Citation
Isthmian canal policy questions;

Material Information

Title:
Isthmian canal policy questions; Canal Zone--Panama Canal sovereignty; Panama Canal modernization, new canal
Series Title:
89th Congress, 2d sess., House. Document no. 474
Creator:
Flood, Daniel J
Place of Publication:
Washington, D.C.
Publisher:
U.S. G.P.O.
Publication Date:
Language:
English
Physical Description:
v, 523, xiv pages : illustrations, maps ; 24 cm.

Subjects

Subjects / Keywords:
Panama Canal (Panama) ( lcsh )
Panama -- Panama Canal ( fast )
Genre:
federal government publication ( marcgt )
non-fiction ( marcgt )

Notes

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

Record Information

Source Institution:
University of Florida
Holding Location:
University of Florida
Rights Management:
This item is a work of the U.S. federal government and not subject to copyright pursuant to 17 U.S.C. §105.
Resource Identifier:
00732709 ( OCLC )
ocm00732709
Classification:
HE537.65 1966 .F56 ( lcc )
386/.444 ( ddc )

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











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







ISTHMIAN CANAL POLICY QUESTIONS


CANAL ZONE-PANAMA CANAL SOVEREIGNTY
PANAMA CANAL MODERNIZATION NEW CANAL




SELECTED ADDRESSES

BY

REPRESENTATIVE DANIEL J. FLOOD OF PENNSYLVANIA










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





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






EIGHTY-NINTH CONGRESS OF THE UNITED STATES OF AMERICA


AT THE SECOND SESSION


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






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












FOREWORD


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


















Digitized by the Internet Archive
in 2013












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














CONTENTS


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














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

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






2 ISTHMA- CA POLICYQUSIN

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





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ISTHMIIAN CANAL POLICY QUESTIONS 3

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






4 I$TE.MIAN CANAL POLICY QUESTIONS

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

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

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





ISTIDLAN CANAL POLICY QUESTIONS 5

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






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





ISTHMIAN CANAL POLICY QUESTIONS 7

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






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





ISTIMIAN CANAL POLICY QUESTIONS 9

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

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





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

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





ISTHMIAN CANAL POLICY QUESTIONS 1

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






12 SIINCNLPLCQUSIN







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

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






ISTHMAN CANAL POLICY QUESTIONS 13

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


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






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


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

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





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






ISTHMIAN CANAL POLICY QUESTIONS 15

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








16 1IS CANAL POLICY


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

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







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

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










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

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


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







ISTHMIAN CANAL POLICY QUESTIONS 19

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


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










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

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







ISTHMIAN CANAL POLICY QUESTIONS 21

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





.4
'1







,IJ












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





ISTHIAN CANAL POLICY QUESTIONS 23

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

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






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

5IQUNITEDC STTE

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

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

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







ISTHMIAN CANAL POLICY QUESTIONS 25

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

DISORDERS SPREAD TO TERMINAL CITIES

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






26ISHINCNLPLCQUSIN

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


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

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

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

wch oenydcae n ul polie ytet tpltos





ISTHMIAN CANAL POLICY QUESTIONS 27

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

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

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

SECRETARY HUGHES REINFORCES OUR POSITION. 1923

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






28 ITMNCNLPLC USIN

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



Goverdnet udnt anQ olfo ntrit n icusofetn


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

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

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

has ee iul deibe ySceare fSaeasaaslt






ISTKMAN CANAL POLICY QUESTIONS 29

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

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











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

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






ISTHIMIAN CANAL POLICY QUESTIONS 31

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


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

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









At least two of the groups wereacopnebyhtgmer


aethd*q bfr operation was baredot

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


m fan



inePana, saild he oeraio whargied ditorin hepeace.






ISTHMIAN CANAL POLICY QUESTIONS 33

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


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

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






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

Thr sacnieal lnfra nerto fteeooyo h eta




ISTHMIAN CANAL POLICY QUESTIONS 35

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

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






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

Canal Zone authorities returethflgtohePnmiagvrmernt.


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

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

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

Student PeietAeln enx
opposite teFrinMnsrbidn.Mrhn ihu folc

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





ISTHMIAN CANAL POLICY QUESTIONS 37

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






38 SEMINCNLPLCQUSIN


wh enretundfo teCnlZn.Te eetefasteSu
students w e vhyPi


aenhsrplafterwrs wnteoeith Oprto Seei ny onThe paaealcon entral Prvienue enetttepesdnilplc


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

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

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


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

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

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

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

them Mondy night to the preinialplae






ISTHMIAN CANAL POLICY QUESTIONS 39

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


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

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











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

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

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

We also know thtther~e areCmuitpategttigtruh

senit in acOtion rightheeiPaaaThdotnsmuhd b

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




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






ISTHMIAN CANAL POLICY QUESTIONS 41

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

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






42 SEMNCNLPLC QUSIN






Manuel~GURD Arazdid f onuson




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





o llunees canremeptroldtesho fergadmnwr ih


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










yon raz unrlwul eorel Itdmned the ofaicerA'

rtuevladrpaethorgnlsent demedert duation
MiirVictor Juliao ndied

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



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

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




i~ico ia andi theenaioa guar comner.Teyacs


Juliao of fa~iili ilingt qupad tfchosprpry

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






ISTHMIAN CANAL POLICY QUESTIONS 43

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


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






44ISHINCNLPLCQUSIN

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

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


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

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

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

are ein ket attheschol ill omene omesto et hem






ISTHMIAN CANAL POLICY QUESTIONS 45

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






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




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









Pidente sugsedtaomcmisinb fom opiedo i



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

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

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





STHMIAN CANAL POLICY QUESTIONS 47

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


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

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

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






48ISHINCNLPLCQUSIN



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


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


Students Union, confirmed ta h rsdn a rpsda x



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


Led by conniving politicos, the public gvtesuet uhapoa ationfrmh.

PARADEBRKNU





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






ISTHMIAN CANAL POLICY QUESTIONS 49

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

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







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

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






52 IT2INCNLPLC USIN

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





ISTBHIAN CANAL POLICY QUESTIONS 53

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







54 ISTI-nHAN CANAL POLICY QlJklg nOWS

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






ISTHMIAN CANAL POLICY QUESTIONS 55

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






56ISHINCNLPLCQUSIN



Zone officials a seven-pointmeoadmlsigweantrtet

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

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

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

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ISTHMIAN CANAL POLICY QUESTIONS 57

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


REPUBLIC OF PANAMA STUDENTS REITERATE INVITATION

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





58 ITDINCNLPXC USIN


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ISTHMIAN CANAL POLICY QUESTIONS 59

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

67-S43-66--5






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






IST-IIAN CANAL POLICY QUESTIONS 61

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

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










National Institute.

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

Meanwhile, University Student UninpeietCalsAeln


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



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

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





ISTHMIAN CANAL POLICY QUESTIONS 63

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













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


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

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

Thernisenhower suppotme nt otra iegetetipato






wh as one wsp roal i etn tL r awt ersna






ISTHMIAN CANAL POLICY QUESTIONS 65

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






66 ISTIEMAN CANAL POLICY QUESTIONS

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


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

U.S. MISSION GETS PANAMA's ECONOMIC PLAN

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






ISTHMIAN CANAL POLICY QUESTIONS 67

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

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

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






n8

divorced fo aaaCnloeain n hudntb ada
blackmail to stop Paaastrasonainlznornentoaiing thecaaosresay

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


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



MORE PANAMADEA~ I)EYIEsBOHE ~t ~uBE

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

life of thisstaeiwtray


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





ISTKMIAN CANAL POLICY QUESTIONS 69

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

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






70 ISTHMIAN CANAL POLICY QUESTIONS

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

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






ISTHMIAN' CANAL POLICY QUESTIONS 71

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






72 SEnNCNLPLCQUSIN


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


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











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





74 IST2MEUAN CNL PLC USIN

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

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


dogting anbec mater henin


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

dasconfoThisg to be wrlwie 4osiaoilpormo omns orn aginIs h ntetts

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


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




casemobly reitsgleades tof mee Udntey Steraetigorhtrc





ISTIIAN CANAL POLICY QUESTIONS 75

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






76 SDINCNLPLC UMN

would ipsiftevlidity of itsencmtwrevrcoed.

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


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

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







ISTHMIAN CANAL POLICY QUESTIONS 77

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

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






78 SB A CAA:PLC QUSIN





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SVETY ISSU ELLE XA M AND BUID

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ad acqued wroderth tret n of c ofpblciteet


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


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



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





IST-HMIAN CANAL POLICY QUESTIONS 79

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

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






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





ISTHMIAN CANAL POLICY QUESTIONS 81

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

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

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






82 rs=ma" CANAL POLICY QUVSTIONS

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





ISTELMIAN CANAL POLICY QUESTIONS 83

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






84 ITIINCNLPLC USIN

appeal or gave any ntc oayitrainlbd rt h ra

"mutualunesadnancoprto"tashudpealSml


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

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







ISTH1MIAN CANAL POLICY QUESTIONS 85

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


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

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

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








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




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

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


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





(By EarlHrding, viceprsdnNtoaEcomcCuil


The great American i veawayr series did notstrwihheMsal



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






ISTUMIAN CANAL POLICY QUESTIONS 87

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










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ISTMLLAN CANAL POLICY QUESTIONS 89

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






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UNIVERSITY OF FLORIDA LIBRARIES

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89th Congress, 2d Session House )ocument No. 474 ISTHMIAN CANAL POLICY QUESTIONS CANAL ZONE-PANAMA CANAL SOVEREIGNTY PANAMA CANAL MODERNIZATION NEW CANAL SELECTED ADDRESSES BY REPRESENTATIVE DANIEL J. FLOOD OF PENNSYLVANIA .4 U.S. GOVERNMENT PRINTING OFFICE 67-843 WASHINGTON : 1966

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H. Con. Res. 925 Passed August 18, 1966 EIGHTY-NINTH CONGRESS OF THE UNITED STATES OF AMERICA AT THE SECOND SESSION Begun and held at the City of Washington on Monday, the tenth day of January, one thousand nine hundred and sixty-six Concurrent Resolution Resolved by the House of Representatives (the Senate concurring), That the document entitled "Isthmian Canal Policy Questions, Canal Zone-Panama Canal Sovereignty, Panama Canal Modernization New Canal", a compilation of addresses and remarks by Congressman Daniel J. Flood, be printed as a House document, and that an additional ten thousand five hundred copies be printed of which seven thousand five hundred copies shall be for the use of the House of Representatives and two thousand five hundred copies shall be for the use of the Senate. Attest: RALPH R. ROBERTs, Clerk of the House of Representatives. Attest: EmERY T. FRAZIER, Secretary of the Senate. (II)

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FOREWORD By HON. JoHN IT. DENT, REPRESENTATIVE Fnomr PENNSYLVANIA Since World War 1I the history of the Panama Canal has been marked by a succession of crises as to the best means for providing increased transit facilities. The principal proposals for supplying such capacity are(a) Modernization of the existing Panama Canal by increasing its capacity and operational efficiency through the major modification of the 1939 third locks project (53 Stat. 1409) to provide a summit-level terminal lake anchorage in the Pacific end of the canal to correspond with that in the Atlantic end: or (b) Construction of a new canal near the present site in the Canal Zone of sea level (tidal lock) desi-n: or (c) Construction of a new canal at Nicaragua or elsewhere. Consideration of these and other vital questions of the grreatest importance has been gravely complicated, as a result of noisy agitations and demands by Panamanian radicals as regards our authority over the Canal Zone and by a series of surrenders to Panama by the United States of important rights, power, and authority. These concessions include those provided by the 1955 treaty and subsequent executive actions, with some of the latter in direct conflict with the formally expressed intent of the Congress. Understanding the nature of the Panama Canal problem in its broadest aspects, Representative Daniel J. Flood, of Pennsylvania, after thorough study of the subject, undertook in a series of illuminating addresses and statements to the House of Representatives, to clarify the principal issues and to aid in the development of wise and just Isthmian Canal policies by our Government. His addresses, which are extensively documented and based upon years of observation as well as study, are, indeed, unsurpassed in our national history in expository content and value and have attracted the widest attention among thoughtful students of interoceanic canal problems. Because of the crucial importance of making the information developed in these addresses available, in convenient form, to the legislative and executive branches of our Government and the country at large, the more important ones are included in this document. A comprehensive bibliography on interoceanic canal history and problems was included in an address to the House on September 2, 1964, by Representative Clark W. Thompson, of Texas, under the title of "Isthmian Canal Policy of the United States-Documentation, 1955-64," which, together with the addresses of Representative Flood previously mentioned, furnishes an exhaustive compilation of resource material on the subject. I

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Digitized by the Internet Archive in 2013 http://archive~org/details/isthrnoI00unit

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CON TEN m .March 26, 1958: Panama Canal Zonle:iIl r I U nited States ---------.--_-_-_-_June 9, 1958: Paiina Cancl-Latest >22 July 23, 1958: Panama Cauz: ( bjee n I o ir: i 51 February 25, 1959: letllnian Canal P-1 i Ch A o t 73 Juie 2., 1959: Panama Caiai Zitme ilA rl --127 April 19, 1960: Panama Canal: Key Tarc 1 o o Fro 15 April 12, 1962: Monroe oroctine Or Kli brn r -eri--150 June 7, 1962: Isthmian Canal Poliey-An Evalual ion 177 June 13, 1962: President Taft: Statement, on Canal Zone SoverI J u risd ictio n _---_-_ -_-_-_---_-_-_-_-_-_193 February 18, 1963: Panama Canal Procrastination Perilous ------------195 April 9, 1963: Congress Must Save the Panama C:nl-201 May 8, 1963: Panama Canal Questions: Imnlnediate Action Reqiiired229 June 27, 1963: Crisis in Canal Zone: Panamanian -ltitimat in-------242 September 26, 1963: Continued Liquidation of Pawuna Canal: Congress Must Act -------------------------------------------------------269 October 22, 1963: Canal Zone Crisis: Plan for Action ------------------283 November 13, 1963: Canal Zone Crisis: Plan for Action-Si1pplementary 290 December 10, 1963: Panama Canal Picture: The Real "Ugty Amiericans" and Their Journalistic Boomerang --------------------------------298 February 7, 1964: Panama Canal-Employment of Aliens for Canal Zone Police Tantamount to Treason------------------------------------303 March 9, 1964: Panama Canal: Focus of Power Polities ---------------305 March 11, 1964: Panama Canal: Formula for Future Canal Policn: 345 April 7, 1964: Panama Canal Zone: Most CostIv U.S. Territorial Possession -----------------------------------------------------------361 April 14, 1964: Panama Canal Crisis: Irresponsible Jounais----------363 April 20, 1964: Panama Canal Zone: Mighway Contro al for Protection ------------------------------------------------------370 1\Iay 5, 1964: Under Two Flags: Blinders, Coafusion, aind Chaos at Panama----------------------------------------------------------37G May 21, 1964: Panama Canal and the ilto ise m Paer--------399 June 17, 1964: Canal Zone Police : led utr ion S Ihota e, aIIt T :ror409 August 12, 1964: Caribhean Cris i: Continuin Storm Igns D )In1 wm Action Against Further Peril ----------------------------------------------415 April 1, 1965: Interoceanic Canal Problerm : Iui 'r or Cover I'?_--_ 4 2S July 29, 1965: Interoceanie Canal Problem: lnc{iairy or Cover 1 p?5el. 4 o 3 September 7, 1966: Panama Canal Problems: American Legion A iopts Notable Resolution---------------------------------------------517 September 29, 1966: Panama Canal: U.S. Sovereignty or Coulwauwiust Control? ------------------------------------------------------519 V

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[From the Congressional Record, 85th Cong., 2d sess., Mar. 26, 1958] PANAMA CANAL ZONE: CONSTITUTIONAL DOMAIN OF THE UNITED STATES Mr. FLOOD. Mr. Speaker, for a number of years I have been privileged to serve on the Committee on Appropriations with assignments to subcommittees for the Department of Defense, the Department of Commerce, and related agencies. The last includes the Panama Canal Company and the Canal Zone Government. Thus, in the course of my duties, our subcommittee has encountered various problems relating to the Panama Canal and interoceanic canals generally, both in Washington and during visitations on the isthmus and in other areas of the world. To this study I have devoted much time and effort, and have made a number of statements to the House as well as to its legislative and appropriation committees expressing some very definite views on significant phases of the Panama Canal question. Since my first association with this subject, I have noted that ever present in the Isthrmian setup are the relations between the United States and the Republic of Panama. Though these in the main have been satisfactory, I have also observed that special situations affecting the welfare of the Panama Canal enterprise periodically arise and that, accordingly, they require repeated clarification. A recent incident in Panama, because of its grave implications, emphasizes that the Congress and the Nation should be informed further with respect to current hazards for this vital outpost of the United States. What I say here today, I wish to assure our friends in Panama and in all Latin America, will be spoken with the utmost sincerity, good will, and affectionate esteem. I certainly would not advocate any policy except one of the fullest measure of justice and generosity for Panama; and I feel that not only have we been just in our Panamanian relations, but as hereafter shown, most generous, indeed. However, I do believe that the time has come when extreme and radical demands for the surrender by the United States of all its power and jurisdiction in and about the Panama Canal require a frank expression of views by those in authority in the United States. To this end I venture now to address myself and request that there be no interruptions or questions propounded until I conclude. CRISES AT SUEZ INTERACT AT PANAMA Mr. Speaker, the American isthmus is the crossroads of the Americas, and as such has long been a topic for extended debate in the Congress. The statesmen who preceded us here and who early in this century evolved the foundations of our interoceanic canal policies, 1

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ISTHiMIAN CANAL POLICY QUESTIONS have 1ong since passed from the scene. Nevertheless, the great monumet i of their endeavors in the form of the comnpieted canal at Panama and t he treaties> under which it was constructed and has been subseo cnt ly maiained and operated still remain-with the exception tit certaIn of the treaty provisions have been generously liberalized in bebalt of Panama. Sa in dIIla iaal brought into focus by the nationalzation on .July t. 6. of t he Suez Canal by Ezypt. Thue (rast mc ac ~ron at Suez was followed by voluminous propaganda aimed at wresting ownership and control of the Panama Canal from the United States and transferring its jurisdiction to some international or other authority. Munch of that uproar came from Soviet Russia and its satellites, but some came from persons who occupy high office or position in the United States. The latter. wittingly 'or unwittinly. have fostered what has been a lonz-term Communist design that dates back to the critical days of the Russian revolution in November 1917. At that time one of the subjects discussed by the Red guard with John Reed was the internationalization of the Panama Canal. John Reed. as you doubtless know. was a notorious American Communist reporter wrho covered that great political upheaval and, on his death in 1lfP. was 'canonized'' by the Soviets and buried with high Soviet honors in Red Square by the Kremlin wall. And that, Mr. Speaker. was more than 40) years ago-see John Reed. 'Ten Days That Shook the World." M!odern Library 4 1935. page 2:35. Regardless of its origin, or the good intentions of some who have supported this sinister aim, their demands conform to the well-known pattern of penetration and subversion featuiring the tactics of the : nternatke onr comunistic conspi racy. This clamor reached alarmin propc rtioiis by early 1957 and ha'd to be combated. EXPOSURE SERVED TO HALT ADVERSE PROPAGANDA In a addeirs to the House on Mfev 29. 1 9.7. followmzg my last visit to tla khmns I die uzed at considerable length the iuri'dical hasis of U.S. ownership and control of the Panama Canal. and its diplomatic history since opening to traffic. Previous to my addres. Representative Brooks Hays. of Arkansas. on3fypo.spke to the House on the same theme and included a pf dscusion.by recornized authorities. of the diplomatic angles of t-he Suez and Panama Canal problems. and their basic differences. These two addresses. together by their clarifications, served to halt 7or a time the 19.7 adverse propaganda campaign against the United States on this subject. especially in Panama. Even though the Isthmnian uproar subsided, it was realized that under present world conditions the calm could not last indefinitely. for the Suez affair had made too strong an impact on the radical elements in Panama and elsewhere, with a renewal of the Communist

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ISTHMIAN CANAL POLICY QUESTIONS 3 "hue and cry" for the abrogation of U.S. ownership and control of the Panama Canal. The only questions were when and in what form would it next arise. PROPAGANDA IN PANAMA REVIVED In a historical sense it did not take long. On december 10, 1957. before the Second Congress of StiidenPts in thle Cit y of Paiimma, R1public of Panama, Dr. Ernesto C 1 ast iero, Vice Minister of ForeinrI Relations of the Republic of Paunma, in the princip al address on that occasion, ald in 1iline with CoirwUmist declaratiolls and policy, attacked the Juridical basis of the IT.S. severe gn (ontrol over the C 1 anal Zone and its ownership of the Panama Canal. This he did in spite of the negotiation of the Eisenhower-Remon Treaty of 1955 now being implemented. Featured by gross distortions and omissions, as well as nonfactual statements, the principal features of his address merit listing with brief comment. These are: First. Assertion that Panama is the "titular sovereign" of the Canal Zone just as Egypt is over the Suez Canal-a gross misstatement of the facts. Second. Claim that under the 1936 treaty both countries have a "joint and vital interest" in the conduct of the enterprise-a statement erroneously implying joint sovereignty. Third. Statement that the doctrine of the Suez Canal has analogies applicable at Panama and that this allegation has "impressed strongly world opinion because of the clear warning it involves"-an implied threat against the United States. Fourth. Declaration that Panama is not receiving the benefits to which, as a partner with the United States in the canal enterprise, it is entitled-a nonfactual statement as Panama, under the treaties, is not a partner but a beneficiary. Fifth. Assertion that, without going into "legalistic discussions or interpretations of previous treaties," Panama should receive half the gross income of the canal enterprise-a wholly absurd and unjustifiable claim that ignores realities. Promptly accepted by the university student congress and backed by Aquilino Boyd, Panama's Minister of Foreign Relations, Dr. Castillero's proposals formed the basis of a resolution by that body and were published in the press of the world. Creating a new wave of propaganda, immediately seized on. reiterated, and augmented by Communist agencies everywhere, this cainpaign is directed toward the total liquidation of United States sovereignty and control of the Pnnama Canal. In this special connecti on, it is well to note that, the proverbial practice of Communist forces is to spearhead subversion in the free world by means of student bodies. As evidence of such procedures. I have in my possession a picture taken on January 28, 1958, at the Vni versity of Panama. Mounted in large letters above the name S1,1 of thif iis Mtution, which is visited by thousands of tourists en route to various parts of the world, is the inscription, "el canal es nuestro"--he canal i; ours.

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4 ISTIIMIAN CANAL POLICY QUESTIONS Do not these extremists and radicals in Panama realize that the high econoiiic standards they now enjoy are primarily due to the canal and I ihe beIielicent policy of the Unit ed States toward Panania D Do they wish to kill the goose that lays the golden egg? Are they trying to cause select ion of a site outside Panama for a new canal to take care of ever-growing trans-Isthmian shipping? Do they wi to destroy the best interests of their own country ? Iliese and other searching questions that could be priesenlted1 suggest that ihese eleimient s should enga e in extensive self-examIination be fore embarking on their present hazardous course. It is indeed surprising, Mr. Speaker, that sUch troublleiakers did not wait until the United States had expended vast sunis on modernization of the existing canal and then agitate for taking over a far more valuable project. ISTIMIAN AGITATIONS WIN WIDE PRESS COVERAGE In order that accounts of these latest outervs and demands In Panama may be readily available to the Congress, our people, and others concerned, I include to be inserted at the end of mv remarks, and commend for careful examination, a selection of clippings from United States, and Latin-American newspapers. ISTHMIAN HISTORY WELL DOCUMENTED What is the significance of this incident of December last when high government officials of the Republic of Panama undertook to lead in a movement designed to upset the juridical basis for the Panama Canal enterprise and the equitable relations between the two countries, as well as to ignore and disregard recent treaty provisions? To answer these questions adequately it is essential to know the diplomatic history of the Republic of Panama as well as that of the Panama Canal, the construction of which was under taken by the United States as a mandate of civilization. These subjects, as shown by an excellent documentation on the Isthinan Canal policy of the United States, prepared by the gentleman from Texas, Representative Clark W. Thompson, and published in the Congressional Record of March 23, 1955, have been recorded in authoritative writings and addresses listed therein. These and many other statements published in later issues of the Record are commended for perusal, especially by those concerned with the diplomatic features of the canal subject. The situation at Panama has now become acute, and demands our prompt attention. In the light of ascertainable facts the statemnts by these radical elements indeed constitute pure jingoism and impossible demands. Their rantings do a great disservice both to Panama and the United States and must be met forthrightly before the present crisis worsens. PANAMA CANAL-RESULT OF LONG-RANGE POLICY OF THE UNITED STATES Because of the importance of the juridical base for the Panama Canal enterprise, in grasping the essentials of the current situation, I shall emphasize again what I said to the House on May 29, 1957.

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ISTHMIAN CANAL POLICY QUTIONS 5 The legal foundation of our interoceanic waterwiv conv1t of 1 -tl key treaties: First. The I1av-Paunefote Treatv of i9Yi between Great Briain and the I united tates, which facilitated it con a:tin and adopted the main points in the Convention of Conltan:min7opLe of 7 as r for its operation, regulation, and imanagemien. Second. The Hav-Bunau-Varilla Treatv of November IS, 1dy3. between the Republic of Panama and the United St ates. ( )n the art of Panama, this treaty granted to the United States in perpeeuity the V .I occupation, and control of the Canal Zone for tile construction. inatenance, operation. sanitation. and protection of the Panama Canal a if the United States were sovereign of the territorV. and mo1t 1 ignificantly, to the entire exclusion of the exercise by the Rlepullic of Panama. of any such sovereign rights. power. or authority. On tile part of the United States. the main point was that it Luaranteed the independence of the Republic of Panama. which had just seceded from Colombia and whose existence as a separate nation, as will be discvised later, absolutely depended on the United States recognition and success of the canal enterprise. Third. The Thomson-Urrutia Treaty of April 6, 1914, proclaimed March 30. 1922. between the United States and the Republic of Colombia. the sovereign of the isthmus prior to the Panama revolution of N ovember :3, 191 3. That treaty aimed at removal of all the misunderstandings growing out of the political events in Panama in Novemer 1903. restoration of the cordial friendship that had previously existed between Colombia and the United States. and delnition and regulation of their rights and interests with respect to the Panama Canal. The negotiation of these treaties, it should be stressed. was not accidental, but the result of lono-range interoceanic canal policies of the United States developed over many years. Not only have the requirements of these treaties been carefully followed throughout the history of the canal enterprise but, in addition, the treaties are now mentioned in Public Law 841. S1st Congress. approved September 26. 190. pop'ilarlv known as the Thompson Act. This law specifies that the levy of tolls is subject to their provisions. COLOMBIA S INTEREST PROTECTED BY TREATY Because of the importance of the Thomson-Urrutia Treaty. and the fact that it is not as well understood as it should be. I shall summarize its principal provisions. In article I. Colombia recognizes the title to the Panama Canal and Panama Railroad as "now vested entirely and absolutely in the United States of America. without any encunibrances or ind'emnities whatever." Furthermore, this article states that Colombia shall enjoy certain rights with respect to the canal. which include: First. Transit through the canal of Colombian troops. materials of war, and ships of war, without paying any charges to the United States. Second. Exemption from any charge or duty on the products of the soil and industrv of Colombia passing through the canal, as well as Colombian mails, other than those to which the products and mails of the United States may be subject.

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6 ISTHMIAN CANAL POLICY QUESTIONS Third. Exemption of Colombian citizens crossing the Canal Zone frommI every toll, t ax, or duty to which the citizens of the United States -ire ot subject. fIoti hi. I se of the Panama Railroad or any other railroad substi t Ited t here for, in event of interruption of canal traffic, for the transpot1 of t roops, miaterials of war, products and mails of Colombia, payI I MIIy I I ie sa ime charges and dut ies as are imposed for such transport for the 1 listed St ats. In addition, oflicers, agents, and employees of the C olombiih ail Governnent are entitled to passage on the railroad under t he s:ame terms as those of ilie United States. F'i ft i. Tranmisport by the Panania Railroad of Colombian coal, petroleiml, 1111d(1 sea salt, in event of interruption of canal traffic, free of clui. re except act ual cost of handling and transportation not to exceed one-hialf the chiarges levied on similar products of the United States. In article II, the United States agreed to pay Colombia the sam of $25 million, which was done. By article Il, Colombia recognized Panama as an independent nation with boundaries as derived from the Colombian law of June 9, 18155, and agreed to conclude with Panama a treaty of peace and friendship to bring about regular diplomatic relations between the two countries. All this was accomplished, together with a treaty agreement between the two countries as to a boundary line. While Panana was not a party to this treaty, yet she gave it her grateful moral acquiescence because of the supremely important benefits she derived therefrom. Thus, it is clear that Colombia not only has substantial rights with respect to the Panama Canal, but also a treaty interest in the continued operation of the Panama Railroad, which is binding on the United States. Therefore, the abandonment of the railroad would constitute a violation of such treaty interest-a fact that hitherto has been overlooked or ignored. PEAK OF UNITED STATES ISTHMIAN INFLUENCE, 1903-39 The Hay-Bunau-Varilla Treaty of 1903, covering the cession by Panama of the Canal Zone to the United States and providing for the construction of the Panama Canal, was negotiated pursuant to the Spooner Act of June 28, 1902, which authorized acquisition and perpetual control of the Canal Zone to construct the Panama Canal and its perpetual maintenance, operation, sanitation, and protection, exclusively by the United States. From the legislative and diplomatic history of that era, it is abundantly clear that the purpose of both the United States and Panama was to establish and maintain complete sovereignty over the Canal Zone by the United States, not only to assure the construction and proper operation of the canal in perpetuity as was provided in the Spooner Act 11(1d the 190:1 treaty, but also-and mark this well-to ci ve absol t e gu1araInt ee tIhat Colombia would never be able to reassert successfully its sovereignty over the Canal Zone, the Panama Canal, the Panana Railroad, or the Republic of Panama. Moreover, as previously stated, Colombia, by the treaty proclaimed in 1922, fully recognized and accepted these conditions.

