence of condemnation was not yet final, the schooner was not yet "definitively condemned," and it was therefore subject to the treaty. The schooner was to be restored to France. 1 Cranch at 109-10.

IIndeed, the question arose in connection with the debate over the very first treaty mae under the Constitution, the Jay Treaty with Great Britain. The treaty provided for the creation of certain commissions and therefore required an appropriation of funds. President Washington, together with other Federalists, including Hamilton and Chief Justice ElUworth, took the view that the treaty, of its own force, created an indispensable obligation as a matter of domestic law, and that Congress was required to appropriate the necessary funds. Jefferson, Madison, and other Republicans took the view that neither the Jay Treaty nor any other treaty could regulate matters that were within the legislative jurisdiction of Congress. See 1 C. Butler, "The Treaty-Making Power of the United States,' 422 et seq. (1902); S. Crandall, "Treaties Their Making and Enforcement." 165 et seq. (2d ed. 1916); I W. Willoughby, "The Constitutional Law of the United States," 549 (2d ed. 1929). Jefferson reiterated the Republican view in his "Manual of Parliamentary Practice." See L. Henkin, "Foreign Affairs and the Constitution," 141 et seq. (1972) [hereinafter cited as Hen kin].









Imnplicit in the decision was h lmnaypooito httePeiet
with the ad4vice and consent of teSnthdpwrt aeasl-xctn
treaty affecting the disposition of a vessel captured at se vethuhCnrs had power to ma~kerue(adhdifatmdacofitnru) vrigte
same subject matter. The Cutexprsenodutwavrabtth ntition~ality of th~etray
In the years that fllowed this deciinteSpeeCutgv sl-xc
ing"' eff ect to numerous treatiestha.tdipsdomatrthtCneshdpwr to regulate. See .Hj .Uie tts 9 ..35 2-4(94.cam
against the Unt tae) Cook v. Unite Stts 8 ..12 1-9(93
(customs inspections); Bacrdi v. Poeeh 1 ..10,11(90 tae
marks); see generally Henkin&, supra, note 1, at 14.Tdy saIeuto hs and other decisions, itcolnobescesulmanandasagerlppom tion, that the treaty power stops where the power ofCogesbin.Otheb, trary, the Court has said that the treaty poweroprtnofisladwthu the aid of congressionslation extends to Uprprsbetfongtiin between our NWation an tes ?a av. Cityo etle 6 .. 3 12) The lesson of history is that these "proper subject inld aythtaewti the legislative jurisdiction of Congress.
My second observation is related to thie first. I aesgetdta h w
powers-the power of Congress to legislate and the power of h rsdn n the Senate to make "self -executing "treaties-may overlap. I d o ent suggest that they are coextensive. Thiey are both created by the Conttto n they are both subject to the fundamental lim~itainthtreupsdbr under; 2 but the limitations that apply to the one do ntncsaiyapyt h other. The treaty power may exten to subet that aebyn h eiltv
jurisdiction of Conges Missoutri v. Holln,22US 1 12) iial h
President and the Senate may be powerless to Congress can accomplish by saue.
I shall elaborate briefly upon the latter point. Someloecurs3admn
serious students of the law4I have epsedthe view that cranmtes-r subject to reultion by Congres only; and that a treaty, liipuorstda with such a matter, can be given effect only to the extent that itmabeutoid or implemented by statute. The two matters that are frqetymnindi this regard are the raising of revenue and the apopriation of fns h osi tution provides that "all" bills frriigrvne"hl"oiiaei h os
(Article I, section 7, clause 1), and, further, that "'no" oe hllb~rw from the Treasury except in consequence of "aprpitos aeb a
(Article I, section 9, clause 7). In the face of these provisions thieopnoexrsd by some is that a treaty purporting to require the estbihetoalrtonf a revenue measure, or a treaty purporting to require an~ aprritoofuns coulnot be effective, asa mtter of domestic law, in th absneostuor authorization or implementation. I find it unnecsary to deal witthtisen order to answer the question you have put to me.
I now turn to the quetion at hand.
III.
The point of departure is the broad principle that~ wasladowinGfryv
Riggs, 133 U.S. 258 (1890), and was repeated ini Asakura v. iyo Sat 6 U.S. 332 (1924), to which f have alluded above:tetet oe xed oa proper subjects for negotiation betweeouNainndthr;ndwna treaty purports to do so, it acts exproprio vigore,wihuteadoflgston and is effective for all purposes, provided it does nothing tht isfridnb h Constitution.

In Reid v. Covert, 854 U.S. I (195T), Mfr. Jusntice Black stated th plcal ue "The prohibitons of the Constitution were desge to apply to allbacesoUh National G~overnment," including the Congress, telxctvadteItctv n







31

Does the Constitution forbid the President and the Senate to mAe selfexecuting treaties disposing of territory or property belonging to the United States? I have taken note of the opinion, held by some, that the Constitution entrusts certain matters to Congress alone. In my opinion, however, the disposition of territory or property belonging to the United States is not such a matter. In my view, territory or property belonging to the United States may be disposed of by action of the President and the Senate under the treaty clause.
There are at least four considerations that support this conclusion, and I shall discuss them briefly below.
First, the fact that the Constitution gives Congress power to dispose of territory or property belonging to the United States does not suggest that the, President and the Senate have no power to do so under the treaty clause. This was the implicit teaching of Marshall's decision in the Peggy and of the cases that followed. The existence of power in Congress does not imply an absence of power under the treaty clause. On the contrary, the one proposition of which we can be certain is that many of the powers that are given to Congress are shared by the Presiden and the Senate when they act, under the treaty clause, to conclude and effectuii t bona fide international agreements.
I think it follows that ifone were to hold that the power to dispose of territory or property belonging to the United States resides in Congress alone and is distinguishable in that respect from the numerous powers that are shared, one would be obliged to find some basis for the distinction either in the text of the Constitution or in the history of the relevant provisions. I find none.
The language of Article IV, insofar as it confers upon Congress the power of disposition, is identical to the language of Article I, which confers upon Congress numerous powers that may be exercised by the President and the Senate through the self-executing treaties. Article IV says that Congress "shall have power" to dispose of territory or property belonging to the United States, just as Article I says that Congress "shall have power" to regulate foreign commerce, to make rules governing captures on land and water, and so forth. Article IV goes on to say that Congress shall have power to make "all" needful rules and regulations respecting territory or property. As in the case of Article 1, however, Article IV does not say that the powers it confers the power to dispose of territory or property, and the power to make rules and regulations respecting it-shall reside in Congress alone.
The record of the proceedings during the Constitutional Convention supports the interpretation that is suggested by the language of the Constitution itself. The territory and property clause of Article IV was adopted during a general discussion of the role that the central government should play in connection with the territorial claims that had been asserted by the several States with respect to the western lands. In the course of the discussion there was no suggestion whatever that the purpose or effect of the clause was to give Congress exclusive power to authorize or implement international agreements disposing of territory or property. See 2 M. Farrand, "The Records of the Federal Convention of 1787" 457-59, 461-66 (rev'd ed. 1937) [hereinafter cited as Farrand).
The history of the treaty clause is even more conclusive. During the course of the convention several proposals were put forth. One would have required every treaty to be approved by both Houses of Congress. 2 Farrand, supra, at 532, 538. That proposal was rejected. Another would have required the Senate to concur in treaties, but would have exempted peace treaties from that requirement, except for peace treaties depriving the United States of territory or territorial rights. 2 Fa"and, supra, at 533-34, 543. That proposal was rejected as well. In its place, the convention adopted a proposal that required the Senate to concur in all treaties.
It may be possible to interpret these actions in a different way, but the simplest and, for me, the most persuasive interpretation is this: the delegates to the Convention assumed (1) that the treaty power could and would extend to questions of territory, and (2) that treaties, including treaties affecting rights in territory, could be effective in the absence of action by both Houses.5

5 1 should note that this very point was considered In the State Conventions that were called to ratify the new Constitution. The obJectlon was made that the treaty clause gave the President and the Senate power to alienate territory. The Virginia and Norb Carolina conventions proposed a remedial amendment that would have required every treaty ceding or compromising rights or claims of the United states in territory to be approved by three-fourths of the Members of both Houses of Congress. 2 "Documentary History of the Constitution," 271. 382 (in. U.S. Cong. Doe. Ser., No. 4185) ; see generally S. Crandell. "Treaties Their Making and Enforcement," 220-21 (2d ed. 1916).




98-991 0 78 4











a hi t reaty may co he oo d cosieato totsnot yb ocuin

To one ofe thlaet tat uemet or this poke toteqetoi h or a Raid noat lah ull coydnwt hecnurneo teSntm cocueatet dihih oftrioyorboet elongedg to the United States, and tbtt tha treaty may conve aoo ditl e to th sertryo rprv nqetonhoato 23 dow not hold 9) Hat de these7 al 1 (92:Betv ok,1 al 112e (aised; Frheyi .1 Frni,23US 33(96.Tedcumivodnv o pronery of doe thinkes hoateerts tha the pricpe onclusinishae reache Prsien whd S ee incoluigshatrty hist orica ll co vetinan thataetsoudb sudtocne ad wihblntoteUnited Statesma behu h osn o oges hc can llycnot edmite.n the cota ybhr r ayatoiisweei shl that ateat m vcne od il oscands itou thet fCo~s cntring o rity w t 17Wl.aI 41 reI do o odta hs ae rvd ufcent answrt the quetia aoe



dinclteiove I hae preached eecasewe iwdi igto h eta n


hrclcnietosIhavealreaof mt ioepovd ustnilsupr o othe o osiion eha a ofeaty Uipsngted teitoyo rpryblnigt h qUeitied tds ayb efeeuig id ocsst h otay
F iny my cocuo ispored to hth ca prcic.W il o o uge tad the command o te Cnttto a eatnae ypritn rcie maPreie and t Sconat havemdnefeeuigtetisdsoigo4ent





dipthe ovIteru some t of the van bonais he ges o dbtes swela
Prsien onoesanua esag t onres mkei cea ta mnycnsdee th ctint ea urgtcsino mri ertr necag o pns






33

State Department have pointed out that there are certain powers which are exclusively within the provision of the Congress and there are certain powers Aich may be exercised by treaty or by legislation.
Thus, for example, the appropriation power or the raising of funds for revenue purposes must *be by legislation. But in this case both article IT and article IV, in our view, and in the view of the legal authorities who are responsible for these determinations have decided that either is legally feasible and that in this particular instance the better course would be to proceed with the self-executing authority.
Mr. BUCHANAN. As your decision may imply, while you have been through an arduous process of negotiating and you have represented our country ably, I think you know that perhaps your most difficult task lies ahead in helping the President convince the Congress and the American people of the merit of the fruits of your labor.
Let me ask one more question.
I hate to keep plowing the same ground. I want to be sure I understand, sharing your view very strongly of the importance of the permanent guarantee of the neutrality of the canal, and since you have made some very strong statements concerning our unilateral right to provide such a guarantee should neutrality be violated or threatened, in the treaty concerning the permanent neutrality article IV, of course, commits us along with the Panamanians to such permanent neutrality, but article V says that after the termination of the Panama Canal Treaty only the Republic of Panama shall operate the canal and maintain military forces, defense sites and military installations within its national territory.
In discussing that before the National Assembly of Panama, Dr. Bethancourt who headed their negotiating team said on August 19, 1977, that they had first wanted to make plain that American forces couldn't be there after December 31 y 12 noon, 1999, but your objection on the ground that might imply there could be Cuban forces or Russian forces led to the end result of the present language providing only for Panamanian forces after that time.
U.S. ABILITY TO DEFEND THE CANAL UNDER TERMS OF NEUTRALITY TREATY
Now, my question is, If we have no military presence there and the Panamanians only will maintain military forces, defense sites, and military installations, how then do we fulfill our role should it become necessary?
Mr. LINOWITZ. General Dolvin may want to amplify this. I can say to you this provision has the full approval of the Department of Defense and the Joint Chiefs of Staff.
General DOLVIN. Mr. Buchanan, if I could, we interpret that to mean no other nation other than Panama could garrison forces there and the Joint Chiefs feel that they can carry out that responsibility from the forces located elsewhere, external forces, we can bring them in. But when it says no other forces would station themselves there it is in the sense of garrisons we now have there, but we would exercise whatever forces are needed, we will bring them from Fort Bragg or Fort Campbell or marines at sea or wherever needed.














~Mr. BCHANAN. Isorpeetpeec hr uhta o o'
tie should boe thiiican oldifrne thnifeecottenh preentd yitutindthesitainyuhv ecie n em



tou altheofn neutralitytet. ispoo a



inatr re g ade ofic neta i s o ug o omlcrcmtne.Ee ofuner th greet cicmaneirquedwe oldbintain eitra voesl owl ver, it cetea, antledifferet miiayoeainwe o shallv gte b stjureinfor t cmaal andtato he o ansolutis
ofPeramanentnneutrweityaandoausoc at ie wth unaptetthtta

im soldct e tna s wount e tetd'o exmlik th








papers that we have before us? Are these the only two papers that there are?
Mr. LI~owITZ. No, sir; there are two treaties. Appended to the neutrality treaty is the protocol. There is also an instrument which contains two agreements in implementation of two provisions of the treaty and then there will be annexes and maps. The treaties and the implementation agreements are now available and have been publicly made available. The annexes, I guess, are now being printed in final form and maps have been prepared in final form and that is everything.
Mr. WOLFF. There are no other? We have had some difficulties with Vietnam, as you know.
Mr. LINOWITZ. I know.

EXISTENCE OF OTHER AGREEMENTS
Mr. WOLFF. And there are no other memorandums of agreement?
Mr. LINOWITZ. There are no other agreements, written, unwritten, understandings, which affect this treaty that are not covered in any one of these, in one of the documents I referred to.
Mr. WOLFF. There are no others not affecting this treaty, but there are no other memorandums of agreement nor have there been any other conversations held with the Government of Panama that would in any way bind our Government to any other activity other than that which has been spelled out. Am I correct in that?
Mr. LINOWITZ. Yes, sir. But let me be sure that I say it clearly. There are no other agreements or understandings which are not already public or which will not be made public affecting these treaties. There are some documents which have been exchanged on some minor things such as on post office and Gorgas Memorial Institute and so forth, letters between the two governments. There are eight, of them, I guess, or nine of them dealing with-I can read the listing of these. These are the notes which have been exchanged on commissary, post office and Gorgas Memorial Institute on what is called joint agreement on certain activities on the FAA, on the protective status of BarroColorado Island, Smithsonian Institution and implementation of the Barro-Colorado agreement, and I think that is it. Those are the only letters which are ancillary to th 'e documents.
Mr. WOLFF. Have there been any other unilateral declarations that have been made by either side? What I am trying to get at is, is there any other discreet documents we don't know about right now that are liable to be surfaced in the future?
It took us some 4 years to find another document that unfortunately causes us great embarrassment today.
Mr. LiNOWrrZ. Mr. Wolff in answer to your question, there are none. You want to know if there is anything of substance, anything of significance that is not contained in the documents that have been made public or will be made public. The answer is "no."~
Mr. WOLFF. Are there any promises or recommend at ions that have been made with the Government of Panama that have not surfaced?
Mr. LN-OWITZ. There is a letter from the Secretary of State to the officials of Panama which undertakes to use our best efforts to make available the economic arrangements which I discussed in my opening statement.