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ISTIIMIAN CANAL POLICY QUESTIONS 7 By such important and significant facts the vast differences bet weeni the Suez and Panama Canals are strikingly shown. The fledgling Panama Government of 1903, intensely desirous of securing hot h li fe and freedom, foflu(d them in these treat y st ipu)lat ions. Ir eji for ltie cesarean operat ion known in history as tile Pliiala Ievohiit ion, out of which the independence of Panama rescued, anId promision> of Ihe Hay-1inau-Varilla Treaty, the Rej public of 1a ia i 1 coilb1 li Nver Ihave survived; in fact, could never have been creat ed. Besides, t he I iit ed States would never have undertaken constiructtion of tin' l)ai-an( anCal in a region then justly described as "the pesthole of tle world" and long characterized as a land of endemic revolt Ion i bat hld rele-(Itedly required the presence of naval vessels to maintain freedom of Isthialian transit. These points were fully understood at that time by both Pan amanian and American leaders. They realized that political stability was imuiperative for the success of the canal enterprise-its construction, and subsequent maintenance, operation, sanitation, and protection. They also recognized that such stability could be obtained only by vesting completed and exclusive sovereignty in the United States. The great North American statesman who developed our Istmliian policies included such eminent leaders as President Theodore Roosevelt, John Hay, John Bassett Moore, Adm. John G. Walker, William Howard Taft, and Elihu Root. President Roosevelt always viewed the Panaina Canal as the greatest acconiplishnient of his administration, and comparable in importance to the Louisiana Purchase. In essence, the results of their vision and efforts remained unimpaired until 1939-a period now recognized as the peak of U.S. influence on the Isthmus. TREATY POWER UNDERMINES U.S. AUTHORITY With the passing of the years after opening the Panama Canal to traffic on August 15, 1914, increasing demands on the part of the Republic of Panama for revision of major provisions in the treaty structure developed. Not until 1936, however, was the first important step made with the signing of the Ilull-Alfaro Treaty, which, because of opposition in the Senate, was not proclaimed until July .2, 1939, just prior to the start of World War II. The Hull-Alfaro Treaty-unlike the 1903 canal treaty-was negotiated without authorization or direction of the Congress. As understood by realistic observers at the time, it marked a weakening of the dike in the diplomatic setup of the Panama Canal, but without impairment of the fundamental principle of U.S. sovereignty over the Canal Zone and the canal. To better understand its important provisions, it should be noted that in the 1936 treaty Panamanian leaders sought the abrogation of the guarantee provision of the 1903 treaty because they felt that their country's independence was secure following the 1922 treaty between the United States and Colombia by which Colombia had recognized Panama as an independent nation. and believed that the elimination of the guarantee in the 1903 treaty, which they caie to regard as Panama's "Platt amendment," would add to their country prestige.

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8 ISTIHMIAN CANAL POLICY QUESTIONS While now ise abridging the sovereign authority of the United States over the Canal Zone and canal, the 1936 treaty did surrender important rights and privileges of the. United States granted by the 1903 treaty, as for instance, the right of eminent domain for canal purposes within the Republic of Panama, all without any consideration except that of token character. It raised the canal annuity to Panama from $250,000 to ,430,000 to compensate for reduction of the value of the fYold dollar. The crippling of the accessory powers of the United States, however, did not stop here. After prolonged secret negotiations started in 153, the process was advanced much further in the EisenhowerRemon Treaty proclaimed August 26, 1955, also negotiated without the authorization of the Conress. This treaty gave away additional and most valuable rights and properties of the United States, also with little more than nominal consideration. It further increased the canal annuity from $430,000 to $1,930,000. The costs involved in these benefits to Panama will have to be borne either by transit tolls or taxes paid by American citizens, and may well jeopardize proposals for the amortization of the Panama Canal investment. Certainly, the 1955 treaty was negotiated following long deliberations with the purpose and belief that the provisions would be accepted and relied on by both the United States and Panama for many years to come. Yet, the ink was hardly dry on that document before radical elements in Panama, echoing insistent Communist propaganda, have been, and are making the unrealistic and impossible demands to which I have now called attention. To illustrate, it is well to note that the demand is being made that the United States pay to Panama one-half the gross revenue derived from the canal enterprise. These revenues during the last fiscal year were $50,774,000, but the net income was only $3,821,456, of which the present annuity to Panama of $1,930,000 is more than half. There is no wonder that the President of Panama promptly characterized this demand as unrealistic. PANAMA RAILROAD LIQUIDATION NARROWLY AVERTED Among the most unhappy features of the 1955 Canal Treaty was the surrender to Panama by the United States of valuable Panama Railroad property in the cities of Panama and Colon, including the terminal freight yards and passenger stations worth many millions, but excepting tracks in Colon required by switching for the Cristobal piers. Not only that, the treaty even contemplated abandonment of the railroad itself, which had been acquired by the United States pursuant to both law and treaty, with adequate compensation. Moreover, this move was made with complete disregard of the treaty rights of Colombia as to the railroad. Apprised of the situation, congressional leaders intervened. Under the able direction of the distinguished Chairman of the Committee on Merchant Marine and Fisheries, Representative Herbert C. Bonner of North Carolina, pursuant to House Resolution 118, 84th Congress, that committee conducted an independent inquiry into the railroad situation and submitted recommendations reversing those of the supervisory executive agency of the United States, the directorate of

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ISTHMIAN CANAL POLICY QUESTIONS lhe Panam C1ana :l Co'~mp any. t liquil te thi ri' lr Aeem of this illrv will 1 _e foi;nd m Houe lepor Y '. '. i> ( ', Tlie result:Irever-al. Iy t1 P n rU7L -t : 2 'in 1U u -. torate. and the .111tinuane of the ra1-11a0, afilly juViAd: also been the W s equent operation of the ra o 1. The wise action of the Congres:n the e p w waV too late to zave the trem-iiendlou lyI p Ib facilities of thihistoric anid s t rateI raIl lie. Where does thiz leave us ? Now. because there n n4 vi Vr replacenient,* we are onomg to have a trait inian rcIL 1a4 with Ut its originally designed and adequate terminal station and vari'. Unless Panama sells back these tac lities to u 1 1rcQ. :. a r dous price-new ones may wel! have to be constructed at ur own expense. Can you imagine. Mr. Speaker, a nhi more ab.zur r 1-r ominous for the future pr)(per condu r of our I m POi wth all the capable men of broad experience in this Nation available. a was well illustrated by the railroad inquiry. why can they not Ibe used in such situations to protect the legitimate interests of the United States and those of Panama and Colombia as well? To say the least, our Department of State was asleep at the swItch. CANAL ZONE IS CONSTITUTIONAL TERRITORY OF THE UNITED STATES The main lesson to be derived from the sustained surrenders of our Isthmian rights and prerogatives. all necessary for the proper maintenance, operation, sanitation, and protection of the canal. exend beyond the limits of the Canal Zone and reaches into the very foundatio'n of our constitutional form of Government. As previously set forth, the acquisition of the Canal Zone and Panama Railroad was accomplished pursuant to the Spooner AX., of 1902 and the 1903 Canal Treaty. with adequate compensation aocordeI. The Panama Canal was constructed and has been subsequently managed pursuant to laws enacted by the Congress. Thus, the full force of our Government system is implied in the evolution of our 0asIc Isthinian Canal policies. Long recognized by Some of our grear statesmen as parof tie .coast line of the United States." the Panama Canal hias deeper s-' nificance of far-reachincy character. The Panama Canal Zone. Mr. Speaker. i not an oceupi te'rtoV as was once erroneouslI reported to the United Na(i)n7 y Ur Department of State-see Senate hear-ing E.n :nterloeking sbver-ion .n Government departments, part 19. Mar h Q5, 1K4 page 1 I. nstead, it is a portion of the constitutionally acqureA :err y the United States. Of course, if for any reason the United States should wholly abandon the canal enterprise, it would not likely wish to remain av 'nterre or sovereig-ntv over the Canal Zone. In such C: e, Panama oul doubtless repossess the zone are-, without oci &tion. 1 len e, I-m a practical. realistic :tandpoint. what purpose ,an Theze ctfl 1emands for recognition of Panama's itular soverenty' ser e e x yeet that of creating unjustinable friction between the ulite States and1 Panama ?

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10 ISTHMIAN CANAL POLICY QUESTIONS Unfortunately, the surrenders culminating in the treaty arrangement still being implemented-though they have not abrogated or subtracted from our rights of sovereignty-have violated the clear intentions of the Congress and represent a threat to our national power. Certainly, the time has conie when every Member of the Congress should realize what has happened: That, in large measure, we have given away our bargaining power in dealing with the Republic of Panama in ieg"ard to one of our most vital national possessions. As has been clearly shown by numerous press and individual reports from the isthmus, the instant situation is acute. Its proper resolution will require statesmanship of the highest order on the part of both the United States and Panama. This statesmanship, it is respectfully ur"ed should recognize the basic elements that enter the isthmian problem and not ignore them. At this point, Mr. Speaker, I wish to emphasize that this tragic policy of appeasement and giveaway did not originate with the present administration, but was inherited. This fact, however, should not prevent this administration, or any that follows, from taking proper action to safeguard our national interests now and in the future. This, i would respectfully submit, will be best for ourselves, best for Panama, and best for the world at large. ISTHMIAN HISTORY MUST BE RESTATED What is the explanation for this strange course of events? Many could be advanced, but of them the most telling is the gross ignorance of isthmian history that has developed since acquisition of the Canal Zone in 1904 and starting construction. New generations, both in the United States and Panama, have simply gotten away from historical facts that underlie our isthmian policies. Nor do they realize that the Republic of Panama grew out of the canal enterprise and not the canal project out of Panama. When pondering these somber thoughts we must concentrate on how to restore just and realistic thinking. In my opinion, we shall never regain our bargaining power with Panama until there is a complete, fearless, and widespread restatement of some cold, hard facts of history and a reappraisal of them. This is the only way whereby we can produce men on both sides of the bargaining table who can fairly evaluate the respective rights, obligations, and responsibilities involved. hn Meanwhile, our colleges and universities and writers of this hemisphere should delve into the subject from available sources and spread the story of the great waterway, of which the creation of the Republic of Panama was but a single, though important episode. In this, Mr. Speaker, the press can render a great service, and again I invite attention to the documentation on Isthmian Canal policy prepared by Representative Thompson of Texas to be found in the Record of March 23, 1955. NO SUEZ AT PANAMA The December 16 incident was no ordinary matter. Fostered by radical elements, some high up in the Government of Panama, and conforming to the program of the international Communist conspiracy, it seems aimed at lining up the nations of Latin America in support of Panama as was done among the Arab nations in support

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ISTIIMIAN CANAL POLICY QUESTIONS I I of Egypt. In that light, it repireseIIts aI issue hat Il le 'reat (.()III tries of tIhis henispliere a"'id their leaders 11m11u1st e vei i'ly f hac, for 1hey well know what th1e results woul(1 be sioulId sich a movemet eVr miat eria Iize. Thje coibineid (iieIercises of U.S. Armed Forces in lie vst hmi area, A p ril 21-27, 7, Hwhich were obsei'ved by 11e re2n0eel1 im \ :' countries of I his lienispliere, eloqueItly erved to emplriiz Ihai ho Suez crisis will be pernitt(1d on H e A iiaeI'P'itIn ist With this fee Iingiu, I lva\e every reason to elI Ve l iit oti i' ei Is to the south11 w il1 whlolelheajrt edy joi. Surely every coiden:tt ion for their own self -prIeservatil at thIis(l ri'a Itine of 0 pn 11 in and subversion requires such a corimonseise at tiuld Ule. NATIONALISTIC AGITATION AT11 PANAMA INVOLVES SERIOUS JANGERIS Mr. Speaker, notwit standing the leail ines of lie pr(--s, le l i 1i ei I St ates has mauny friends among t he people of 1anna. To I hem I would suggest that demands fmalat ing iron their milSt for mIt ionializat ion of the Panaima Canal or confiscat 1on of its receilt s, 111 ea'l of making a case for Panama, are actually spread( iig ie Ii'es fr 1111 for nationalization-lie long-range Coenimuinist (trea0. Such internationalizat ion both Panama and t he lUitfed Sidah's would oppose. However, if brought about, how would PItianma fare when subordinated to an internal ional body as (compared to 1 le beieits derived from the country that fostered if s birth ? The answer is obvious. A further point concerning tlie Current agitation at Pana wit Ii its increased demands is the effect it must have on IIlhe Congress and the people of the United States to give fuller considerat ion to i le subject of an alternate isthmian canal. This, as a ma er of fact, is now being studied under the direct ion of the Conaniitte on Merchant Marine and Fisheries. Another observation about the situation at P1anama coiicerns its relations with Colomrbia. If Panara, by sustained diplomat ic miianeuvering, can seriously weaken the treat y st ructure and secure abrogation by the iUnited States of its key provisions, Colombia can do likewise. Then, because of the absenCe of any guarantee of P.aiamanian independence, what would be fhie outcome ? This would depend on what policy the United States might adopt. Which no one can foresee. Certainly, our Nation cannot ahlord to accept grave responsibilities in the absence oT adequate aiulloriiy. To state the matter candidly, Panama, through securing abrogat ion by the United States of its guarantee of PaIaniln inlepenlene, has succeeded in removing i he greatest legal barrier to its eveniial reabsorption by Colombia. Also, may I ask, because of the abrogation of tr 'eaty provIsioIs guaranteeinr tli(I iid(epenldeice of Panama, wat would be lie result if the Un1 it ed Stfat es sIho11(1 suIrren der all iits power and -thoiity a. to the PI anama ( Cali al Id Canal Zone? Woiud revoliutional ry praeU'tices i mme(1 iatelv y i sprI i llp in PIanamfla, as they did 1)efore U.S. occpation of tie Canal Zle ? And would Colombia reasert her former sovereignty ? In lie liglit of history, what is lie answer? How the Commit world would revel in such a sitiat ion and how tihey would strive to exploit it. Certainly the Pa11na Canal problem is so complex ill ch,'a'rater and so far reaching iii its ranifiiieationus and conisegleices that it behoo'es 67-843---66 2

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12 ISTHMIAN CANAL POLICY QUESTIONS al those in authority in the United States and Panama to think d irouiohi every question presented before reaching conclusions and itaking decisions. This, in recent years, has not been done. CONGRESS SHOULD ACT NOW In view of all the elements that enter into the present Isthmian picture, the Aimerican people pose some telling questions: Why has our Department of State pursued its purblind policy of extreme concession and appeasement in dealing with canal crises over a period of many years ? Why does it remain silent now, thus giving color to the radical demands of the extremists in Panama? Why does it not take a vigorous stand for the legitimate rights of our country, the exercise of which-I repeat-is best not only for the United States, Panama, and Latin America, but also for the entire world, and especially the maritime nations with vessels that transit the canal and have to pay tolls? The more the Department of State procrastinates, the more important it is for the Congress, which is the ultimate authority, to make its own declaration of policy in the premises, to state clearly that there will be no further changes in the basic canal treaty, and that it is not going to stand for further liquidations of U.S. power and authority in and about the Panama Canal. Every legal and moral consideration, and the necessities for stability, demands that this be done. To these ends, I urge prompt passage of House Concurrent Resolution 205 of the present Congress, the text of which follows: Whereas there is now being strongly urged in certain quarters of the world the surrender, by the United States, without reimbursement of the Panama Canal, to the United Nations or to some other international organization for the ownership and operation of the canal; and Whereas the United States, at the expense of its taxpayers and under, and fully relying on, treaty agreements, constructed the canal, and since its completion, at large expenditure, has maintained and operated it and provided for its protection and defense; and Whereas the United States, following the construction of the canal, has since maintained, operated, and protected it in strict conformity with treaty requirements and agreements, and has thus made it free, without restriction or qualification, for the shipping of the entire world; and in consequence of which, with respect to the canal and the Canal Zone, every just and equitable consideration favors the continuance of the United States in the exercise of all the rights and authority by treaty provided, and in the discharge of the duties by treaty imposed : Now, therefore, be it Resolved by the House of Representatives (The Senate concurring), That (1) it is the sense and judgment of the Congress of the United States should not, in any wise, surrender to any government or authority its jurisdiction over, and control of the Canal Zone, and its ownership, control. management, maintenance, operation, and protection of the Pana ma Canal, in accordance with existing treaty provisions : and that (2) it is to the best interests-not only of the United States, but, as well, of all nations and peoples-that all the powers, duties, authority, and obligations of the United States in the premises be continued in accordance with existing treaty provisions. [From the Panama (Republic of Panama) Star and Herald of Dec. 17, 1957] PANAMA OFFICIAL FORESEES 50-50 ARRANGEMENT WITH UNITED STATES OVER CANAL A new arrangement between Panama and the United States under which the two countries would share the income of the Panama Canal

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ISTIHMIAN CANAL POLICY QUESTIONS 3 ifore.-een by I iPainamas V ce Miii ter of Foreigin ReIliOn Erf Speaking before a cztudeit coiareivrd(av, Dr. C Nsv iiro thie (lorcemeniit of tle I 4 K howr Ireaty I P1oinVII I "that tnra tv i far from bein thIe ideal solution f tie d(Iflerei between the two countries. (astillero, a student l(eadtl'r in Is uivrity days, del]V I1 prilcilpal address at the adljoIrliimienit essioil of the II Special C)11-of Students. He devoted a large part of his addre-s to a review of the achievements of the student movemenlt sAice 19 3, when it caIme to Tile fore iI Panama s national life. The closing portion was devoted to Iorei affairs, and specifically to the Panaria-United States relations. He said. in part: In Nuvenber 1 9 on the Ooh 1i Of the U-nited Nations General Avembl's debate on the Suez Canal (risis, the Fort an Minister certifled before the entire world that the Panami a Canal is bi it o Pananiarnian territory, tlit sana is the titular 'overeign of the Panama Canal Zone, just as Eaypt is oer the Suez Canal, and tht it has -rante to Th Unitid States of America onhy the rights power, aid authrity I nessry fo r tle specific purposes of the Imin;enan e >a notation, operation, and protection of the canal, an enterprise in which a stirpuhiatedI in the treaty of 1Y9I}. but ii eolnmtries have a joint and vitAl interest. Likewise. he set forth there, for e;orcemunt at a future time which is not foreseeable now, the d(octrine that the Suez Canal has anaiovies of variou types with the Panama Canal, a statement which while rejected by the United States, has impressed strongly the world's opinion because of the clear warning it involve<. In the-e oirimrnztaneos, there is special significance to the cormplaint, supported dail*v bjy new fac-ts, that our country is not receiving the benefits to vbeii we in fairness are entitled as partners, with the United States, in the (:aial enterprise. Inasmuch as the enforcement of the Remi'n-Eisenhower treaty is showing that that treaty i far from being tht ideal solution for these differences, it would not be strange if strength should be zaned by a trend of opinion whibh maintairs that Panama must arrive at jn arrangenient with the United States to revive half the income of the cnal. without going into legalistic discussions r inlterprf-tations of previous treatlus. The Remnn-Eisenhower treaty was si,(ned in 1955. [From the Panama (Republic of Pano aa) Star and Herald of De. 19. 157] PROPOSAL ON CANAL )AIi "UNREALISTIC resient Erhesto de ii GairdIa. JTr., fee>s that the >iea of a Split of th i Panuamilla Can00al 1,1! m Witi the U Iited t at es i "not too real istic H~e indliate (th at SiniCe operat g (expIense and t(A1s are dhe! (rmflned by the Unie S 5 ates, PanIda e wouId rin tle rik of' 1et in 1'tIng if Xhe oztal praI fai led 10h a Cit. '\;ce lMN:i,-er of Foriin Aiir Er,121 C ti r a11r n a student 3!een !2Tgeted 51] n ar'al nOet 0 or 1 1. flt Ir. .v that the phie7s(nt 'Treaty vfar liromi Ihn the il scolun Lo 1PaniIam U3,ited >ttes dilferences OVer the waterway. He referred to a split not of profits. but of income. The presidential pre-s office authorized the following ta'ment rwt beh al f of IPr~ eient de a i G tard a.

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14 ISTHMIAN CANAL POLICY QUESTIONS The idod, in my opiliOf, is not too realistic, inasmuch as operating expenses ot the c:aii being estabilihd iii the Canal Zone and tolls being fixed by the ('zwIrcs of the United States, we would run the risk that the operation of the w lterw ay would leave 1101hing. lvuj inow we are si1riving for better salaries for Panamanian employees in the Canal Zone and it cannot escape anyone that a salary increase is an additional expeidture that would necessarily affect the earnings from the canal traffic. A er Vie -Afinister Castillero's adores, the National Student Con'gre-s app)r)oved a reollt ion calling on the President and the Foreign Ministr to i uirt akc negotiations with the United States for sharing ihe cania ls iwme. In Wtshingon some State Department officials appeared surprised at Cast illro's st atement, pointing out that a new treaty increasing the canal annuity from $430,000 to $1,930,000 was worked out in 1955. [From the Panama (Republic of Panama) American of Dec. 23, 1957] REPUBLIC OF PANAMA STUDENTS WANT CANAL NATIONALIZED The Panama Students Federation (FEP) made it clear today that the nationalization of the Panama Canal is the ultimate aim of Panama students and the people. A communique issued by FEP President Andres E. Castillo and Press Secretary Humberto A. Brugiati said negotiations aimed at getting Panama a 50 percent share of the revenues derived from Panama Canal tolls is only their immediate aim. The communique further stated that the FEP would continue to fight for a revision of existing Panama-United States treaties until our glorious national emblem flies with all its sovereign majesty over the Panama Canal." Today's communique was the aftermath of a resolution approved by an FEP congress, asking the President and the Foreign Minister to negotiate a 50-50 division of Panama Canal income. The resolution was presented and approved immediately after a closing address by Deputy Foreign Minister Ernesto Castillero, a former student leader, who said he would not be surprised if a trend toward negotiating a 50 percent share in canal profits should gain force. The idea was later branded as unrealistic by a spokesman for President Ernesto de la Guardia, Jr. [From the Washington Evening Star of Dec. 30, 1957] IANANA RAISES OUTCRY FOR BIGGER TOLL SHARE (By Marshall Bannell) Pkx-.A CITY, PANANA, December 30.-An outcry has again started in Panama for an increase in the annual income received by the Republic from the United States for use of the Panama Canal area. At present Panaina receives $1,930,000 per year from the United States. This is more than double the amount paid annually 2 years ago and was agreed upon in a treaty signed by President Eisenhower and the then Presideiit of Panama, Jose Antonio Remon.

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ISTHMIAN CANAL POLICY QUESTIONS 15 This increase in payments has not prevented further deirandls, however. Deputy Foreign Minister Ernesto Castillero recently, in a speech be fore a university student congress, demanded that the U niteed States pay Panama 50 percent of the gross income from 1Panama Canal tolls. H is proposal wvas promptly drafted into a resolut ion and passed by the student, organization. Canal tolls brilg in well over $50 million per year and this would mean that, tinder Mr. Castillero's proposal, Panama woul(l collect more bian $25 million. Tiere was no suggest lon by t lie )epl1y Forepzy Minister that Panama should foot any of Hie eanal exl)enas( nor finance the present defense organization by the U.S. Air Force, Arny, andi Navy. Panaman !an officials complain that, thi Repuli( nV iyes less th ani 4 percent of the Iotal income from canal tolls. The U.S. answer, however, is that while gross income from canal tolls was $88,677, 449 in 1956 (highest in peacetime history), the net income after paying operating expenses was $4,179,464. And, t hey add, there were no charges made for the large defense forces maintained in the Canal Zone by the U.S. military services. The latter costs are classified information. Even Panama's conservative President, Ernesto de La Guardia, agrees that a 50-50 split of the gross income from the Panama Canal is unrealistic and has said so publicly. But his words have not stilled 4 nationalistic elements in Panama. What concerns many serious-minded Panamanians and United States officials is that Panama, to use their own words, "may be cutting its own throat" through the continual nationalistic blasts at the United States. They point out that early in December 1957 a subcommittee of the House Merchant Marine Committee, headed by Representative Leonor Sullivan, Democrat, of Missouri, visited Panama and held public hearings in connection with the Panama Canal operations. One of the things they learned was that the Panama Canal is fast reaching its capacity and that either the present canal will have to be exl)anded or a new, sea level canal constructed. Either will be a multi-billiondollar project. No report will be made by the subcommittee until next spring. However, the members took time to visit several sites that have been proposed for the construction of a new sea-level canal. Their interest eitered, according to Representative John J. Allen, Republican, of California, on a route through Nicaragua. The United States holds perpetiiual rip'hts to construct a canal through that country if and v eii a nw one is needed. So far. Gov. W. E. Potter, who heads tIhe Panma Canal Con n )Ir. the wholly t.S. Govrnnhell-owned orgran ization tiiat opera e tle Panama Canal, has muale no public comnnieit on Ilie clamor here for increased ine e for tlie Rep1blic of PunIi :i ma front ilhe canal. But many observers foree-A{ t hat when the Board of l)irect ors of the Panama (anal CoM pa iiy meet here late in .ineui, t'w 1e in v M brought up and a stall emelnt issued. However, observers lcr v Ioi vit ol tm that any change in i he present status of payments to Panama for the use of the 10-mile-wide. 40-mile-long strip of land will liave io be ) a proved by the U.S. Congress.

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I6 ISTHMIAN CANAL POLICY QUESTIONS [From the Washington Daily News of Jan. 6, 19581 NEw PANAMA CANAL NATIONALIZATION DRIVE ON (By Edward Tomlinllson) Tle Governmijeijt and flie public il iHis country ib' 1 u1b get ready for an all-out. heiispherewide campaign for nationalization of the PaaIma C anal. High U.S. officials here in Washington don't like to talk about it. But Ile idea has been snowballincr in the minds of Panamanian yoliticians and nationalists every since Abdel Nasser took Suez and got away with it. PLAN FIHT Now, the univeisity shenflts., wlio always Ilave Ipearhealded antiU.S. sentiments in the Isthmian Republic, have organized to fight until "our glorious flag flies in triumph over the Canal Zone." The st dents have receive(l the tacit blessingg of the Pa.mi anian Foreign Ministry, as well as outstanding leaders of the country including t he majority of living former Presidents. EFflorts to wrest complete control of fihe vital vaterway from Hie Yankees in nothing new, of course. Back in the 198('s an organization for tle internal ionalizwtion of the canal flourished. The leaders of the movement said the big ditch i shoublh belong to all natioiis. It was abandoned after the Roosevelt administration agreed to a number of revisions of the treaty in favor of Panama in 1936. A another wave of nationalism swept the country after World War II, and ant i-U.S. demonstrations become so violent that our military forces abandoned all wartime bases throughout the Republic. In 1954 widespread demands for more treaty revisions were made. As a result, in 1955, we upped the annuity from $450,000 to $1,9,30000, turned over vast anmovnts of Canal Zone property to the Government of Panama and made many other concessions in addition. Leaders of the campaign bluntly say that ultimate nationalization does not preclude demands for more and more treaty revisions in the meantime. Amonr immediate add(litional demands already being whooped up, is an equal division of canal revenues. DIVIsION NOTE Note they want the revenues divi(led equally. not just the income. Nothing is said in the new prop:iganda about taking out expenses and other huge costs of operating, maintaining, and protecting the colossal enterprise. The 1957 annuity amounts to more than half of the net in come of $3,821,456. Let no one think this campaign can be shrugged off. because Panama is a tiny, weak country. Egypt also is a tiny weak country. But backed by the whole Arab world in its Suez venture, it became a formidable power to be reckoned with. The Panamanians count on tremendous support from other Latin American nations.

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ISTHMIAN CANAL POLICY QUESTIONS 1 7 [Froim the Christian Science Monitor of Jan. 18, 195s] PANAMA FACTON Bis 'o (ANAL lEVENUi (By R alph K. Skinner) PANAMA CITY, 1PANAMTA.--What amounts to a national c111inpaig1 for a 50-50 share in thle gross revenue of th e Panaina ( is bei conducted by power ful groups in Panamna. The drive criticizes the UJniited States for never lhavin g giVen Panama a fair share in the enterprise in which they clalin t hey are partners. The campaign, Well financed and skill fully directed, gels promi ent attention in newspapers here. it is causing difficulties to Panama's capable President dela G iard i who is endeavoring to improve the already harmonious relations wit 11 the United States. Observers see two major reasons behind this campaign. First 't few rich individuals and politicians are afraid that in a period of political calm like the present the scrupulous De la Guardia adbninistriation might investigate their private empires and take away some of their privileges. ANTI-UNITED STATES AGITATION Their aim is to use the press and radio to so stir up the people that they will agitate against the United States, demanding cOiieeSsiols impossible of attainment. This puts pressure on tlw President to comply with the demands of the Panama people. Thus, t his reasoning goes, Senor de la Guardia has not the time to investigate act ivities of the instigators of this stratagem. Also, this same pressure for impossible demands against Washington may tend to damage the President's good contacts with the U.S. Government. Rumblings in the press, quoting utterances of ambit ious officials, would seem to indicate that Pan.amna ardently wants either nat ionalization or internationalization of the Panamn a Canal. Neither is correct. The last possibility just does not exist. There never will be internationalization of the great waterwav if Pana can prevent it, this correspondent has been asslired. Local sent iment is summed up in a statement in a local paper which said that PaaiuL does not need more people eating at its table. Briefly, every dollar coming in would be welcomed, but no shiaring of any largesse is contemplated. LACK NEEDED KNOW-HOW And what about nationalization? There is no doubt that Panamanians would welcome eagerly the canal's income and the f1atterin sense of possession of such a valuable property. But, individually a nl nationally, they shudder at the thought of trying to operate it. They do not have the know-how. Neither do they want the responsibility.

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18 ISTHMIAN CANAL POLICY QUESTIONS So all the hullaballo about internationalization or nationalization is seen to be solely for political or economic reasons-either to hamper the present administration in Panama or to pressure the United States into more handout benefits to this country which claims partnership status in the Panama Canal. Setting off current agitation in Panama was a statement made to a university student group by Dr. Ernesto Castillero P., Deputy Minister of Foreign Relations. He said Panamanians should aspire to a 50-50 share of the revenue of the Panama Can.al. It appears that either Dr. Castillero made the statement for applause value or because he had been asked to include it in his talk. Certainly, it became clear he had not given it much thought because when asked if he referred to the gross or the net revenue of the Panama Canal, lie did not know. Finally, he said he was referring to the gross ($50,774,000 for the last fiscal year). PLAYED UP IN PRESS The Castillero statement was headlined in the press, some papers playing up the idea of getting more money from the United States, which currently pays $1,930,000 to Panama as an annuity well as millions of dollars in salaries to Panamanian workers and more millions in purchases from Panama. Immediately, Senor de la Guardia pointed out that such a suggestion was unreal. A businessman, the President knew that giving away half the gross revenue of the canal would not leave funds for the necessary salaries and expenses. While the President considered the proposal analytically, many of the people in the street considered it emotionally in terms of getting something for nothing. Almost immediately, however, the Minister of Foreign Relations, young, attractive Aquilino Boyd, announced he backed Dr. Castillero's statement. This sassing the President is understandable only because Senor Boyd is young, impetuous, and aspires to be President himself in 1960. This was his bid for the nationalistic vote in the future elections. POLITICAL WEAPON It is recalled that Senor Boyd also participated in the university roundtable conference on interoceanic canals last spring in Panama Cit. Penortedly. this conference was organized to embarrass the United States by having foreign nations declare its treatment of Panama "unfair." The conference backfired and was a fiasco. A recent article typical of certain anti-U.S. statements says the Foreign Minister and Deputy Foreign Minister reflected the "just and legitimate aspirations" of the Panamanian people. The writer added that these two officials have said publicly what the people of Paina have been thinking for years. The article ends with incendiary statement that, although the author is anti-Communist, he would be ready to organize and head a Communist Party here if by so doing Panama would get justice for its claims.

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ISTIBMIAN CANAL POLICY QUESTIONS 119 [IFoi he Amleiicais DAily, \Miai Springs, Fi. J L ;a> UNITED STATES NOT CONCER1NED At.oUT PEoirs'0<.\I (), MA STUDI EN TS ment on the p nrom)sal of the NaioaL I udet ( ey m that Pan Il1am be i hYI I ia (lf of tile giros ren 1Ue froI i1 B h anl) Zi Y Ofliciafs poiilted omi Ohat the Univ'ed Skates n m,]dJ (yGi:a eLe iatied their I treaty in 1955 and both sides a)1)(ar(d to 'M isid wih tIheFoN prsvions. Une thEIe revisHU reat y e anamais amull shar I e oMh net profits of the canal was set at $1,90,000. Under the proposad plan Panama's share driing tlhe fisc al year 1957 would have been $25,P87,249. A s p okesman for President Erinesto de Ea Guardia, Jr. des ribed lhe proposal as "uireaistic. 1 1 said thaIti sHice the Caial ZcnIe Govcrnment establishes the costs of operation and the U.S. Congress sets the transit tolls, "we could be faced with a situat ion whlery the operatioll of the canal produced nothing." The spokesman pointed out that Panama was seeking better wages for Panama citizens working in the Canal Zone. [From the Americas Daily, Miami Springs, Fla., Jan. 29, 195S] PANAMA TIRED OF TREATMENT AS JUNIoR PARTNER, ARiAS DEcLARESUNITED STATES-PANAMA WORKERS Si IOULD GET SAME PAY NEW ORLEANS, January 28.-A former Panama President said his nation is tired of being treated like a junior partner in the Panama Canal project. Ricardo H. Arias, now Panama's Ambassador to the United States, said "Panama has not gotten the, benefit it should have from ohe canal." He was here today to address the Mississippi Valley World Trade Conference. "After all, it, is a partnership arrangement; we provided the land, and the United States the kntw-how t d2. the cana1 Bi P:w'ulnanian workers, toiling side by side with workers from the Inited States, doing identical jobs, got less money than those from the United States," said Arias. Arias said he hoped Congress would equalize the pay of United States and Panamanian workers in the Canal Zone. Such a bill passed the Senate last year, but died in the House. Arias said an equalization of pay would help quash the feelings among Panamanian students that the canal should be nationalized. He said he did not think talk of nationalization would hurt the bill's chances in Congress. "You cannot tell a man doing the same job as the next fellow that he's going to get less pay," Arias said. "Panama is tired of being treated like a junior partner." Arias served as President of Panama until 1956. He said he doubted the United States would dig a canal through Nicaragua because of dissatisfaction with the Panama situation.

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20 ISTHMIAN CANAL POLICY QUESTIONS [From the Scripps-Howard newspapers] PA NAMA STEPS Up DRIvE To TAKE OVER THE CANAL (By Edward Tomlinson) PANAMA CITY, February.-Nationalist politicians and the press are calling for "equal partnership in the operation of the Panama Canal," while several well-organized groups are demanding outright nationalization. Newspaper editorials, columns, and special articles flail away at Uncle Sam for "humiliating treatment" of Panama. El Dia refers to the "UTnited States-dominated canal" as "that imperialistic enterprise.' University students, always the tools or dupes of political agitators, rant against "North American desecration of our national integrity." A huge banner on the university grounds facing the man highway leading from the airport proclaims that "The canal is ours." Significantly this catch phrase is much like the Brazilian Communist slogan. "The oil is ours," aimed at U.S. oil companies operating in Brazil. Canal treaty revisions made by the Eisenhower administration in 1955 have brolnght numerous financial and economic benefits to Panama. The yearly payment was raised from $450,000 to $1,930,000. We returned to Panama $25 million worth of real estate in Colon and Panama City. Panamanian citizens working in the Canal Zone are now required to trade in Panamanian stores instead of the zone commissaries. But the newspaper La Nacion still call it "the fraudulent treaty." A coluimnist in the same paper says January 25, the anniversary of the signing of the document, "should be declared a day of national mourning.' Many of the newspapers do not even acknowledge the legality of the Panama Canal Company, the U.S. Government agency that operates the waterway. An editorial page column in La Estrella, the most important newspaper in the country, calls on the Government of Panama not to deal with the Company on the grounds that "it is not a juridical )ody The Panama Government officially is behind this campaign. The Under Secretary of Foreign Affairs, Ernesto Casillero, has called for a 50-50 sharing of the canal revenue. Not the profits, mind you. The present annuity already amounts to more than half the annual net profits. He wants half the gross revenue, and no sharing of the ex penises of operation. The campaign is being stepped up to enlist the sympathy and support. of other Latin American countries. The University of Panama is staging an international seminar of hemisphere economists to consider the scope of the treaty. Some newspapers go so far as to suggest that Panama should reestablish diplomatic and trade relations with Moscow. Says one columnist: "If Panama should resume diplomatic and trade ties with Russia, we would get sputniks, tractors, and machinery. Along with

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ISTHAMIAN CANAL POLICY QUESTIONS 21 c very machine would come a Russian1 technician1, and every technician Would be a Communist.' In short, "If the Yankees won't turn the canal over to us, let's go Coll11 1ist. PAN AMA NLAN JNOsTS IGNORE FACTS OF 1IsITORY Mr. Speaker, the extreme lamentations in the various outcrvs from the ist himus cannot remain unchallenged. All the world should know that Panama, emerged as a sovereign nation under the protection of the United States, and that under this sponsorship it has grown and prospered, as was clearly foreseen by the founding fathers of that Republic. In the field of international relations it has been signally honored. Its statesmen have been members of important international commissions. its flag now Ilies on hundreds of merchant vessels in various waters of the world. Under these circumstances, Mr. Speaker, it is high time to ask if the reckless demagogs and jingoists of Panama are going to cast down ihe ladder whereby their country rose to independence and eminence, or will the better judgment of its more thoughtful citizens, who are mindful of historic facts, prevail?

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I 'o i 1 (It (Te>iona c(ord, S5th Cong., 2d sess., June 9. 195 j PAMA CANAL-LATEST DEVELOPMENTS IYI. FIJ ). i\r. \pVke, aInflt 2 years a) a mee(tinH of the Presidns of t he Amievri an na Iin at 1'ania City, Rheplic of P~anaa Juiii 2 1-22, 1 9 a0, :I18Attracte world atteniiOn onl the I si hnus of Panama a i the ) :~U ~ gra aa proj (ect On wich(I the ecOnoiO c well -being of thbe I epubli o 0 Pa namia I argly depen 'ds. Wh. le pubhlic int er was thus focused toward the West, events ot far great er siginficance were in the m kingr in the Ne ar East. Four days iater, on July 26, what till then had been considered a gp)l it ical imposibility occurred-the nationalization by Egypt of t he Suez Canal. Otlicially indorsedl 1y the Government of Panama, this seizure of the Suez Canal started a chain of events affecting the Panama Canal that has never ended, a situation that I have watched closely. Though I addressed the House at considerable length on March 26 and April 2, 1958, on the vitally important question of sovereignt over the Canal Zone and Panama Canal, subsequent and most events recently occurring on the isthmus together with statements of Panamanian leaders, now dramatized by the bitter experiences of the Vice President of the United States oyurin his visits in Latin America in early May, impel me to address the House further on this key element in our Isthmian Canal policy. RECENT ISTIIMIAN REACTIONS TO THE SOVEREIGNTY QUESTION What are the events on the isthmus following my April 2 address thamt first attracted world attention? The first occurred on April 3, when the Liberal Party of Panama, in ordr to put Pre.ident Ernesto de la Guardia, Jr., "on the spot," innouneed plans for a petition to the Government of Panama asking for rights to explore for oil and minerals in the Canal Zone. W T hen requested to comment on this demand, I stated that such questions were legal and I hoped that constituted Panamanian authorities would know bow to deal with them. A second event was the publication in the Estrella de Panama on April 18, 1958, of a statement by Senor Don by. Ih. Aleman, Jr., chairman of the foreign relations committee of the National Assembly of Panama. Some of its most significant points are summarized: First. Revealed that Panama now has in preparation a "White Book to present to world opinion its views on the sovereignty questioni. Second. Stated that Panama would be ready at any time to submit this question to proper internation courts for settlement. Third. Demand a larger share in toll receipts of the Panama Canal. 22

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ISTHMIAN CANAL POLICY QUESTIONS 23 Fourth. Quoted an April 18, 1906, statement by former Secretary of War William H. Taft out of historical context in justification of Panamanian views on the Canal Zone sovereignty question. AMBASSADOR ARIAS HIGHLY CRITICAL OF U.S. GOVERNMENT A third episode occurring in the United States was a major political address by Senor Don Ricardo M. Arias E., Ambassador of Panama to the United States, on April 29, 195S, at the Edmund A. Walsh School of Foreign Service of Georgetown University in this city. A grandnewphew of Tomas Arias, one of the foundling fathers of the Republic of Panama who, on December 4, 1903, signed the Panamanian certification of the Hav-Bunau-Varilla Treaty, Ambassador Arias should be well acquainted with isthmian history. I have the address of Ambassador Arias, which was placed in the Record of May 28 by Representative Adam Clayton Powell, Jr., of New York. Its text, I assume, is correct. While Ambassador Ar is' Georgetown University address contains much that is historically valid, it also features many statements and interpretations uhat certainlv can be challenoed. However, sice a detailed analysis would be too lengthy for our purposes today, I must limit myself to key points. In line with the lead from Seflor Aleman at Panaima, Ambassador Arias likewise took up the sovereignty question and made this sionificant revelation: The foreign policy of my country during the List 50 years has been to exert every effort in order to obtain at least for Panama con(ditions similar to those granted by the United States to Colombia in January 190.3. For this objective, he added: I am sure that in the end Panama will attain her purposes. Highly critical of the U.S. Government to which he attributed bad faith, the address went far beyond an objective historical discussion of the foreign policy of the country to which he is accredited. Thus, I must question the propriety of its delivery in our midst for propaganda purposes. For the present, however, I shall only call attention thereto with this comment: if conditions were reversed and the U.S. Ambassador to Panama had made a similar public utterance critical of Panama, his recall would have been demanded immediately by the Panamanian Government. CRISIS AT PANAMA CLEARLY FORESEEN That events on the isthmus were heading toward some incident affecting the efficient operation of the Panama Canal has long been evident. In early March of this year, I warned proper authority of this possibility, specifically mentioning that radical Panamanians might attempt to raise their flag in the Canal Zone. Also in my address to the House on April 2, I emphasized that we should not wait until some tragic incident occurs to spur us to action. Now, Mr. Speaker, was I unduly apprehensive of the situation so extensively presented and documented in my two addresses? Far from it. Subsequent developments on the isthmus, which are now re

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24 ISTHMIAN CANAL POLICY QUESTIONS vealed in the light of tragic experiences of the Vice President in Lima and Caracas as parts of well-planned campaigns against the United States and for the overthrow of constitutional government in Panama, have already occurred; and the end, I fear, is not yet. PANAMANIAN FLAG-RAISING INCIDENT IN CANAL ZONE In a carefully organized raid into Canal Zone on May 2, 1958, called "Operation Sovereignty," Panamanian University students planted 72 Panamanian flags at various locations, including 1 in front of the canal administration building-an eventuality that I foresaw and had sought to prevent by timely notice. It is significant to note that the raid of flag planters was accompanied by Panamanian newspaper photographers who took pictures of some of the flag raisings, which were published in Panama with reproductions in other countries. Though it appears that some of these highly provocative incidents were witnessed by Canal Zone police, it is indeed strange that no arrests or detentions were made for these breaches of the peace and the trespassers were allowed to leave the Canal Zone with out obstruction. This flag-planting demonstration, Mr. Speaker, was not a simple matter that can be dismissed as mere student pranks or enthusiasms. Instead, it was a calculated move in worldwide psychological warfare of communistic pattern against the United States. It promptly received extensive coverage in Latin America and also in the Soviet press. No doubt it will be exploited to the maximum advantage of those seeking to wrest control of the canal enterprise from the United States. The only action taken by Canal Zone police was to collect the flags and give them to Panamanian officials who returned them to the students. Had the conditions of the flag-raising incident been in reverse order, with North Americans invading the Republic of Panama as participants in such provocations, authorities of Panama would have dealt with them with the utmost vigor. SIGNIFICANCE OF FLAG-RAISING INCIDENT RECOGNIZED IN UNITED STATES The significance of the flag-raising incident in the Canal Zone, so well covered in the press, was instantly recognized in the United States. The Panama Canal Society of Washington, D.C., composed of surviving builders and others long associated with the canal enterprise, members of the Armed Forces and Foreign Service who have seen duty on the isthmus and know its problems and dangers at first hand, took prompt action. On the occasion of its 23d annual meeting in the Nation's Capital on May 10, 1958, the society in a notable program devoted to a discussion of the administration of the Panama Canal under the Reorganization Act of 1950-Thompson act-adopted resolutions that strongly reinforce the views I have repeatedly stressed as to what should be done by the Congress with respect to the present situation at Panama. The resolution follows:

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ISTHMIAN CANAL POLICY QUESTIONS 25 RESOLUTIONS OF THE PANAMA CANAL SOCIETY OF WASTIINGTON. D.C. RE llSVE CONCURRENT RESOLUTION 205 Whereas at the 23d annual meeting of the Panama Canal S society of Waihington, D.C., held on May 10, 1957, it adopted by unanimons vwte. resolutionis declaring that the Congress should, by formal action, reaflirin the long etablished and practiced policy of the United States in holding that it exercises coitjete and exclusive sovereignty over the Panama Canal and the Canal Zone. in peri)etuity, under solemn treaty provisions, for the maintenance and operation of the canal and the government of the zone; and Whereas there was introduced in the House June 6, 1957. by Congr essmian Daniel J. Flood, of Pennsylvania, House Concurrent Resolution 205 providing "That (1) it is the sense and judgment of the Congress that the ignited States should not, in any wise, surrender to any other government or authority its jurisdiction over, and control of, the Canal Zone, and its ownership control, management, maintenance, operation, and protection of the Panama Canal, in accordance with existing treaty provisions; and that (2) it is to the best interests-not only of the United States-but, as well, of all nations and peolesthat all the powers, duties, authority, and obligations of the United States be continued in accordance with existing treaty provisions"; and Whereas recent unfortunate and highly provocative incidents oclurrinz in Panama and the Canal Zone, furnish added and imperative reasons for the adoption of the indicated House concurrent resolution: Be it therefore Resolved by the Panama Canal Society of Washington, D.C., (t its 20d annual meeting held in Washington, D.C., May 10, 1958, as follows: 1. That it respectfully urges upon the Congress the wisdom and grave importance of adopting House Concurrent Resolution 205 as early as may be possible. 2. That copies of these resolutions of the Society be furnished to the Congress, the press, and other Panama Canal societies. DISORDERS SPREAD TO TERMINAL CITIES The Isthmian disorders, however, did not stop with the flag-rai.ing demonstration in the Canal Zone. On the evening of May 5. university students, emboldened by their flag-raising triumph in the Canal Zone, marched on the presidential palace in Panama City to demand the taking of immediate steps in behalf of Panamian sovergnt takng f imedateStes i bealfof anarna soeregnty. It was on this occasion that President Ernesto de la Guardia. Jr. vielding to their demands, announced his intention to ask that the Panamian flag fly over the Canal Zone. In this connection, it should be noted that of the flags returned from the Canal Zone 59 were carried by the students to the palace. It is indeed unfortunate that the Government of Panama apparently followed the lead of radical and heedless students in the formulation of its foreign policy with respect to the canal. Encouraged by what appeared to them as a further victory, the radical elements in Panama promptly turned their guns on their own Government. Amidst scenes of wild disorder Panamanian students marched on the palace demanding dismissal of the Minister or Education and improvement of education facilities in public schools. Serious rioting in Panama City broke out on May 20, and spread to Colon the next day. After 6 days of street fighting and bloodshed, requiring use of the National Guard, President de la Guardia claimed a decisive victory in suppressing the uprising that he considered had aimed at overthrowing his government. He also stated that though not implicated in the beginning of these troubles, Communist leaders and fellow travelers had taken part.

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26 ISTHMIAN CANAL POLICY QUESTIONS These scenes of political turmoil, in which many were killed and more wounded, Mr. Speaker, took place in the Panamanian terminal cities of the Panama Canal, almost within a stone's throw of the canal itself. That this state of disorder is a continuing process is shown by the fact t hat at this moment in Panama City there are immured in the National Universit y, which has some strange immunity, some 500 students besieged by the Panamanian National Guard. These situations justify and emphasize once again the wisdom of the framers of the Hay-Bunau-Varilla Treaty, which had granted to the United States the right and authority to maintain public order in the cities of Panama and Colon and adjacent areas-a right which, at the instance of Panama, has been subsequently abrogated through treaty provisions. SECRETARY HAY OUTLINES U.S. POLICY, 1904 Let us now return to the question of sovereignty raised by both C(hmman Alenian and Ambassador Arias, which has been so effectivelv propagandized by the flag raiders in the Canal Zone. It is nothin nlew. Instead, it is merely the "zombi" of an old issue that has been periodically dragged out of its tomb. However, because these otlicials have brought it up, I feel that it is incumbent on someone to set the record straight with materials that they ignored or overlooked. In a note dated May 25>, 1904, from Secretary of Government Thomas Arias, one of the revolutionary junta of 1903, addressed to (ov. George W. Davis of the Canal Zone, Secretary Arias made the following statement: The Government of the Republic of Panama considers that upon the exchange of ratifications of the treaty for opening an interoceanic canal across the Isthmus of Panama its jurisdiction ceased over the zone. Although the earliest American officials were scrupulous in complying with treaty provisions, the Republic of Panama was only a few months old when its leaders, following the note of Secretary Arias, presented the sovereignty question to U.S. officials. In a comprehensive reply to the Panamanian Government on October 24, 1904, that is still classic-Foreign Relations, 1904, pages 613-630-Secretary of State Hay asserted that "the great object to be accomplished by the treaty is to enable the United States to construct the canal by the expenditure of public funds of the United States--funds created by the collection of taxes" and that "the position of the United States is that the words 'for the construction, maintenance, operation, sanitation, and protection of the said canal' were not intended as a limitation on the grant, but are a declaration of the inducement prompting the Republic of Panama to make the grant"-of the Canal Zone to the United States in perpetuity. Though Secretary Hay mentioned the term "titular sovereign of the Canal Zone," he declared that such sovereign is "mediatized by its own acts, solemnly declared and publicly proclaimed by treaty stipulations, induced by a desire to make possible the completion of a great work which will confer inestimable benefit on the people of the isthmus and the nations of the world." He stated that it was difficult to conceive of a country contemplating the abandonment of such a "high and

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ISTHMIAN CANAL POLICY QUESTIONS 27 honorable a position, in order to engage in an endeavor to secure what at best is a'barren scepter.' SECRETARY TAFT EMPHASIZES U.S. ISTHMIAN POLICY, 1905-06 Later, on April 18, 1906, when testifying before the Senate Commit tee on Interoceanic Canals-hearings, volume III, page 2527-Secretary of War Taft, when commenting on article III of the Hay-BunauVarilla Treaty, stated: It is peculiar in not conferring sovereignty directly upon the United States, but in giving to the United States the powers which it would have if it were sovereign. This gives rise to the obvious implication that a mere titular sovereignty is reserved in the Panamanian Government. Now, I agree that to the Anglo-Saxon mind a titular sovereignty is like what Governor Allen, of Ohio, once characterized as a barren ideality, but to the Spanish or Latin mind poetic and sentimental, enjoying the intellectual refinements, and dwelling much on names and forms it is by no means unimportant. Prior to that, on January 12, 1905, Secretary Taft, when discussing the question of jurisdiction in a report to President, Theodore Rossevelt, wrote: The truth is that while we have all the attributes of sovereignty necessary in the construction, maintenance, and protection of the canal, the very form in which these attributes are conferred in the treaty seems to preserve the titular sovereignty over the Canal Zone in the Republic of Panama, and as we have conceded to us complete judicial and police power and control over the zone and the two ports at the end of the canal, I can see no reason for creating a resentment on the part of the people of the isthmus by quarreling over that which is dear to them but which to us is of no real moment whatever (hearings before Senate Committee on Interoceanic Canals, 1907, vol. III, p. 2399). This was a courteous effort of Secretary Taft to sooth the sensibilities of our Panamanian friends but never with the thought or purpose of surrendering the actual, necessary, and exclusive sovereignty of the United States over the Canal Zone and Panama Canal as clearly provided by the 1903 treaty, and as has been interpreted, asserted, and maintained by the United States through all the years of canal history. Certainly, Mr. Taft, as Secretary of War and President of the United States, never directly or indirectly urged or practiced any departure from the well-established policy of the United States with respect to its complete and exclusive sovereignty over the Canal Zone and the Panama Canal. SECRETARY HUGHES REINFORCES OUR POSITIoN. 192 When the subject of sovereignty in the Canal Zone came up again in discussions with Dr. Ricardo J. Alfaro,, Minister of Panama to the United States, Secretary of State Charles Evans Hughes, on October 15, 1923, stated: The grant to the United States of all the rights. power. and authority which it would possess if it were sovereign of the territory described, and to the entire exclusion of the exercise by Panama of any such sovereignty, is conclusive upon the question you raise. The position of this Government upon this point was clearly and definitely set forth in the note of Mr. Hay to Mr. d6 Obaldia of October 24, 1904. (Foreign Relations, 1923, vol. II.) Secretary Hughes reiterated this stand on December 15, 1923, in a conversation with Dr. Alfaro, declaring with a refreshing degree of 67-843-6-3

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28 ISTHMIAN CANAL POLICY QUESTIONS candor that the U.S. Government "would never recede from the position which it had taken in the note of Secretary Hay in 1904. This Government could not and would not enter into any discussion affecting its full right to deal with the Canal Zone under article III of the treaty of 1903 as if it were sovereign of the Canal Zone and to the entire exclusion of any sovereign rights or authority on the part of Panama"Foreign Relations, 1923, volume III, page 684. Moreover, Secretary Hughes added: It was an absolute futility for the Panamanian Government to expect any American administration, no matter what it was, any President or any Secretary of State, ever to surrender any part of these rights which the United States had acquired under the treaty of 1903. To this I would add the comment that it would be unthinkable for the present day responsible authorities of the United States to take a contrary position. PANAMA : A "RESIDUARY" LEGATEE In my address to the House on March 26, 1958, I described the Canal Zone as constitutionally acquired territory of the United States, which description was derived from a copious documentation and canal history. It is pertinent here to stress again that the framers of the 1903 canal treaty, both of Panama and the United States, knew what they were doing. The grant of the Canal Zone for canal purposes was made in perpetuity. Thus it is most significant that the 1903 treaty provided that annuities were to be paid only "during the life of this convention," which could be modified or changed. The treaty also contained provisions for a change in status of the Republic of Panama through its "union or confederation" with other states. Thus, the Panama Canal setup was created for all time and all contingencies. In the light of the perspective that is now possible what is left for Panama in connection with its claim of "titular sovereignty," which has been variously described by Secretaries of State as an "absolute futility," a "barren ideality," and a "barren scepter"? At best that country is a mere residuary legatee with justifiable claims for the Canal Zone only in the event of the United States ceasing to maintain and operate the Panama Canal. In such case, as I have stated heretofore, the United States would not raise any objection to Panamanian reassumption of the indicated sovereignty. On this phase of the case I would submit that if the United States should ever abandon the Panama Canal it would indeed be a sad day for all nations, and especially for Panama. In such event the whole world would come tumbling down to envelop and destroy the Panamanian Republic. Meanwhile, as set forth in my March 26, 1958, address, the Canal Zone remains as part of the constitutionally acquired domain of the United States. PLED PLOTS WELL PLANNED Mr. Speaker, the international communistic conspiracy does not operate blindfolded. Instead, it thinks and it plans in terms of generations and makes its moves with ruthless calculation. The series of in

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ISTHMIAN CANAL POLICY QUESTIONS 29 cidents from the flag-raising in the Canal Zone on May 2, on through the assaults on the Vice President at Caracas on May 13, and the serious disorders in Panama, May 19-21, 1958, cannot be viewed as isolatled occurrences, for they are alike and have the same common denominator. All were perpetrated by so-called university students, all had trained leaders, and all were executed with the ruthless skill and precision characteristic of the Red pattern. Of these disorders, those affecting the operation of the Panama Canal, though less publicized, have the greatest significance. The aim has been to drive the United States from the Isthmus of Panama; and if this should fail then to utilize the canal for the purpose of fanning to flame anti -American feeling throughout Latin America. The time for our Nation to make its position clear is long overdue. The trend of events over a long period makes our course unmistakable. Every day that passes stresses the urgency for a strong policy declaration by the Congress that there will be no further changes in the basic canal treaty setup and that the United States is not going to stand for further liquidations of its power and authority in and about the Canal Zone. Temporization on the subject helps neither Panama nor the United States. To protect our interests in the current situation with respect to the Panama Canal, we have adequate legal means under solemn treaty obligations. TREATYMAKING REQUIRES INFORMED NEGOTIATORS In view of the attitude evidenced by certain Panamanian officials and provocative actions by radical elements using Panama as a sanetuary for hostile propaganda against the United States, will not searching queries naturally arise in the minds of American taxpayers concerning our relations with Panama ? Will they not ask why should our tax money be used to finance such a tropical luxury as a $23 million proposed toll-free bridge at Balboa, replace ing_ adequate free ferry service? Will they not also ask why they should bear the cost of ceding to Panama, without adequate consideration or provision for alternative facilities, of the terminal yards and passenger stations of the Panama Railroad ? Will they not inquire into why the Hotel Washington in Colon should be given to Panama without compensation or replacement? Of course, they will ask these embarrassing questions about our conduct of Isthmian affairs, and many more. Obviously, the present situation is not a sudden development. As shown in my previous addresses it goes back to the Hull-Alfaro Treaty of 1936-a treaty negotiated about the same time that the United States recognized Soviet Russia. Featured by a serious weakening of U.S. rights and authority in the Isthmian area but without changing the fundamental provisions for the perpetual grant of the Canal Zone for canal purposes, the process of erosion was advanced in the 1955 treaty. While the explanations of this deteriorating situation are complex, an examination of available records discloses that Panamanian negotiators overmatch United States negotiators. The Panamanians were far better informed and the Americans appear to have been uninformed professional appeasers.