1310
ou

Mr. WOLFF. Thank you very much. It is very reassuring to kriow that we won't be met in the future with some additional documentation that might influence us one way or the other as to how we should proceed at this point.
Mr. LINOWITZ. May I also say we were cognizant of the past history.
Mr.WOLFF. Thank you.
ChairmanZABLOCKi. The Chair would like to announce there is a quorum call in progress if the Members intend to return. If the Members want to stay on, the Chair is willing to continue.
Well, the Chair will forego going for a quorum.
Mr. Pease.
Mr. PEASE. Yes.
Mr. Chairman, I thought the Chair was going to recess and I wouldn't have a chance. I appreciate this opportunity, just a couple of questions.
Before I begin the questions, let me just say that I think that our representatives in this negotiating session have done an excellent job and are to be highly commended for the work that they have done. Obviously, the Congress needs to look at your work and it may be open to some question at some point, but I think overall you have done a fine job. I commend you for it.

APPROVAL OF DISPOSITION OF U.S. PROPERTY
am just sort of curious. There has been a lot of discussion about the route taken to approve the disposition of U.S. property, the transfer of U.S. property, whether it should be through the Congress or through the treaty process. When you are thinking in those terms, thinking of land transfer, is it your position that you are transferring only improvements to the land, and does the question of sovereignty and ownership of the land come into play there?
Mr. HANSELL. Well, if we can distinguish between sovereignty and ownership. There is no doubt that we axe dealing with ownership of land. That is, there are lands and waters involved in the transfer. Questions of title are somewhat uncertain as to some parcels of property, but there is no question that we are dealing with lands and waters as well as improvements.
Mr. PEASE.OK.

ECONOMIC DEVELOPMENT PACKAGE
The economic development program that is outside of the treaty contains several elements. Are those figures already agreed to or will they be provided to Panama through action of the executive branch; have the decisions been made P in other words?
Mr. LINOWITZ. Best efforts will be provided to provide up to those amounts.
Mr. PEASE. Best efforts will be made to provide those?
Mr. LINOWITZ. Yes, Sir.
Mr. PEASE. Particularly FMS credit, that could require an action of Congress to do that.








What effect, if any, will there be on the treaty if those efforts were not successful and none of those economic development program elements were included?
Mr. LINOWITZ. Let me reemphasize as I think we have indicated before, Mr. Pease, the economic development package is not part of the treaty, it has been negotiated separately, and it calls for an undertaking on the part of the United States to use its best efforts to provide these economic elements.
Therefore, the treaty would stand even if the economic development package does not go forward. Obviously we would hope it does go forward; we think it is in our highest interests to help Panama with its economic development, but it is not integr-al as part of the treaty itself.
IMPACT OF FAILURE TO RATIFY TREATY
Mr. PEAsE. My final question, Mr. Chairman, what do you see as the effect of nonratification of this treaty if it were not to be ratified by the U.S. Senate?
Mr. LINOWITZ. Mr. Hamilton asked that question earlier and the response was that there would be a deep sense of disappointment throughout Latin America, that there would be a reaction, we don't know what form it might take, but after all these years of expectation we shouldn't be surprised at outbursts that could cause real problems.
Mr. PEAsE. In terms of the operation of the canal, things will proceed as they have been going for the last 60 years, we would proceed under the existing treaty.
Mr. LINOWITZ. There would be a new structure, the United States would work through a new Government agency which, as Ambassador Bunker said in his opening statement would be supervised by five American and four Panamanian appointees.
Mr. PEASE. Excuse me, I am thinking if the treaty were not ratified, the operating arrangements would continue?
Mr. LINOWITZ. Under the present system yes, sir.
Mr. PEASE. Thank you, Mr. Chairman.
Chairman ZABLOCKI. Perhaps the Chair should recess and still try to make this quorum, if you gentlemen don't mind.
Thank you very much.
IWhereupon, a short recess was taken.]
Chairman ZABLOCKi. The committee will resume the hearing.
Mr. Goodling.
fr. GOODLIN_-G. Thank you, Mr. Chairman.
I have a couple of questions that I would like to ask. As both of you know, we have met on a couple of occasions, several members of the committee, and on both occasions we talked about four particular areas that I had great concern about, and I would like to mention those.
U.S. RIGHTS UNDER THE NEUTRALITY TREATY
First, that the United States has the right to guarantee the neutrality of the canal without any termination date.
One question I have in relationship to that. I would perceive that the problem would come internally, that if we in fact need to guarantee








the neutaity it just rrgtb htteTrbe swt h aann
when you say we have the right togaatee nurlt hticue
tralit is concre?1P

Mr. GoODLING. I have another prble ihta wihIwl brn up a little ltr


Second, our concern was that our warships woul otbimpie as they go toandfrm,> an f Irea hraypoelIasm that that is true, that we do have acess, rapidly to warhp on back and forth?
Mr. LINowimZ. Yes,
Mr. GooDJLING. And tlhe tidcner tha ehehdwe e
talk about no AeicntxdlasIasueeryhgcosot of tolsI do have alittlecncr wit th lossqo 2 iloni neet I would have to assumne ta ehv ot$0mlint an rate of income that we norm~ally wudhv a.I htntrgt Mr. LINOWITZ. Probably, unless there a~reuntipaeerigs but I think for alpratcl purpossw rbbyaentgigt

request for tax dollars involved in, teray
Mr. LINOWITZ. Yes, Sr
U.S. EMPLYE IN CANLZE
Mr. G9ODLING. And, fourthoucocrwaAmianwrkg in the Canal Zone maltl ocre ihtewyi a rte
in, I think it was Ambassador Bukrssaeet "ngnrl hs are designed to allow present employees, bot mrcnadPn amanians, whose evcswl erqie ytenwPnm aa
Commission to continue working under condiin ieeal'ols favorable." There are a lot of geea ltes. I amn assuming theei oepoiinfrtoepol h r
5 years from retirement, 8 erSrmrtrmet opaet o
there is some specific arathathycngtoiGvemntwr ifthy are no~t neeentecnl

Congressman.

ECONOMIC DEVELPET PAKG EAAT RMTET



had a feeling that what he was tying into this package, it goes back






39

to my question about the tax dollars. I thought he was tying into this whole thing the area they talked about, economic assistance, military assistance'and so on, and I am under the impression that that in no way has anything to do with the treaty, yet nobody seemed to separate that during your give and take on that particular area.
Mr. LINOWITZ. In my opening statement, sir, I did point out that the economic package, so-called, economic development package is separate and apart from the treaty.
Mr. GOODLING. I am very sensitive to that because I don't want some "Vietnamese letter" coming forth 5 years down the pike and saying oh, when you agreed to that treaty you agreed that you were going to send-I have a pretty good record against military sales and I don't want to get caught in that bind (down the pike. I want to be assured that in no way does my own record being for the treaty have anything to do with any economic packages or military packages down the pike 5 years, 10 years or whenever it may be, that they are not just tied together. Can I be assu~redI of.Mr. LINOWITZ. We understand your concern and can assure you nothing has been agreed to that has not been disclosed in our testimony.
Mr. GOODLING. I have a feeling as we go (down the pike ad if in fact guaranteeing the neutrality is a problem with the Panamanians, and I am voting to send military equipment sales and so forth into Panama the Panamanians can in fact dlefendl the canal, or whatever it is, then they are shooting my GI's as we come in to defend the neutrality of the canal. So you are assuring me that there is no connection between the treaty and the idea of some kind of assistance, be it military, economic or whatever, in the future?
Mvr. LINOWITZ. No; this is as I think we have testified previously, the economic development package and the military assistance package is outside of the treaty entirely.
Mr. GoODLING. But it isn't bait?
Mr. LINOWITZ. It isn't bait?
.Mr. GOODLING. Wasn't used as bait?
Mr. LINOWITZ. No; it is of significance to Panama and I think it is very important to make this clear. Panama has felt that it needs help with its economic development program, particularly under the new regime as it will be developing. It, therefore, has sought to obtain the assurances from our appropriate governmental agencies and dlepartments that it could have help along the lines we have testified to.
Mr. GOODLING. But they understand that is a long process through this committee and many other committees in the Congress and so on?
Mr. LINOWITZ. I think the answer, sir, as I clearly testified, is that they understand that there is nothing in the treaty which assures them of treatment otherwise than that to which they would be entitled if there were not a treaty.

OPPOSITION TO PANAMANIAN GOVERNMENT
Mr. GOODLING. Could I have one other reaction from either or both. I think again it was my colleague, Mr. Hamilton, who mentioned what would happen if the Senate did not ratify the treaty, and you responded, I think, Ambassador Linowitz, to that. I get a lot of feed-










et cetera, are th most likely pepl togeinovdnthacofryg to bringabu dirption, 'and so on. How would you react to that? Mr. LiNowITZ The antidictator peope Ou asuptoisha

be Z Cmmunits and those who~ arearigt omn neti
Latin America. As a matter of fact, the Commnssi aaahv

these treaties.
Mr. GooDLING. How about the anidictator focswti aaa

Mr. LINOWITZ. You can't lump them thtesl.Treaeom that are antidictator and some prodictator, but thfatite basic thing to insure, sir, is that eeyhn htGnrlTrio has betrigto achieve, Presidents and4he fSat fPnm
have been trying to achieve for deades, is nothignwi hti being sought, reconition of soveregty, proper payetfrWa they regard as their own territory. Wen you stake into acutta whatever is here approved will have to have the plbisieedre ment it is very difficult tQ say that an anti dicttrhpgopwudb in oppostion to these treaties, it is te pipe who have a potnt

Mr. GooDLIN. I would like to conclude te ysyn hti
spite of the fact tat the loud voices in myditctaermnoul

whraln th Le,from whatlIsee of the treaty, Ia eymc
in support of the treaty, and I can look way byn h 0sur miles of water and land as to what it mans to us I think i h uue Mr. LINQWITZ. Thank you.
Mr. GOODLING. I congratulate~ you. Mr. LINOWITZ. Thank you.
Chairman ZABLOCKI. Mr. Bingham. Mr. BINGHAM. Thank you, Mr. Chairman.

much in support of the tet n ol iet oni xedn


DISOSTION OF U.S. MILITARY EQUIPMENT




are turned over to Panama? General DOLVIN. I don't believe, Mr. Binham that aple to

mnent can b roughbt back to this country.






41

Mr. BINGHAM. WellGeneral DOLVIN. Unless we made some sort of arrangement and wanted to do it.
Mr. BINGHAM. In other words, that is something that is not determined under the terms of the agreements?
General DOLVIN. WellMr. BINGHAM. What will happen to the mobile equipment, is not covered, is that right?
General DOLVIN. Clearly whatever we want to do with. it, bring it back home or dispose of it any other way, because it is movable equipment
Mr. BINGHAM. At the present time, does the executive branch intend to ask for authority to turn over that equipment to Panama?
General DOLVIN. To my knowledge, sir, that has never been raised and that is 23 years down-it would be down the pike that long and has never been raised.
Mr. BINGHAM. Thank you.
Chairman ZABLOCKI. Mr. Burke.
Mr. BURKE. Thank you.
FINANCIAL ASPECTS OF THE TREATIES
Gentlemen, since 1903, if I understand the figures correctly, the United States has from time to time subsidized the Panama Canal by act of Congress. Since that period of time, we have an unrecovered indebtedness, including accrued interest of about $700 million. Now we propose to pay $40 million out of revenues to the Panama Canal and in addition we have pledged an additional $10 million. If we take the accurate and true investment figures how then are you going to manage to do what you say without taking money from the taxpayers to guarantee the operation of the Panama Canal?
Mr. LINOWITZ. We have already testified about that, Mr. Burke, I think when you were not here.
Mr. BURKE. Perhaps I wasn't since I was attending another committee hearing.
Mr. LINOWITZ. Let me repeat it then, sir.
In the first place, there is $20 million a year roughly which we have been paying to the United States as interest, so-called, on our original investment. We have now received $642.5 million as interest on that original investment. The original investment by the way is $387 million, which has sinceMr. BURKE. But I am talking about the total'investment, not the original $387 million investment. If you take the original investment in our present dollars you will find it to be a great deal more.
Mr. LINOWITZ. I agree. What I am trying to say, we have been paying about $20 million a year as interest to the U.S. Treasury. That sum has been considered an operating expense and would be available for payments as may be required under this new treaty arrangement.
Second, we are going to increase tolls and we know that with the toll increase it wilbe possible, accoIding to our best estimates, to meet the financial commitments we are hereunder taking without going to Congress for appropriations.








Mr. BURKE. Without going to CJongesin thnbtiyous a bookkeeping system lk h oenetvr fe os o a
go to the taxpayers sometimes without goin to teCnrsb' cause budget items can be moved from one thngito ntetue am talking about sound busiesbokeigadhns akn
practices, rather than Government aconigpates

NEED FOB APPROPRIATION
Can you guarantee the Aeian peope tahsarneetta you have made will not cost the taxpayers one cent? Mr. LINOWITZ. No, sir.
Mr. BURK. Youi can'tLurne t Mr. LINQWITZ. It is impossible ogaate l ecnsyi
according to the best etmtsw a oa ae Mr. BURKE. For the moment, you mean, Mr iotzesmas you make today but tomorrow miht LIMITATIONS ON NGTIATIONS TO~ BUILD) SEA LVL AA
Now why do yo,in tis areet rcueorrgt sAei cans to negotiate with any other natinn connetowihherbld ing if needed, of anothrnwsalvlca?
thir rights tonegotiate wit anybd elso a salvlcnli Panama.
Mr.. BURKE. I know, butnosupsthPamaGvret says no and we need it, are we then boundbyorwnaemnto say the heck with th Amrcnpolr ourowseuiywecnt do it because we pledged to Panama who would no lonebefidl to us?
Mr. LIINOWITZ. Well, I thn twoudb nhnal o st
say we have made up ourmidanwewntobld ,salvl

Mr. BURKE.Well,. I ihtsay wtin Paaa hr r te
areas.
Mr. LINOwWT. Well-from even going t*oayohrntos





it. ifKE thet daamniffesaye ou t mae exatl thedifw

for giving into the treaty.