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30 ISTHMIAN CANAL POLICY QUESTIONS CONGRESS SHOULD ACT PROMPTLY As shown by extensive records that from time to time I have detailed to the House the Isthmian area is a region that has been long featured by partisan and mercurial politics. It would be utterly futile to attempt to operate the Panama Canal with efficiency and in keeping with treaty obligations should such activities be permitted to invade the Canal Zone, as was clearly foreseen by the authors of the 1903 treaty, both in Panama and in the United States. They drafted the treaty to guard against such intolerable conditions as we have recently witnessed in the Canal Zone and in the terminal cities. Only by freedom from political considerations of any country can stability in the Canal Zone be guaranteed. To that end, I urge with all the force at my command the prompt passage of House Concurrent Resolution 205 of the resent Congress. In order that the Congress and the people of the United States may have some of the documentation on which my remarks are based, I quote a selection of news stories from Panamanian, Latin American, and United States newspapers, as follows: [From the Panama American of May 2, 1958] STUDENTS PLANT 50 REPUBLIC OF PANAMA FLAGS IN CANAL ZONERAID DESIGNED To REAFFIRM SOVEREIGNTY Panamanian university students, launching Operation Sovereignty, claim to have planted about 50 Panamanian flags on the Canal Zone today. The Students' Union issued a communique saying the students were instructed not to violate any Canal Zone traffic rules, not to enter militarv reservations, and to respect the United States flag. The communique described the raid as a symbolic act aimed at reaffirming Panamanian sovereignty over the Canal Zone, and calling to national and international attention problems between Panama and the United States concerning the canal. None of the students was picked up by the Zone police. An official spokesman said the Panamanian foreign office was "considering the delicate situation" which the students had created. Canal Zone officials had no comment. Canal Zonians in general took the whole affair as a joke. Places in which the flags were planted included the Canal Zone side of the Fourth of July, the Prado, the Thatcher Ferry, and in front of the Administration Building. The flag in front of the Administration Building was planted by a group of five students traveling in an automobile. In full view of the building's astonished white-collar workers they tried to plant one flag firmly in the center of the grass circle by the main door. The mast of the students' flag broke, but they managed to stick the stump into the turf before taking off at speed. The Canal Zone cop on duty at the building walked over calmly, respectfully folded the flag, and took it into his police booth. In other places the students placed the flags so insecurely that they fell to the ground. American observers, mindful of the manner in

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ISTHMIAN CANAL POLICY QUESTIONS 31 which the Stars and Stripes are never permited to touch the ground. commented that the students did not seem to have much patriotic respect for their own flag. Students Union President Carlos Arellano Lennox. in a manifesto to the people of Panama, declared that statements by Congressmen and certain organizations in the United States have revealed an intention to establish a U.S. colony or protectorate in the Zone. The manifesto said that Operation Sovereignty was intended to demonstrate the feeling of Panamanian students in favor of a fundamental revision of the treaties between the United States and Panama. Such a revision would seek to realize Panama s rights and demands. [From the Panama Star and Herald of May 3. 195-1 REPUBLIC OF PANAMA FLAG PLANTED IN CANAL ZONE BY STUDENTSS IN SURPRISE MOVE The Panamainian fla, was planted in the Canal Zone by Panama University students yesterday morning in a well-planned surprise operation that created what the foreign office termed a -delicate situation. Thirty-nine flags were removed by the Canal Zone police from various spots in Ancon and Balboa. A student spokesman said 72 flags were used in the operation and indicated the same banners were planted in spots not readily visible to police. The incident brought immediate diplomatic repercussions. Robert Acly, Counsellor of the U.S. Embassy in Panama. called on Foreign Minister Aquilino Boyd at noon yesterday. There was no announcement if a formal protest was lodged. An embassy spokesman said: "The embassy is awaiting a full report from the Governor's office in the Canal Zone. In the meantime. we are watching the situation with interest. There will be no further comment pending the receipt of the report." The Panama Foreign Office said: The Foreign Office is considering the delicate situation which has developed as a result of the symbolic act which took place this morning when a group of youths belonging to the Union of University Students of Panama raised the Panamanian flag in the Canal Zone. A Panama Canal spokesman said: "The action is ridiculous and not worthy of official notice." There was official concern that the incident might be followed by new demonstrations within the Canal Zone that could result in violence. The operation, named Operation Sovereignty in a University Students Union announcement. was carried out at 10 :15 a.m. Groups of students-handpicked for the operation-were posted at the sites which had been chosen for the flag-planting. At 10:15 a.m. (their watches had been synchornized prior to the operation) each group moved to its assigned post, planted the flags and left. Their instructions were to offer no resistance in the event of arrest. to keep away from military reservations and not to run. (All of the men participating in the operation) (some young womer took part

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32 ISTHMIAN CANAL POLICY QUESTIONS also) were required to wear coats, in order not to give the impression that vagrants were involved. At least two of the groups were accompanied by photographers alerted just before the operation was carried out. Simultaneously with the planting of the flags, other university student teams were calling at 10:15 a.m. at the Presidential Palace, the Foreign Office, the office of the dean of the university and the office of the Foreign Affairs Committee of the National Assembly to report that the operation was being carried out. Another group of students rode up Central Avenue in cars, carrying the Panamanian flag. Carlos Arellano Lennox, president of the university union, spoke over a local radio station, announcing that the operation had just been carried out. The first report of what was happening came from the Administration Building. At 10:15 a.m., four men walked to the center of the grass circle in front of the Administration Building, planted the Panamanian flag which was on a wooden staff 7 feet long (the staff broke on the first try) and then posed by the flag while a fifth man took their picture with the Administration Building in the background. The group then went back to an unidentified automobile and left via Heights Road. (Zone police said the men ran; a member of the student group said they walked.) The flag planted in front of the building was of good quality cloth and measured 3 by 5 feet. The other flags were made of cheesecloth and measured 12 by 18 inches. Under each flag was a blue triangular pennant with the initials UEN (Union de Estudiantes Universitarios) in white. Zone police reported that other flags were planted as follows: 10 on La Boca Road, 1 in front of the Balboa Service Center, 9 along the Balboa Prado, 3 in the Ancon residential area, 6 on Frangipani Street, 4 near the Tivoli Guest House, 3 on Fourth of July Avenue in front of the district court building, and 1 in front of the Civil Affairs Building. There were reports of other banners planted at the Chinese garden near Corozal and on the main thoroughfare in Cocoli and near Rodman. All of the flags were removed and taken to the Balboa police station. No arrests were made, although in some instances the demonstrators could have been detained. Authorities said the demonstrators, if arrested, could have been charged with disturbing the peace. Immediately after the incident, zone police set up a reinforced patrol along the Panama City-Canal Zone boundary line. Student President Arellano Lennox said last night the movement was not anti-American, pro-Communist or connected with any political organization. It was a strictly student move, he emphasized, aimed at bringing to the attention of the people of the United States the juridical situation in the Canal Zone. Arellano Lennox pointed out that in Spain and Japan--the former a neutral in the last war and the latter an enemy country-the flags of those nations fly at American bases in the two countries; yet PanIma, which has been the United States ally, is denied the right to fly its flag in its own territory in the Canal Zone. Arellano Lennox, who is an instructor in a private Catholic school in Pmnama. said the operation was aimed to show that while Panama

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ISTHMIAN CANAL POLICY QUESTIONS 33 is a weak country, there is a vigilant youth ready to affirm Panama's rights whenever necessary. He reiterated the students' demand that Panama receive a fair share of benefits from the Panama Canal. (In a formal statement earlier, the University Students Union reaffirmed its goal for a fundamental revision of the Panama Canal treaties.) The student president pointed out that students went into the Canal Zone not to haul down any flags, but to plant the Panamanian flag. [From the Christian Science Monitor, of May 3, 1958] PANAMA ADVISER ATRS IEWS (By Ralph K. Skinner) PANAMA CITY, PANAA.-Diogenes de la Rosa, top economic adviser to President de la Guardia of Panama, has frequently been termed, "the leading Marxist intellectual in Latin America." Apprehension has been expressed here and abroad about the influence of Senor de la Rosa on the President's thinking and resultant decisions. Asked concerning his Marxists beliefs, Senor de la Rosa answered, "I am a Marxist but not an orthodox Marxist. I don't accept the whole system. I believe it represents a good method to study the social phenomenon but it is not for me a dogma." One matter on which Sefior de la Rosa is especialy vehement is that he is not a Com miist. Asked if communism as practiced in the Soviet Union would be beneficial for Panama, he replied, "Absolutely not, I do not believe communism meets the basic problem in human needs. It does not do so in Russia and it would not do so in Panama. Technologically and economically, communism accomplishes much. But the Russian man does not live better because of communism." Sefior de la Rosa added that he did not believe that complete acceptance of Marxism would be beneficial to the people of Panama. POWERS EXCEED POST Officially, Diogenes de la Rosa is Executive Director of the National Economic Council of Panama, reporting directly to the President. But he is more than this. He assists President de la Guardia in the preparation of major speeches and determination of policy. He said: I gather the facts and assemble the information and the President writes the speeches. I also draft laws and executive decrees. I make investigations for the President in everything but political matters. I do not mix in politics at all. The adviser revealed that the President uses him as go-between and mediator between the executive power and certain groups. For example, he acted as go-between enabling President de la Guardia to make a special, unannounced arrangement with the student federation at Panama University aimed at keeping the students under control. Those who oppose Senor de la Rosa's important post contend that the President must make decisions based often on facts submitted by his adviser and that these facts may contain some imparta

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34 ISTHMIAN CANAL POLICY QUESTIONS tion of Sefior de Ia Rosa's saturation for 30 years in certain Marxist philosophies. ACCUSATIONS RESENTED President de Ia Guardia resents the accusations against his adviser and the insinuations that his thinking is guided by Sefior de la Rosa. Nevertheless, it is known that the President is cognizant of the Marxist background of de la Rosa and, privately, does not deny it; that the President considers Senior de Ia Rosa's value to him as an adviser far outweighs the negative aspects, and that the President considers himself capable of straining out any possible interpolations in de Ia Rosaprepared reports and drafts. It is rumored that within the President's own cabinet and elsewhere, some question the chief executive's ability to distinguish between his own conclusions and those of Sefior de la Rosa. Of course, part of this may be attributed to the strong jealousy here of Sefior de la Rosa's unquestioned influence with the President. Seinor de la Rosa's official representation of the Panama Government abroad has been protested by groups in Panama. He is presently attending an economic council in Guatemala. Of this he said: There is a considerable plan for an integration of the economy of the Central American countries, and, in my opinion, Panama must cooperate in this integration. AFFILIATION DENIED The presidential adviser said that there is no organization of Marxists in Panama; he has never been affiliated with the Communist Party: and he has had no political affiliation since 1948 when he left the Socialist Party in which he had been a leader. For the record Sefior de la Rosa has served as adviser to several Latin-American presidents and has traveled widely in this area. He is a prolific writer. Senior de la Rosa said he is part of the generation that brought student revolution throughout Latin America in the years 1918 to 1925. He spoke of the Soviet revolution of 1917 as being an instructor for his generation, and added, "Everywhere I go in Latin America today, I find ready contacts with the people of my generation because we all share the same ideas." The people of the United States do not realize it, but they lack the "simpatia" of the Panama people, according to Selor de la Rosa. He said this was very dangerous because such "simpatia" is essential to the proper defense of the Panama Canal. He repeated that "There is no 'simpatia' for the United States in the Republic of Panama." DA NGER CITED The presidential adviser was asked if this lack of "simpatia" meant that the Panamanian people might undertake to aid an enemy of the United States in time of war. Sefior de Ia Rosa answered, "That is exactly what I mean and it is very dangerous." Commenting further on United States-Panama relations, he added All the people of Panama feel a great resentment toward the United States. We have the impression that the United States does not wish to comply with its promises made in the 1936 and 1955 Treaties. The Panamanians don't believe that the United States keeps its promises to Panama.

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ISTH MIA-N CANAL POLICY QUESTION S 35 Senor de ]a Rosa, who (Oidrs himinsel aii ohljeive ) .bfeim the United States, Spoke o 1 111nited SlatofiihII e t) 'ii c t 1!w people of Latin Ameria. IHe sail the United S[da h battle for public opinion in Lat'iin Aierica hw.amse hzk, a v :t logical penetration into the sfiosness od lie Lao iM-Am 111-wI countries. Seior de la Rosa is sometimes accused of being pro-Soviet and alit iAmerica. Asked about this, lie replied: That is not so. I am an enemy of the Soviel. I am not unfrietidl v he United States. I criticize and oppose certain policies of the United States. I consider certain of these policies detrimental to the interests of my counry and to all of Latin America. But I am not a foe of the United States. He indicated that the policies he opposed were economic. He said he strongly believed that the United States was restraining trade in Latin America. ECONOMIC AID s0'uGHT Seflor de la Rosa says he believes the United States should give more economic aid to Latin America., and less military equipment. Panama's present problem, he said, is the need to create an economy. lie says, "To me, that means we need capital lim and not social isi. Socialism cannot solve the problem now andt capital is needed. However, with capital I am seeking far better salaries for laborers and a raising of the standard of giving. This adls up to a progress ;ive capitalism." Getting this capital is not eas.y. Native Pana investors will not put their money in low-return farming and betterment projects and low-cost housing, he said. Seflor de ]a Rosa stated that the state would have to provide the funds for agricultural aid. educational aid, improved sanitation, and public health, more and better roads, and the like. But the state lacks funds. A foreign loan is being contemplated at the present time. The sum of $30 million at this time would ieet Panama's pressing needs and permit great progress to be made, the financial adviser considers. The highly publicized demands of certain Panama politicos for 50 percent of the revenues of the Panama Canal, and other such fanciful proposals, do not arouse much interest in Sefnor de la Rosa. What he would like to see is a definite program by the United States to aid Panama with a stated sum of money each year for several years. This would enable setting up programs to accomplish some last ing good, Sefior de la Rosa told this correspondent, and added that he has a plan for it if the funds are forthcoming. [From the Washington Evening Star of May 6. 19S I PANAMA SEEKs To FLY HER FLAG OVER C\N .\1 PANAMA, May 6.-President Ernesto De La Guardia. Jr., says lie is going to ask the United States at once to let the Painanann fzau fly over the Canal Zone. The President sent that word out last night to a student demonstration demanding that Panama reassert its sovereignty rights over the

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36 ISTHMIAN CANAL POLICY QUESTIONS Canal Zone. The United States operates the waterway and controls the zone 5 miles wide on each side of it under a perpetual lease. About 100 students marched on the presidential palace carrying 59 of the Panamanian flags they had planted at various points in the Canal Zone Friday in what they called "Operation Sovereignty." Canal Zone authorities returned the flags to the Panamanian government. [From the Panama Star and Herald of May 6, 1958] PANAMA WILL MOVE FOR FLAG To FLY IN ZONE-PRESIDENT GivEs WORD AT STUDENT DEMONSTRATION-UNIERSITY STUDENTS PARADE CARRYING FLAGS PLANTED IN ZONE; BANNERS RETURNED YESTERDAY President Ernesto de la Guardia, Jr., sent word to a student demonstration last night that his administration will undertake immediately the necessary steps to have the Panamanian flag fly in the Canal Zone. The message was conveyed by Carlos Arellano Lennox, president of the university students union, from the balcony of the Presidential Palace as President de la Guardia stood beside him. De la Guardia had excused himself from addressing the demonstrators because of a hoarse throat. A group of about 100 university students had paraded earlier along the entire length of Central Avenue to the Presidential Palace, carrying the Panamanian banners which they planted in various spots in the Canal Zone last Friday. The students said their Operation Sovereignty was aimed at reasserting Panama's rights of sovereignty in the Canal Zone. Fifty-nine flags were returned Monday by Canal Zone authorities to a Panamanian official and were in turn delivered to the university students. Lt. Col. Raul Arias, aid to President de la Guardia, received the flags at the Balboa Polic Station from Capt. Gaddis Wall, district commander. The return of the flags was requested on instructions from President de la Guardia. The banners were delivered by Colonel Arias at the residence of Student President Arellano Lennox. The university students' parade started at 6 p.m. from the plaza opposite the Foreign Ministry building. Marching without a police escort, the students bucked the heavy Central Avenue traffic at the start of their march, but by the time they reached the downtown seeion they were at the head of the line of vehicles and the avenue was clear of traffic. The flag-bearing students were preceded by a caravan of seven vehicles, including one equipped with loudspeakers over which martial airs and typical Panamanian music was played. There was applause from balconies and from the sidewalks for the marchers. At Santa Ana Plaza, the students halted and sang the national anthem. After the demonstrators reached the presidential palace, a delegation of students headed by Arellano Lennox went upstairs to talk with the President.

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ISTHMIAN CANAL POLICY QUESTIONS 37 The conference lasted about half an hour. On the street. the demonstrators chanted for De ]a Guardia to come out ail(1 an on~iouncer called on the President "to do your duty and salute the flag." The Chief Executive came out on the balcony wit lithe s u-lent delegation. Arellano Lennox, addressing the demonstrators. AI io had been joined by several hundred citizens, said the delegation liad informed the President that the youth of Panama demanded that before any bases are granted for intercontinental missiles the PTanamaian flag should fly in the Canal Zone. This was a reference to a. recent request by the United States for a survey of hilltops in Panamanian territory for use as radar sites. The results of the survey have not been disclosed. Arellano said the President was told also that the youth demanded that before any more concessions are made to the United States, Panama's rights in the Canal Zone be recognized. le added that it was Panama's duty to help hemisphere defenses, but that did not mean submitting to more humiliations. As Arellano concluded his brief report. the demonstrators took up a chant for President de la Guardia to speak. Arellano announced that the Chief Executive excused himelf from speaking because of a hoarse throat. There were boos from the crowd. Arellano signaled for silence and added that the President's message was that starting today the Government will undertake the necessary investigations and steps to have the Panamanian flag fly in the Canal Zone. There was applause. The President immediately withdrew inside, followed by the student delegation. The demonstrators on the street began dispersing. The demonstration was orderly. There were scattered cries of "Down with the Gringos!" [From the Panama American of May 6, 1958] UNITED STATES-REPUBLIC OF PANAXA FLAG NEGOTIATIONs EXPECTED IN WASHINGTON SOON Panama, will shortly open negotiations with the authorities in Washington with the aim of authorizing the flying of the Panamanian flag alongside the Stars and Stripes in the Canal Zone, it was believed in well-informed circles today. Such negotiations would be the logical next step following President Erensto de ]a Guardia, Jr.'s assurance to Panama University students last night that his administration will seek to have the Panama flag flown in the zone. It was understood that during negotiations leading up to the 1955 Remon-Eisenhower treaty the United States declined a Panamanian proposal to the same effect and that ships entering Canal Zone pots and transiting the canal should fly the Panamanian flg at the foremast along with the Stars and Stripes. It is customary for ships entering port to display the flag of the country in which that port is situated. The university students paraded through Panama City to the Presidcncia last night proudly bearing the ., flags which earlier vesterday

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38 ISTHMIAN CANAL POLICY QUESTIONS I iad been ret urned froiii i lie ('anal Zone. They were the flags t he students 1lanted in the zone in Operation Sovereignty. The parade along Central Avenue ended at the presidential palace where I EU president, Carlos Arellano Lennox, and a delegation of st tident leaders were received by President de la Guardia. Arellano Lennox presented one of the flags to the President as a gift and slhortlv afterwards, with Mr. de -a Guardia standing beside him on the balcony of the Presidencia, the student leader announced to the Catering of students and others below the President's promise to negotiate the flying of the Panama flag on the Canal Zone. Mr. de la Guardia, who is suffering from hoarseness, excused himself from speaking to the student gathering. Speaking from the balcony, Arellano Lennox declared that the delegation had informed the President that the students are demanding that the Panama flag fly over the Canal Zone before any bases be granted to the United States for radar stations or missile-launching sites. The announcement that the President had agreed to negotiate the flying of the flag was greeted by cheers from the group below. The students were applauded yesterday as they marched along Central Avenue by people who gathered on balconies along the route of the parade. The demonstrators dispersed at the end of Arellano's speech. [From the Panama Star and Herald of May 7, 1958] REPUBLIC OF PANAMA STARTS MACHINERY FOR FLAG NEGOTIATIONsADVISORY BODY ASKED To TELL BEST APPROACH-PREsIDENT INSTRUCTS FOREIGN MINIsTER To SEEK ADVICE FROM NATIONAL COUNCIL OF FOREIGN RELATIONS The Panama Government yesterday set in motion the official machinery for formal negotiations with the United States to have the Panamanian flag raised in the Canal Zone. A similar bid by Panama in the 1955 treaty negotiations was unsuccessful. The official announcement said President Ernesto de la Guardia, Jr., instructed the Foreign Office to consult with the National Council of Foreign Relations over the best way to approach the negotiations. The eight-man council is composed of the country's top legal minds. It includes two former presidents-Drs. Ricardo J. Alfaro and Harmodio Arias-and four former foreign ministers who have been closely connected with past negotiations with the United States. President de la Guardia on Monday night sent word to a university students' demonstration that his administration would undertake immediately the steps necessary to have the national flag flown in the Canal Zone. Last Friday, university students planted 59 Panamanian flags in the Canal Zone as a symbolic act to reaffirm the country's sovereignty over the 500-square miles of Panamanian territory in which the United States operates the Panama Canal. The flags were returned to the University Union which paraded them Monday night to the presidential palace.

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ISTHMIAN CANAL POLICY QUESTIONS 39 The announcement issued by the President's press office following a Cabinet meeting yesterday said: Complying with instructions from the President of the Republic, Ernesto de la Guardia, Jr., the Minister of Foreign Relations, Aquilino Boyd, this morning addressed the chairman of the National Council of Foreign Relations to advise him of the desires of the National Government to undertake negotiations with the Government of the United States of America looking toward the raising of the Panamanian flag in the Canal Zone and to seek, through the advice of that body, the most convenient approach to those negotiations. How long the Council of Foreign Relations would take to report back to the Foreign Ministry on the flag question was not known. Observers recalled that among the proposals submitted by Panama during the 1955 treaty negotiations was one which called for ships transiting the Panama Canal to carry the Panamanian flag and for raising it at the canal terminals. Negotiators for the two countries did not reach agreement on the proposal. [From the New York Herald Tribune of May 7, 1958] PANAMA: A MATTER OF FLAG PANAMA.-The government of President Ernesto de la Guardia. Jr., holds that American rights in the Canal Zone are restricted mainly to the operation and defense of the canal, but opposition parties and public clamor are pushing him to take an even stronger stand. The other night about 100 students joined by citizens, marched on the presidential palace in a demonstration called Operation Sovereignty. De la Guardia pleaded sore throat, didn't show. But yesterday he moved to swing support behind his position; he said he will ask the United States to let the Panamanian flag fly over the Canal Zone. The situation was brought to a head by a U.S. request to put radar installations in Panamanian territory. [From the Americas Daily, Miami Springs, Fla., of May 8, 1958] LATIN AMERICAN NEws IN BRIEF-PANAMA WANTS HER FLAG FLYING IN CANAL ZONE PANAMA.-It is expected that soon the Government of Panama will start negotiations to have its national flag wave at the side of U.S. flag in the Canal Zone. These negotiations will follow the statement of President Ernesto de la Guardia, that his Government wishes to hoist the Panamanian flag in the Canal Zone. The students had organized a demonstration to the presidential palace carrying 59 Panamanian flags they had hoisted last Friday in the Canal Zone in an act they called Sovereignty Operation. In this capital it is recalled that in the negotiations of the treaty of 1955 with the United States, Panama asked for a similar stipulation, and that the ships crossing the canal should hoist the Panamanian flag. but the United States rejected the proposal.

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4() ISTHMIAN CANAL POLICY QUESTIONS [From the Panama Star and Herald of May 14, 19581 COMMUNISM ON THE MARCH Let face it. The Reds are undoubtedly on the march to take over our free Americas-Both ideologically and by force of arms if we are so supine as to let them get away with it. Because the United States has won two world wars, fighting for democraev not aloiie for its own great nation but for all the American nations of this hemisphere and for our allies overseas, does not mean that, the United States of America can buck the growing forces of Red communisin singlehanded. It took the combined forces of the Western Allies to win two world wars. It may well take more than all of our Americas together to buck Russian communism which is obviously on the march as of today. And the Russians mean business. They know the power of slanted publicity; also the power of bullying small nations into falling in line with them; also that of infiltration from within. The Communists of today can command much of the Far East area and no one knows how much of the Near East, plus that sprawling African Continent. It is called, the Dark Continent because the majority of its people are dark skinned. Also because it is still so little civilized save in a comparatively few spots, by the French settlers, a few German groups, some Italian colonists around the Mediterranean. We also know that there are Communist parties agitating throughout our supposedly free Americas. We have heard of Communist infiltration in Guatemala. We have seen it in action right here in Panama. The doctrines mouthed by so many young speakers were following the Moscow line. Yet the Moscow line is wholly alien to all of our free Americas. All of our nations have fought for these freedoms and won them by force of arms. By the same token we will fight for them again. The Moscow intrusion is worldwide. Only yesterday the Star and Herald featured-and well it did in the printing-the fact that rioters had sacked and burned the U.S. library in Beirut; the Iraqi pipeline was blown up as rioting flared in Lebanon. And the secondary headline reported that angry mobs are shouting for the downfall of the pro-Western government. That is what Communist infiltration means. How much further warning do we of these free Americas need before we stand up and throw out these disloyal citizens who are so basely abusing the boom of honest citizenship in nations whose freedoin was bought at the high cost of sweat, blood and tears. The citizens of our free Americas do not deserve to enjoy the freedom our forefathers bought in blood if they, the descendants of heroes of the independence, do not close ranks in all the countries of our Americas and throw the Communist agitators out. [From the Panama Star and Herald, May 16, 1958] PRESIDENT SAYS HE IS CONCERNED OVER ACTIvITIEs OF AGITATORS President Ernesto de la Guardia, Jr., said yesterday he was concerned over the activities of agitators who in reality want none of the nation's problems settled.

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ISTIIIIAN CANAL POLICY QUESTIONS 41 He made the statement after referring to 'student movements which are developing now in some sections of the country." The Chief Executive did not elaborate on this reference in his speech which he delivered yesterday in Oeu at the dedication of a Government-built rural liusing project. Two recent student movements which drew national attention were the planting of Panamanian flags in the Canal Zone by National University students and a parade by high-school students from Aguadulce to demand completions of a new school building. I cannot close my remarksthe President said in his prepared addresswithout stating, in connection with recent student movements which are developing now in some sections of the country, that I have not cast aside the dreams of national redress and redemption from my formative years in the National Institute. That I still dream of a just, prodigal, rich, noble, and great fatherland. That is my dream as a citizen and my dream as Chief Executive. And if I suffer the agony of fighting realities which tend to destroy that dreamvested interests that operate openly or surreptitiously, that resort to bribery when they cannot disconcert and confuse public opinion through well-known press organs; the deep political decomposition of the country which contaminates from the popular strata to the highest officials; the state of excitement of the popular masses which turns them into victims of maneuvers by agitators who in reality want no problem settled because they would then lose the basis to satisfy their vanity and their lust for the limelight while I suffer the agony of fighting against these realities, which cannot in any way be blamed upon students, yet I do not lose breath, nor does my will falter, nor my dream diminish for a just, prodigal, rich, noble, and great fatherland. In his speech the President emphasized that while problems of every nature grow throughout the country, the means for solving them still are inadequate. He stressed that it was necessary to plan for the country overall and not just for particular communities. I myselfhe addedfeel at times that my capacity for waiting disappears in the face of messages and messages which demand administrative action to solve 1,000 difficulties which embitter the life of the Panamanian family and narrow its horizons and I cannot help but deplore in such cases the lack of means for rendering help. But no one is unaware that ours is a country of scarce and limited economic resources. He called for a "deep sense of responsibility" on the part of the people in order not to "mortgage the future by acting senselessly in the present. [From the Washington Evening Star of May 20, 1958] PAXNAA STUDENT CLAsH KILLS 1, INxuMs 62 PANAMA, May 20.-A high school youth was killed and 62 persons were injured in demonstrations against Panama's education minister yesterday. President, Ernesto de la Guardia, Jr., blamed the clash between the students and national guardsmen on political opponents who he said used the youth as a shock force against his government. le agreed to meet tomorrow with student leaders to discuss their demand for removal of three guard commanders. The students promised an orderly funeral today for the youth who was killed.

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42 ISTHMIAN CANAL POLICY QUESTIONS The 62 persons injured in the clash at Panama City's largest high school included 42 students, 18 guardsmen, and 2 bystanders. Four students and five guardsmen were hospitalized. GUARDS ATTACKED The students hurled stones at the guardsmen and attacked them with clubs before the troops broke up the mobs with shots fired into the air and tear gas. Mr. de la Guardia said the dead student, Jose Manuel Arauz, died of contusions rather than bullet wounds. Volunteer firemen patrolled the school after guardsmen were withdrawn after the clash. No students were arrested. Thousands joined the high school in an orderly, -mile mourning march on the presidential palace last night. A delegation promised young Arauz' funeral would be orderly. It demanded the officers' removal and repeated the original student demand that Education Minister Victor Juliao be fired. ASK AID FUND PROBE The students accuse Mr. Juliao with not properly equipping and staffing all high schools. They also demand an investigation of the use of U.S. aid funds allocated to improve Panama's schools. Mr. de la Guardia said in a radio address that 27 percent of the nation's budget is devoted to school needs but because of limited resources not all needs can be met. [From the Washington Post & Times Herald of May 22, 1958] PANAMA RIOTS SPREAD TO COLON PANAMA, May 21.-Panama's student disorders spread last night to the city of Colon, where rioters stormed national guard headquarters with stones and bottles. Six guardsmen and a boy and girl were injured. The demonstrators, who included nonstudents, rioted after a youth mass meeting. Later a student leader told authorities he had not instigated the attack. Authorities have blamed most of the trouble on political agitators. A student was killed in a clash with national guardsmen Monday. President Ernesto de la Guardia, Jr., ordered schools closed after the student federation ordered a 48-hour strike. The students are demanding the removal of Education Minister Victor Juliao and three national guard commanders. They accuse Juliao of failing to equip and staff schools properly. [From the Washington Post & Times Herald of May 23. 1958] TRooPs BATTLE SNIPERS IN 2 CITIES-9 KILLED, 61 HURT IN PANAMA RIOIrNo; GOVERNMENT DECLARES STATE OF SIEGE (By Luis C. Noli) PANAMA CITY, May 22.-Panama troops battled destructive rioters and snipers today and bottled up student demonstrators here and in Colon.

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ISTHMIAN CANAL POLICY QUESTIONS 43 Nine persons were killed and at least 61 injured in hour5 of figIi iIII here between national guardsmen and rioters who went on a rampa of destruction. The Government claimed snipers killed the victims. There were no reports of casualties at Colon, second largest city in the country, at the Caribbean entrance to the Panama Canal. Other sections of the country w ere reported quiet. The riots came in the midst of the threat of a general strike at ii i lnight Thursday. The Government met that threat and the a-compmiy*ing riots with declaration of a stare of siege-modified martial Iah. There were reports the afternoon opposition newspaper Naci*0 1 forced to close and its editor. Manue] Madia \aldes, wvt jailed. National guard headquarters said National Uiniversity ii wlent arranged for a truce to evacuate students massed in the National Istitute before the troops moved in to clear out smpers. At Colon, students concentrated in a high school building anl tiroopgave them an ultimatum to move out in groups of three to surrender. The strike was called after several days of student demois-trat iM, demanding the ouster of Education minister Victor Juliao for aIle1ed failure to correct bad school conditions. After national guardsmen fired on students Monday. killingQ oni youth, the students expanded their demands to include [he firingr of4 three national guard chiefs. President Ernesto de la Guardia, Jr. refused to yield to all the student t demands. The Government charges that political foes of De la Guardia are inciting the students to demonstrate. The students deny it. No opposition figure has been named as a leader. [From the New York Tines (f May 26, 1958] PANAMA REGINE CLAIMS A VICTORY-COUNTRY CALM AFTER ( Yv OF RIOTS-PRESIDENT SAYS STUDENTS WERE DrIPES (By Paul P. Kennedy) BALBOA. C.Z., May 25.--President Ernesto de Ia Guiardia, Jr. claimed a decisive victory today in the Panamanian iprtsn1. He said the victory had been achieved wvitliout a reSort to eres1Ve force. He conceded however, that nemotiat ions with sitdle( who had barricaded themselves in the National University were at a stalemate. Panama has had 6 days of street rioting and blood4hed. The lemonstrations led by students began last Monday. The President termed the demonisrations "a direcr attack to overthrow my government.He said the students had heen nsed "a, a catalytic.' "AVithout knowing it," he said, "they played into the lands of tioie attacking me." Sefior de la Guardia acknowledged the validity of criticism that his government had been soft. "I must confess that what I wanted to demonstrate a tolerince was taken by the public as weakness, which ula -omethliin to do with the *7-842-C6--4

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44 ISTHMIAN CANAL POLICY QUESTIONS show of force by the opposition during the demonstrations," he declared. Ile said he doubted that Communists had been implicated in the Sprisingrs at the beginning, but that they had come in later. He singled out two student leaders, Bolivar Davarlos and Andr6s E. Canillo, saying the former was a Communist and the latter a fellow traveler. The President said a committee of disinterested citizens had presented a list of student demands last night, and he had agreed with t he demands as a basis for conferences with student leaders this imorning. Instead of seeking conferences, he charged, the students came up with three new demands. He showed correspondents a letter from the students making the new demands. They called for the release of all persons jailed during the demonstrations, the end of the state of seige, and reestablishment of the rights of labor and students. WOULD NOT FREE ALL The President said he was willing to release all but those charged with crimes of violence. These include persons charged with sniping, he said. He added that he would agree to restoring the rights of labor and students, but these had to be clarified. For example, he said, two bridges were burned during the rioting and students' rights do not cover that. He said he had refused early demands that Victor N. Juliao, Minister of Education, and three top officers of the national guard be dismissed. He added that he would retain Col. Bolivar Vallarino, chief of the national guard, whom history will give a prominent place. [From the Panama American of May 22, 1958] GUNFIRE CLOSE TO CANAL ZONE-7 DEAD, 60 WOUNDED AS STUDENTS DEFY GUARD Panama' City was a battleground again today. There were T killed and at least 60 wounded by early afternoon. The government has suspended civil rights. Firing was heaviest around Central Avenue and the National Institute, command post of the defiant students. Whereas in Monday's skirmishing with the students the National Guard confined their fire chiefly to tear-gas grenades, today rifles and submachinegun fire could be heard throughout the city. Canal Zone Policeman Richard D. Meehan, on duty at the head of J. Street, was injured when a bullet coming out of Panama ripped across his back about the waist. His condition is not serious. Another zone policeman was reportedly hit by a rock. Spent bullets were found in the playground of Ancon School. The school was promptly closed for the day. Pupils who lived in Panama are being kept at the school till someone comes to get them.

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ISTHMIAN CANAL POLICY QUESTIONS 45 Cristobal High School, in Panamanian territory in New Cristobal. did not open today. Students were informed of this previously. Today's fighting is in part a sequel to the expiration at midnight last night of an ultimatum to President Ernesto de la Guardia, Jr. from the students demanding that he fire Education Minister Victor N. Juliao, National Guard Commandant Col. Bolivar Vallarino, seeond in command Lt. Col. Saturnino Flores, and third in command Lt. Col. Timoteo Melendez. Long before the shooting started Panami City was locked up tight this morning. Students roamed in bands through an early downpour to enforce their call for a general strike. Other bands blocked roads coming into the city, and in several cases gave motorists a rough time. Bomberos manned the ambulances which screamed to and from Santo Tomas Hospital. Lucio Paz, Jr., 15, was shot in the chest while standing in De Lesseps Plaza. He was taken immediately to Gorgas Hospital, where he was pronounced dead on arrival. A squad of armed motorcycle policemen roamed the city this morning removing improvised barricades set up across several streets. The policemen sporadically fired shots into the air as they moved about the city, but as soon as they moved on, the students replaced the barricades. One hour later the first clash between students and the National Guard since last Monday, when the police were called off, occurred around 9 a.m. today when students started smashing the plate-glass windows of the Caja de Ahorros (savings bank). Student Miguel A. Batista, reportedly a policeman's son, was critically injured by a bullet in the abdomen during the clash. Another student was hospitalized with severe cuts from broken glass and a third was hit with a rifle butt wielded by a policeman. Reports from Colon this morning indicated that students stoned the home of Gov. Jose M. Gonzalez during the morning hours and roamed the city forcing business places to close. In the trouble areas of Panama' City. armed National Guardsmen restored order after brief skirmishes with the students. However, they refrained from approaching the area of the National Institute, in accordance with instructions issued by their superiors. Nevertheless, the National Institute area took on the appearance of a battleground as snipers took potshots at the students both outside of the school building and in the open patio inside. Students took refuge behind automobiles to escape flying bullets. apparently fired by high-powered rifles from some distance away. Several of the students in and around the institute were injured by snipers' bullets. It was reported late last night that antistudent groups armed with blackjacks and iron bars roamed the center of the citV itching to clash with the students. Early today delegations of students departed for the interior of the Republic to gather support for a general student strike in support of their demands for Juliao's ouster. It was not known whether the strike called for midnight tonight. but. already in effect, will also be aimed at the removal of the three police commanders, as had been originally demanded by the students.

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46 ISTHMIAN CANAL POLICY QUESTIONS In a communique issued this morning, the students federation accused politicians of offering to sell them arms. The communique said the students are rejecting all efforts to inject politics into the moveinent. As a result of the arms offer, all persons entering the National Institute building were being searched for concealed weapons. At least one Panami City newspaper and one radio station was closed down this morning following the suspension of civil liberties. Newsman Manuel Maria Valdes is said to have been arrested by the police. Following conference with student leaders yesterday afternoon, the President suggested that a commission be formed coniprised of six students and six Panama University professors to consider the demands in the field of education as well as those seeking removal or resignation of public officials. The rector of the university and professors were present. Minister of Agriculture, Commerce, and Industry Victor Navas transmitted this to the students at the National Institute. The proposal was rejected. It was understood the students insisted on the removal of the National Guard chiefs, or nothing. While these negotiations were underway, word came that a march of mothers, girl students, and other women would start from the university for the presidencia. This group gained adherents as it went along; was reported to number about 1,000 by the time it reached Cathedral Plaza. At Banco Nacional corner on Central Avenue, male students formed a cordon to protect marchers. At the plaza they were addressed by Cleto Manuel Sousa, a longidentified Communist who is also registered as a student at the universitv. (Sousa made a long trip to Russia a few years ago and had been seen haranguing students groups on Tuesday.) Sousa suggested the men stay behind; heeding his advice, the women went on alone after singing the national anthem. Six women formed a committee who went inside and spoke with the President. They included Mrs. Clara Lopez de Gonzalez, who said in addressing the institute crowd later that she told the Chief Executive: "If by midnight the commanders are not down, you will go down with them." Others on the committee were Lesbia Espinosa, Lidia de Gomez, Minerva de Forte, Noemi Castillo, and Griselda Elden. Mrs. Castillo, who also spoke at the Institute, said she asked the President to come out on the balcony but he did not do so. The Presi(lent was accompanied at the conference only by a Catholic priest, Father Gomez. A Presidential spokesman said later the Chief Executive had offered to discuss any aspect of the case on a factual basis with representatives, "but they seem in no mood to discuss anything." Even before dark some busdrivers had been alerted for a sympathy strike. Members of the Typographers Union met and put themselves on an alert basis.

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ISTHiMIAN CANAL POLICY QT~E STION. 47 A the Carcel Modelo okv jaily inmatu, set up a dir i -;h1ortlv bf -ore amId nigIt. Tvhe were fu Cted 'y e d eVwn and tear -as. A nnml <' f I ,a:id ro anvd the tticr r e JuvghtT. _11 [From the Chri:i2 S Ti e7e M : r o a -cr31. 1cf.7] STUDENTS HARAsS GOVERN-ENT-P TS NEUTRALIZE PAN \MA A N (By Ralph K. Sk nneri PANAMA CI=. PAINAMA.-Panama's President de la Guardia I frustrated and saddened by anti-American riots of students he ha.'I given credit for being more mature. If. as appears likely, Ernesto de la Guardia. Jr. remains in te presidential chair after the current period of rioting. pillage. killing. and national disturbance is ended, it will be a hollow victory. This reform-seeking President has seen all the accumulated good cf his 17 months in office dissipate in the midst of stupidity. hate. cupidity. and political treachery which has engulfed this capital city and other sections of Panama since Monday. May 19. The biggest mistake of this forward-looking pre;-dent mav have been his endeavor to give recognition as adult thinkers to an undisciplined mob of students who took advantage of his good intenTinnand trusting nature. For years the students' traditional interference in politics has called enmity between them and the national guard. Panama's combination army and police. STUDENTS WON IN 194 7 In 1947 violent student coercion. led by adults. forced the National Assembly into unanimous rejection of a 1.5. request for military baes in Panama. Students thought themselves influential until Col. Jose A. Rem6n became President. He told them to keep out of politics or he would close the schools. He meant it and the students realized it. They withdrew from political activity. Under President de la Guardia. the students have become noisv and demanding again. This is due to three themes which are being dinner by interested parties into every Panamanian. but espeCially the student groups. These are: 1. Every Panamanian has the right to expect great and uending benefits from the Panama Canal. in which Panama ik self -asserted "equal partner." 2. If Egypt could nationalize the Suez Canal. Panama sh aspire for nationalization of the Panama Canal. 3. It is patriotic and proper to denounce US. treatmeir Panama during the past 55 years. TREATY CLEAR This perverted campaign is receiving great support from certain politicians and publishers here. And. when all propaganda tun ru'

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48 ISTHMIAN CANAL POLICY QUESTIONS out, there is the domestic equivalent of "Which came first, the chicken or the egg?" Locally, the question is whether the United States or 1Panama has sovereignty over the Canal Zone. The treaty is plain in saying that the United States exercises the same sovereignty as if it were sovereign. But soapbox orators don't quote the treaty. When the students recently became too vehement, the national guard took action, but the President stepped in. Senor de ]a Guardia told this correspondent several weeks ago that he thought the guard was too rough with the students. He also said that the general public distrust of student politicking was unfair. The President said the future of the nation was in the hands of these students and they should be helped and guided and given a voice in national affairs to train them for the future. To accomplish this, he sent negotiators to the student leaders, proposing that lie would order the police not to molest the students on condition that the students would be sane and reasonable in their attitude to law and order. The President reported that he had even proposed special students' courts to handle the trial of students rather than trying them in regular police courts. Carlos Arellano Lennox, president of the University Students Union, confirmed that the President had proposed an arrangement to him but said he had neither accepted nor declined it. PIQUE SPARKS RIOTS It is believed that the Presidential order to the National Guard to give a free hand to the students and not to restrain nor manhandle them brought about much of the tragedy that has followed. And Sr. de la Guardia still has refused to allow arrests of student agitators and decisive though forceful handling of student attacks. Either the students knew of the Presidential orders and took advantage of them and gained a false courage which led to extremes. The precise spark which lit the Panama scene in such a bloody light was probably student pique, high school student pique. The University Students Union staged a raid into the Canal Zone early in May and planted some 50 Panama flags in various public areas. Led by conniving politicos, the public gave the students such approbation that they considered themselves national heroes. The flag planters paraded to the Presidential palace and made certain demands on the President and exacted a promise of immediate action from him. PARADE BROKEN UP This excited a rival student group, composed mainly of high school students, but headed by a man nearly 40 years old, considered a radical ind very dangerous. The second student group paraded to the Presidencia but the President had gone to the country on an official visit, and was not there to receive them. This infuriated the students. They said they would return the following Monday, May 19. The President sent them word not to parade but to present their demands in a normal way through usual channels. When the students tried to parade, they ran into a National Guard contingent armed with tear gas bombs. The students pelted the guard

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ISTHMIAN CANAL POLICY QUESTIONS 49 with rocks. Many on both sides were hurt and one student w s un1ntentionally killed by a blow on the chest. Immediately the students called a strike, demanded the ouster of the three commanders of the national guard and of tlhe Minister of Education in the Cabinet. When the President did not aerede to their demand, they cried for his ouster. Since then there have been days of rioting, store windows broken throughout the shopping district, pillaging, sniping by many individuals, and burning of automobiles and the usual stupidities perpetrated by mobs. There have been about 9 deaths and some 60 injured, according to official censored reports. The Government imposed a curfew from 10 at night to 5 in the morning after suspending civil rights for up to 30 days. There is press and radio censorship. Only administration radio stations are broadcasting. For a few days there was no public transportation an( every store in the city was closed. As this is written, there is a continuing state of upset. The Government and national guard hold control of the city, but the students are barricaded on their university campus clamoring for a general strike throughout the country. JUMBLE OF CAUSES The causes of all this form a jumble. It appears that the student agitation which started it all was precipitated by headstrong. misled, arrogant students trying to run a national government, which, in turn, thought it was controlling the student tempers throllg'l negotiation. Agitators jumped quickly into the breach in the wall of national calm made by the students. There may have been a handful of Communist leaders, but the majority were not, as seen by capable observers. The majority were paid agitators, hired snipers, troublemakers. hoodlums, paid by political interests to harass, at the least. and, at the most, overthrow the administration of President de la Guardia. Seuor de la Guardia has tried to institute reforms; he has endeavored to stop the two-handed dipping into the Government treasury which has been traditional here. Even more, he has attempted to break up the vested interests and special privileges of a few family hierarchies, long established. ARIAS HAND SEEN The current fracas has brought to the fore the name of Dr. Harmodio Arias M., brilliant lawyer, ex-President, financial tycoon and publisher, and probably Panama's most adroit behind-the-scenes politician and power manipulator, according to reliable sources. According to intimates, President de la Guardia considers Dr. Arias responsible for much of the agitation presently upsetting this country. A city improvement plan proposed by President de la Guardia would run a highway directly through an unauthorized giant shrimp plant in which the Harmodio Arias interests are controlling. The

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50 ISTHMIAN CANAL POLICY QUESTIONS disruption and cost to the shrimp organization, if the highway is built, is so great that some report that the President thinks the shrimp cooperative would not stop short of revolution to block his proposed highway. There is not seen the slightest likelihood of the President dismissing the three National Guard commanders. They have stood by him, and he stands by them. Because of the prevalent public distrust of the Guard and the general belief that Panama is actually a "police state," this going along with the Guard is the only really vulnerable point in the President's armor of reform. Some observers consider that the President recognizes the present privileged invincibility of the National Guard and is building up his strength to an eventual challenge of their usurpation of the supreme power of the nation.

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[From the Congressional Record, 85th Cong., 2d Sess., July 2), 19581 PANAMA CANAL: OBJECT OF IRRESPONSIBLE POLITICAL EXTORTION Mr. FLOOD. Mr. Speaker, iin the course of my lVOnm addres.e> the House on the Panama Canal, I have developed at length the pat tern of demands that have been so strenuously pressed by extreme adid radical elements in the Republic of Panm' a. Yet, their full scope wa> not publicly revealed until the recent visitation there, July 12-16, 1958, by Dr. Milton Eisenhower as special representative of the President of the United States. Published after arrival of Dr. Eisenhow er, the deniands include not only the officially expressed views of the Panamanian Government but also those of Panama University students. The latter call for what PV termed a "fundamental revisionof the basic canal treaties. Though not reported comprehensively in the press of the United States, the story of the Eisenhower mission has been well covered in the press of Panama and summarized in news stories in a few 1.S. newspapers by informed American correspondents resident on the isthnius. These accounts I have now had an opportunity to study. and shall include in my remarks so that they may be examined by all in authority. It is pertinent here to state that, when the late IPvrwident Jose -. Rem6n, of Panama, was confronted with political interference on the part of university students, he took effective measures to keep them ilout of politics. Yet, recently in Panama, even during the visit of Dr. Eisenhower, university students have been injecting themselves not only into matters of domestic concern but, as well, inro questions of foreign policy affecting the relations of that country wi\d h1 I,;itW States. To describe these demands with candor, the een1 ute irresponsible political extortion. If acceded to they can onilv IVrQ(u e new demands for greater extortion. Though the range of the deman(ls is extensive. there aie three of special sig-nificance. emphasized in the Spanish press of Panama: One. Closing down of all business activities in the Canal Zone. Two. Flying of the Panamanian flag in the Canal Zone and on vesels in transit. Three. Adopting Spanish as the official language in the Canal Zone. As to the operation of business enterprises in the Canal Zne. these are absolutely essential for Panama Canal and other I.S. persoiinel. including the Armed Forces. The flying of the Panamanian flag in the Canal Zone and on vessels in transit would constitute a symbol of sovereignty that does not in fact exist. If this demand were ever acceded to, it would be followed immediately by others for mineral, oil. and gas explorations. farming, 51

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52 ISTHMIAN CANAL POLICY QUESTIONS and miscellaneous business enterprises, as well as for settlement of all lands in the Canal Zone not in actual use for canal or defense purposes. In this connection, Mr. Speaker, President Taft, by Executive order of December 5, 1912, pursuant to the Panama Canal Act of 1912 and in conformity with treaty, declared thatAll land and land under water within the limits of the Canal Zone are necessa ry for the construction, maintenance, operation, protection and sanitation of the Panama Canal. Title to all such land was acquired by the United States, making the Canal Zone a Government reservation. Every consideration requires t he continuation of this policy not only for the best interests of Panama but :also for the future well-being of the great project from which Panama derives the major part of its income. Furthermore, without t his authority of tbe United States over the Canal Zone it would be impossible to operate the Panama Canal. As for the third point, the proposal for adopting Spanish as the official language of the Canal Zone is obviously designed to force out North Americans from employment in the canal enterprise. Its effect, however, would not stop there for any such language requirement would necessarily apply to civilian employees of the Armed Forces engaged in protecting the canal. In either case, it would introduce security situations too complicated to comprehend. The Panama Canal, Mr. Speaker, is an interoceanic public utility operated by the United States pursuant to law and treaty. It is a business proposition entirely distinct from the Republic of Panama for the benefit of world commerce. As such it must be prevented from becoming the victim of further political extortion. Because many Panamania leaders, when presenting their case, have repeatedly quoted former Secretary of War William H. Taft out of historical context, I wish to set the record straight as to what his exact views on the sovereignty question were. In an address on the Panama Canal work, delivered in New Orleans, February 9, 1909, when he was President-elect of the United States, he included the following statement: It is said that the Lord looks after children and drunken men. Well, I think we ought to include the United States, too. * If the Hay-HerrAn Treaty of 1903 had been confirmed by the Colombian Senate, a failure to do which aroused our national indignation, we would not have been at all in the favorable position we are now to complete that canal. Because under the treaty with Panama we are entitled to exercise all the sovereignty and all the rights of sovereignty that we would exercise if we were sovereign, and Panama is excluded from exercising any rights to the contrary of those conceded to us. Now that may be a ticklish argument, but I do not (are whether it is or not. We are there. We have the right to govern that strip, and we are going to govern it. And without the right to govern the strip, without the power to police it, and without the power to make the laws in that strip bend, all of them, to the construction of the canal, we would not have been within 2 or 3 or 4 years, hardly, of where we are in the construction. Now, Mr. Speaker, those unqualified words of President-elect Taft, who, as Secretary of War, had been confronted with Panamanian sovereignty demands are even more applicable today than they were then. First, because of 50 years of interpretation and application of the policy thus defined by President Taft and because the Panama Canal is nowr one of the two principal commercial crossroads of the world.

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ISTHMIAN CANAL POLICY QUESTIONS 53 Once again, Mr. Speaker, I wish to emphasize the urgency for a congressional policy declaration on the Panama Canal sovereignty question, for which purpose I introduced in the last session House Concurrent Resolution 205, the text of which was last published in my remarks in the Record of July 15, 1958. In order that the story of the Eisenhower mission to Panama and its impact as described in the Latin American press and as interpreted by resident North American reporters may be adequately recorded, I include as part of these remarks the following selected news stories: [From the Star and Herald, Republic of Panama, of July 14, 19581 REPUBLIC OF PANAMIA FLAG ISSUE LAID BEIoRE Dn. EIsENlbowE--DE LA GUARDIA CITEs NEED OF ECONOMIC Aim-3--lou WORK SESSION HELD BY TEAMS OF PANAMA AND UNITED STATES OF'TjIMS SUNDAY AFTERNOON President Ernesto de la, Guardia, Jr., told Dr. Milton Eisenhower yesterday that flying the Panamanian flao in the Canal Zone would contribute to a better moral climate for cooperation between Panama and the United States. The proposal was made by the Panamanian Chief Executive at a 3-hour work session which he and his advisers held with the brother of the President. of the United States at the Hotel El Panama. Dr. Eisenhower is in Panama on a fact-finding mission for his brother which will take him to Central America and Puerto Rico. A communique issued by the presidential press office listed, in outline form, a wide range of subjects discussed at the conference. between President de la Guardia and Dr. Eisenhower and their high-level advisers. The topics were listed under three main headings: Contractual relations between the United States and Panama; creation of a better moral climate of cooperation between the peoples of Panama and the United States; and problems of economic and social development of Panama. The Panama Government's announcement did not give details of the discussions, nor did it even suggest what was the reaction of Dr. Eisenhower and his advisers. Dr. Eisenhower himself declined to give any details of the discussions, saying only that the Panamanian officials "presented their views on a great many problems" and that there would be "more to follow" when he goes deep-sea fishing with the President tomorrow. He said that when he has completed his study tour of Central America he expected to make recommendations to his brother. He indicated these probably would be an extension of the recommendations on U.S. policies which he made in a report on his South American tour in 1953. President de la Guardia's reference to the flag issue recalled that there has been agitation recently in Panama-particularly by students-for flying the Panamanian flag in the Canal Zone in recognition of Panama's claim of sovereignty over that strip of land. Previous requests by Panama along that line have been turned down by the U.S. Government. The last time the question was formally raised was during the negotiations for the Rem6n-Eisenhower treaty of 1955.

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54 ISTHMIAN CANAL POLICY QUESTIONS On May 2, the University Students' Union carried out "Operation Sovereignty" in the Canal Zone. It consisted of planting around 70 Panamanian flags in Canal Zone territory. At a student demonstration in connection with that operation, President de la Guardia pledged that his administration would take the matter up officially with the United States. The matter was referred to the National Council of Foreign Relations and yesterday's proposal by the President was the first official mention of the issue since that time. The communique did not give details of the President's proposal. In listing the points which the President submitted to Dr. Eisenhower, the communique said: B. Creation of a better moral climate of cooperation between the peoples of Panama and the United States. The national flag of Panama in the canal zone and the adoption of Spanish as the official language. The text of the communique issued by the presidential press office is as follows: In an atmosphere of the greatest cordiality, the President of the Republic and members of his cabinet reviewed fully with Dr. Milton S. Eisenhower and his party, the relations between Panama and the United States for the purpose of arriving at means of strengthening them on the basis of the gains made along that way up to the present, particularly in connection with the approval by the Congress of the United States of the laws required for the implementation of the 1955 agreements, in which measures the action of President Eisenhower has been decisive. Immediately after that, the President of the Republic submitted to Dr. Eisenhower the following points: A. Contractual relations between the United States and Panama. 1. Fair interpretation of the agreements in force. 2. Guaranteeing the Canal Zone market to Panamanian commerce and industry. Purchases by the Canal Zone in Panama (Items 8 and 9 of the Memorandum of Understanding Reached). Cessation of economic activities other than those connected with the purposes for which the Canal treaty was signed. 3. Rates for supplying water to Panama. 4. The single wage scale. 5. Refund of import duties on liquors sold to the Canal Zone. B. Creation of a better moral climate of cooperation between the peoples of Panama and the United States. The flag of Panama in the Canal Zone and the adoption of Spanish as the official language. C. Problems of economic and social development of Panama. 1. The United States should have primary interest in Panama's development of its full economic possibilities as the only means of meeting the needs and requirements of a rapidly growing population. 2. The Panamanian State and its obligations with regard to economic development and the furnishing of education, health and social improvement services. 3. Mutual advantage for the United States and Panama from a plan for cooperation and economic aid, on an emergency basis, in some cases, and on a long-range basis, in others, for the immediate improvement of the unemployment situation and for enlarging and strengthening the basis of Panamanian economy. 4. An economic cooperation plan. With respect to the economic cooperation plan, the President of the Republic divided it into two parts, one referring to funds for an emergency program and the other to long-term measures connected with the future development of the country. The President of the Republic submitted to the consideration of the visitors various projects prepared by the National Government, some of which were examined in detail and all of which awakened such interest that it wa agreed that they would be discussed more fully before Dr. Eisenhower's departure.

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ISTHMIAN CANAL POLICY QUESTIONS 55 The work session at the Hotel El Panama was attended by: In the Panama team: Preideiit de la Guardia. Foreign Mlini ter Migual _Moreno. Jr., Minister of Governmient Max Heurtematte, Minister of Finance Fernando Eleta. Minister of Public Health Ieraciio lzarletta. Minister of Agriculture and Conminerce AlIberto Boyd, Minister of Education Carlos Sucre. Minister of Public Works Roberto Lopez, Comptroller General Roberto Heurtematte, Ambassador to Washington Ricardo Arias, and Administrative Assistant to the President Inocencio Galindo. In the U.S. team: Dr. Eisenhower: Rov R. Ruibottom, Assistant Secretary of State for Inter-American Afiairs: Dempster McIntosh. Managing Director of the Developiment Loan Fund: Tom Coughran. Assistant secretary of the Treasury: Samuel C. Waugh, President of the Export-Import Bank; United States Ambassador to Panama Julian F. Harrington, and Lt. Col. Vernon Walters, who acted as interpreter. Dr. Eisenhower and President de la Guardia were together for 41 hours in a meeting that started with a luncheon in a private, dining room of the Hotel El Panama and then moved to the presidential auite. Three hours of that time were devoted to a discussion of Panamias problems. Dr. Eisenhower's official program for Sunday started at 10 a.m. with a courtesy call on President de la Guardia at the Presidential Palace. The automobile ride along Central Avenue was uneventful. There was scattered applause at some points. Some spectators complained that the official motorcade traveled too fast. In the Yellow Hall of the Presidential Palace, Dr. Eisenhower pre;ented De la Guardia with a glass cigarette box and ash tray, a gift from President Eisenhower. Then Dr. Eisenhower went to the Canal Zone to call on Gov. W. E. Potter (who had returned from Washington at 6 a.m. Sunday) and Lt. Gen. Ridgelv Gaither, commander in chief of the U.S. Caribbean Command. Governor Potter said Dr. Eisenhower asked for background information on some questions he expected would be raised at his meeting last evening with representatives of Canal Zone non-United Statescitizen labor unions. These included housing and wage rates. Potter said Dr. Eisenhower also made an inquiry on a Panamanian complaint about the importation of beef in the Canal Zone. The Governor quoted figures of 1 million pounds of Panamanian beef purchased annually by the Canal Zone as against 50,000 pounds of imported beef. General Gaither said he and Dr. Eisenhower discussed the weather in Baltimore. Both are Baltimoreans. The afternoon was devoted to the work session. which was followed by the conference with the labor delegation. In the evening, Dr. Eisenhower and his daughter, Ruth, were guests of honor at a dinner tendered in the Balboa Room of El Panama by President and Mrs. de la Guardia. Dr. Eisenhower's program for today will be announced this morning. It is known, however, that he will make a trip through the Panama Canal accompanied by Roberto Heurtematte. Panama's Comptroller General, and Ricardo Arias, Ambassador to Washington.

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56 ISTHMIAN CANAL POLICY QUESTIONS WiLL Discuss LABOR'S IssUEs WITH ZONE, SAYS EISENHOWER Dr. Milton Eisenhower yesterday promised to take up with Canal Zone officials a seven-point memorandum listing wage and treatment issues raised by representatives of non-U.S. citiezn labor. President Eisenhower's brother received the labor delegation, composed of officers of locals 900 and 907, AFL-CIO, at the U.S. Embassy residence where he is staying during his visit in Panama. Elimination of the segregation that still exists in the zone was one of the issues voiced by the labor group. You gentlemenDr. Eisenhower told the groupprobably realize that my brother has perhaps done more than any other President to do away with segregation. He is opposed to segregation but you gentlemen realize you cannot change the minds of all the people at one time. The local-rate labor delegates also presented their bid for a 10percent wage hike to match that recently awarded the classified civil service employees. They disagreed with the policy of fixing wages based on the area of recruitment. They described to him the unions' low-cost housing project. The group which called on Dr. Eisenhower included W. H. Sinclair, AFL-CIO international representative, Harold W. Rerrie, president of local 900; Alfred J. Morris, president of local 907; Jose de la Rosa Castillo and Ricardo Martin. Dr. Eisenhower was accompanied by Under Secretary of State Roy Rubottom; Dempster McIntosh, Managing Director of the Development Loan Fund Corporation; U.S. Ambassador to Panama Julian F. Harrington, and Robert Cox, labor attach of the Embassy. The labor group later said it had received the following statement from an Embassy representative: Dr. Eisenhower, as personal representative of the President of the United States, has invited you into his temporary home in Panama to discuss problems with him and to assist him in his fact-finding mission. Certainly no official or employee of the U.S. Government would attempt to detract in any way from this effort either now or in the future. The seven points submitted by the labor group to Dr. Eisenhower were1. A 10-percent wage increase for all Panamanian employees in the Canal Zone who will not receive any substantial increase from the application of the single-wage scale. 2. That the adjustment of incumbents into the single-wage structure be made according to the grade and step presently held by the incumbent so as to protect his seniority. 3. We disagree with the present policy of fixing wages based on the area of recruitment. Experience has taught us that this is not the most practical or fair method. The Panamanian Government fully supports this point of view. 4. It is necessary that the U.S. Government support and back the efforts of AFSCME, AFL-CIO, and the local unions to put over their low-cost housing project for Panamanian workers in the Canal Zone.