43

Mr. L[NOWITZ. Are you talking about a sea level canal or the present one?
Mr. BURKE. I'm talking about the present one. We have committed ourselves to Panama on the basis we can take the present leader's of Panama's word for something. We did this with the Japanese, as I recall, when Pearl Harbor was bombed. We have also taken the words of Communist-orientated governments and been fooled. Why, then, do you think the government leaders, such as we have in Panama, With a known record of violations of human rights, a dictatorship, why do you think that all of a sudden they are going to sit down and say we like you-you are no longer imperialists. This has been their argument all the time in the past. In fact, it has been the argument of all of the pro-Soviet nations.
Frankly, I can't understand why we have not negotiated on the basis that we have done something right with this canal. We built it and it cost the American people a great deal of money and we also defended and made this hemisphere safe from invasion by other nations during World War I and 11. 1 can't understand why we would exclude ourselves by this type of agreement to even looking forward to building another one if it is needed, particularly since the Panama Canal presently isn't capable of handling aircraft carriers or super oil tankers and, second, we have the question, even though we have the right under the treaty to have our warships come through there, but it couldn't be sabotaged, no matter who has control of it, and since Panama could remain neutral, our enemys' ships could pass through.
Mr. LINOwNNITZ. I will take that in pieces.

PANAMA'S RECORD ON TREATIES TERMED EXCELLENT
In the first place, the record of Panama has been excellent in connection with the observance of treaties. If you look back over the years, even this highly distasteful treaty to them has been one to which they have adhered over the years. So I think, in fairness, we ought to recognize that.
Second, what we have tried to indicate is that we are going to make a new treaty arrangement which we believe will merit the strict commitment of the Panamanians and which as signed by Torrijos will be endorsed by a plebiscite among the Panamanian people. In other words, you are here talking about a treaty which represents the will of the Panamanian people.

SEA LEVEL CANAL
In your other issue on the sea level canal, in 1970 we made a study of where a sea level canal should be put if it were to be placed somewhere in the hemisphere, and the recommendation was, it ought to be placed in Panama. Therefore, it becomes of the greatest importance to us to be assured of having the right to a sea level canal in Panama and that no other country be able to work with Panama in putting through such a canal. That is what we got in this agreement and in return we agreed we won't go to any other country for such a sea level canal.









but I still ca't urndertn wh weaepeldgousvs 4










aotvserethsle rshiptra n arepehv o igti u w hemisthere Castno wh ol ovadsmeoih thrnto' threwh Pa a reat-mrcnir-o muitnn etil nm oaidnton behrn cpbe o asn diinltoul nti eipee


Morbl BrKeor wit rar o huma ye rihs n we reporiedom tm

quest.PANAM4NTHUMA RIGHTSO ISSUEAALOO






45

Mr. BURKE. We are committed under this agreement the same as we were under the old one, that is, to make sure of their employment status and to make sure they get paid and unemployment and whatever else it may be?
Mr. BUNKER. Yes, sir.
Mr. BURKE. So the American Government could be stuck with that, too.
Mr. BUNKER. It will be paid by the new Panama Canal Commission.
Mr. BURKE. Thank you very much.
Chairman ZABLOCKI. Mr. Whalen.
Mr. WHALEN. Thank you, Mr. Chairman.
Gentlemen, I would like to add to the accolades you have already received on the very excellent work which you have done on behalf of our country.
I was at the treaty ceremony last evening and I was rather struck by the fact that the signing on behalf of the Republic of Panama was done by a Panamanian citizen this time instead of a French citizen who signed in 1903.

PLEBISCITE IN PANAMA TO RATIFY TREATIES
Instead of looking at the U.S. Senate let us look at the Republic of Panama. Are there any further ratification procedures which must take place in that country and, if so, what are they and when might they be concluded?
Mr. LINOWITZ. There is a plebiscite and it will probably take place before the end of the year.
Mr. WHALEN. A vote among the citizens of Panama, is that correct?
Mr. LINOWITZ. Yes, sir.
Mr. WHALEN. The treaty, of course, provides for a reversion of the canal and its property to the Republic of Panama by the year 2000. Maybe this is a little bit of a followup on Congressman Burke's question.
DOLLAR VALUE OF CANAL ZONE
Has there been any dollar value attached to these assets?
Mr. LINOWITZ. I think we made some statements. Part of the problem is that you try to calculate the value as of the year 2000 and that is conjecture. We don't know what the Panama Canal will be in the year 2000. It may at this point be more valuable as it is or as seems more likely considerably less valuable. It may be an architecture monument, so it is very hard to say what its value will be at that time. We have made some estimates, I believe, of the value of the property which will presently be transferred. Those we can submit for the record.
INTEREST PAYMENTS RECEIVED BY TREASURY DEPARTMENT
Mr. WHALEN. You have indicated that the $20 million received
annually in interest amounts to something over $600 million. I presume that originally this was an arbitrary figure and undoubtedly has more than recompensated the United States for its original investment.






46

Now has that money gone to the Panama Canal Company or has it gone to the Treasury?
Mr. LiNOWITZ. Goes to the U.S. Treasury.
Mr. WHALEN. So in effect we at least have more than recouped otir original investment?
Mr. LINOWITZ. Yes, Sir; the original investment, of course, a great deal had been added since that original
Mr. WHALEN. As improvements have been added how has that cost been covered, through the revenue of the canal or through direct Jnvestment appropriations by the Federal Government?
Mr. LINOWITZ. Both.
SEA LEVEL CANAL NOT UNDER TREATY TERMS
Mr. WHALEN. You have indicated that the treaty provides for the
possibilities for negotiating either for a third lane or a new canal. If such a treaty or agreement were concluded, would the year 2000 conversion clause also apply to this facility?
Mr. LINOWITZ. We have provided terms and conditions would be worked out. In other words, if we decide that we want to put in a sea level canal, then we would work out terminal dates, what rights
Mr. WHALEN. I see. So if there were a new facility created as a result of any further agreement, it would not be bound by the language in the treaty that is now before us?
Mr. LINOWITZ. That is right, it would be subject to mutual agreement.
IMPACT OF TREATY ON PANAMANIAN JURISDICTION OVER CANAL 70NE
Mr. WHALEN. Ambassador Bunker, on page 6 of your statement I think you have outlined what I suspect the Panamanians see as the most important provision of the treaty. You s the Canal Zone under the one treaty will cease to exist and the canal territory will be under the general territorial jurisdiction of the Republic of Panama. This deals, I think, with the sovereignty question which has been a very significant issue. I wonder if you could outline specifically some of the changes that will take place if this is implemented?
Will the Panamanian Government police the area and so forth?
Mr. BUNKER. There will be a transition period of 3 years during which period our police will still function. At the end of the 3-year period general jurisdiction will be turned over to Panama.
Mr. WHALEN. I realize that. I just wondered if you could be perhaps a little more specific in terms of arrests, trials, and so forth. Apparently the American citizens now are not subjected to
Mr. BUNKER. There will be a procedural guarantee of trials for American citizens which will be spelled out in the annexes which will be submitted to you.
Mr. WHALEN.Would the Republic of Panama police then actually have responsibility for policing all of the area in the canal, for apprebending those alleged to have violated Panamanian law, be they American citizens or Panamanian citizens?
Mr. BUNKER. Yes; that is correct.
Mr. WHALEN. They don't have this responsibility or jurisdiction now, as I understand it?






47

Mr. LINOWITZ. That is correct.
Mr. BUNKER. That is correct.
U.S. MILITARY PRESENCE IN CANAL ZONE
Mr. WHALEN. One final question. How many noncanal U.S. military facilities now are in operation in the Republic of Panama that we eventually would either turn over or abandon?
Also, while you are looking for your figures, gentlemen, you might indicate how many personnel are involved-I am referring to facilities outside of the Panama Canal Zone itself.
General DOLVIN. That is a very difficult question to be precise about, Mr. Whalen. The Federal Register shows three bases in Panama. The fact sheet that was passed out shows seven. The facts are the entire Canal Zone is about twice the size of say Fort Knox, Ky. These are relatively small bases. But I think seven is probably a fair way of grouping them because there are some small installations, such as antenna farms and things like that. The whole Canal Zone as you know was put together as one entity.
Mr. WHALEN. They are outside of the zone?
General DOLVIN. They are outside of what will be the canal operating area under the new treaty.
Mr. WHALEN. But would be within the zonal territory?
General DOLVIN. They are all within.
Mr. WHALEN. There is no military facility of the United States in the Republic of Panama outside of the zone boundaries, is that correct?
General DOLVIN. That is correct. We have not had any since 1956.
Mr. WHALEN. France Field I understand was outside the zone?
General DOLVIN. That was in the Canal Zone, old France Field. I will say on treaty day that very little of what are now military bases will go back to Panama. We do anticipate over the life of the treaty, as we possibly draw down our forces, that some of these will return to Panama but the option on when it takes place rests with the United States.
Chairman ZABLOCKI. Mr. Lagomarsino.
Mr. LAGOMARSINO. Mr. Chairman, I wonder if we might have permission to submit questions in writing. It is obvious we are not going to have time to go into all of the things we should here.
Chairman ZABLOCKI. Without objection, questions not asked now will be submitted to the witnesses and I am sure they are willing to respond for the record.
Mr. LAGOMARSINO. I wonder also if we might have permission to submit for the record the 1977 January-February issue of Freedom House, which refers to human rights in Panama and other countries in the world.
Chairman ZABLOCKI. Without objection, so ordered.
[The publication referred to follows:]






98-991 0 78 5













[P3rom Freedom at Issue, January-ebur W7No91



The Comparative Surve of!



Freedom-VIJ




Thailand is the year's greatest loss, mqvingfo free to"otfee
failure is somnew a offsetby a mao gain, a otgljistefe
nations. Also joining the "free list" is Sri Lanka and tenwyidpn
dent Seychelles. Important giswere as aebepcalSan
and by Egypt, Sweden, Cyprus, Nigeria, and4 Guyn.Btteovrl
world trend away from freedomcotnenabyiSuhAmra:E
Salvador declines to partly free, and Argnia rgaadPrga
to "not free." Also newly "not free"are Ku at nd he M lgs
Repubilic, while in India and South Krea~ civladp itclrg s
continue tofade.






Q ince 1972 Freedom House has conducted couxntry-by- tendency of people concerne ihhmnrgt osrs i country comparative surveys of the status of freedom in those situations where they tik imrvenispsbl the world as a complement to. its more generalized yearly rather than those wihse oees h maac sas surveys. Previously, there had been a few comparative an inevitable result of the fathtwereptobari surveys of freedom, but since these were generally published confirmed detail abut oppeso only i onre hr in books and not reissued, they were quickly outdated by the oppressiona is inoplete. Thu,ineatolopinhs flow of events, particularly for areas with unstable political been exposed several yaso eaieslneo h conditions. The Freedom House Comparative Survey fills supeson oflietsinCnaoAbnawheharga the need for a continal adjusted survy. Moreover,, as a getdeal about thos inCilrthSoitUonIts result of the continual mnonitoring on a country-by-couinry hoped that inasmlwythSuvycnpoieor basis, the methods and judgments used in the analysis have balance. With incesn neeti eaigUS oeg gradually been improved. I policy, and particularly foreign aid, to humnrgt
There are several reasons why a comparative survey of consideratos, the Survey mycontrbt to testigo freedom is important. First, it is useful for those reporting obetvsanrdfopliyecin. on, evaluating, or simply concerned with denials of fredm AqieifrntppoefthSuvystoge to be able to place particular gains and losses for fredo recognition to the efforts and difficulties ofalthswo against a more o~r less consistent standard. This is persistently stugeffeedom weee hymyb.B particularly important un tlhe face of the double stnards f its existence, th uvey iniate htteeaetoeih reporting that condemn restrictions on freedom incountries Western democrcies thtre bu h rgeso suchas Chilewie ignrngthem in azai orR Blai. freedom in evr onr, even i attieoufrig This imbalance may reflect the socio-poiia bias of tepoliies donot reflettiscnen reporter, or, paradoxically, stem frmthe unfortunate In order to. ealuate the followinSuvythredrms clear about our defnto of fedm isb reo
tThis and~ othernotes are at en ofatcl. w do not mean~ national soveeiny.AlhuhtSry