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ISTHMIAN CANAL POLICY QUESTIONS 57 5. The elimination of segregation that still exists in the Canal Zone. 6. More support to Panamanian unions in the Canal Zone, by U.S. Government agencies. 7. We -insist that Panamanian workers in the Canal Zone should have representation on the Canal Zone Board of Appeals. Text of the unions' statement on the conference with Dr. Eisenhower is as follows: AFSCME, AFI-CIO International Representative William H. Sinclair said last night that he and other union officials who met with Dr. Milton Eisenhower and members of his delegation were very satisfied with the cordial manner and friendly atmosphere in which the conference was held. Harold W. Rerrie, chairman and spokesman for Local 900 at the meeting, expressed great satisfaction in meeting with Dr. Eisenhower and the opportunity afforded to the Canal Zone noncitizen labor groups, to present their views on a number of issues. Both Sinclair and Rerrie agreed that Dr. Eisenhower expressed great interest in the low-cost housing project being sponsored by the international union for noncitizen workers of the Armed Forces and Canal Company government. Dr. Eisenhower said that he had already received some information on the acute housing situation in Panama and was apparently definitely pleased with the efforts being made by the labor unions to help find a permanent solution to this tremendous problem. Dr. Eisenhower said he know president Arnold S. Zander personally, which led union spokesmen to believe that the highest sources in Panama. the Canal Zone, and the United States will give full backing to the union's housing program which is scheduled to get underway as soon as the AFSCME's housing adviser arrives on the isthmus later this month. The question of a 10-percent wage increase for noncitizen workers in the Canal Zone, which was denied by the Canal Zone Administration recently, was also raised at the conference where union officials brought Dr. Eisenhower up to date on the steps already taken by the local unions in the zone and the international union in Washington. This and other matters raised at the conference by spokesmen for local 907 would be taken under advisement, Dr. Eisenhower said. Ie will discuss a number of the issues with local officials in the Canal Zone, then make a full report to his brother, President Dwight Eisenhower, when he returns to Washington. Spokesmen for local 900 and the international union were very firm in pointing out to Dr. Eisenhower that they want to see a labor man on the Canal Zone Board of Appeals. The House of Representatives recommended in H.R. 6708 that Canal Zone Panamanian employees be represented on the board. Sinclair and Rerrie insisted, however, that they did not want anyone on the board who would be a "yes man," but they wanted someone instead, pi:eteraiiy from noncitizen labor unions, who would stand up for the rights of 0he workers on all issues. Sinclair and Rerrie told Dr. Eisenhower they wanted a labor man on .he board because if he did not do a good job they would want to remove him right aw,)y. The labor spokesmen were very elated, however, over the great interest Dr. Eisenhower expressed in connection with the low-cost housing project whbih is a point of superlative importance to the local union's and international unions platform. REPUBLIC OF PANAMA STUDENTS REITERATE INVITATION The University Students Union of Panama yesterday wrote Dr. Milton Eisenhower, reiterating its invitation for a meeting in the National University. The union's letter was in reply to a communication from Dr. Eisenhower which turned down the students' demand that any meeting with him should be held in the university.

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_8 ISTHMIAN CANAL POLICY QUESTIONS A U.S. Embassy spokesman said last night that Dr. Eisenhower will not reply to the students' letter and that the matter is regarded as closed. The students' letter, which was delivered by hand to the U.S. Embassy residence at La Cresta, said: DEAR D. EISENHOWER : The Union of University Students regrets that the tight schedule arranged for you, prior to your departure, by the United States State Department makes it impossible for you to accept the invitation that was cabled directly to you in Washington on July 11, at 9: 58 p.m. We deplore that those responsible for arranging the program of conversations to acquaint you with the problems of the respective countries that you are visiting should fix the site for these at the Embassy residence, which, under international agreements, is territory under the jurisdiction of the country it represents. We reiterate to you our invitation to the National University at your convenience or when you are not traveling on such a "tight" schedule as you mentioned in your letter yesterday, and under the same arrangements ; namely, accompanied by your personal escort and under our protection. [From the Star and Herald, Republic of Panama. of July 15, 1958] EISENHOWER, STUDENTS WAIT FOR EACH OTHrI-RECTOR KEEps ApPOINTMENT AT EMBAssY Ho3rE-DIscrssioNs WrrH PANAMA OFFICIALS AVILL CONTINUE TODAY DURING ALL-DAY FIsHING TRIP Dr. Milton Eisenhower and his Panamanian colleague, Dr. Jaime de la Guardia, rector of the National University, had a friendly chat last evening. but students stayed away from the meeting at the U.S. Embassy residence. Instead, they waited for Dr. Eisenhower to show up at the university. Dr. Eisenhower, who is president of the Johns Hopkins University, and the University Students Union had exchanged invitations to meet, but at different places. He is on a factfinding tour for his brother, the President of the United States. He declined to come to the university campus because of a tight schedule. The students refused to Lo to the Embassy residence at La Cresta because that technically is foreign territory, The invitation from Dr. Eisenhower was for a delegation of students, plus the university rector. Only Dr. de la Guardia showed up. They had a friendly chat about their administrative responsibilities as university heads. Yesterday s program for Dr. Eisenhower still listed a 6:30 p.m. appointment with a student group at the Embassy residence, despite student announcements that it would not be kept. At that hour a delegation of five students waited for him in the universitv administration building atop a hill in plain sight of his temI )!rary home. The students, who are at odds with the Panamanian Government, enforced their own security precautions and posted armed student guards in the campus area. They had announced that members of neither the Panama National Guar'd nor the secret police would be periitted on the campus as security guards for Dr. Eisenhower. For the benefit of photographers, the student delegation that was to have met with Dr. Eisenhower sat down around the table set aside for

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ISTIIMIAN CANAL POLICY QUESTIONS 59 the ieeting. At the head of the table was an empty chair with the sign "Mr. Eisenhower." The student deiegonatioll was composed of V irginia Raimirez and R icardo Quiroz, of the Tnion of i School Sildents: Julio Rovi and Carlos Arellano, of the 1l ni versitv Students Union; and Blas Bloise, of the Federal Council of the Students Federation. At noon yesterday, about three score students carrying posters demonstrated peacefully opposite the U.S. Embassv office building, which is in a different section of the city from the Embassy residence. One poster said: "Milton Go to the United States of Aierica." Others dealt with Panama's claims of sovereignty over the Canal Zone and with student demands for a 50-50 split of canal revenue between the United States and Panama. Still others made reference to allegations that the U.S. Armed Forces in the Canal Zone supplied arms to the National Guard during the disorders last May in which several students were killed. The demonstrators dispersed 45 minutes later without incident after being informed by a National Guard officer that neither Dr. Eisenhower nor Ambassador Julian F. Harring-ton was in the building. At that hour, Dr. Eisenhower was on a trip through the Panama Canal. lie told newsmen last night that "if I had been there, I would have invited them to send a delegation in and discuss all they wanted to discuss." Dr. Eiseihower has been on the isthmus since Saturday. Panama is the first stop in his study mission which will take him through the Central American countries. The impasse with the university students about where to meet has been the only incident in his Panama. visit. Of the students' refusal to visit him at the Embassy residence because it is foreign territory, Dr. Eisenhower said yesterday: If I took the same attitude. I would not have come to Panama. I have discussed problems with various groups. Any delegation which the stludenits may have sent would have been received as cordially as any of these groups. Dr. Eisenhower declined to comment for publication on Panilama's touchy proposal to have the Panamanian flaoz flown in the Canal Zone, but he said that in the discussions Sunday with President Eruesto de la Guardia, Jr. there was no suggestion of the revision of any of the treaties between Panama and the United States. A student statement of topics which would have been discussed with Dr. Eisenhower listed the "fundamental revision" of those treaties as the main itei. It gave the following as the "inininnun aspirations" of students: 1. Express reaffirmation by the United States of the sovereintv of the Republic of Panama over the Canal Zone territory. 2. Liquidation of the Panama Canal Company because it is a violation of the terms of existimig treaties between the two countries. 3. Substitution of the term "in perpetuity" in the 190: Canal Treaty by a period which will be in keeping with the principles of internal ional law. 4. Sharing on an equality basis of economic benefits resulting from the canal enterprise. 6T7S,4,1 (i66-5

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

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ISTHMIAN CANAL POLICY QUESTIONS 61 He remarked that he considered "the presentations by President l)e la Guardia and his associates thorough and well thought through." le added that he thought that those projects which would require credit "all would be repayable." Dr. Eisenhower said that most of the subjects of discussion dealt with the aspirations of the Panamanian leaders to better the economic conditions of the people. Today's fishing trip will bring to a close Dr. Eisenhower's oflicial visit to Panama. He leaves early Wednesday for Tegucigalpa, Ionduras, where his arrival is scheduled for 10 a.m. Dr. Eisenhower spent practically the entire day yesterday in the Canal Zone, observing the operation of the waterway and visiting military installations. He first stopped at Miraflores locks, where Gov. W. E. Potter and Marine Superintendent W. S. Rodiman acted as tour directors. The party then traveled to Pedro Miguel to embark on the canal tug Culebra for a 3-hour trip through the cut and across Gatun Lake. Lunch was served aboard the tug. From the Gatun boat landing, Dr. Eisenhower and his party were taken on a tour of Army installations which included the U.S. Army Caribbean Latin American School at Fort Gulick, the Jungle Warfare Training Center at Fort Sherman, and the historic Fort San Lorenzo. Dr. Eisenhower's party consisted of 26 persons. Guests included Roberto Heurtematte, C comptroller General of Panama; Fernando Eleta, Minister of Finance, and Ricardo Arias, Panamanian Ambassador to Washington. At a briefing for newsmen later, a Panama Canal spokesman said the canal trip afforded an opportunity for Dr. Eisenhower and Governor W. E. Potter to discuss items pertaining to the Canal Zone which were raised by President de la Guardia at the work session Sunday with Dr. Eisenhower. The spokesman said Dr. Eisenhower showed considerable interest in the mechanics of the waterway and that he was impressed by the durability of the 50-year-old waterway. An Army representative said Dr. Eisenhower expressed interest in the activities of the Latin American School to acquaint Latin American officers with U.S.-style democracy. The party returned to the Pacific side by military plane at 4 p.m. The meeting with University Rector Jaime de la Guardia was next on Dr. Eisenhower's schedule. In the evening, U.S. Ambassador and Mrs. Julian F. Harrington tendered a dinner in honor of President de la Guardia and Dr. Eisenhower. This was followed by a reception for 100 additional guests. [From the Panama American of July 14, 1958] REPUBLIC OF PANAXLA STUDENTS PICKET UNITED STATES EMBASSYQUIT WHEN ToL EISENHOWER, HARRINGTON TRANSITING CANAL About 50 Panamanian high school students picketed the U.S. Embassy in Panama City this afternoon carrying placards proclaiming "Milton, the Canal Is Ours," "50 percent of the Canal" (a reference

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62 ISTHMIAN CANAL POLICY QUESTIONS to the claim that the United States should split the gross revenue of the canal 50-50 with Panama) and "We Don't Want Communism." Later they displayed their signs along the 4th of July Avenue, at the National Institute. They announced their intention of remaining at the Embassy till they saw Dr. Milton Eisenhower or U.S. Ambassador Julian F. Harrington. A national guard prowl car detachment led by Maj. Bartolom6 Carri6n moved them back from the entrance to the Embassy, but told them they could stay across the street in the sun if they wished. Carri6n also told them that Eisenhower and Harrington were transiting the canal today, and would not be at the Embassy. The pickets left shortly afterward. Meanwhile, University Student Union president Carlos Arellano Lennox announced that the university students would be all ready to greet Eisenhower at the university at 6:30 this evening. The students would institute their own security precautions for Eisenhower on the campus of the autonomous university, Arellano announced. Eisenhower will not be there. An Embassy spokesman announced that following the students' refusal yesterday to send a delegation to meet Eisenhower in the U.S. Embassy residence on La Cresta (El Panam 'a Milton) this evening, Eisenhower regarded the matter as closed. The students stated that their refusal to meet Eisenhower there was based, among other reasons, on the fact that the Embassy residence is technically United States rather than Panamanian territory. Eisenhower and Harrington, together with the Canal Zone Gov. William E. Potter, marine director, Capt. W. S. Rodiman, Eisenhower's daughter, Ruth, who is acting as his official hostess on his present trip. Mrs. Potter, Mr. Harrington, other members of the Eisenhower team and representatives of the Canal Zone brass were aboard the Panama Canal Company tug, Culebra, enjoying a sunny day on the glistening waters of the canal between Pedro Miguel locks and Gatun. Also on the trip were Ricardo Arias, Panama's Ambassador to the United States, and Finance Minister Fernando Eleta. The lunch on board would not be quite the same as regular clubhouse fare, Potter allowed. Commanding the bright, shiny Culebra is Capt. Edward K. Wilborn, who has A. T. Van Gelder as engineer, and a crew of 10. After arriving at Gatun this afternoon the Eisenhower party was scheduled to visit the USARCARIB Latin American School at Fort Gulick and the Jungle Warfare Training School at Port Sherman. They were to fly back to Albrook from the small Fort Sherman strip by military light aircraft. Tonight Harrington is giving a dinner for Eisenhower and President Ernesto de la Guardia, Jr. This dinner will be followed by a reception. Tomorrow the Eisenhower party, top military and civilian brass from the Canal Zone, along with President de la Guardia and many of his top officials are to put out to Panama Bay on the most brassbound fishing expedition known in their area for years. Discussion on the trip is likely to include money and marlin, collateral and corbina, sovereignty and sailfish, as the party informally

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ISTHMIAN CANAL POLICY QUESTIONS 63 carries on the closed-door session which ran into 90 minutes overtime at El Panama Hilton yesterday. The U.S. team at yesterday's session consisted of Eisenhower, Ifhrrington, Assistant Secretary of State for Latin American Affairs Roy R. Rubottoi, Assistant Secretary of the Treasury Tom B. Coughram, Export-Import Bank President Sanmuel C. Waugh, and Development Loan Fund Manager Dempster McIntosh. At the table for Panama were President de la Guardia, Panamanian Ambassador to the United States Ricardo M. ("Dicky") Arias, Foreign Minister Miguel J. Moreno, Jr., Treasury Minister Fernando Eleta, Minister of Government and Justice Max Ieurtematte, and Comptroller General Roberto Heurtematte. Other members of the de la Guardia cabinet sat behind the Panama team. An official Panamanian Government statement later annomieed that President de la Guardia presented the following points to E*icenhower: A. Contractual relations between the United States and Panama. 1. Fair interpretation of the agreements in force. 2. Guaranteeing the Canal Zone market to Panamanian commerce and industry. Purchases by the Canal Zone in Panama (Items 8 and 9 of the Memorandum of Understandings Reached). Cessation of economic activities other than those connected with the purposes for which the Canal Treaty was signed. 3. Rates for supplying water to Panama. 4. The single wage scale. 5. Refund of import duties on liquors sold to the Canal Zone. B. Creation of a better moral climate of cooperation between the peoples of Panama and the United States. The flag of Panama in the Canal Zone and the adoption of Spanish as the official language. C. Problems of economic and social development of Panama. 1. The United States should have primary interest in Panama's development of its full economic possibilities as the only means of meeting the needs and requirements of a rapidly growing population. 2. The Panamanian State and its obligations with regard to economic development and the furnishing of education, health, and social improvement services. 3. Mutual advantage for the United States and Panama from a plan for cooperation and economic aid, on an emergency basis, in some cases, and on a long-range basis, in others. for the immediate improvement of the unemployment situation and for enlarging and strengthening the basis of Panainanian economy. 4. An economic cooperation plan. The Panamanian Government statement said Mr. de la Guardia divided his economic cooperation plan into two parts. One part referred to funds for an emergency program, and the other to long-term measures connected with the future development of Panama. Arellano Lennox said today that the reference to the flying of the Panamanian flag in the Canal Zone was just what the nnive-iy students had in mind when they launched "Operation Sovereignty," the flag-planting foray into the Canal Zone May 2. He aded that a Panama University student convention 2 years ago had resolved that Spanish should be the official language of the Canal Zone. A student spokesman also denied that the university students intended to exploit Eisenhower's refusal to meet them in the university. The spokesman said: To exploit implies the use of coercion to force the acceptance of our ideas. This would mean conducting the student movement along lines contrary to the

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64 ISTHMIAN CANAL POLICY QUESTIONS principles of a democratic organization. We reject such conduct. On the other hand, upon seeing it played up in certain North American newspmers that the University Students Union is led by Communist principles, we want to make it clear once and for all that while the university includes students of all shades of political opinion, the University Students Union has maintained an all-out fight against the Communist philosophy and against everything that means totalitarianism. The current issue of the University Voice, a newspaper published by the Students Union, describes the present Government of Panama as being "infiltrated by confessed and repentant Communists." The publication declared, presumably in reply to charges that there is communism in the student movement. "Communism is in the Government, not in the student movement. The knowledge escapes no one that an avowed Marxist is to be found behind the presidential chair." This is taken to be a reference to Presidential Adviser Diogenes de la Rosa. The Eisenhower appointment yesterday with greatest impact on the Canal Zone was probably his meeting at La Cresta with representatives of Locals 900 and 907 of the American Federation of State, County & Municipal Employees, AFL-CIO. Calling on Eisenhower were Local 900 President Harold A. Rerrie, Local 907 President Alfred J. Morris, AFSCME International Representative William H. Sinclair, Local 907 Secretary-Treasurer Ricardo Martin, and Local 907 Adviser Jose de la Rosa Castillo. They presented to Eisenhower the following list of their aspirations: 1. A 10-percent wage increase for all Panamanian employees in the Canal Zone who will not receive any substantial increase from the application of the single wage scale. 2. That the adjustment of incumbents into the single wage structure be made according to the grade and step presently held by the incumbent so as to protect his seniority. 3. We disagree with the present policy of fixing wages based on the area of recruitment. Experience has taught us that this is not the most practical or fair method. The Panamanian Government fully supports this point of view. 4. It is necessary that the U.S. Government support and back the efforts of AFSCME, AFL-CIO, and the local unions to put over their low-cost housing project for Panamanian workers in the Canal Zone. 5The elimination of segregation that still exists in the Canal Zone. 6. More support to Panamanian Union in the Canal Zone, by U.S. Government agencies. 7. We insist that Panamanian workers in the Canal Zone should have representation on the Canal Zone Board of Appeals. In answer to a question by Eisenhower, the union leaders conceded that in their viewpoint the segregation situation in the Canal Zone had improved considerably over the last 5 or 6 years. Eisenhower told them his brother, President Dwight D. Eisenhower, was strongly opposed to segregation, and had probably done more to eliminate it than any other American President. "But," said Eisen

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ISTHMIAN CANAL POLICY QUESTIONS 65 hower, "it was well known that the minds of all the people could not be changed at one time." Sinclair said today that Eisenhower told union leaders that final passage of the single wage bill is only a routine matter now. Sinclair added that he and other members of the labor groups were very pleased with the cordial and friendly atmosphere in which the conference was held. Rerrie expressed great satisfaction in meeting with Eisenhower and members of his delegation and the opportunity afforded to the Canal Zone noncitizen labor groups to present their views on a number of issues. According to Sinclair, Eisenhowerexpressed great interest in the low-cost housing project being sponsored by the International union for noncitizen workers of the Armed Forces and the Panama Canal Co. Eisenhower said he had already received some information on the acute housing situation in Panama and was apparently definitely pleased with the efforts being made by the labor unions to help find a permanent solution to this tremendous problem. In a statement issued by Sinclair he said: Union leaders felt particularly happy over the fact that Eisenhower knows AFSCME President Arnold S. Zander personally, which made them feel that the highest sources in Panama, the Canal Zone, and the United States will be backing the housing project, scheduled to get under way with the forthcoming arrival of Martin Frank, housing adviser to the union, and Thomas Morgan, international director of organization for AFSCME. Rerrie informed Eisenhower of the actions taken locally and in Washington in connection with the unions' bid for a wage increase of 10 percent, equal to that recently received by United States citizens employed in the Canal Zone and particularly since the single wage bill will not provide for any overall wage increases for the vast majority of workers who will remain on locality rates. According to the statement: Sinclair and Rerrie were very firm in pointing out to Dr. Eisenhower that they wanted to see someone representing zone workers appointed to the Canal Zone Board of Appeals as set forth in the suggestions made by members of House Committee on Post Office and Civil Service in H.R. 6708. They stated that they did not want to see a yes man appointed to the Board. but instead they wanted someone, preferably a labor man, placed on the Board who would stand up for the rights of the workers at all times, and be removed in the event he fails to do so. The union officials said the White House will hear a great clamor if this important suggestion made by the House of Representatives is bypassed. Other matters raised by spokesmen of local 907 in connection with discrimination, support of labor unions in the zone by Government agencies, the fixing of wage rates and adjustment in the single wage structure, would be discussed locally and a full report on the entire conference will be made to President Eisenhower, Eisenhower said. Another important issue in which the local unions are now interested cover the reduction or elimination of a 30-percent tax levied against aliens receiving civil service retirement benefits was not discussed at the conference yesterday. but was referred to the Foreign Minister for him to take up with Eisenhower. inasmuch as this would involve a tax treaty or convention between the two Governments. The Foreign Minister promised to discuss the matter with Eisenhower and take the necessary steps to seek an agreement which would benefit all those employees who will be covered by the civil service retirement benefits in the future and those who are already receiving such benefits. Social highlight of yesterday's schedule was a dinner given by President de Ia, Guardia at El Panama-Hilton last night for Eisenhower and a total of 57 guests.

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66 ISTHMIAN CANAL POLICY QUESTIONS Eisenhower had entertained the President and his cabinet at lunch. The Panama Canal tugboat Culebra, which is often used to take tourists on sightseeing tours of the canal, was decked out like a Mississippi riverboat to receive the distinguished passengers. She was all gleaming brass and fresh paint and under the canopy on the afterdeck, green canvas chairs were set out together with tables decked with shining silver coffee pots and refreshments. The Eisenhower party arrived on schedule at 9:15 a.m. in a motorcade of black official cars which drove down onto the wharf by Pedro Miguel locks where the Culebra was waiting. Potter had arrived a few minutes earlier and was the first to greet Eisenhower and his daughter, Ruth, at the gangway. Eisenhower, wearing a sports shirt and a panama hat, lost no time in getting aboard and was moving around chatting informally with the other guests as the tug steamed away up the canal in brilliant sunshine. [From the Americas Daily, Miami Springs, Fla., of July 15, 1958] U.S. MissION GETS PANAMA's EcoNOMIc PLAN PANAM.-The Presidential Office published last night the following communique on the conference held yesterday between the U.S. mission presided by Dr. Milton Eisenhower and a group of Panamanian officials presided by President de la Guardia: In an atmosphere of the greatest cordiality, the President of the Republic and the members of the Cabinet extensively revised with Dr. Milton Eisenhower and his group the relations between Panama and the United States, with the aim of finding ways to strengthen them, on the basis of the progress made to date, in particular regarding approval by the United States Congress of the laws necessary to bring into effect the agreements of 1955 measures in which the intervention of President Eisenhower has been decisive. Immediately after, the President submitted to Dr. Eisenhower the following points: Paragraph A. Treaty relations between the United States and Panama. 1. A fair interpretation of agreements in effect. 2. Guaranty of the Canal Zone market for Panamanian commerce and industry. 3. A rate for supply of water to Panama. 4. A single wage scale (in the Canal Zone). 5. Refund of import duties for liquors sold in the Canal Zone. Paragraph B. Creation of a better moral climate of cooperation between the peoples of Panama and the United States. The flag of Panama in the Zone and adoption of Spanish as the official language. Paragraph C. Problems of economic social development: 1. The United States must take primary interest in the development of all Panamanian economic possibilities as the only way to face the needs and demands of her population, which is rapidly increasing. 2. The Panamanian state and development, rendering services its obligations regarding economic in education, health and social improvement. C. Reciprocal convenience for the United States and Panama of a plan of cooperation and emergency economic aid in some cases and at long term in others, to improve immediately the situation of unemployment and to expand and strengthen the foundations of Panamanian economy. The President submitted to the consideration of the visitors several projects drafted by the National Government, some of which were examined in detail and all of which awakened interest, to the point that it was agreed to discuss them more thoroughly before Dr. Eisenhower's departure.

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ISTHMIAN CANAL POLICY QUESTIONS 67 [From the Christian Science Monitor of July 15, 1958] PANAMA 'EWs ExPLORED-DR. EIsENowWER F s HEs (By Ralph Skinner) PANAMA CITY, PANAA.-In a double sense, it, was a fishling expedition. U.S. Government planes flew Dr. Milton S. Eisenhower and his party with Panama President de la Guardia and advisers to an island in the Pacific off Panama. There a Panama Canal tur and two launches. plus U.S. Army launches took Dr. E isenhower ind the Panama President fishiniig. PANAMA VIEwS PRESSED As they fish, they will discuss the problems of Panama, economic and otherwise. continuing a discussion started July 13 with their staffs participating. It was to be a real sport-shirt conference without interruption except possibly when marlin or sailfish took the trolling bait. The party was to stay overnight on the boats and return to Balboa early July 16 when Dr. Eisenhower is scheduled to leave for Honduras. Since July 12, Dr. Eisenhower has been getting a thorough immersion in Panama's problems as presented by representatives of the rling families here who also are Panama's top government officials. All his information is presented from a strictly Pananian ian viewpoint. Even during his visit July 14 in the Canal Zone, Dr. Eisenhower was accompanied by top Panama politicos. One of them is Finance Minister Fernando Eleta, who has visited the Dr. Eisenhower home in the United States. The last time was only 3 weeks ago. Minister Eleta entertained Dr. Eisenhower on the evening of his arrival and is considered a personal friend. There is some worry expressed by Americans here that Dr. Eisenhower may become so saturated with 1Panama propaganda that he cannot make a proper evaluation of the U.S. view in controversial matters. Others discount this by pointing out Dr. Eisenhower's astuteness and recalling that, he is here for the purpose of learning Panama problems-which are basically internal ones. SPECIAL PROBLEMS RISE Panama has presented such problems as flyiing the Panama flagz' and ma king Spanish the official amage in the Canal Zone. These are sops to students anld nationalistic groups. Panama's real need is money and plenty of it. A desperate need exists for a solution to the unemployment problem, Iow-co )t hi1n',ii1, agricultural impetus, feeder roads, and rural develwo)eint. A new approach to the U.S. relations with Panama is long overdue. some think. NEW APPROACH FAVORED Perhaps Dr. Eisenhower, tihvough his reconiendat ions to his brother, can suggest a. monetary gift to Panama in a decent, orderly fashion in some form of foreign aid. But it should be completely

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68 ISTHMIAN CANAL POLICY QUESTIONS divorced from Panama Canal operations and should not be paid as blackmail to stop Panama's threats of nationalizing or internationalizing the canal, observers say. Treaty rights of the United States to fly the U.S. flag in the Canal Zone should not be subject to such constant harassment nor made the subject of demands as was done July 13, observers here believe. Dr. Eisenhower rebuffed students who arrogantly demanded that he should come to their campus not to lecture them but to listen to them. He invited them to sent representatives to talk to him at the American Embassy but they refused. STUDENTS HOIST PLACARDS Immature students have caused considerable trouble here, and on July 14 paraded with crude placards calling on "Milton" to go home, to note that the canal was Panama's, and that they demanded 50 percent of Panama Canal earnings. Extreme security precutions reportedly exceeding those for the 1956 meeting of 20 American presidents indicated concern for Dr. Eisenhower's safety which did not make for good public relations here. Indifference to the Eisenhower visit has marked the general attitude of the people of Panama, implying that the visit was to the ruling hierarchy. People in the street have the attitude we couldn't care less when the Eisenhower party drives through the capital city. There is no opposition, just indifference. [From the Washington Daily News of July 18, 1958] MORE PANAMA DEMANDS LIKELY-IKE's BROTHER STIRS TROUBLE (By Edw. Tomlinson) PANAMA CITY, July 18.-As a result of Dr. Milton Eisenhower's visit here the seeds of future trouble over the Panama Canal have been sowed. Dr. Eisenhower referred to his trip as a "study mission" and said anything he discussed with officials would be reported to his brother and other Washington authorities only as an expression of Panamanian Government "aspirations." Hardly had the doctor and his party left the isthmus, however, when some extreme Nationalists passed the word Uncle Sam is now committed to negotiate with Panama concerning new treaty demands. To some politicans, extremists, and especially merchants this would mean virtual Panamanian domination of the economic and political life of this strategic waterway. WHAT WE'VE GIVEN Only in the last 10 days, the U.S. Congress appropriated $20 million to construct another bridge across the canal connecting the northern and southern portions of the Republic.

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ISTHMIAN CANAL POLICY QUESTIONS 69 A few days later legislation was completed which makes the wa'es and salaries of Panamanians working in the Canal Zone equal to those paid U.S. citizen employees. At the urgent request of Isthmian merchants we have re-used Panamanian employees the right to trade in Canal Zone commissaries anI shops. We also upped the annuity which we were paying the Republic from $430,000 to $1,930,000. And we turned over to the Republic approximately $25 million worth of land and real estate in the cities of Colon and Panamia City. Apparently these concessions were considered chickenfeed. We now are called on to discontinue all commercial activities iii the Canal Zone. This would force 40,000 U.S. employees and their f families to purchase all necessities, from food to medicine in the Republic. Politically, they insist that the Inited States raise the Panamian flag in what one fiery student described as equal majesty with the Stars and Stripes over the zone, the canal and all ships passing through. Among other things, they also think we should agree to compel our citizens and officials in the zone to forget English and speak Spanish exclusively. In the original canal treaty of 1903, the Republic of Panama granted the United States in perpetuity all rights, power, and authority within the zone as if the United States were sovereign of the territory. We have refused to change that document. As the current Panamanian politicans see it, we have in effect agreed to discuss modifications of this agreement. They argue that Dr. Eisenhower came as special ambassador representing the President and that he heard highest Panamanian officials outline what they expected-and they point out these requests were put in an official communique. Next day Dr. Eisenhower himself praised President de la Guardia for what he called a well thought out program. So far as the general public, particularly the Nationalists, are concerned this sounded like a commitment for future negotiations. The crusading students aren't going to let them forget it. [From the Christian Science Monitor of July 19, 1958] JUST BEGINNING? MILTON EISENHOWER STUDY MISSION-THE 21-DAY VISIT OF T1lE PRESIDENT'S BROTHER TO CENTRAL AMERICA INCLUDEs FisiiiNG IN EcoNoN1IC WATERS AS WELL AS PANA A BAY (By Ralph Skinner) PANAMA CITY.-Almost all dav Tuesday two fishermen sat side by side in special swivel chairs on the stern of a U.S. Army launch. Watching baited lines twist and jump through quiet waters of Panama Bay, the fishermen discussed United States-Panama relations and the solution of Panama's problems, which are almost entirely economic. The fishermen were Dr. Milton Eisenhower on a 21-day factfinding mission through six Central American nations, and Panama President de la Guardia. The big topic was money from the United States and how to blow some strong winds on the Panamanian economic doldrums.

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70 ISTHMIAN CANAL POLICY QUESTIONS The money was requested on a repayable loan basis. Finance Minister Fernando Eleta told this correspondent no gifts or grants were requested by Panama, although, of course, they wouldn't be refused. Interrupting piscatorial discussions was the word that American marines had landed in Lebanon. U.S. Under Secretary of State Roy R. Rubottom and Panama Foreign Minister Miguel J. Moreno flew back to Panama City immediately. Immediate result of the 3-day visit, as seen by Finance Minister Eleta in an exclusive interview, is the better comprehension by Dr. Eisenhower of localized problems confronting Panama in relation to the Canal Zone. The Canal Zone Governor is under the Defense Department and not the State Department. Senor Eleta wants more Canal Zone purchases directed into Panama to bolster its economy and underwrite expansion of cattle, dairy, and agricultural industries. He empliasized Panama will not abuse the captive market it desires. PANAMA "SATISFIED 1 Panama officialdom is "quite satisfied" with the attention given Panama demands and proposals by Dr. Eisenhower and his team. Panama expects priority to be given its needs and requests on account of the Eisenhower visit and expects that the United States will make feasible financing of Panama projects presented. Senor Eleta, identifying Dr. Eisenhower as one of President Eisenhower's most trusted advisers, considers his recommendations will carry great weight. His authoritative opinion will be heard not only by his brother but by all in the U.S. Government concerned with Panama's future. Senor Eleta is a personal friend of Milton Eisenhower and has visited his home many times. He expects to make repeated trips to Washington, pushing continuance of financial negotiation with the United States. Senor Eleta said, "We want to get started on financial negotiations as soon as we can." The Finance Minister said most of the immediately realizable Panama projects should be underway by the end of this year. Long-range projects will be taking longer but all financial arrangements are expected to be accomplished prior to the 1960 termination of the de la Guardia administration, although actual projects may be incomplete by then. MIDEAST SEEN BOOST Senor Eleta sees the Middle East crisis as aiding Panamanian chaiices of getting aid. Raw materials and oil from Latin America are becominig more essential to the United States and emphasize the need of better Latin-Aimerican relations. Senor Eleta said, "Obviously the only true friends the United States has, aside from the NATO block, are the Latin nations." Senor Eleta said Po nama's definite planned projects are ready to start immediately Oil receipt of U.S. funds. Great emphasis was put on hydroelectric power, even more, than on education, low-cost housing, feeder roads, or agriculture. Senor Eleta said, "I believe wealth, productivity, and the standard of living is directly proportionate to electric power per ca ita any country generates."

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ISTHMIAN CANAL POLICY QUESTIONS 71 Whereas students talk unceasingly of the sovereignty of Panama in the Canal Zone, Senor Eleta said not one word was mentioned in the Eisenhower discussions on this topic. More important, he indicated, is for Canal Zone Governor Potter to be relieved of the necessity to show a profit on Panama Canal operations, enabling him to give more impulse to the Panamanian economy, while he allegedly is sacrificing to get a profit for his canal operations. Panama complained about the high cost of water sold by the United States in the Canal Zone to the Panama Government for resale to private citizens. Panama makes a, profit at the present rate, but wants a bigger profit to finance sewerage systems and other public works. Intensification of point 4 activities here was requested from Dr. Eisenhower. Furnishing U.S. funds for contemplated projects is not enough, as Panama's people must be educated to use the projected facilities. The background furnished the Eisenhower team of U.S. leading lending organization officials included a statement that the population is increasing at a faster rate than the gross national product, with per capital income lower than in 1953. Sixty percent of Panama's population is under 25 years and a great number under 15. Dependency on the family breadwinner is too high. The ratio between Government fiscal income and the gross national product is 20 percent, indicating people are taxed so heavily that reproductive capital is not being accumulated for further investment. Senor Eleta said: We cannot by ourselves in Panama solve our economic problems, which in time become social and political problems. The United States, needing political stability in Panama, should have a primary interest in development of Panamanian economic possibilities. Dr. Eisenhower's contacts here were limited to American officials and ruling families of Panama. Sefior Eleta sumnmed up the attitude of Panama's average man to the Eisenhower visit as "intense expectation of what will result from the visit." Monday's setting sun backlighted La Cresta Hill, where Dr. Eisenhower waited at the U.S. Embassy residence for a student delegation, which never came since they had requested him to meet them in the valley below. Panama newspapers which front paged the Panama President's proposals to Dr. Eisenhower one day, on the following day front paged the students' minimum demands on Dr. Eisenhower. The students are desirous of dictating U.S. foreign policy and demanded U.S. intervention in the Panamanian Government, among other things. Mirroring current preoccupation with what students think, a Panama Cabinet Minister said. "I think it would have been a goiod thing if Dr. Eisenhower had met with the students." NO CRITICISM Asked if any criticism of Dr. Eisenhower was voiced in Panama during his stay, Sefior Eleta said: None. Dr. Eisenhower carried himself cordially and amiably and with the dignity always characteristic of himself and his family.

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72 ISTHMIAN CANAL POLICY QUESTIONS The Wednesday morning drive from the capital to Tocumen Airport offered Dr. Eisenhower a reminder of Panama's economic needs. Observers wondered if Dr. Eisenhower, engrossed in protocol calls, fishing parties, formal dinners, and midnight receptions, noticed Panama subsistence farmers using centuries-old agricultural methods, and boys, almost men, stark naked along the road, and flimsy, thatchedroofed homes with palm sidewalls. As the military air transport plane with the Eisenhower party became airborne for Honduras, the question arose how much the recollection of the Panama visit can withstand the impact of heavy schedules in five countries to be visited and remain vivid and vital for reporting to the President. Backed by intimate personal relations with Dr. Eisenhower, Sefior Eleta says he is unafraid of this. Said Sefior Eleta: Panama's position is so clear, so logical, everything will be all right. We extracted our conversations and sent a summary to President Eisenhower.

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[From the Congressional Record, 86th Cong., 1st Sess., Feb. 25, 19-59 ISTHMIAN CANAL POLICIES-A CHALLENGE TO THE CONGRESS Mr. FLOOD. Mr. Speaker, in previous addresses to the House on the Panama Canal, I have dealt at length with interoceanic canal problems, especially the diplomat ic and juridical, following the Suez crisis in 1956. Two recent events have again attracted world attention to the isthmus. The first was a Panamanian enactment signed by President Ernesto de Ia Guardia on December 18, 1958, which declared the extension of Panama's territorial waters from the internationally recognized 3-mile limit to a 12-mile limit; the second, the refusal of the Panama National Assembly to reconsider this action as requested on January 9, 1959 in (I note by the U.S. Government. The first was treated by me in an address to the House, also on January 9, 1959. Certainly, a matter so charged with serious implications as control of the approaches of the Panama Canal, which are essential for its successful operation and protection, cannot remain unchallenged and unclarified. They require a further statement so that the people and the Congress of the United States, all maritime nations, and various interests that use the canal, may be better informed. In approaching this complicated subject, I wish to stress that the issues are fundamental, and challenge the right of the United States to meet its treaty obligations. Thus, they transcend all personal or political considerations and must be considered on the highest plane of statesmanship. Also, I desire to emphasize that, as regards the Republic of Panama and its people, I hold both in the highest esteem, and count many Panamanian citizens as valued friends of many years standing. To this task of clarification, I now address myself. UNITED STATES REACTED PROMPTLY When reacting to the ex parte action of Panama allegedly extending its maritime jurisdiction surrounding the Canal Zone, what position did the U.S. Government take? The note delivered on January 9 by our Ambassador to Panama contained the following significant points: First. Stated that the United States considers the action of the Republic of Panama regrettable in view of a forthcoming international conference to consider the width of territorial seas. Second. Expressed the view that there is no basis in international law for claims to territorial seas in excess of 3 nautical miles, and that there is no obligation on the part of States adhering to the 3-mile limit to recognize claims of other States for greater widths. 73

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74 ISTHMIAN CANAL POLICY QUESTIONS Third. Requested the Government of Panama to reconsider its action and reserved its rights in the area affected by the Panananian enactment. Fourth. Based the rights of the United States on article XXIV of the 1903 Hay-Bunau-Varilla Treaty. Because of the importance of this provision, I shall quote it: No change either in the Government or in the laws and treaties of the Republic of Panama shall, without the consent of the United States, affect any right of the United States under the present convention, or under any treaty stipulation between the two countries that now exists or may hereafter exist touching the subject matter of his convention. The meaning of this treaty provision is clear and unambiguous. It should preclude application through unilateral action by Panama derogating in any manner the rights, power, and authority of the United States and world shipping with respect to the Panama Canal and Canal Zone. But it does not protect against agitations revealed as conforming to a worldwide conspiratorial program of Communist origin against the United States. As could be expected, Mr. Speaker, by anyone adequately familiar with Isthmian diplomatic history, a formal request by the United States in a matter so vital could only lead to acrimonious and futile international debate. It is, indeed, significant that Panama quickly distributed copies of its action to all legislative bodies of the world in an effort to gain worldwide support for its unjustifiable attempt at boundary revision. Most certainly, Mr. Speaker, the questions involved, which are covered by basic treaties, should not be permitted to become topics for debate. This can be prevented only by a clear-cut, unequivocal declaration by the Congress of the United States reasserting our historic and practiced Isthmian Canal policies. PANAMA NATIONAL ASSEMBLY'S REFUSAL Specifically, in response to the request of the United States, what did the Panama National Assembly actually do? It voted on January 13, 1959, after receipt of the U.S. protest, not to reconsider, for any reason whatever, the currently attempted extension of its maritime domain to the 12-mile limit. The prime purpose for this effort is obvious: encirclement of the Canal Zone with 9 miles of alleged Panamanian waters at each end, in effect, making the zone another Berlin. It called upon all friendly nations to support the Panamanian pronouncement and directed that copies of the resolution be transmitted to all legislative bodies of the world. It castigated this speaker (Mr. Flood) as being public enemy No. 1 of Panama. It hurled numerous invectives that will receive no attention from him except to say that he has always been, and is, a true and realistic friend of Panama and its people; and that he will not be deflected from the proper discharge of his duty as a Member of the Congress of the United States by what must seem to those who view the situation objectively as the heedless, if not childish, actions of leaders in the Panama National Assembly. Especially noteworthy, however, was the failure of the national assembly or its leaders to meet adequately the historical, diplomatic,

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ISTHMIAN CANAL POLICY QUESTIONS 75 and juridical objections that have been repeatedly made on the floor of the House and published in the press of Panaina. Rather, they have ignored or attempted to confuse these statements of facts. UNDERLYING PANA MANIA N OBJECTIVES REVEALED Of far greater significance, Mr. Speaker, than either the formal actions or failures of the National Assembly on the indicated occasion, was the revelation, in the heat of the 4-hour full dress debate preceding adoption of its resolution, of the principal underlying political aims of certain Panamanian leaders. Deputy Aquilino Boyd, a former Foreign Minister of Panama, and now a candidate for President, made the following points: First. Demanded that Panama receive half of the gross revenues of the Panama Canal. Second. Asserted that the Panama Canal is now surrounded by 9 miles of exclusively Panamanian waters in which Panama can exercise definite acts of sovereignty. Third. Enumerated these alleged acts of sovereignty as follows: (a) Requiring the display of the Panama flag on vessels entering Panamanian waters. (b) Exercising of vigilance over shipping to maintain internal security. (c) Regulating fishing activities. (d) Trying of persons for offenses committed on board ships in Panamanian waters. (e) Requiring foreign war vessels to comply with Panamanian navigation rules. (f) Enforcing customs, fiscal and sanitation regulations. Imagine sanitation regulations to be enforced by Panama. God help the Canal Zone-God help Panama-God help everybody. You will have yellow fever and malaria once more devastating Panama and Central America and the southern United States. We want to help these people with our foreign-aid programs and with our point 4 programs. That is one criticism I have had of our foreign aid program and point 4 programs-every dollar of which I have supported from the very beginning. Not enough goes to Central and South America and to the Caribbean. It should be better handled and more should go to them. Let us teach these people how to help themselves so that they can handle their sanitation problems for their own welfare and for the welfare of the world. But, they are not yet ready. This is not paternalism-this is true friendship to our neighbors to the south. My heart is with them. My heart is with them but not with this cheap demagoguery. Why the best way in the world to be elected justice of the peace in Panama City is to stand up and to say, "The canal is ours. Give us the canal." How can you lose? Deputy Alfredo Aleman, Jr., though less definite than Boyd. snggested that Panama may, first, charge vessels entering Panamanian waters for costs of aids to navigation; and, second, enforce Panamanian labor laws on Panama-flag vessels entering Panamanian waters. Is that not a nice way to destroy the American merchant marine? That is the way to get elected, Mr. speaker. I need not tell you, but if you have any doubt, read this. 67-843-66-6

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76 ISTHMIAN CANAL POLICY QUESTIONS These are some of the many requirements that Panama probably would impose if the validity of its enactment were ever conceded. Their significance is readily apparent to the ship operators of all nations as it is to all who are informed on the problems of the Panama Canal. Should Candidate Boyd's insistence on 50 percent of the gross annual canal revenues for Panama, which would approximate $43 million as compared to $3,800,000 for present net revenues, ever prevail, the resulting deficit of approximately $40 million would have to be borne by the overburdened American taxpayer or world shipping, with possible liquidation of the entire canal enterprise. This factor alone clearly illustrates how reckless politicians sometimes can involve themselves in proposals that are absolutely ridiculous and absurd. Furthermore, Mr. Speaker, in view of the assertions and demands listed above and facts elsewhere developed in this address, I submit that if Panama has any enemy No. 1, he is not in the United States, but among its own radical leaders who, for political advantage, seem willing to bring their country to the brink of disaster. PANAMA CANAL, A MANDATE FOR CIVILIZATION Mr. Speaker, for a number of years I have served on the Committee on Appropriations with assignments to subcommittees for the Department of Defense, the Department of Commerce, and related agencies. The last includes the Panama Canal Company and the Canal Zone Government. Hence, I have lived with the canal situation over a long period of time. Visiting the Canal Zone on official duty on a number of occasions and reading widely in isthmian history, I have made a number of predictions in the past. It is indeed a sterile satisfaction to me that all my fears have been justified in what has been a progressive deterioration and piecemeal liquidation of U.S. rights with respect to the Panama Canal. Often have I pondered why such conditions as now prevail should ever have been allowed to develop at this crossroads of world shipping. I have come to the very definite conclusion that they are not accidental, but the result of a sustained effort in a long-range program in which the United States has unfortunately failed over a long period to meet its treaty obligations in safeguarding some essential features in management of the great waterway. We undertook this tremendous task, Mr. Speaker, as a "mandate for civilization." It is up to us to measure up to that trust and not fail im t. ATrEMPTED ENCIRCLEMENT VIOLATES TREATY The principal historical and juridical facts that I have previously endeavored to present to the Congress with extensive documentation are: That the Panama Canal is an artery for world commerce; that its construction was undertaken by the United States at its own expense pursuant to international agreements, the 1901 Hay-Pauncefote Treaty, and the 1903 Hay-Bunau-Varilla Treaty; that the Canal Zone is constitutionally acquired domain of the United States in perpetuity for canal purposes; that the grant of this territory, "rights, power, and authority" within the zone, and its "auxiliary lands and

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ISTHMIAN CANAL POLICY QUESTIONS 77 waters," is to the "entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power, or authority"; and that the treaty set up provides likewise for exclusive U.S. control over the maritime approaches from one high sea to the other as essential for free and open navigation and for efficient canal operation. In 1903, when the Hay-Bunau-Varilla Treaty was ratified by Panama and the United States, the limits of the territorial waters of the Republic of Panama and Canal Zone were coterminous. No subsequent international agreement has changed those limits. To be valid, any change in them must be authorized in treaty or other convention in which all affected parties participate. Moreover, even if Panama could, by legislative action, extend its jurisdiction over the sea approaches to the canal, immediately the provisions of articles II and III of the 1903 treaty would become operative and apply to these approaches, which would become portions of the Canal Zone with exclusive jurisdiction for canal purposes vested in the United States. At this point, I quote text of the indicated articles II and III of the 1903 Hay-Bunan-Varilla Treaty, which are commended for careful study: ARTICLE I The Republic of Panama grants to the United States in perpetuity the use, occupation and control of a zone of land and land under water for the construetion, maintenance, operation, sanitation, and protection of said canal of the width of 10 miles extending to the distance of 5 miles on each side of the center line of the route of the canal to be constructed; the said zone beginning in the Caribbean Sea 3 marine miles from mean low water mark and extending to and across the Isthmus of Panama into the Pacific Ocean to a distance of 3 marine miles from mean low water mark with the proviso that the cities of Panama and Colon and the harbors adjacent to said cities, which are included within the boundaries of the zone above described, shall not be included within this grant. The Republic of Panama further grants to the United States in perpetuity the use, occupation and control of any other lands and waters outside of the zone above described which may be necessary and convenient for the construction, maintenance, operation, sanitation, and protection of the said canal or of any auxiliary canals or other works necessary and convenient for the construction, maintenance, operation, sanitation and protection of the said enterprise. The Republic of Panama further grants in like manner to the United States in perpetuity all islands within the limits of the zone above described and in addition thereto the group of small islands in the Bay of Panama, named Perico. Naos, Culebra, and Flamenco. ARTICLE HI The Republic of Panama grants to the United States all the rights, power, and authority within the zone mentioned and described in article II of this agreement and within the limits of all auxiliary lands and waters mentioned and described in said article II which the United States would possess and exercise if it were the sovereign of the territory within which said lands and waters are located to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power, or authority. Special attention is directed to the last sentence of the first paragraph of article II. Thus, Mr. Speaker, the recently attempted surrounding of the Panama Canal by Panama is not only a violation of international law but a clear transgression of existing treaties that must not be countenanced. Therefore, the problem is one of juridical character in which the rights of the United States and world shipping must be protected. The De

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78 ISTHMIAN CANAL POLICY QUESTIONS apartment of State acted wisely in its note on January 9, 1959, refusing to recognize the claim of Panama to a "greater width of territorial sea." SOVEREIGNTY ISSUE FELLED, EMBALMED, AND BURIED More than half a century has passed since acquisition in 1904 of the Canal Zone. The key figures in that historic event have passed away and none with comparable knowledge or experience have taken their places. The canal enterprise has long been accepted by our people as a solved problem, with resulting lack of public interest. Hence, it is not surprising that few persons realize that the central issue in the current canal situation, that of titular sovereignty, is not new. Rather it is an old one in a new guise. In 1904, this issue was felled by Gov. George W. Davis and Secretary of State Hay. In 1905-06 and 1909, it was embalmed by Secretary of War and President-elect Taft, respectively. In 1923, it was buried by Secretary of State Hughes. So what do we actually have: The exhumed corpse of a dead issue-a veritable political zombie. VIEWS OF SECRETARIES HAY AND HUGHES The diplomatic history of the sovereignty question is too long and complicated to be comprehensively covered here. But I do wish to quote Secretary Hughes, who, in 1923, when facing a comparable situation, handled it effectively. In a conversation with the then Minister of Panama to the United States, Mr. Hughes, on December 15, 1923, declared with a refreshing degree of candor and vigor that the United States "would never recede from the position which it had taken in the note of Secretary Hay in 1904. This Government could not, and would not, enter into any discussion affecting its full right to deal with the Canal Zone under article III of the treaty of 1903 as if it were sovereign of the Canal Zone and to the entire exclusion of any sovereign rights or authority on the part of Panama"-Foreign Relations, 1923, volume III, page 684. To this Secretary Hughes added: It was an absolute futility for the Panamanian Government to expect any American administration, no matter what it was, any President or any Secretary of State, ever to surrender any part of these rights which the United States had acquired under the treaty of 1903. That, Mr. Speaker, is the type of incisive treatment required today. We must not sit back and let evil triumph through our own indifference. MARITIME-DEFENSE INTERESTS RECOGNIZE DANGERS The inherent dangers in the situation at Panama, though not generally recognized yet in the United States, seem better understood in other maritime nations. In addition to the United States, other great maritime nations have addressed notes of protest to Panama: The United Kingdom, Japan, and France. But far more alert to these problems than peoples and governments have been various shipping interests of the United States and other nations that use the canal and pay tolls. Moreover, our defense agencies are fully aware of the hazards and strongly oppose further weakening of our position in the Isthmian area. All these interests look to

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ISTHMIAN CANAL POLICY QUESTIONS 79 the Congress for leadership in protecting the Panama Canal enterprise, for they know that to yield in principle will be fatal. Another important consideration that should be kept in miind is that the extremely radical agitation hostile to the United States which obtains in Panama may be well calculated to induce among Panamanians, employed in the Panama Canal and U.S. defense organizations on the isthmus, a like hostility. Where will all this lead? Conceivably out of the large number of Panamanians employed under the recent t reaty stipulations some might be brought to a similar viewpoint with resulting injury to the United States. If, for instance, any such 1"anamanians with communistic leanings, should decide to sabotage the canal or defense installations, the United States would be in a large measure powerless to prevent it. Therefore, Mr. Speaker, how important it is that Panama as well as the United States should undertake no decisive step affecting their mutual relations except with advance notice and full discussion. The action of Panama in undertaking, in the absence of such notice, to extend in arbitrary fashion its sea limits is certainly not to be commended anywhere at any time-especially so where the welfare and destiny of nations are involved. "MILK COW" DIPLOMACY STARTED AT PANAMA When viewing thq tremendous foreign aid programs of the United States today, many have wondered when and where they started. They were not launched with the Marshall plan in 1947, at Yalta in 1945, nor at Teheran in 1943, but for Panama in 1936. On March 2 in that year, with the signing of the Hull-Alfaro Treaty, was started a process of Isthmian surrenders by our Government that has not yet been officially ended. It was further advanced in the 1955 Eisenhower-Remon Treaty, ratified by the United States without adequate public discussion and debate. The results of the ensuing relinquishments have been withdrawal of important canal activities to the limits of the Canal Zone and impairment of some of them in it, but without surrender of the fundamental principle of exclusive Canal Zone sovereignty. Perhaps the most notorious treaty action was that concerning the strategically important Panama Railroad, which, without authority of the Congress, was slated for liquidation. As one who participated in blocking that effort, I speak with the background of personal knowledge. Imagine this, Mr. Speaker. While the treaty power was giving away the highly valuable terminal yards and passenger stations of that railroad, the Congress was saving its main line from abandonment. Now we are going to have a rail link without its adequately planned terminals. Can you imiagine anything more ridiculously inept ? Altogether, events at Panama bring to mind the fact that in the times prior to the secession of Panama in 19W3 from Colonmbia that Panama, because of its transcontinental railroad and resulting income, was long looked upon as the "milk cow" of Colombia. Conditions have now changed. The Panama Canal, through our diplomatic failures, has become the "milk cow" of Panani: and the United States, the "milk cow" of the world.

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o ISTHMIAN CANAL POLICY QUESTIONS PANAMA CANAL NOT A RELIEF AGENCY Among the striking evidences of our extremely generous policy in Panama were the 1955 treaty provisions for donations of valuable properties (more than $25 million) in the cities of Colon and Panama to the Republic, without any but token consideration, also for raising the annuity supposed to be paid by the Panama Canal Company from $430,000 to $1,930,000. The impact of these and other gifts on the operation of the Panama Canal will be felt for many years. In a diplomatic sense they mean that the canal enterprise, an interoceanic commercial undertaking, has been used as an international relief agency. This confusion of a vast business project with foreign relief is unbelievable, for business and foreign aid are separate functions and should be kept, so. Fortunately, the Congress has taken the first step toward correcting this error, with legislation transferring responsibility for the additional $1,500,000 to the annuity from the Panama Canal Company to the Department of State, which was responsible for it. This transfer, though just so far as the Department of State is concerned, remains a charge against the United States and must be borne by our taxpayers. As an independent interoceanic public utility under the President, the Panama Canal operations must not be confused and weakened through ill-considered policies of placation, for it is not a local project for local political exploitation. Instead, it is one required by law, pursuant to treaty, to be self-sustaining with tolls that are "just and equitable" for the transit of vessels of all nations on terms of equality. These, Mr. Speaker, are prime responsibilities of the United States for the implementation of which the Congress is the final authority. PANAMA NO LONGER POSSESSES MONOPOLY OF CANAL ROUTES Many explanations for the extreme and radical demands concerning the Panama Canal, emanating from the isthmus and elsewhere, may be given. But one of the most potent factors underlying them is the erroneous assumption in Panama that no other location exists for another Isthmian Canal-an assumption that is responsible for the bold, radical, and ever-increasing demands put forth in behalf of Panama. During the crucial years of Panama Canal history, 1902-06, when the great decisions as to the choice of route and type of canal were made, Panama was undoubtedly the best choice from every controlling point of view, especially operations, engineering, and economy. Without question, the proper decisions were made, and many years of successful operations fully justify them. But limitations that then applied, especially in engineering, no longer hold. All major engineering problems were solved long ago and now there are other routes competitive with the Panama route for major increase of interoceanic transit capacity. Made even more competitive by the effects of the 1936 and 1955 treaty factors at Panama, together with extreme demands and actions in that country, some of these routes may be passing the Panama route in desirability from several important standpoints, including a more

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ISTHMIAN CANAL POLICY QUESTIONS 81 satisfactory political climate-a deter inig factor, other thini gs being equal. At this moment, Mr. Speaker, pursuant, to authorizat ion of lie House of Representatives, a distinguished Board of Consult ants under the direction of the Committee on Merchant Marine and Fieberies is delving into the question of a canal at another location to rake care of the greatly increased isbtmian t raflie of the futue. T 11 *linjust ifiable occurrences in Panama will doultles cause this Board to. search, with the utmost. zeal, for another route. To say the least, the, current absurd and reckless deniaiis under radical leadership at. Panama may well force the united State., to tile alternative of an other transisthmian waterway in preference to submission to the prohibitive costs inevitably involved in these demands. UNITED STATES NOT THE "'C%)N3ON ENEMY' OF PANAMA Among the most gratifying of my experienres in on-ec-tIon with the canal question are the many assurances of sui)port, fronl various parts of the nation and from the. isthmu. I am espe ially happy to state also that much of this support comes from tihou-li ful Panamanians, among whom the United States has many und rst anding friends. They very definitely do not approve of the ext reme aitations and unrealistic demands affecting the Panama ("'mnii that have been made since the 1956 Suez crisis. They know the history of their country and that their independence crew out of the canal enimerprise. They appreciate that their nation's welfare depends on the deficient operation and management of the Panama. (anal under the control of the United States. They also know that the United States is not their "connnon enemy" buttheir true and tested friend. Unfortunately, the actions of some of their heedles le: rs and agitators seem more determined to follow the example of Egypt in thle Suez crisis and Communist leads rather than the real interests of their country. Their official actions present grave questions for tle united States that must be adequately met. RADICAL DEMANDS FOSTER DRIVES FOR INTERNATIONALIZATioN The vast majority of the North American and Panamanian people look upon the Panama Canal as an agele-s institution. But this is not true. Those who know its history understand that were the United States ever to withdraw from the Panama Canal, the results would, indeed, be. tragic for Panama and world commerce. Attacks on U.S. jurisdiction are not new. They trace back to discussions in 191'T in Petrograd between the Red Guard and Jolhi Reed, a notorious American Communist newspaper reporter now buried in the Kremlin. During recent years an important factor in lie agitations and disorders that have occurred on the isthmus has been their communistic pattern and design. In fact. international comnunmisin in 1956, following the Suez crisis, opened its agitational campaign aimed at wresting control of the Canal Zone from the United States by means of agents trained at, the State College for Political and Social Science at Prague, Czechoslovakia.