No te--Copy righted by FedmHue and rpitpemsingatd









49



gives attention to the question or -freedom"' from calculated from other quantities. A numbered ranking simdomination of one people by another, in general it does not ply indicates that the state in question seems to fall within a use freedom in the sense of independence. Since grouping of states at a certain point along an arbitrarily
independence is not a critical component of our definition, in divided continuum from free to unfree. Ratings are now the Comparative Survey a former colony may be rated less based on the comparison of ratings on a check list of political free after independence than before-for example. Uganda. and civil rights. Ideally, for each item on the list each country
Given this limitation, "freedom." as used in the Survey, is given a rating of high, medium, low, or very low. There is refers, first of all, to the extent to which the people of a no attempt to mathematically compute the results, but the country are able to play an active and critical role in patterns of those states which enjoy more freedom must obchoosing their leaders, and thus ultimately in determining viously lie to the high side of those which are less free. the laws and means of enforcement under which they will To achieve a high ranking (I or 2) in political rights a live. Such political rights generally imply an authentic country must have the critical rights provided by a fully electoral procedure. Secondly, freedom refers to the extent operative electoral procedure, generally including an electto which people openly express opinion without fear, and are oral confrontation of multiple parties with a significant opprotected against arbitrary actions by an independent position vote, and those elected must receive the great judiciary. Consideration of civil rights of this kind also preponderance of political power. A state ranked (1) will also includes a wide spectrum of other personal rights, such as be strong in subsidiary indicators, such as a recent change of those to freedom of religion, voluntary organization, and government from one party to another, lack of foreign freedom of movement and occupation. domination, decentralized political power, or a broad inWe would argue that the freedoms the Survey compares formal consensus that allows all segments of society defacto are the essential human rights that political systems must power. A state at (2) must have a high rating for most critical guarantee. However, we are aware that the term "human rights, and a relatively strong position elsewhere. Violence, rights" is now often used in a much broader sense, to apply foreign domination, high illiteracy, or extreme poverty are to the full spectrum of human needs, for it is now widely environmental conditions that may cause a ranking of (2) inbelieved that political systems should meet those further stead of (1). States ranked at (3) and (4) generally have comneeds?2 This approach would add "positive rights" to the petitive voting procedures, but these may be marred by the negative ones we consider; for example, the right to food, banning of opposition parties, unfair electoral procedures, or education, health care, recreation, or even aesthetic cx- elimination from the rolls of large portions of the populaperience. This is, of course, the "freedlomn from" usage of the tion. States at (5) have poor, if any, electoral procedures, but
-Four Freedoms." However, no matter how desirable significant opposition may be allowed to organize-for expositive rights of this kind may be, it is a mistake to attempt ample. through legal opposition parties. AlternativelyN, such to make the concept of freedom cover the full range of states may strive for a broad consensus among segments oi desirable social goals for a society. The reader should be the population, or accept a high degree of decent ral ization. warned that the Comparative Survey is not an attempt to Regimes at (6) have merely a facade voting procedure (outcompare the quality of life or the provision of happiness comes generally 95 to 99.9 percent favorable to the among countries, but only to compare certain specific government), or none at all, but they show some responaspects of life-though admittedly we feel these aspects are siveness to common public pressures, have some claim to of critical importance. consensual support, or provide a voting procedure that
It is often objected that the Survey attempts the impossi- allows limited choice among selected individuals. At (7) ble, for it is inappropriate to compare the political systems of political competmton is narrowly restricted to in-fighting wealth), literate West European nations with those in poor, within party hierarchies, and all other attempts to influence illiterate countries with traditions different from Western policy or personnel are considered illegitimate. ones. In part, this criticism is justified. But it is less cogent if In general a low civil-rights score will reduce political two points are made. First, by scoring countries in terms of rights-although )ot v ice ersa. An election without a right freedom, we do not mean to imply that all peoples, or their to express opinion publ icy is hardly free. States are also) leaders, should immediately achieve the levels of freedom in reduced by one point on political rights by a less than high a country such as Denmark. We recognize the many, special rating on freedom front foreign control. Foreign control is problems that confront less favored s6cieties. We believe defined for this purpose rather narrowly, emphasizing the only that progress toward greater freedom is possible almost extent to which the government and people of a sta te, are free everywhere, and that there is very seldom an adequate to publicly criticize a hypothetically dominating state, or justification for backward steps. Secondly, we believe that how much the government is allowed to diverge from the ruling elites, once they embark upon social and economic dominating state's position in international consultation, modernization, will have little choice but to adopt a model of and organizations. government adapted from Europe (including Marxist- In civil rights we consider four critical rights: freedom
Leninist): and that, if given the choice, there is a prima facie from political censorship, open public discussion, the case that they will eventually prefer those systems offering maintenance of a rule of law (espccial~ as signified by the more freedom over those offering less.' ability of the courts to decide aga inst, the governmentt, and
Raknsfor political and civil rights freedom from government terror (fr xample, freedom
Rankngsfrom imprisonment or torture for political reasons), Here
In the Survey, states are ranked in terms of their political also, foreign control may impede rights, especially the first and civil rights on separate seven-point scales, from (1), most two. In addition to these four, we consider two types of supfree, to (7), least free. The numbers by which the ranks are porting or subsidiary freedoms. First are those from identified do not represent quantities, nor can they be simply totalitarianism; economic independence of the media from


















Most FreeLatFe
1 2.345
Australia BotswanaCgu ndraCia(Nt) Agra fhnsa
Austria C poi a Elav r ButnC mr s Agl lai
BahamasFiiGynBrzlCnoRpAretnBnn Barbados Filand ni DominicanRe. EytBhanru i
Belgium Gampbia M lyi utml noei agaehBlai
Canada Gec artu eao ey oii uud
Costa Rica GrenadaLictnti oe S BraCm da
Denmarkc Isael M lie toh aeVreI. Cmro
France ItalyMeioM rcoEudrCnrlA.Rp
Germany (W) Japan Monaco NcrgaEutra una Ca
Iceland Luxenbourg Paian ParaguayGaoChl
I rel and Nauru South Africa Pilippines Gie-isu Cia(o .
J amaica Papua-New GuineaW.SmaQtrHiiCb Malta Portuga a oe& odrsizehsoai
Netherlands San MainoPrnieH gayEhoa
New Zealand SriakSigprIrnG mnyE
Nowa SurinamSpiIvrCosGhn
SeychellesTrinidad &TobagoTogJrdnGie Sweden TurkeyUntdAaKu itIq
Switzerland EmrtsLbri4oe N
United K~ingdom UprVla Mlgs e. Lo
U.S.A. Zmi artnaLbaw
Venezuela NplM










Omhaan Monola>
AustriPer MiozCoambiquaea
Barbados~~~Poan NigneCroo s anldshBuc
BelgiSaum Arabia Rumania Oat
Cenegal Rwance
Denmarenekomli
FranSuda Togotis o
Swazilan Ugandad
(W)Sri UaaiaSRbno

NeTaezanna Vietnam
New~hiln Zelad enidd&Toag
Norway Uereguel SweYeen (N)mo



Yugoslavi

Most Fee Raning ofNation by Unie Rabt eatFe

2oh 3 4z5n6












government, and freedom of individuals to move about, may or may not be In making this judgment we mut ron. choose among educational systems and occupations, obtain sider how a state compares to other partly free and not free private property, operate in the market freely, or organize states overall, and consider where it would aill in a finer and join private organizations of choice. These latter analysiswithin the still rather broad categories,(6) and (5 freedoms include freedom of religion, as well as freedom to The Tables also record changes from previous ratings that organize and join unions. Civil rights are also affected by the are based on reanalysis rather than on changes in the counpresence or absence of nongovernmental, environmental in- tries during the year. For example, new information may adequacies, such as illiteracy and debilitating poverty. In this cause a change in our understanding of a long-standing second category of subsidiary freedoms we also place losses situation in a country. In addition, we sometimes decide that to freedom occasioned by private forces such as bosses, we have been regarding an issue from the wrong point of landlords, or labor leaders (and, at the extreme, private view. This year a number of changes of this kind occurred slave-holders). Questions of illiteracy and poverty bring us because of the introduction of a new and more adequate back, of course, to the positive rights which we argued above check list for comparative examination. should be outside our concern. Yet they must be taken into Without being exhaustie, some of the changes due to this account in so far as they affect a population's ability to Cx- year's reanalysis will be mentioned here, w hile others will be press opinion or vote effectively. (In passing it should be considered later in the course of discussing changes that ocnoted that evaluating the effects of such factors needs a great curred within the countries in 1976. Of greatest interest to deal more study.) many will be the reevaluation of civil rights upward from (2)
A country ranked (1) in civil rights must rank high on all to (1) for Ireland, Italy, and France. It "as felt that in critical rights, and medium or higher on nearly all other reviewing the full spectrum of civil rights we no longer had rights. In this consideration the most important subsidiary adequate justification for this distinction, particularly since rights are those to individual movement, choice of occupa- our interest in free expression is in politically relevant cxtion and organizational affiliations, and freedom from pression, and not in social controls such as those on abortion private terror (especially as related to political opinion), or pornography. In the case of France, this change was also Level (I) countries must also not have very low levels of made possible by an improvement in politically relevant poverty or illiteracy (although this is much less important in liberties over the past several years In the political realm, very small countries). Rank (2) in civil rights generally im- reevaluation led us to move Italy down from a (I) to a (2) plies a high ranking on three of the four critical rights, and because of the continued inability of the Italian system to not more than two lows in the subsidiary rights. Successively change the party in power (as is done in most democracies), lower patterns are then attached to succeeding rankings, un- or to incorporate all major groups in decision-making (as is til rank (7) implies a very low score on all critical rights and done in Switzerland). This is not to imply that the Christian low scores on most of the other check list items. Democrats should bring the communists into the governIn considering these rankings it is well to remember ment, for we realize that in the long run this might be the that the foregoing patterns are highly generalized. There are greater threat to democracy. special situations in which one or a few considerations Elsewhere in the world political liberties were raised from override the general picture, or in which lack of information (2) to (1) for Venezuela, (3) to (2) for Papua-New Guinea, forces reliance on only a portion of the full spectrum of and (6) to (5) for Nationalist China, because comparatively evidence that should be considered. An example of both of we simply did not have the evidence to continue placing these these problems is Lebanon. This formerly free country is states in the lower categories. In the case of several small now split into areas with widely varying local and foreign Persian Gulf states, political liberty was raised from (6) to leadership and security conditions, and must for the time be- (5) because of the consensual factors involved in the pering be very roughly estimated for the purposes of the Survey. sistence of traditional forms, the extremely small size of the The Tables of Nations and Territories states, the often very large relative size of the ruling family
and tribe, the openness of rulers to their people, and, in the
The heart of the Comparative Survey is found in the ac- case of the United Arab Emirates, the broad distribution of companying Table of Nations and Table of Territories and power in a federal system. In considering alternative forms Dependencies. Updated at least each year, these tables of consensual politics, there should perhaps be reevaluation record the current status of freedom in each country or also of the Chinese situation of the last few years, in which dependent area; the changes that have occurred since the last currents of communist opinion seem to compete for inSurvey; and, for some countries and dependencies, the out- fluence in a manner that, within narrow limits, appears more look for or prognostication of likely directions, given the consensual than the rank of (7) suggests. However, because current situation and the government's apparent plans for of current unrest and the difficulty of the question, reconthe future. Examination of the Tables will reveal that, in ad- sideration here was postponed until the next Survey, when dition to the rating scales for civil and political rights dis- perhaps the situation will be clearer or more information cussed above, the nations and dependencies of the world are available. divided into Free (F). Partly Free (PF), and Not Free (NF). Declines in freedom For this division states ranked (I) or (2) for both civil and
political rights will be rated free, states ranked (3), (4), or (5) During 1976 the most dramatic loss to freedom was the will be rated partly free, and states ranked (6) and (7) will be destruction by another military coup of the promising Thai considered not free. Borderline cases are more difficult, and experiment in democracy. Again the problem was the unthe final category is not predictable simply from the willingness of opponents in incompletely institutionalized numbers. Thus, while a (7) and (5) state-such as Chile-is democratic systems to accept the fact that in a democracy no bound to be not free in our ratings, one marked (5) and (6) group gets everything it desires. Instead of intervening on the

















The Comparativeouvyo reo

Tab>Ie of Nations

Rigt 4 t igtsII ccomCpOutlook 0, Luxembourg 2 1 0
Afphjni~ljn 7 6 NF 0Miagis) Remubli 5 F

Aria 7 h 1. 6 NF 9 a0
Ardorr 4 NF 0Maldie 4P
Aretia5 N -2MM1 F 0
Au-ursa I F a artna I
Faarss2 0 Mexico 4 aP
6,iri 4 P F 0 Monaco 4 2 I0
Bingl~tdch 7 1 P 0Mnoi7 7NF0
Barbado% I F 0 MIorocc 5 P
Begu I F 0 Mozamnbique 7- 7 I
Bhtn4 4 PF 0 Nepal 6 5NF0
Bo .12 6 4' P F Netherlands
Boisana 2 3 F 0 New Zealand I I 1
Brazil 4 5 PF 0 Nicaragua S P
Brunei 6 5 NF 0 Niger 7 6N
Ruiria 7' 7 N F 0 Nigeria 6 4 P
Burma 6 6 NF 0 Norway I I F 0
Burundi 7 6 NF 0 O)man 6 6NI
Cambodia"' 7 7 N F 0 ?Paiani 4 5FI
Camera 7 5' 0 F 0 -Panama 7 6 I0
Canada I I F 0 Paua-New Guinea 2 0 2F* 0
Cape Verde Islands 6 6' HNF 0 Paraguay 5 6- FCtlA fr~can Rep. 7 1 NHF + Peru 6 4 P
Ch~ad 7 6 NHF 0Phlpie 5 5P
Chile 7 5 NF + Poland 6 6 NF
CbmnaCom) 7 7 N? F Portugal 21+ 2+ F
Chinai(Nma 5. 5 PF' 0 Qatar 5' 0 J
Colombia 2 3 F 0 Rhiodesia 6 5 I0
Comorolala~nds 5 3 PF 0 Rmna7 6N
Congo Republic 5 6 PF 0 Rwan~da 7 5N
Costica I I F SaM rio2 2I0
Cuba 7 6' 0 F +Sao Tome and Principe 5 5 "S
Cyprus 3+ 4 PF 0 Saudi Arabia 6 6NF0
Czech~oslovaka 7 6 H F 0 Sngl6 4P
Denmark I I F 0 Syhle + 2I
Domnincan Republic 4 3 PP Sierra Leone 6 5
Ecuador 6'0 4 PF 01 Singapore 5 5P

El alador 3- 3P_ 0Suth Afica 4 5 P
uatorial Guinea 6 7 NF 0 Spain 5 ~ 3+ F
Etipa7 6 NF 0 Sri La na 2 3 F.0
Fii2 2 F 0S Sudan 6 6N 0
Finland 2 2 F 0 Surinam 2 2F0
Frane I 1'0 F 0 Sw~aziland 6 ~4 P
Gabon 6 6 NF 0 Sweden I+ IF
Gambia 2 2 F 0 SwitzerlandI I 0
German)(E) 7 H NF +Svria
Grnmany(W) I I F 0 Tainzania 6 6 N
Ghana 7 5 HF 0 Thailand 6- .
Greece 2 2 F 0 Togo 7 6 N
Grenada 2 4 PF 0 Tonga 5 I>
Guatemala 4 3 PP 0 Transkei 6 S ~
Guinea 7 7 NF 0 Trinidad &Tobago 2 a I
Guinea-Bissau 6 6 NIF 0 Tunisia 6 SN
Gu~ana 3+ 3 PF 0< lurkev 2 3 *
Hii6 6 NF 0< Uganaa I
H onduras 6 3 PF 0 US I
Hunger) 6 6 NF 0 United Arab Emiates 5. 5 P
Iceland I I F 0 United KinigdomI I
hnida 3. S PF 0< United States
Indonesia 5 5 PF 0 Upper Volta 5+ 5- P+
Iran 6 6 NF 0Uruguay 6. 6- N
Iraq 7 7 NF 0 Venezuela 1' 2 F
Ireland I I F 0 Vietnam ~ 7 1 I
Israel 2 3 F 0 Western Samoa 4 2 P
liaIl '' %1. F 0 ien(N) 6 5 Ia
),~oCoast 6 11 HF 0 Yemen(S) 7 7 I0
Jmia1 3- F 0 Yugoslavia 6 6 I0
Japan 2 1 F 0 Zaire 6+ N0
Jordan 6 6 NF 0 Zambia 5 5 P
Kenya 5 5 P o- rk .

%tuwait 6- 5- NF- 0 dml lcrtfl- telatsrefArmsmre ani e d(1
Laos 1. 7- NF- 0 Dth m ud iiywFofwmlr.Jm-e-IW PM.

Lcberia 6 4 PF 0 3 m~A p ,1 f.s, h a- Tlmc, b.o fOlfrmg..i. rieum owd.itr k, aL bya 7 6 NHF 0 1 .ph 1-- -d e.k. -cun mm.d a-1 hreaw, p-isp,,.
Liechtenstein 4 2PF 0 piml,~nu i s~A~dm ~u~ba u k aiaa








53



side of order. to support an essentially moderate government Table of Territories and Dependencies (backed by a conservative electorate), some factions of the military apparently used disorder as an excuse for their Political(1 Civil Status of
violent return to power. While the short-term success of this Rights Rights Frcdom Outlook
k Ind of intervention is likely, such actions poison the future. Australia Christmas Island
A hopeful sign, however, is that the military has maintained (in Indian Ocean) 4 2 PF 0
the degree of unity made'possible by the monarchy, and in- Cocos (Keeling) Islands 5 5 PF 0
stalled a civilian premier who talks of an eventual return to Norfolk Island 4 2 P1- 0
democracy. Chile
Easter Island 7 6 N NF 0
In Latin America there were a number of declines. Most Jluan Fernandez 7 6 NF 0
important was the military takeover in Argentina. However, Denmark in this case the democratic system was corrupt and slipping Faroe Islands 2 1 F 0
fast, the military were already a law unto themselves, and in Greenland 4 1 PF 0
resutin stae o insituionlize anrchyGenral France
the reutn tt fisiuinlzdaacy6nrl Overseas Departments 3 3 PF 0
Videla's coming to power was widely accepted, Many French Guiana
Argentine military leaders no doubt sincerely see their in- Guadeloupe tervention as a short interregnum before return to democ- MRtine racy. However, without eliminating the fanatical violence Saint Pierre & Miquelon both in their own ranks and in those of the violent left, Overseas Territories French Polynesia 4 3 PF 0
success can only be temporary. President Bordaberry's M ayottc 2 2 F 0
removal in Uruguay destroyed the last semblance of public New Caledonia 4 3 PF 0
choceinth runig f hecoutr, ve thug te ew Terr. ofthe Afars & Issas 3+ 3 PF +
chiei h rnigo h cuty vnthuhtenw Wallis and Futuna 4 3 PF 0
president is a civilian, In Paraguay repression appears to Netherlands have become-even more severe, and democracy more super- Neth. Antilles 2 2 F 0
facial. However, changes in the ratings of both Uruguay and New Zealand Paraguay are based in part on reconsideration of reports that Cook Islands 3 2 PF 0
have come in over the last two or three years, especially in Noeuc 2sad 2 PF 0
regard to murder and torture by the security services. In Portugal Mexico a leading opposition paper was suppressed, and the Azores 4 2PF 0
presidential election failed to include an opponent from the Macao 5+ 4 PF 0
main opposition party. In El Salvador manipulation of elec- Madeira 4 2 PF 0
Spain
toral laws effectively shut the opposition out of a chance of Canary Islands 6 4+ PF+ +
winning either in the national or municipal elections-and Places of Sovereignty thus precipitated their withdrawal from the process. This in Africa 6 4+ PF+ +
was accompanied during the year by violent suppression of South WtAfrica* student and peasant protests. (El Salvador is a good example United Kingdom of a case where freedom of the press is not enough to give a Belize 1 2 F 0
high rating to civil liberties.) In Jamaica political opposition Bermuda 2 I F 0
Brit. Indian Ocean Terr. 4 2 PF 0
has come to be characterized by violent confrontations. and Brit. Virgin Islands 3 2 PF 0
murders, with the inevitable response of the security services. Cayman Islands 4 2 PF 0
Elsewhere, the communist or Marxist states of Laos and Channel Islands 3 1 F 0
Falk land Islands 2 2 F 0
Mozambique further institutionalized the totalitarian Gibraltar 2 2 F 0
aspects of their model. By again postponing an election and Gilbert Islands 2 2 F 0
pushing through authoritarian changes in the constitution, Hlofng 2on 3 F 0
Indira Gandhi moved India further away from democracy. M ontserrat 2 2 F 0
The government of South Korea extended its suppression of St- Vincent 2 2 F +
the press and of the opposition party; it used its agnsti- St. Helena 2 2 F 0
gnso Solomons(Brit.) 2+ 2 F 0
still fear throughout society, even far beyond the political Turks and Caicos 4 2 PF 0
realm. Politically, Park has reduced the distinction between Tuvalu 2 2 F 0
his regime and that of Kim 11 Sung. The ruler of Kuwait dis- States 2 3 F 0
solved parliament and overthrew the constitution, following New Hebrides in this the lead of Bahrain the year before. By a referendum (Brit.-French
(eebr17)in which the opposition was not allowed to Condominium) 3+ 3 PF +
(Deceber 975)United States
present its views, the government of the Malagasy Republic American Samoa 3 2 PF 0
set up a one-party socialist state in which freedoms became Canal Zone 5 3 PF 0
fofet Tecostttindelre, o eapl, Guam 3 2 PF0
essentially fofi.Tecnttto elrs o xml, Puerto Rico 2 I F 0
that: "The state punishes with the greatest severity whoever Micronesia 4 2 PF 0
harms, by act or inaction, the objectives of the revolution, Northern Marianas. 3 2 PF 0
the building of the socialist economy or the public interest."'As Virgin Isads3b2a. Consequently there have been typically nondemocratic elections, the closing down of newspapers, and the banning of at most of its opposition, as well as all ethnic groups. Finally, in least some parties. There remains, however, an element of Malta, electoral violence and restrictions on press freedoms compromise in the government's attempt to incorporate have marked the last two years.









54



Ads ances in freedom I ndcpcndence was achieved during the last year by the
Sevchelles in freedom and by the Transkei. Unfortunately.
In 1976 the most important advances in freedom occurred the' emergence of the latter was marred by the suppression of in the European area. With well-contested legislative and the main opposition party. including the jailing of its leaders presidential elections, Portugal achieved a fully democratic and the presumption of continued heavy influence from system, a gain made possible by the existence of a spirit of South Africa. However, Chief Matanzima is not a South compromise across at least most of the political spectrum- African puppet and, with the exigencies of the emergence Portugal's admission into the Council of Europe symbolized past, Transkei's freedom may soon advance. We do not its new status. Without the hazards of revolution, Portugal's accept the argument that Transkei should not be regarded as example is being followed in Spain. Political rights have been an independent state-indeed it appears to be more indeincreased in the last two years, with a shift of power toward pendent than many other Satellites (e.g., Fast Germany or reliance on a wider consensus, expressed in part through the Mongolia). We agree that the homelands policy of which Legislative Assembly. Civil rights have also advanced, Transkei is a product is not ajust one in its prmnt form, but through a relaxation of censorship, and much broader this judgment cannot determine our assessment ot the degree acceptance of political activity, acceptance that extends in of Transkei's independence. In the Upper Volta persistent some cases even to expressions of regional demands. Sup- strikes by the powerful unions led on the one hand to r"wesported by the larger European community, Spain should
sion, but, on the other, to consultations that enhanced the
make further progress toward an open and representative broadly consensual nature of General Lamizana's rule. system. To the cast, democracy seems firmly replanted in Essentially free elections have now been proposed for next Greece, while with a recent senate election Turkey has reaf- year. With the cooperation of opposition political partim firmed, if somewhat violently, its commitment to Morocco was at last report embarked on a series of elections democracy. Cyprus is still unable to resolve its division, but that were to make possible parliamentary government by it is encouraging that both the Turkish and Greek portions of April 1977. the island held successful democratic elections in 1976.
Elsewhere in Europe, Italy and Germany both had crucial Changes in territories and dependencies elections, while Sweden enhanced the prima facie fairness of
its democratic system by voting for a change in its political Turning to the ever-decreasing group of territories and leadership for the first time since the 1930s. dependencies, there have been several changes since the last
Turning to the rest of the world, Egypt managed to take an Survey. These include the disappearance of Portuguese important step in its recent movement toward democracy by Timor into Indonesia and of the Spanish Sahara into a legislative election in which three quasi-parties were Morocco, though resistance movements continue to exist in allowed to compete. In Guyana the return of the opposition both. The island of Mayotte decided to stay with France to parliament improved the functioning of the system; when the Comoro Islands became independent and, it the however, there appears to be some danger that the rap- Comoros don't interfere, will soon be a Department. prochement may go so far as to eliminate the concept of an Departmental status advanced freedom for St. Pierre and opposition. In Bangladesh the military leadership in- Miquelon. Among British possessions, Tuvalu left the augurated a period of moderation during which political par- Gilbert Islands to form a separate colony. ties were reestablished, and newspapers critical of the regime Improvements in the status of freedom appear to have reappeared. However, in late November national elections been achieved in the Territory of the Afars and Issas, apscheduled for 1977 were postponed and opposition leaders parently on its way to independence from France; in Porarrested. In Zaire. the return of control of their schools to tuguese Macao, as it achieved a larger degree of home rule; the churches symbolizes a greater degree of pluralism. and presumptively in the remaining Spanish territ&ies as a result of the liberalization at home. In the British-French
Other changes and trends condominium of the New Hebrides a new constitution and
elective assembly raised the status of freedom. (This actually
We are especially concerned that the projected elections in occurred in 1975.) In South West Africa a continuing Sri Lanka, which are to be held before June 1977, should be process of constitutional deliberation has allowed a wi dened successful. In view of several factors-thc opposition's and freer participation of groups in political discussion. Even success in by-elections in the last few years, the ability under the internal branches of the Southwest African People's pressure of the newspapers to retain a critical role, and the Organization (SWAPO), a revolutionary organization supformation of a new Tamil front-it appears that the ported by most outsiders interested in the country, have been democratic system here is healthier than we had thought. We included in this discussion, although not at the conference hope that a fair election will confirm our judgment, and that table. Our reanalysis did not make possible a change in the talk of an illegal postponement is careless speculation. rating of this dependency, but there was progress here, and Although our reassessment did not make it possible for us to we expect more in the future. revise Senegal's numerical rating, the government's permis- To Portuguese territories we have added the Azores and sion for the formation of two opposition parties during the Madeira because of their distance, recent agitation, and past year (in a manner very similar to that in Egypt) served analogy to the Spanish Canaries. They are perhaps better to advance freedom of political expression. We assume this placed in the territorial category than some of the British trend will soon affect the electoral process. It should also be territories, such as the Channel Islands. However, Frances mentioned that the situation in Nigeria appears to be better Corsica, an area of recent regional agitation. would perhaps than we judged last year; this year progress on the develop- as justifiably be placed in the territorial Table. In any event, ment of a new and democratic constitution is certainly we certainly do not mean by our inclusion or exclusion that promising. the Azores or Madeira have special rights to self-determina-









55



tion in comparison with other areas at a distance. pensive government ownership) by way of illustration. The line between communist and noncommunist socialist states
Comparing two political-economic models was also difficult to draw. To qualify as a communist governUntil now the relationship of freedom to socialism and ment, the leaders had to claim that theirs was a communist capitalism has been an issue we have avoided, on the plea government and strive to copy in detail the party organizathat those subsidiary, antitotalitarian civil rights, in which tions and control mechanisms of communist states. The new capitalist states will rank high, will be offset by the non- states spawned by the collapse of the Portuguese empire, in governmental pressures that erode civil rights, and in terms particular, seem to lie close to this line. However, it should be of which socialist states should rank higher. However, if we recognized that some socialist, one-party states clearly accept a reasonably strict definition of socialism, it is imp'or- differentiate both their organization and ideology from comtant to note the extent to which the world is becoming munism (e.g., Iraq or Tanzania). Where a state is only tempolarized between those aspiring to one or another of two porarily in one category, and has serious public aspirations of moving into another, this has been indicated in the Table.
models of political-economic life-a one-party socialist We have also indicated the most flagrant examples of a state model and a multi-party nonsocialist model, with the latter failing to follow its ideological line by appropriate actions. 'far more likely to result in a high level of freedom.
I he accompanying Table of Political-Economic Systems The Table of Political- Economic Systems illustrates that, presents the picture as we see it. Looking first at economic even with all the necessary qualifications, there are two s stems, for the purposes of this Table socialism is defined as definite clusters of states ideologically. In terms of our a system in which the government aspires to directly control definitions there is only one socialist, multi-party state, while the preponderance of economic activity (or to compel and there are very few capitalist one-party states. Apparently, supervise cooperative arrangements). In a strict socialist several of these anomalous states may soon shift to one of state no one is in doubt as to the government's objectives, the larger clusters. It should also be noted that most of the although lack of money or ability may impede full realiza- non-party states either have governments that consider thL'r tion of the model. Private property-holders in such states present situation to be merely an interregnum, or represent have few rights, for their ownership is judged ultimately the last stands of traditional pre-party systems that were "wrong." In capitalist societies the presumption is the once universal. reverse. The government owns and operates portions of the The Table of Political- Economic Systems illustrates the economy only %%,hen and as it has to. In mixed, often pater- fact that the freer states in the world are nonsocialist, multinalistic. systems governments play one or both of two roles. party states, while the less free are one-party states. Since the First, without denying the rights of private ownership' the existence of multiple parties is an important category of our government may see itself as responsible for redistributing check list for political freedoms, this result is to some extent income or providing a high standard of services. Tax burdens an artifact of our classifications. However, where it could be in such "social democracies- become very high. Second, for shown that an effective opposition could exist without parone reason or another government leaders may believe that ties, this would not be a critical category of our judgment. manv ke,, industries should be run directly by the govern- Moreover, given our check list, countries without parties or ment. Somewhat intermediate between the two roles is the With single parties can easily achieve at least a partly free initiation of extensive land reform (although not collectiviza- status. But most do not. Reference to the Table will show tion. which is more characteristic of the socialist model). In that capitalism by itself does not assure freedom (at least as mixed systems, particularly those involving extensive we have defined it), but socialism by itself seems to be government ownership, the countervailing power of the positively detrimental. It is either that socialism as we have private sector is much weaker than in a pure capitalist socie- defined it concentrates too much power to make possible the ty; although the private sector remains an important factor, maintenance of freedoms, or that the association of for private capital continues to play an acknowledged role. socialism with communism in most of the world today is so
Definitions of the forms of political mobilization by part close as to make independent, freer experiments very dify
structure and extent of centralization are less complex. In a ICU t. decentralized country constituent states or provinces are not
normally governed by appointees from the center, while in a Modern colonialism centralized system the main function of regional or provin- For this Survey we have again included the Table of Major cial government is to administer policies worked out at the Subordinate Peoples first presented in 1974 (Freedom at center. Since no one-party state has a decentralized system Issue, Jan.-Feb. 1975). As we pointed out at that time, the (except de facto. where it cannot govern), the Table for this consideration of territories and dependencies was not a category) distinguishes instead between two types of one- useful way to look at the problem of colonialism in the part governments, communist and noncommunist. While 1970s. For the issue is no longer primarily the final eliminaall modern one-party governments evidently go back to com- tion of the vestiges of nineteenth-century imperialism, but munist models, one-party organization is utilized today as a rather the extent to which some peoples have come to means of controlling societies from capitalist to socialist. dominate others in their own homelands. This is the point
There are, of course, manifold difficulties in placing many the Third World is making, however inelegantly and onecountries in such a simplified scheme. There is, for example, sidedly, when it condemns Zionism. a continuum from capitalist through mixed to socialist For this reason we have presented an approach to the economics. Since the line bei'ween multi-party capitalist and question of colon' ialism that reflects the major forms of submulti-party mixed is particularly hard to draw, it was ordination most analogous to colonialism. We found the decided to simply place a few of the highest-tax social closest analogies to be subordinating unions in which a democracies in the mixed category (along with those with ex- dominant people with a separate territorial base has ex-











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57




Table of Major Subordinate Peoples



Population Cultural Israel Arabs I low-med, low
(dep. Similarity Kenya LuoO3) I medium low
people) to Mexico Mayans I high medium
Dependent (in dominant Political
State People millions) people Equality Morocco Berbers 5 high medium?
(several groups)
Afghanistan Tadzhik 3 high medium Nigeriai41
Uzbek I medium medium Pakistan(4
Algeria Berbers Peru Quechua 2-5 medium medium
(several groups) 5 high high? Philippines(y Moros 2 medium low-med.
Bolivia Aymara I medium medium Rumania Magyars 2.5 high medium?
Quechua i,5 medium medium South Africa Bantu Peoples 14 low low
Burma Karens 2-3 medium low (Zulu, Xhosa
Shan 1.5 medium low Sotho, tc)
Canada Quebec French 5 high high Spainii) Catalan 5 high high
Chad Toubous (Arabs) 2 low low (Basque) I medium low
China (Com.)ll) Chuang 7 medium medium Sri Lanka Tamil 2.5 medium low-med
Hui 3.5 medium low Sudant)i Southern Peoples 4 low medium
Korean I medium medium Switzerland French 15 high high
Miao-Yao 3 medium medium Thailandli Malay I medium medium
Mongol 1.5 medium low
Puyi I medium medium Turkey Kurds 2 medium low
Tibetan 4 low low USSR Armenians 2 medium medium
Uighur 4 low low Azerbaidzhani 4 low low
Yi(Lolo) 3 low low Bashkir I medium medium
Czechoslovakia Slovaks 4.5 high high Byelorussian 7 high high
Ethiopia Erhreans 1.7 medium medium Chuvash 2 medium medium
Gaila 17 medium medium Estonian I medium low
al 10 medium medium Gergian 3 medium medium
(several groups) Koanh45 o o
Gojam (prov.) 1.5 high medium K.rah 4,5 low low
Sidamo 2 medium medium Latvian 1.5 medium low
Tigreans 3 high high Lithuanian 2.5 medium low
Francet$ Alsatians I medium high Moldavian 2.5 medium low,
Bretons I high high Mordvin I medium medium
Guatemala Mayans 2 medium medium? Tartar 4 low-med. low-med.
India Assamese 1o high high (several groups)
Bengali 45 high high Tadzhik 1.5-2 low low
Bihari 20 high high Turkmen IS low low
Gujarati 25 high high Ukrainians 35+ high high
Kanarese 25 medium high Uzbeks 8+ low low
Kashmiri 3 medium low United Scots 5 high high
Marathi 45 high high Kingdom (Scottish-Irish) I high high
Malayalam 20 medium high Welsh 2,5 high high
Oriya 20 high high Yugoslavia Albanians I high medium
Panjabi 17 high high Bosnian Muslims I high medium
Rajasthani is high high Croats 4.5 high medium
Santali 3 medium? medium Macedonians I high medium
Tamil 40 medium high Slovenes 1.5-2 high medium
Telegu 50 medium high
IndonesiatiM2) Bali 1.5--2 med.-high medium
East Timor I low-med. medium I That a a number of other major peoples that ma) emerge tO clim rights to sildetermination. Most of these arc now idcifia for th pose of the table with the dominan Kalimantan 4 low-med. medium Peo,
Lesser Sundas 3-4 low-med. low-med. 2 The ethnic picture in I ndoncsia is parlticuary complex Sinc thirevibtrie o1 recent idonsan
(cxc. Bali) history and uhe experience of oiher island star" suggest thai separaist independence monmncms
Molucca I low-med. low are apt to be defined by islands, the table s confirsod to lsim the major island popular ion that
Sulawesi(t' 6 low-med. low might feel themslvs oppressd by Java
Sumatrat 15 low-high med.-high 3 The Luo is onlythe most obvious example of the many tribs in Kenya that may feei oppressed
West Irian I low low by Kikuyu peconinnor,
4 Aitioso a number of people may be denied rights to elf-detrination b ih, Stle h- ,re Iran($) Azerbaijani 5 high high or in this case imperially dominated by another people In Pakistani. howevr, th Pahibi may
(Turkic) soon become dominant people
Kurds I high medium Tu Philippmes are very complex both ethoographicai and physioliraphcali Poitntia
sop-Mitsl arc legion. hegionng with the Visayats, Out solution a to list on1) the Souther Iraq Kurds 2 medium low MusirnsorMonoiihian hvacioaiiy iiadc ouistand~ncia.ims

tended its rule over neighboring peoples without ex- accompanying table is produced.
tinguishing their self-consciousness as separate peoples. We In presenting this material we make no strong implication
are not considering those many heterogeneous states in that the peoples represented here should organize independwhich peoples cooperate together in government (as general- ent states. However, we do assert that they have rights to inly in Nigeria or Belgium), or in which the ruling group is dependence analogous to those of the colonial peoples of the
supranational, as in Pakistan. Nor do we consider heteroge- past generation; and that if their demands for autonomy are
neity without a territorial base, as in the case of most ethnic not being met within the present system, then this should be groups in the United States. Using this definition, and con- considered an important constraint on freedom. Taking this
fining our attention principally to those individual groups of attitude, in 1974 we contrasted the position of the large subordinate peoples that number more than one million, the number of subordinate peoples within the federal,









58




position of peoples within the operationally centralized USSR. Obviously, with the decline since 1974 of democracy in India, including decline in the relative autonomy of its state governments, this distinction has become much lss valid.
Conclusion
Reviewing the shifts in the status of freedom in 1976, it appears that we have ha a very mixed year. Certainly the events this year provide some reason for encouragement. That is an improvement over 1975, when India first left the family of free nations an exit acco m d bydeclines in its major neighbors, and when all of Indo-China succumbed to communism. In 1976 particular importance should be placed on the success of freedom on the geographical margin of the European cluster of democracies. This is seen patiularly in Portugal, Spain, Grece, Turkey, and Cyprus, and there are encouraging changes in Egypt and Morocco. The most disappointing area in 1976 was the bloc of South American nations from Chile to Brazil, most of whose peoples are relatively well advanced and familiar with democratic stitutions. BraLil's successful municipal tons in
November were a move toward reestablishing ocracy.
We can only hope that the interrupted democrat progress
in the homelands of the bulk of the people of this area will eventually be reflected in a return to freedom.
Discouragement over the frequent setbacks encountered by freedom in most of the world-symbolized this year by events in Thailand-may be offset by reflecting that the. struggle to attain freedom in Western Europe and America was also not easy. Looking at the rest of the world in 1977, we are reminded of what Lord Acton said about the stru for freedom in the Western tradition in an address deliv just 100 years ago:

in every age [the] progress Ir freedom] has been beset its natural enemies. by ignorance and supcrstiton, by the lust of coqest and by love of ease, by the strong man's craving for power, the poor man's craving for food. During long intervals it has been utterly arrested, when nations were being rmcd from barbarismandfrom the grasp of strangers, and when the p struggle existence, depriving men of all interest and under in p ia made them eagr to sell their birthrightfora m f p ...Atall times sincere friends of freedom have beenrare, and its have been due to minorities. tht have prevailedby associating themseves wth auxiliaries whose objects often difered ftrom their own; and this association. which is always dangerous, Iha sometimes been disastrous.5
Notes
I For dditional informatwion onmihodoicg, worm,. and eulrits o priiu Com arativi S.-nI,,,Faa loue, ..1 Jon -Feb. 193. Jdiy-Asti. 1974Jari-Fb 1975...d jm
Feb 1976. Another cpii, oolili e y by the author myb ,5~foundin Waldviw.Sepi 1974. pp 47-51 E~i~caien the. topic 3"in Wroe.No, Wl9. pp. 39-43 and Fr~cu,, at tmit. No. Dec 1974. pp 12-1.
2. b.. fr e-ipln Rttinid Claude, d, Cortipwlf H -~a. Rght, (Baltmr onrpbs iiopkin 3 Sw lk.D Carti. "Affiring AmeulmiIdeals in Forin Polwy : F-ed atu1- NovDec 1979. pp. 12.15
A-". nssinyw3ArA-. eb. 45 1976. p. 27"S1. 5L-4 Acton, 7he IHujf..t otifr Ep.tiAarM ainia, W, P. 1,





59

PANAMA S HUMAN RIGHTS RECORD
Mr. LAGOMARSINO. Without going into detail on that report because that would take a long time, I might observe Panama has the worst record of human rights, according to Freedom House, of any of the countries in South America and is on an exact par with the U.S.S.R. just to give some perspective.
I was on Congressman Yatron's mission to South America; my impression is exactly the same as his. We talked to five Presidents, to six Foreign Ministers, to many other government officials and, with the exception of the Foriegn Minister of one country, at the end of a 3-hour dissertation, none of them even mentioned the Panama Canal. and this was right after the agreement had been reached and announced early in August.
SEVERAL LATIN AMERICAN LEADERS SAID TO FEAR TOLL INCREASE
Several, all of them, did say, when asked, that they supported the canal treaty; however, several of them also said privately they had great concern about it, they would just as soon it didn't happen; and several expressed, in a very concerned way, their fear about raises or increases in the tolls and several were very surprised to learn that the the tolls would be increased, because they-at least one of them said he had been assured they would not.

TERMS OF NEUTRALITY TREATY QUESTIONED
I would like to ask about the term "permanent neutrality." That is the term used, is it not?
Mr. LINOWITZ. Yes, sir.
Mr. LAGOMARSINO. What does "permanent" mean?
Mr. LINOWITZ. Indefinite.
Mr. LAGOMARSINO. Is it the same as "perpetuity," by which we apparently mean 97 years?
Mr. LINOWITZ. It means the same, I take it, as "in perpetuity."
Mr. LAGOMARSINO. As I understand it, there is a provision in the treaty that results in the fact that if we should be at war our enemy can use the canal; is that correct?
Mr. LINOWITZ. As they do today, sir.
Mr. LAGOMARSINO. That would remain; we would have no control over that; that would not be a violation of neutrality, is that correct?
Mr. LiTNOWITZ. Neutrality today and under the new treaty would call for assuring that the canal remains open to vessels of all nations in time of peace and war.

USE OF INTEREST PAYMENTS
Mr. LAGOMARSINO. Relating to the interest payment that has been made to our Treasury and will now be made to the Panamanian Government, I must say I find that to be a rather interesting theory as to how we get money to the Panamanians-in other words, paying them, in effect, interest on our investment; is that correct?
Mr. LINOWITZ. Paying them money that we have hitherto been paying ourselves on an investment.








Mr. LAGOMARS .l in ait spangthemthe inter ha been a orls?

investment is a uiu okepn eie htw eefaigi
thatwe were gettn back acertainamon teachya;wwr considering a fxed expese on that original ivesmn onteai of which the d i w
Mr. LAGOMARIo Thtwud hve cninudhdw4o nee
into this t at Mr. LI I a, so.
Mr.IAOMARINO. SO, neffet ,it isging ocs h apyr
$20 million a year fromthe Mr. LIOTZ Nottetaxpaers;the cnl'oeaigcmay Let me be sure you understand that. The to e f not from the American taxpayers. Most of thes is can; therefore, most of the money that ge come from Americ a.
Mr. LAGOMSINO. T wl b m w i
now of $20 mnillion to h rauy


Mr. LINOW1?TZ. That is a different isshe Mr. LAGOMARSINO. I am unclear on the aon httetlswl be raised. We were advised right after the aeemet was at least I thought I was a4vsed-4Jiatt mediatelyby 30 cet a o;ta htwudmaeu h 4 ilo
part of this payment to Paaa a incret or wa i e
brefed us incorrect on that? Mr. LINowITZ.e n thought of
we talked about a percentage increase an 30-cent-per-ton hae. W ch j ac W np
increase will be necessary If there is a lot of That~ is why haven't arve ~auneatiue
M.LAGMAINO.4 AT whl9g hugh er o eto
Mr. LINowITz. exactly.
Mr. LAGOMARSINO. I don't know how m t tolls ar b it
would seemi to mie a 25- or 3Q-peent inceas wol bemreta cents a tn.
Mr. ,IOIZ YesSir. o ..

Mr. LINowITz. It is about 5 cen ts, 46 cens.
Mr. LAGOMARSINO. About 46 cents?
Mr. LINOWITZ.
Mr. LAGOMARSINO. now as I mentioned, some of th





Now with regrd to the itms np Import Bank credits, $75 million m o i million Overseas Private Investment Corporation loan arant, is it my understanding that those payments or that amount of






61

will be made avai able to Panama without the requirement of any action by the House of Representatives?
Mr. LINOWITZ. No, sir, they will be subject to all the usual obligations and limitations and restrictions that would apply if there were no treaty negotiated.
Mr. LAGOMARSINO. Perhaps I misunderstood. I thought you said we put the paragraph that starts out "None of these loans, guarantees" and so on, ahead or right behind that, that we moved that up.
Mr. LINOWITZ. "None will require." If you look over what we are talking about, the Export Bank credits are up to a certain amount which the Congress fixes. The guarantees don't call for further congressional action, either for the private investment guarantee or the AID housing.
Mr. LAGOMARSINO. So what you are saying is that that will not require congressional action?
Mr. LINOWITZ. These proposals may be implemented within
existing statutory programs.
Mr. LAGOMARSINO. The foreign military sales credit will require guarantees?
Mr. LINOWITZ. Yes, sir.
SHOULD HUMAN RIGHTS CRITERIA BE APPLIED TO PANAMA
Mr. LAGOMARSINO. The one thing that concerns me about that. is: If we are going to apply the same criteria that we applied to Argentina, Brazil, Chile, El Salvador, Paraguay, Uruguay, Guatemala, how are we going to do so if indeed the analysis of the human rights violations that I mentioned a moment ago is accurate?
Mr. LINOWITZ. Well, Mr. CongressmanMr. LAGOMARSINO. Or is the answer that this is a special case, and we must proceed because we must enter into this treaty?
Mr. LINOWITZ. There are other elements of special character. What we are talking about is putting Panama in a position to be able to join with us in doing what is necessary for the defense of the canal. There is that special character.
On the human rights element, as you know, our view of it is quite different from the one you have asserted.
Mr. LAGOMARSINO. Thank you.
EXCHANGE OF NOTES ON ECONOMIC ASSISTANCE PACKAGE
Mr. GILMAN. I will try to be brief. I note that the documents to which you refer are part of the agreements and the related documents concerning various U.S. Government activities currently located in the zone; you refer also to the loans and loan guarantees, and credits to be provided to Panama to assist its economic development.
I don't believe that any of those exchanges of notes or that any of the loan guarantees or credit papers have been submitted to the committee. Could you tell us whether you can make those available to our committee so that we can make them a permanent part of this record?
Mr. LINOWITZ. Yes, sir, we will be glad to.
Mr. GILMAN. Mr. Chairman, with your permission, I request it be made part of the permanent record.
Chairman ZABLOCKI. Without objection, so ordered.
[The documents referred to follow:]







62


ExcuANGE OF NOESz, LoANi GUARATECEDTPPRADRLTD ouE&
CONCERINiG VARIOUS U.S. GOENETAivrmINHECALZE

The Department of-,State of the United4ttso

America has the honor to inform the Foreign Miisr of the Republic of Panama that, upon the etyit force of the Panama Canal Treaty, it isteineto of the United States of Americat establish thePnm

Bureau of the United States Foreign Broadcast Infrain Service (FB15) as an integral part of the Ebsyo the United States of America in the Republic ofPam, The Bur-eau would form part of the diplomatic missing in a manner similar to that of other agencies of thea United States Governmuent currently operating~ in the Republic of Pan~ama, under the authority of theanie States Ambassador.

The Foreign Broadcast Information Service is a agency of the United States 'Government with worldwd responsibility for monitoring and translatingit nls available foreign public media,~ includn (a0 rnmsin by major press agencies, (b) public radio and telviion broadcasts, and (c) selected articles from newspaper and other publications. These tz aad,maeil are-.made available in the U~nited States~ ofAmrcan abroad to i.nteres ted persons in both govyernmentaan private sectors. FBIS~ executes this responsibility from fourteen bureaus located in foreign countries,\



tha United States diplomatic mssions totoecutis







63


The-Panama Bureau of FBIS will have responsibility for providing this service for an area which includes most countries of Central America and northern South America, and a part of the African continent. The Bureau Staff currently consists of four United States citizen employees (a Bureau Chief, a Deputy Chief and two editors) assigned for rotational tours of two to four years. There are no locally-hired American employees. United States citizen personnel of the Bureau shall have the same privileges and immunities, ..and be subject to the same conditions, as other American personnel currently assigned to Ithe various agencies forming parts of the Embassy of the United States of America in the Republic of Panama. The Bureau also currently employs three locally-hired third country nationals resident in Panama, and twentynine Panamanian citizens. FBIS anticipates no perceptible expansion of its American or local staff in the foreseeable future.

At the.'present time, the Panama Bureau of FBIS is located on a single parcel of land, comprising some 320 acres and including the Bureau office and the Chiva Chiva radio antenna field, located on the Fort Clayton Military Reservation.



SA






Department of State.,

Washington, September 7, 1977.




98-991 0 78 6




















Excellence:

I have the honor to refer to the Panam Canal Treaty signed this date by representatives of the United States of America and the Republic of Panam. In that connection, my Government.proposes that
-S
negotiations relating to continued air traffic control services commence as soon as possible and that a definitive arrangement on this subject be concluded prior to the exchange of instruments of ratification of the Panama Canal Treaty.

If the foregoing proposal is acceptable to the Government of Panama, I shall be grateful to have an affirmative response from Your Excellency.

Accept, Excellency, the renewed assurances o f my highest consideration.

For the Secretary of State:




Ellsworth Bunker
Ambassador at Large






His Excellency

R6mulo Escobar .Beth t,

Chief Negotiator.

















EM'SAJADA DE PANAMA WASHINGTON, D. C. 20008 7 de septieinbre de 19 77







Excelencia:

Tengo el honor de re'erirm(! a su nota con fecha

de hoy, relative a los servicios cont'-I'luados de

control de traflico aereo, y de que mi

Gobierno convene en iniciar za la

mayor brevedad possible, y en concluir -,,n arroq1o

definitive en torno a esta cuest.2ton antor-Loridad

al intercambio de los 4re.c ion

del Tratado del Canal de Panama.

Ruegole accept, Excelencia, lar,

reiteradas de mi mas alta





m uu 0 n c otir t
Je fe de las















Su Excelencia

Ellswortli Bunker,

Embajador sin CarLera 6 ?

Estados unir:os dc-

















September 7, 1977




Dear Dr. Escobar:

This is to confirm our understanding, reached in connection with the negotiation of the Panama Canal Treaty, that upon entry into force of that
*Treaty, Article XVII of the United States-Panama Air Transport Services Agreemient, signed a~t Panama Ilarch 31, 1949, will have no further application.

'Sincerely,



Ellsworth-Buinker Ambassador at Large












His Excellency
Dr. Romulo Escobar Bethancourt,
Chief Negotiator.








67


ARTICULO II



Los Gobiernos se comprometen a tratar de promulgar, deconformidad con su s process legislative nacionales respectivos, la legislacio-n que fuere necesaria por parte de cada uno de ellos para garantizar la preservaci6n y protecci'n de dicho Monum4E nto Natural en la forma en que se contempla en la Convencio-n, y a no tomar ninguna accio'n que pueda menoscabar en forma alguna su condici6n de monument protegido, salvo como se dispose a continuacio'n.



ARTICULO III



Los Gobiernos acuerdan colaborar en el uso de este Monrtento Natural para los prop6sitos de investigation y studio cientificos y ayudar a los cientificos y las institutions cientlficas de cada uno a realizer dichas actividades en (-I Monumento Natural. Los Gobie.-nos acordaran peri'dicamente lds arreglos que puedan ser mutua:,-,ente conveniences y deseables para facilitar tal colaboraci6n.



ARTfCULO IV



Los Gobiernos acuerdan que, de conformidad con los prop6sitos del Articulo VI de la Convenci6n, ellos pondtan a la di 3posici6n de todas las republicans americanas por iqual, mediate publications u otros medics, los conocimientos cientificos derivados de los esfuerzos cooperatives para establecer y mantener el Monumento Natural.








68


ARTICULO V



Los Gobierno -,, conscientes-de su interns mutu'o en el funcionamiento eficaz dc--I Canal de.Panama, acuerdan que al ejercer sus responFabilicllades en virtue del Tratado del Canal de PaniT-ic., en consideraci6n este Acuerdo. Queda, entendido el uso del rea comprendida en el Monumento N. Icurai pa,-,., a! prop6sito de mantener las instalaciones existences con el funcionamiento del Canal de

Panam5, no seri en menoscabo de la condici6n de

monument que i-iene el Monumento Natural. En caso

de que cualc. cjui-c--- d2e los dos Gobiernos consWere en cualquier moment, que funclonamiento eficaz del Canal de Panam i precise cr-leuior ot -ra acci6n que affect cualquier

parte del i:atu-L I, los Gobiernos acuerdan celebrar

consults expcd i E:- nt c-. y pn-convenir en las niedidas necesarias para la prot- -cJZ-r. de la integridad general del Monumento Natural y el Tom-2-L3 de los prop6ssitos de este Acuerdo.



ARTICULO VI



Los Gobj.erno. copvicrten-en transmitir conjuntamente copies de este Acuordo al Conscjo Econ6mico y Social de la Organizaci6n

de Estados y solicitor que la Organizaci6r -;otifique

a las Par.tes Cont-;,,.-ntcs de la Convenci6n sobre e9tc ;erC








69


ARTICULO VII


Este Acuerdo entra*ri en vigor al mismo tempo qiie- el Tratado, del Canal de Panami y permanence i en vigo-- dj.(.-,zafios y, subsiguientemente, mientras ambas Partes siendo Partes de la Convencion Para la ProIL-ccci6i) dc la Flora, de la Fauna y de las Bellezas EscenAcas dr--. lor Passes de America.








70



DQ11-F at, !-,-ashington, this 7th day of September, 1977, in dupl-ica -r.,, in the English and Spanish languages, both texts

authentic.



FJ-' -',7,D0 cn "lashington, a los 7 dl-as de septierribre de 19 C71 en lo:- Jng].&s y espaRol, siendo ambos texts igualirente





P071 IfjOF Al,'--P:,RICA: FOR THE RE-PUBLIC OF PANAINIA: Pcj- LO' '16 ',j'F;TE)nS DE AMEP1CA: POR LA REPUBLICA DE PANAMIA








71


DELf-ARTM1,1T OF STATE
WAS H ING TON

September: 7, 1977


Excellency:

I have the honor to refer to the Agrc-.:ent

pursuant to Article VI of the Convention oN ature Protection and Wildlife Preservation in the Western Hemisphere, and to the Panama Canal Treatl and related agreements signed on Septenber 7, 1977 by representatives of the United States of America and the Rce::hlic of Panama. Article III of the Agreement relating to the Convention on Nature Protection provides th-t ur Governments may agree from time to time on such c:: ..enonts as may be mutually convenient and desirable, to facilitate their collaboration in the use of the Barre Colorado Nature Monument for the purposes of scient fic research and investigation.

I consider it desirable within the s" it of the aforementioned Convention and for the purposes of the Agreement based thereon that our Govec'rer,1- agree that the Smithsonian Tropical Research Institut- (ST2T), a trust instrumentality of the United States -fc America, which I shall hereinafter call the Institu&e, be designated by both Governments as custodial; of the Barro Colorado Nature Monument. I propose tiat our Governments



His Excellency

Romulo Escobar Bethancourt,

Chief Negotiator.








72


further agree that the Institute shall, during the period of itq custodianship, have sole responsibility to act on behalf of our Governments in authorizing use of the Nature Monument for the purposes of scinii research and investigation~ and for itsprtcina envisaged in the aforementioned Convention and ou Agreement based thereon, In the event that~ one of h Parties should attempt to tae an~y action related t h

efficient operation of th~e Panamia Canal s prviedfo in Article V of our Agreement,. I propose thtteIsiue as custodian, be advised in advance and invited to comn on the potential impact of such action on the overall integrity--% of the Nature M~onument.

I co~nsidcr it desirable and to that end I propose to Your Excaeliency that, during the period ofit custodiJa.nship, the Institute be authoizdto mpo scientific and support staff, to include game wades as necessary to enforce such laws and regulations as may apply to) the Protection of the Nature Moumnt. Pesn violating the integrity of the Nature Monumnt~ cotrr to the provisions of such laws or regulations shallb promptly delivered to the authorities o h eulco Panama by game wardens employed~ by the Institute for appropriate action under the laws of the Repuic of

Panama.

'I further consider it desirable an-d I therefore propose to Your Excellency that our Governments agree to designate the Institute as custodian for the Barro Colorado Nature Monument for an initial period of five years, to be extended for additional 5-year periods upon request by the Institute at least one year in








73


advance of the date of expiration of the period, or until such time as our Governments may mutually agree on other undecrstandings for the administration of the Nature Monument. If, subsequent to the termination of the Panama Canal Treaty, the Republic of Panama should desire to terminate the custodianship of the Institute of the Nature Monument, I consider it desirable and I therefore propose that our Governments agree that the decision take effect one year after

the day on which the Republic of Panama shall inform the United States of this intent.

If the foregoing understandings proposed for

custodianship of the Barro Colorado Nature Monument by STRE are acceptable to the Government of the Republic of Panama, I propose that this note and Your Excellency's affirmative response constitute an agreement between our Governments concerning

this matter.

Accept, Excellency, the renewed assurances of my highest cbnsideration.

For the Secretary of State:




Ellsworth -Bunker
Ambassador at Large








74


DARTMENT OF STATE
WASHINGTON




Excellency:

As you are aware, the<>Smithsonian Troical Research Institute, a trust instrumentality ofth United States of America, hereinafter called "the> Institute," has, for several years, carrie u experimental and research activities of an exclusive scientific nature in various parts of the Republic o Panama. Those activities are described and authorized in Contract No. 1, January 5, 1977, signed by Dr. Abraham Saied, Minister of Health, and Dr. Ira Rubinoff, Director of the Institute. As set forth ~ in the seventh clause of the contract, its duaion is indefinite, but it may be terminate if one of the parties so desires, provided that it notify the other one year in advance of the date selected for termination,Despite the foregoing, it is obvious that the Institute's legal- situation and the


His Excellency

R6mulo Escobar Bethancourt,

'Chief Negotiator.







75


thought it pertinent to propose to you, in compliance with precise instructions from my Government, that the Republic of Panama and the United States of America agree on the Institute's continuation of its scientific activities in the Republic of Panama,

after entry into force of the Panana Canel Treaty and related agreements, in accordance with the provisions of the above-mentioned contr ;c t and in order to achieve the objectives therein set forth.

The agreement which I present to yo' for

consideration would remain in effect for five years from the date of the entry into force o:c the Panama

Canal Treaty and would be extended autocaltically for

5 year periods until either Government ave notice of termination, at least one year before the date of automatic extension.

I consider it advisable to propose to Your

Excellency that if one of the parties to; the contract should wish to terminate it on the basis of the

seventh clause thereof while the Panama Canal Treaty is in force, our Governments agree thaK, unless

there is a mutual understanding to replace the contract, the contract and the agreement ?oposed in this note shall remain in force.

It could also be agreed, and I so propose to Your Excellency, that, if either part; .ishes to terminate the aforementioned contract after the

expiration of the Panama Canal Treaty, our Governments shall immediately initiate consul ations











concern ing futue legal s

Institute and its facilities, proprtie personnel in the Repuhic of Panama, befor thecontract expires.

With respect to facilities ad areas in various parts of the Ist listed and described in the an7x to t use of which has not been grantd by Panama to the United States of A c by a ot

means, I propose that they be ra4e aiblet Institute for its exclusive-tise it is udrto that this agrLment will not .fect the right o the parties to the contract to enter into u eq agreements on the terms of: the In s tl

of other facilities and land and water are in

Republic of Panama which the latter may desirable to make available to the Institut uses and purpses defined in t-he contract.

I wish to propose that our Governets ree

that, as long as the Pnaa Canal treaty r ins

force, the United States of Ajr rica may permit the Institute to use any portion o the d nd

and of the facilities lced therein, si within the land and water areas t se of wi is
granted by the Treaty to the Uited States o for purposes of the afoe cot

to terms and conditions consistent the

Canal Treaty, as the Unied Sta of jmrica & ay

define them.








77


I further wish to propose to Your Excellency

that upon cessation, under the Panama Canal Treaty,

of the right of the United States to use any laitd

* and water areas and facilities located therein which

Are being used by the Institute, our Governments

immediately begin talks intended to reach agreements

permitting the Institute to continue to use such

areas or facilities.

The possibility should be considered, Your

Excellency, that the Republic of Panama may establish

procedures whereby any natural or legal person could

acquire, in accordance with the law .s of Panama, title to land and water areas or properties located therein
which were formerly a part of the territory constituting the Panama-.Canal Zone. I therefore propose

to you that, such being the case, our Governments agree that the Republic of Panama, subject to the applicable laws, shall grant the Institute rights,

other than real property title, with respect to any

land and water areas or properties in use by the

Institute at' the time when such procedures are

established. These rights will be granted by the Republic of Panama by an agreement or other means

not less favorable than the most favorable granted by the Republic of Panam to any other natural or

juristic person.

Finally, Your Excellency, I should l'ike to

propose that in the event that the Republic of

Panama does not establish such procedures for

transfer of title to land and water areas or

properties located therein to natural or legal persons

other than the Government of the Republic of Panama,










the two Governments agree that the Government of the Republic -of Panama shall place at the disposal of the Institute, free ~f cost, the use of all areas and facilities referred to in this letter and any others that may be used by the Institute for the purposes defined in the aforementioned contract.

An exception will be made for cases in wh.th

the two Governments or the parties to the aforementioned contract might reach a mutual agreement on other terms.

If the aforementioned proposals relating to the operation in the Republic of Panama of the Smithsonian Tropical Research Institute are accptble to your Government, I should like to propose th1t this note and Your Excellency's affirmative reply constitute an agreement between our Governments concerning this matter.

Accept, Excellency, the renewed assurances of my highest consideration.

For the Secretary of State:




Ellsworth Bunker
Ambassador at Large







79





The following facilities and lands and waters shall be made available for the continued exclusive use of the Smithsonian Tropical Research Institute.

1. S.Pithsonian Tropical Research Institute Headquarters, shops, administrative offices, cages and laboratories on Gorgas Road.

2. Tivoli Site. Comprises approximately 4.8 acres at the site of the former Tivoli Hotel and adjacent Tivoli Kitchen structure.

3. Nlaos Island. All facilities and areas being used by the Smithsonian Tropical Research Institute on the date the Panama Canal Treaty enters

into force.

4. Flamenco Island. All facilities and areas being used by the Sithsonian Tropical Research Institute on the date the Panama Canal Treaty enters into force.

5.- Pipeline Road Reserve. Approximately 37 acres of land near Pipeline Road at coordinates PA 391116 (Sheet 4243 II, Gamboa).




















98-991 0 78 7








80








EMBAJADA DE PANAMA
WASHINGTON, D.C. 20008 7 dc septie bre de 1977


Excelencia: *

Tengo el honor de referirme a la nota de Su

Excelencia, con fecha de hoy, relativa a la

designacion del Instituto Smithsonian para

Investigaciones Tropicales como custodio del

.Monumento Natural de Barro Colorado, que d'ice

lo siguiente:

Excellency:

I have the honor to refer to the Agre:ment pursuant to Article VI of the CoItventon on Nature Protection and Wildlife Preservation

in the Western Hemisphere, and to the Pana:.a

Canal Treaty and related agreements signed on September 7, 1977 by representatives of

the United States of ericaa and the Re1pulic

of Panama. Article III of the Agreement

relating to the Convention on Nature Protection

provides that our Governments may agree from

time to time on such arrangements as may be

mutually convenient and desirable to facilitate

their collaboration in the use of the BarrColorado Nature Monument for the purposes of

scientific research and investigation.

I consider it desirable within the spirit of the aforementioned Convention and for the purposes of the Agreement based therces that


Su Excelencia

Ellsworth Bunker,

Embajador sin Cartora de loo






81


our Govenments agree that the Smithsonian Tropical Research Institute (STRI), a trust instrumentality of the United States of America, which I shall hereinafter call the Institute, be designated by both Governments as custodian of the Barro Colorado Nature Monument. I propose that our Governments further agree that the Institute shall, during the period of its custodianship, have sole responsibility to act on behalf of our Governments in authorizing use of the Uature Monument for the purposes of scientific research and investigation and for its protection as envisaged in the aforementioned Convention and our Agreement based thereon. In the event that one of the Parties should attempt to take any action related to the efficient operation of the Panama Canal as provided for in Article V.of our Agreement, I propose that the Institute, as custodian, be advised in advance and invited to comment on the potential impact of such action on the overall integrity of the Nature Monument.

I consider it desirable and to that end I propose to Your Excellency that, during the period of its custodianship, the Institute be

authorized to employ scientific and support staff, to include game wardens, as necessary to enforce such laws and regulations as nay apply to the protection of the Nature Monuiaent.








82


Persons violating the integrity of the Nature Monument contrary to the provib ions of such laws or regulations shall be promptly delivered to the authorities of the Republic of Panama IA

by game wardens employed by the Institute for appropriate action under the laws of the~ Republic of Panama.

I further consider it desirable and I

therefore propose to Your Excellency that our Governments agree to designate the Institute as custodian for the Barro Colorado Nature

Monument for an initial period of five years, to be extended for additional 5-year periods upon request by the Ins titute at least one year in advance of the date of expirationi of the period, or until such time as our Governments may mutually agree on other understandings for the administration of the Nature Mlonument. If# subsequent to the termination of the Panamia Canal Treaty, the Re-public of Panama should desire to terminate the custodianship of the Institute of the 11ature Monument,, I consider it desirable and I therefore propose that our Governments agree that the decision take effect one year after the day on which the Republic of Panama shall inform the United States of this intent.

If the foregoing understandings proposed for custodianship of the Barro Colorado Nlature Monument by STRI are acceptable to the Government







83


of thie Republic of Panama, I propose that

this note and Your Excellency's aff-irmrative

response constitutelan agreement between our

Governments concerning this matter.

Accept, Excellency, the renewed assurances

of my highest consideration.

Tengo el honor de confirmar que mi Gob ierno

accede al. entendimiento dispuesto en la nota de Su' Excelencia,* y en que su nota y esta nota de respuesta constituiran un acuerdo entre nuestros dos Gobiernos.

Ruegole acepte, Excelencia, las seguridades reiteradas de mi mas alta consideracion.





mu 0 ilEs'obar Bethancourt
Jefe de las -L--g-c t-aciones








84








EMBAJADA DE PANAMA
WASHINGTON, D.C. 20008 7 de septiembre de 1977


Excelencia:

Tengo el honor de referirme a la nota de Su

Excelencia con fecha de hoy, relative a las

actividades del Instituto Smithsonian para

Investigaciones Tropicales en la Republica de

Panama, que dice lo siguiente:

Excellency:

As you are aware, the Smithsonian Tropical Research Institute, a trust instrumentality of the United States of America, hereinafter called "the Institute," has, for several years, carried

out experimental and research activities of an exclusively scientific nature in various parts

of the Republic of Panama. Those activities are

described and authorized in Contract No. 1,

January 5, 1977, signed by Dr. Abraham Saied,

Minister of Hlealth, and Dr. Ira Rubinoff,

Director of the Institute. As set forth in the seventh clause of the contract, its duration is indefinite, but it may be terminated if one of

the parties so desires, provided that it notify

the other one year in advance of the date

selected for termination.

-Despite the foregoing, it is obvious that

the Institute's legal situation and the development of its activities will be affected by the


Su Excelencia

Ellsworth Bunker,

Embajador sin Cartera de los

Estados Unidos de America.











entry into force of the Panama Canal Treaty and related agreements, signed September 7, 1977 by representatives of the Republic of Panama and the United States of America. In anticipation of that eventuality, I thought it pertinent to propose to you, in compliance with precise instructions from my Government, that the Republic of Panama and the United States of America agree on the Institute's continuation of its scientific activities in the Republic of Panama, after entry into force of the Panama Canal Treaty and related agreements, in accordance with the provisions of the ahove-irentioned contract and in order to achieve the objectives therein

set forth.

The agreement which I present to you for consideration would remain in effect for five years from the date of the entry into force

of the Panama Canal Treaty and would be extended automatically for 5 year periods until either Government gave notice of termination, at least one year before the date of automatic extension.

I consider it advisable to propose to Your Excellence that if one of the parties to the

contract should wish to terminate -it on the basis of the seventh clause thereof while the Panama Canal Treaty is in force, our Governments

agree that, unless there is a mutual und cr -. a-dinc to replace the contract, the contract and the agreement proposed in this note shall remain in force.








88


It could also be agreed land I so props to Y our Excellency, that, if eit-her party wishes to terminate the aforementioned contract after the expiration- of the Panama Canal Treaty, our Governments shall immediately initiate consultations concerning the future legal situation of the Institute and its facilities, properties, and personnel in ~the Republic of Panama, before the contract expires.

With respect to facilities and land and water areas in various pa rts of the Isthmus of Panamna listed and described in the annex to this note, the use of which has not been granted by the Republic. of Panama to the United States of America by any other means, I propose that they be made available to the Institute for its exclusive use. It is understood that this agreement will not affect the right of the parties to the. contract to enter into subsequent agreements on the terms of the Institute's utilization of other facilities and land and water areas in the Republic of

Panama which the latter may consider it desirable to make available to~the In~stitute for the Uses and purposes defined in the contract.

I wish to propose that our G&~ernmnts

agree that, as long as thie Panama Canal Treaty remains in force, the United States of America may permit the Institute to use any portion of' the lands and waters, and of the facilities






87


located therein, situated within the land and water areas the use of which is granted by the Treaty to the United States o 2America, for purposes of the aforementioned contract, subject to terms and conditions consistent with the Panama Canal Treaty, as the United States of America may define them.

I further wish to propose to Your xcel-lency that upon cessation, under the Panas.. Canal Treaty, of the right of the United States to use any land and water areas and facilities located therein which are being used by the Institute, our Governments immediately begin talks intended to reach agreements T;pmitting the Institute to continue to use such areas or facilities.

The possibility should be considered, Your

Excellency, that the Republic of Panara may establish procedures whereby any natural or legal person could acquire, in accordance with the laws of Panama, title to land and rater areas or properties located therein which were formerly a part of the territory constituting the Panama Canal Zone. I therefore propose to you that, such being the case, our Governrments agree that the Republic of Panarma," subject to the applicable laws, shall grant the Institute rights, other than real-property title, with respect to any land and water areas or properties in use by the Institute at the time when such







88


procedures are establishe. These righswl be grantCed by the Republic of Panaab an agreement or other means not less favoal than the most favorable granted byte eubi

of Panama to any other nara or jurstic person.

Finally, Your Excellency,- I should lke-t propose that in the event that the Rpbic~ of Panama does not establish such procedures fo transfer of title to land and water areas or> properties located therein to natural or Ilal persons other than the Government of the Reulc of Panama, the two Governments &gree that h Government of the Republic of Panama shal plc at the disposal of the institute, free ofcot the use of all areas and facilities referee to in this letter, and any others that myb used by the Institute for the purposes define in the aforementioned contract.

A~n-exception will be made for cases in which the two Governments or the parties to~ the aforementioned contract might reach a. riutual agreement on other terms.

If the aforementioned proposals reeling to the operation in the'Republic of Paam of the Smithsonian Tropical~ Research Tnstite are acceptable to your Government, I hol like to propose that this note adYour Excellency's affirmative reply constitute agreement between our Governments cocriy this matter.







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*,Acceptt Excellencyt the renewed assurances

of ry highest consideration.

Tengo el honor de confirmer la aceptacion por

parte de rdi Gobierno de las propuestas contends. en la presented y su acuerdo de que su nota v esta respuesta constituiran un acuerdo entre nuestros dos Gobiernos.

Ruegole accept, Excelencia, las seguridades reiteradas, de mi mas alta consideration.


-low

17" S Cobar Bethancourt
Jefe de las Negociaciones














The following facilities and lands and wa s shall be made available for the continued exclsi

use of the Smithsonian Tropical Research Institute.

1. Smithsonian Tropical Research Institute Headquarters, shops, administrative offices, cages and laboratories on Gorgas Road.

2. Tivoli Site. Comprises approximately 4.8 acres at the site of the former Tivoli Hotel and

adjacent Tivoli Kitchen s tri cture.

3. Naos Island. All facilities d areas being used by the Smithsonian Tropical Research .Institute on the date the Panama Canal Treaty enters into force.

4. Flamenco Island. All facilities and areas being used by the Smithsonian Tropical Research Institute on the date the Panama Canal Treaty enters into force.

5. Pipeline Road Reserve. Approximately 37 acres of land near Pipeline Road at coordinates PA 391116 (Sheet 4243 II, Ganboa).







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DEPARTMENT OF STATE
WASHINGTON
September 7, 1977


Excellency:

I have the honor to refer to the Corgas Memorial Institute of Tropical and Preventive Medicine, Incorporated, and its subsidiary, the Gorgas Memorial Laboratory. The Institute and Laboratory were established in memory of Dr. William C. Gorgas for research on diseases endemic to Central America and northern South America. The Institute receives from the

Government of the United States an annual contribution in Dr. Gorgas' memory for the operation and maintenance of the Laboratory.

The Gorgas Memorial Laboratory is established and operates in Panama under provisions of Law 15 of October 16, 1930, Law 5 of February 5, 1953 and Law 84 of September 20, 1973 of the Republic of Panama. The Institute has informed the United States of its desire

to continue its operations in Panama pursuant to the provisions of these laws.

I refer further to the Panama Canal Treaty and

related agreements signed this date by representatives of the Governments of the United States and Panama, .nd, in that connection, propose that our Governments agree that, subsequent to the entry into force of the Treaty, the Gorgas Memorial Institute and Laboratory shall

continue to enjoy the sole and excrhiv e., w thout



His Excellency

Romulo Escobar Bethancourt,

Chief Negotiator.











charge, of the following areas of lands and waters, and installations, being used by the institute and Laboratory prior to the ,entry into force of the Treaty:

Juan Mina Plantation, approximately 15

acres of land, and one multi-purpose building situated thereon, located on the east side of the Chagres River in the Balboa East District;

and Building 265, a laboratory building

adjacent to the Gorgas Hospital, Ancon, and

adjacent land.

It is understood that this arrangement shall~ continue for an initial period of five years,an will be renewed upon request at least one year in advance by the Gorgas Memorial Institute,

I propose further that in the event the Republic of Panama establishes any mearrs whereby any legal or natural person other than the Government of the Republic of Panama may acquire title under the laws of the Republic of Panama to any areas of lands and waters, or other real property located thereon, which prior to the entry into force of the Panama Canal Treaty formed part of the Canal Zone, our Governments agree that the Gorgas Memoral .Institute shall be~ permitted by the Republic of Panama to acquire ttl to the above-mentioned areas the use of'which it enjoys. Such title shall be accorded by the Republic of Panama pursuant to an arrangement not less favorablet than that accorded by the Republic of Panama*.to any~ other such legal or natural person.