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

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1STHMIAN CANAL POLICY QUESTIONS 83 treatymakers of both countries. Yet as soon as the Un aes implemented the treaty provisions, these radical deimandls in Panaima arose and the recent assembly action was taken. Bv the same token, we can certainly expect that, if all the radical demands in Panama are granted, even greater and more preemptory ones are -, be expected. This is certainly not the process of mutual understandijl2 comemplated in the 1955 treaty. In view of all this, will not the questions arise in the minds of U.S. taxpayers: First. Who must bear the ultimate cost made necesary by that treaty, including the $20 million bridge at Balboa, where an adequate free ferry provided by the United States has long been satisfictorilv functioning? Second. Why should we be taxed to meet these costs when they fail to achieve the intended purpose of good will and mutual understanding on which they were based? In this connection, I may say, that my correspondence voices strong demands that the Balboa bridge project be suspended until the attempted encirclement of the Canal Zone by Panama is rescinded. ISTHMIAN CANAL POLICIES A CHALLENGE TO THE CONGRESS Mr. Speaker, from what has been said here today it is clear that the isthmia.n question is headed toward even graver developments than have so far transpired. These are not the words of a prophet, but deductions enabled by close observation and studi, and the realization of what occurred in 1005S when riots, taking place during students (lemolistrations against the Panamanian Goverment. were renpeible Xotr the deaths of many Panamanians. Current reports of expeked revolt in Panama, coupled with finding of arms caches in that Iepublic. and other recent revolutionary events in the Caribbean, presage future grave incidents which, in tragic consequences, nmy make those of May 1958 appear insignificant. The history of the isthmus is complicated and not understood as it should be, either in Panama or the United States. Its problems are grave: and they can be surmounted only if dealt with promptly and effectively. Mr. Speaker, the situation with respect to the Pana 2 Canal is indeed of the gravest character. Those in charge of the ('omiunist movement in Latin America. and especially in the Caribbean area, have undoubtedly focused their conspiratorial activities on the Pa na ma Canal with the purpose of causing the destruction of amicable relations between the United States and Panama, with complete liquidation of U.S. controls over the canal itself. While I would not charge that the Government of Panamia is one of communist character, vet it is undoubtedly true that overall Communist purpose is to subvert any government where situations present themselves as fertile fields for communistic endeavor. T1ev are always fishing in troubled waters and, with the devil>, cunning. are usually able to capitalize on situations thus created. Therefore. it is but natural that the Soviet Government should properly "recognize the ex parte territorial declaration by Panama touching the matter of sea approaches to the canal. So far as I know, Panama made no

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84 ISTHMIAN CANAL POLICY QUESTIONS appeal or cave any notice to any international body or to the great marit ime nations using the canal as to its intention to take the gravely important step involved. This certainly did not serve the purpose of "imuital understanding and cooperation" that should prevail. Small wonder that it has met with Soviet approval. Commenting further on Soviet influence in the Caribbean area, we imist recall that in 1958 in Venezuela and just now in Cuba, occurred the overt hrow of two Latin American governments, with daily reports of suionmary execiutions in the latter country that were shocking to the people of all lands of constitutional liberty. Only governments of law can bring peae, and prosperity. We may well expect other convulsions in the Caribbean area, especially in the littoral nations of the American isthmus, and this regardless of whether there are any basic justifications. The obvious Communist objective is the maritime separation of the two coasts of the United States by Communist controlled countries, as illustrated by the recent Communist effort in Guatemala. To meet these situations, it is necessary to understand the issues in their broadest sense and that they are exceptional. Their handling requires men of exceptional qualifications. The past failures in some important isthmian policies are frightening. In every sense, they constitute a serious challenge to the Congress. As to the basic question of future major increases of transit capacity, as previously stated, an inquiry into that is underway by men of the highest professional attainments and independence. In regard to discussions of sovereignty and jurisdiction over the Canal Zone and Panama Canal, that matter is now before the Congress in House Concurrent Resolution 33, 86th Congress. This measure would reaffirm our long-established and practiced isthmian policies, serve notice that this Nation will continue its control over the Panama Canal, and counter the movements now converging on the Isthmus of Panama. M'r. Speaker, the United States, in some of its policies, has played the part, of "Uncle Sap" long enough. The time has come to resume its historic role of "Uncle Sam"-a role, though generous in its policies, was firm in the protection of the Nation's just interests. As partial documentation upon which some of the foregoing remarks are based, under leave accorded, I include a copy of House Concurrent Resolution 33, 86th Congress and a number of statements published in the IUnited States and Panama, commended for perusal, especially by committees of the Congress that deal with interoceanic canal questions. Among the statements quoted, special attention is invited to that of former President Hlarmodio Arias, who presents the Panamanian viewpoint, which I believe, are fully answered in this and previous a ddress I have made on the subject. The resolution and statements follow: HOUSE CONCURRENT RESOLUTION 33 Whwre;-: there is now being strongly urged in certain quarters of the world (be surrendr, by the UTnited States. without reimbursement, of the Panama ('aial. to the United Nations or to some other international organization for t he (wNriership and operation of the canal: and

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ISTHMIAN CANAL POLICY QUESTIONS 85 Whereas the United States, at the expense of its taxpayers and under, and fully relying on, treaty agreements, constructed the canal, and since its con)pletion, at large expenditure, has maintained and operated it and provided for its protection and defense; and Whereas the United States, following the construction of the canal, has since maintained, operated, and protected it in strict conformity with treaty requirements and agreements, and has thus made it free, without restriction or qualitication, for the shipping of the entire world ; and, in consequence of which. with respect to the canal and the Canal Zone. every just and equitable conisideration favors the continuance of the United States in the exercise of all the rights and authority by treaty provided, and in the discharge of the duties by treaty imposed: Now, therefore, be it Resolved by the House of Rcprescntatives (the Scnate concurring ). That (1) it is the sense and judgment of the Congress that the United States should not. in any wise, surrender to any other government or authority its jurisdiction over, and control of, the Canal Zone, and its ownership, control, management, naintenance, operation, and protection of the Panama Canal, in accordance with existing treaty provisions; and that (2) it is to the best interests-not only of the United States, but, as well, of all nations and peoples-that all the powers, duties, authority, and obligations of the United States in the premises be continued in accordance with existing treaty provisions. [Department of State press release, Jan. 10, 19591 UNITED STATES DELIVE-RS NOTE TO PANAMA ON 12-MILE TERRITORIAL SEA LAW Our Ambassador to Panama delivered on January 9 a note to the Panamanian Government in which the United States stated its nonrecognition of the provisions of the recently enacted Panamanian law providing for a 12-mile territorial sea and reserved all of its rights in the area which is the subject of the law. The text of the U.S. note is as follows: EXCELLENCY: I have the honor to refer to your note No. 1090. dated Deceinber 23, 1958, transmitting a copy of Republic of Panama Law No. 58. of Decemnber 18, 1958, which has as its purpose the extension of the territorial sea of the Republic of Panama to a distince of 12 miles from the coast. I have been instructed to state that the U.S. Government considers this action of the Republic of Panama is regrettable in view of the recent action of the United Nations General Assembly in voting overwhelmingly to call an international conference to consider the breadth of the territorial sea and fishery matters. It is the view of my Government, as expressed at the United Nations Law of the Sea Conference and on previous occasions, that no basis exists in international law for claims to a territorial sea in excess of 3 nautical miles from the baseline which is normally the low-water mark on the coast. Furthermore. in the U.S. view there is no obligation on the part of states adherinu! to the :-mile rule to recognize clainis on the part of other states to a greater breadth of territorial sea. My Government hopes that the Government of Panama will find it possible to reconsider its action and awaits the further consideration of the question of the breadth of the territorial sea by the international community. In the iantime the Government of the United States reserves all of its right, in the :i rea which i: the subject of Republic of Panama Law No. 5S of December 18. 19.5 Accept, Excellency, the renewed assurances of my highest consideration. The Department wishes to point out,, in view of the many inquiries, that this new Panamanian law cannot affect the rights of the United States with respect to the Panama Canal. Article XXIV of the con

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86 ISTHMIAN CANAL POLICY QUESTIONS vention of 1903 between the United States and Panama, relating to the canal, provides: No change either in the Government or in the laws and treaties of the Republic of Panama shall, without the consent of the United States, affect any right of the United States under the present convention, or under any treaty stipulation between the two countries that now exists or may hereafter exist touching the subject matter of this convention. [From Congressional Information Bureau, Washington, D.C., Feb. 4, 1959] Following today's session of the House Merchant Marine Committee, Chairman Bonner announced that tl 1 e Tollowing are some of the matters that should be looked into: 1. Trans-Isthmian Canal study: Over a year ago the committee, recognizing a trend toward the obsolescence of the present Panama Canal and the early prospect of congested traffic conditions due to the increase in numbers and size of ships transiting the canal, initiated a broad study into the need for modernization of existing facilities and the possible need for additional or alternative facilities. In this connection the committee secured the services of a group of the foremost engineers in the United States to examine the situation and make recommendations for future action, either by way of improvement of the existing canal, the construction of a new one, or both. During the past Congress these engineers, as a board of consultants to the committee, have examined existing engineering data on the 30-odd routes proposed at various times for a canal crossing at various places in the central American isthmus. The board of consultants has visited and inspected the present canal and familiarized themselves with the construction and operating problems involved. A preliminary report was submitted to the committee after the adjournment of the last Congress, covering recommended immediate improvements required to continue the efficient operation of the canal, pending a complete study. During this session the board must make further studies of the Panama Canal and of the canal route heretofore proposed through the Republic of Nicaragua. It is anticipated that their final report will be received sometime about the middle of this year. The importance of the work of this board cannot be overestimated since it has been predicted that the present canal will be unable to handle the volume of traffic expected by 1970. In view of the time required for engineering and construction work of the magnitude involved here, it is essential that the Congress be provided with workable ideas for future expansion in the earliest possible time. [From Economic Council Papers, Sept. 1, 1953] IT STARTED AT PANAMA-WHERE WILL IT STOP? (By Earl Harding, vice president, National Economic Council, New York, N.Y.) The great American giveaway series did not start with the Marshall plan in 1947, nor with Yalta in 1945, nor with Teheran in 1943. The first game of the series was played with Panama in 1936, and the kickoff of another session with the same team is scheduled for the political stadium in Washington on September 10, when Panama's representatives will begin negotiating for more concessions. It was "in furtherance of the good-neighbor policy" that Quarterback Franklin Delano Roosevelt on March 2, 1936, dropkicked into the arms of the Panama politicians our priceless treaty rights to defense bases outside of our 10-mile-wide Panama Canal Zone.

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ISTHMIAN CANAL POLICY QUESTIONS 87 That planned fumble cost American taxpayers much more than the million-plus dollars In rental paid to the Panama Government d(ur;ng( World War II for permission to plant our guns, build our roads, landing fields, bomber bases. al nearly 400 buildings on Panama's pastuirelands and in her swamps and jungles adjacent to the Canal Zone. WORSE THAN PROFLIGACY It took endless negotiating to obtain the permission-where we formerly had the right under the 1903 treaty which F.D.R. abrogated-to use Panamanian territory for defense purposes. Finally our Army was forced to withdraw in 194S and abandon buildings and improvements which had cost well over another million dollars to create. The giveaway of money to Panama was in the pattern of national profligacy set by F.D.R. and not yet abandoned. But giving away our treaty rights to protect the lifeline of our national defense was in the pattern F.D.R. set when, without consulting them, he gave away the territories and liberties of Poland and China. And now, if Panama's desire for still further concessions is not satisfied, pressure in behalf of Panama such as Alger Hiss in 1946 brought to bear through the United Nations. may take the form of demanding internationalization of the Panama Canal. Just as Communists have infiltrated inside and outside the Canal Zone, so have exaggerated ideas of supernationalism taken hold in Panama. Since the United States created the Republic of Panama in 1903, a generation of Panamanians has been schooled to believe in the fiction that their "founding fathers" actually won the independence. Of course, Panama history books haven't told Panamanian youth that only a. handful of conspirators, most of them employees of the Panama, Railroad. then owned by the French Panama Canal Company, knew that a revolution was planned. A DELUDED GENERATION If there is to be straight thinking on the coming agitation for more concessions to the Republic of Panama, some of the forgotten or halftold history should be recalled now. It will be needed to offset the screams of 'aggression" and "infringement of sovereignty" which will be turned on again, as they were in 1947 when rioting students terrorized the Panama Legislature to vote down an extension of U.S. leases on defense bases. Panama, formerly a Province of Colombia, was created in name, and in name only, an independent nation by acts of the United States. Our responsibility was officially denied until the truth -was uncovered. Then Theodore Roosevelt admitted "I took Panama and let Congress debate." Concealed documents. uncovered in Panama in 19009. disclosed th.at preliminary financing had been arranged in a New York bank and that American warships were to be on both sides of the isthmus. American marines prevented the landing of Colombian troops. The total casualties of Panama's soul-stirring war for independence were one Chinese onlooker and one donkey.

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88 ISTHMIAN CANAL POLICY QUESTIONS After the blow was struck, native politicians were sent under U.S. Navy escort to interior towns of the Province of Panama to notify them of then unexpected-and then unwanted-independence. Such was the status of the Republic of Panama-a creature of the United States. All through the 10 years of canal construction and intermittently ever since, administrative and defense problems have been fraught with continual annoyance and needless expense. Time and again American authorities have had to supervise Panamanian elections and supersede or supplant Panamanian police and sanitation administrations. Friction is inevitable in any vital spot where there is dual or overlapping sovereignty. When earlier treaty negotiations were with the mother country, Colombia refused to include the cities of Panama' and Colon in the proposed Canal Zone. Both lie entirely within the 10-mile-wide strip. Then, after T.R. resorted to taking Panama, anything the United States proposed could have been obtained, but no one in authority had the foresight to include the terminal cities. The plan of the Panama conspirators was to declare the independence of only the canal strip and the terminal cities, which were to be brought under the protection of the United States without reference to the rest of the Province. FORESIGHT CAME LATER The need for a wide zone to include the entire watershed of the canal was recognized in a report to Congress by General Edwards, in command at Panama in 1916, but nothing was done. Unofficial warnings of future needs were recorded earlier by the author of this council paper. (See World's Work, October 1913, and text of address before Latin American Conference, Clark University, in Journal of Race Development, vol. 4, No. 4, April 1914.) He then advocated: 1. Anticipating future needs and taking them, as permitted by the Hay-Bunau Varilla treaty of 1903 as convenient and necessary, a Canal Zone 50 to 60 miles wide. 2. Including the terminal cities of Panama and Colon to avoid the frictions which have existed ever since. 3. Inducing the Republic of Panama to establish its capital in the western highlands of the province. 4. Returning the eastern end of the province to Colombia as a gesture sentimentally more effective than the cash indemnity of $25 million which the United States finally paid to Colombia in 1922. It was suggested that acquisition of territory for future defense could not be regarded as aggression-unless delayed until a new generation of Panamanians came to believe their sovereignty an inalienable right. They believe it now. BUT APPEASEMENT HASN'T WORKED Administrative friction, political agitation, and never-ending diplomatic discussions continued. On March 2, 1936, Franklin D. Roosevelt approved the abrogation of practically everying in the 1903 treaty to which the Panamanian politicians objected.

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ISTHMIAN CANAL POLICY QUESTIONS 89 Senate opposition delayed our ratification of the 19:4 t raty until July 1939. This treaty gave Panama an entirely new a iv. Article I of the 1903 treaty was eliminated. it rea: "The United States guarantees and will maintain the independence of th 1Itpubi( of Panama." The old treaty granted to the United States "in perpetuity the use, occupation and control"not only of the Canal Zone but also ofany other lands and waters outside of the zone which may be necessary and eoivenient for the construction, maintenance, operation, sanitation, and protection of the said enterprise. And further, under the old treaty, Panama granted to the United States all the rights, powers and authority within the zone * and within thf limits of all auxiliary lands and waters * which the United States would Ixpssess if it were sovereign of the territory within which said lands and waters are located, to the exclusion of the exercise by the Republic of Panama of any such sovereign rights, powers, or authority. All that was abrogated in the following clause of the 1936 treaty, which is still in force: The United States of America hereby renounces the grant made to it in perpetuity by the Republic of Panama of the use. occupation, and control of lands and waters, in addition to those now under the jurisdiction of the United States of America outside the zone * which may be necessary and convenient for the construction, maintenance, operation, sanitation, and protection of the Panama Canal or of any auxiliary canals or other works necessary and convenient for the construction, maintenance, operation, sanitation, and protection of the said enterprise. Then, having abandoned our rights to defense bases outside the Canal Zone, the United States agreed with Panama, in article II of the 1936 treaty, that "if, in the event of some now unforeseen contingency" land outside the Canal Zone should be needed, the two governmentswill agree upon such measures as it may be necessary to take in order to insure the maintenance, sanitation, efficient operation and effective protecItion of the canal, in which the two countries are jointly and vitally interested. The U.S. Government's right of eminent domain in acquiring property within the cities of Panama and Colon which might be needed for canal operation was renounced. Also eliminated was the right of the United States to maintain public order in Panama if the Panamanian Government couldn't do so. And the annuity of $250,000 paid by the United States for use of the canal strip was increased to $430,000-on account of the RIoose'velt devaluation of the dollar. The 1936 treaty made many other concessions to Panama. It restricted residence in the Canal Zone to American civilian and military personnel, established corridors within the zone for Panamanian convenience, and prohibited new private enterprises in the Canal Zone. The effect of the 1936 treaty's ratification in July 19.9 was summarized in such headlines as "The United States in Panama Pact Quits as Guardian, Becomes Neighbor-New Treaty Ends the R1ight of Intervention, Substituting Bilateral Cooperation."

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90 ISTHMIAN CANAL POLICY QUESTIONS WAR MULTIPLIES ANNOYANCES Acquisition of bases for defense of the canal became imperative when war in Europe started in September 1939. Thereupon administrative annoyances multiplied. Communist infiltration as well as Nazi influences in Panama came to the surface. Labor union organizers flocked in from Mexico and from the United States. Most of the Panamanian employees on the canal are now represented in collective bargaining agreements with the CIO. Many of them are children of West Indian laborers who were imported to help build the canal and who have become Panamanian citizens. Most of the skilled employees, citizens of the United States, have been unionized by the A.F. of L. Red unionism, under the Latin American leadership of Vicente Lombardo Toledano, of Mexico, has had its toehold in Panama since Lombardo and the late Philip Murray of the CIO were photographed together for their joint promotion pamphlet "Labor's Good Neighbor Policy." U.S. Army and Navy and canal authorities were necessarily tightlipped about the annoyances attending their use of more than 130 defense sites. Obtaining access wasn't always painless, but responsible Panama officials were generally cooperative. The big question was "How much?" A defense sites agreement was not finally signed in Panama until May 18, 1942. It granted to the United States only "temporary use for defense purposes of the lands referred to in the attached memorandum." Details were kept secret. The agreement stipulated that "The Republic of Panama retains its sovereignty over the areas" and that all buildings "shall become the property of the Republic of Panama upon the termination of their use by the United States." The bases were to be evacuated 1 year after ratification of a definitive treaty of peace-not just after a cease fire. Some of the 130-odd defense sites were small areas for observation towers, searchlight, or gun emplacements. Others were outlying uninhabited islands; some mere broad pastures or cleared jungle made into landing fields. The total area amounted to many thousands of acres. Most of the land and water had little monetary value except in the minds of some Panamanian politicians who emphasized its international importance and suggested rental as high as $1,600 per acre per year. ANTI-AMERICAN CLAMOR But neither protection of the canal and their own country nor the gravy flowing into their treasury silenced the anti-American elements. Clamor against "yanqui aggression" was popular even during the war, and was intensified immediately after V-J Day. On September 2,1946, the Panama Assembly unanimously demanded that the United States evacuate all defense sites immediately. On the same day it was announced in Washington that 65 of the defense sites covering more than 10,000 acres had been relinquished, and that defense site rentals of $975,587 had been paid up to June 30, 1945.

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ISTHMIAN CANAL POLICY QUESTIONS 91 And on the following day Panama's President Enrique Jim'nez announced that occupation of future defense sites wouldn't even be discussed until all had been returned. Thereupon U.S. Ambassador Frank T. Hies left for Washington, and on September 12, 1946, a joint statement of the two governments announced that defense-base problems would be resolved by friendly negotiations. But agitation continued. President Jinme'nez was quoted as demanding that the United States revise its whole attitude toward his country and make the 1936 treaty more effective in terms of benefits for Panama. Panama has had four-or has it been five ?-Presidents since 1948. The hope of the administration in Washington is that the present President of Panama, Jose Antonio Remon, formerly its chief of police, may be able to stay in office throughout his 4-year term which started October 1, 1952. Also that solution of Panama's economic problems through its people working harder and producing more food which our Canal Zone administration is willing to buy, may at last bring a measure of stability to our little neighbor. THE VOICE OF MOSCOW-THE HAND OF ALGER HISS Whether the voice of Moscow, resounding in the U.N., can stir up more discord in Panama is still a point to be watched. In November 1946 the Soviet made a furious attack in the U.N. on the United States, charging that its defense bases around the world are evidence of aggression. Alger Hiss, then head of the Office of Political Affairs of the State Department, without consulting or advising Spruille Braden, Assistant Secretary of State for Latin America, sent to the U.N. (largely Hiss' brainchild) a list of America's occupied territories and included in it Panama. That gave Panama a text. Ricardo J. Alfaro, then Panama's Foreign Minister and chairman of its U.N. delegation, in a speech before the Trusteeship Committee of U.N., declared that Panama retains its sovereignty over the Canal Zone and that the State Department's report should be corrected. Newspaper headlines gave the Assistant Secretary of State for Latin America his first inkling that such a report had been issued. Hiss could not be found that clay to recall it. Mr. Braden demanded a showdown, because he was responsible for negotiations in behalf of our military authorities, who insisted that we still needed the bases in Panama. The Hiss report strengthened opposition of the Panamanian politicians while Mr. Braden was assuring the Pentagon of State Department support to get the bases under the terms of the 1936 treaty. But Dean Acheson, then Acting Secretary of State, backed up Hiss. "I was infuriated by the stupidity-which I then thought it wasof putting Panama in the category of occupied territories," said Mr. Braden the day before this council paper went to press. "But I did not realize its full significance as a play into Russian hands until after Hiss' other activities were exposed." 67-843-66--7

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92 ISTHMIAN CANAL POLICY QUESTIONS Mr. Braden now recalls that immediately following the assist by Hiss a dispatch from London reported Parliament's being told by its very left Labor member, Zilliacus, that the United States should turn over control of the Panama Canal to the U.N. and that Britain should do likewise with Gibraltar and Suez. On December 9, 1947, Dr. Alfaro resigned as Foreign Minister in protest against his Government's agreeing to consider extending the leases on 13 bases, the most important ones, which were then still occupied by us. Following his lead, the Panama Assembly on December 23, 1947, unanimously rejected lease extension. Anti-American mobs surrounded the legislature vowing to lynch any member voting for the leases, and students and teachers threatened to call a general strike. So the United States, in January 1948, abandoned the 13 defense sites and retreated within its Canal Zone. It is understood that future defense will be entirely from within the Zone limits. How much further the American giveaway policy will be stretched to satisfy demands of the Panama politicians, commencing on September 10, remains to be seen. Panama's negotiators are to be Ambassador Roberto M. Heurtemattee, who is stationed in Washington; Dr. Octavio Fabrega, former Minister of Foreign Relations, and Carlos Sucre, former Minister of Government. Will Panama try to follow today's example at Suez? And when will American taxpayers stop the worldwide game of American giveway? [From the Washington Evening Star, Sept. 13, 1956] RED PLOT SEEN AGAINST UNITED STATES ON PANAMA CANAL (By Omer Anderson) BONN, September 13.-International communism has opened an agitation campaign in Latin America against the Panama Canal, coinciding with meetings on internationalization of the Suez Canal. The campaign is directed from Prague. It aims at stirring Latin American nationalism against control of the Panama Canal Zone. Communist leaders feel that the Panama Canal-in the present troubled international situation-is a made-to-order Red propaganda target. The campaign has these twin objectives: 1. To put the United States on the defensive in the Suez dispute. 2. To use the Panama Canal issue as a vehicle to infuse fresh vigor into Latin American anti-U.S. feeling. TRAINED IN PRAGUE Agitators have been dispatched, it is reported, from the so-called State College for Political and Economic Science, the big Communist overseas propaganda training center in Prague. This institution specializes in agitation in the underdeveloped areas of the world.

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ISTHMIAN CANAL POLICY QUESTIONS 93 The Communists reportedly hope to get backing from the political foes of Panamanian President Ricado Arias. Elsewhere in Latin America, the campaign is being tied to local anti-United States and British issues. Communist strength in Latin America, although not manifest recently, is strong. There is close contact between international communism's clearinghouse in Prague and local Latin American Communist movements. The Panama Canal is a durable whipping boy of Communist agitation in Latin America. It is also a volcanic issue of Panamanian politics-long dormant, then suddenly erupting. The Suez conference, according to reports from Prague, will be used by the Soviets as a forum for a wide-ranging discussion of Western imperialism. There is just enough similarity between the Suez and Panama Canals to give the Soviets an opening. OLD COMMUNIST THEME The Panama Canal "crab" by President Theodore Roosevelt's administration in 1901 is a treasured theme of Communist propaganda for Latin America. Russia also is reported planning to move to the fore certain other Latin American controversies. These include Britain's ownership of British Honduras, disputed by Honduras, and of the Falkland Islands, disputed by Argentina. One of the minds behind the pending campaign is reported to be Jacobo Arbenz Guzman, ousted as Guatemala's President by the Castilla Armas coup in 1954. Arbenz fled with his family to Switzerland. He was brought to Prague last autumn, and is said to be a principal adviser to international communism of Central American affairs. [From the Saturday Evening Post qOt. 25, 1958] THE UNITED STATES OF AMERICA CANNOT SURRENDER ITS RIGHTS IN THE PANAMA CANAL Agitation in the Republic of Panama over the status of the Canul Zone features two claims: (1) "The canal is ours" and (2) P'anama and the United States are equal partners in the canal, and ;hould therefore split its gross revenues 50-50 while we meet all expenses. In this country, some voices, notably Mr. James Warburg's, have been raised to suggest that we should internationalize the canal, to set a good example to Colonel Nasser. None of these proposals makes sense. There is nio legitimie comparison between the position of the American Government at PI.anma and that of the Suez Company in Egypt. As Congressman Flood, Democrat, of Pennsylvania, has pointed out in several speeches, the Canal Zone is "constitutionally acquired territory of the United States." While the British Government owned 43.75 percent of the Suez Company, and its administration was largely French, the company was an Egyptian enterprise, operating on a 100-year lease, when Nasser expropriated it.

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94 ISTHMIAN CANAL POLICY QUESTIONS Our treaty of 1903 with the Republic of Panama gave us sovereign rights over a strip of land 10 miles wide across the isthmus. The stated purpose of the grant was that we might build, maintain, operate, and defend an interoceanic canal, and the grant was perpetual. We undertook to pay the Republic of Panama $10 million in 1903, and an annuity thereafter. The payments have been increased several times, and now stand at about $1,900,000. It is conceivable that this will be increased but the notion that Panama can rightfully claim a half share of the tolls is ridiculous. Yet it was put forward by the Deputy Foreign Minister of Panama, who now occupies a professor's chair at the University of Panama, where he instructs students in the fancied rights for which they riot periodically. Charles Evans Hughes, Secretary of State in 1923, made this statement to the Minister from Panama when he raised the question of sovereignty in the Canal Zone: "It is an absolute futility for the Panamanian Government to expect any American administration, no matter what it is, any President or any Secretary of State, ever to surrender any part of those rights which the United States has acquired under the treaty of 1903." Considerations of international law and hemisphere security make the Hughes declaration of 1923 even more valid today. [From the Panama American, Dec. 21, 1958] PATRIOTISM, PROFITS, AND CONTRABAND SIR: Panama's politicians, whose patriotism extends no further than their own interests, in 1946 helped set Panama's financial status back 10 years by saying "Not one inch more of our land" and fostering the idea that the United States was the common enemy of all Panamanians. It is true that we must defend our country. But, on the other hand, why make it hard for 300, just to keep 6 in a favored position? What have we done in Rio Hato since the Americans were forced to abandon the airfield there? (a) We showed the world we were filled with patriotism. (b) We went 10 years backward financially. (c) Thousands of Panamanian citizens were left jobless. (d) Housing problems for the poor increased since the U.S. Government abandoned all local-rate housing projects, thereby enabling property owners to rent apartments in Caledonia and Guachapali for $50 or $60. (e) Servants can again be exploited for $15 a month to wash, cook, and clean the house. During the war and before the Rio Hato base problem this was impossible. Somehow we Panamanians managed to survive the 10-year step backward in our financial standing. As the years went by the merchants found they did not have enough cash for a new Cadillac every year, as their profits were not exorbitant. So they began thinking of how and who to cry to. Their cries were heard because unfortunately, they are big taxpayers. They crowded the late President Remon, and talked him into using the wrong approach.

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ISTHMIAN CANAL POLICY QUESTIONS 95 When Dr. Ilarmodio Arias wanted to change dte traty in 1936 he did not need any public demonstrations. Ile simply wem ahead and used his brains. I do not know Dr. Arias personally but 1 was old enough at that time to know he was working to improve fl-ie conditions of all Panamanians. During his administration he brought the country out of chaos without too many loans. It is a pity that he is old now, but Dr. Gilberto Arias, his son, could and should do us some good under his father's tuto-,1g. Would Dr. Harmodio Arias have handled the 1955 treaty in the manner President Remon instructed liim to? Heck, no. He would have worked through letters and personal contacts with the U.S. Government. I am quite certain he would not have used the "Cita con la Patria" method. With none of the noise and public d(emonstrations, Dr. Harmodio Arias could have obtained: (a) Equal pay for equal work; and (b) A much greater increase in the annuity than was obtained. These are the two issues of most direct benefit to the Panamanian pueblo. I would like to say something about contraband. I know contrabanding is wrong, and should be punished. But did contraband from the Canal Zone affect the exorbitant profits of the merchants of Panama during the war years? They were so busy counting their profits they had no time to cry about the commissaries, then. Who was benefited by the closing of the commissaries, and who was harmed? The merchants, who thought that their sales would increase and profits with them, were disappointed. Everyone was harmed, including the merchants. The Canal Company was forced to lay off many of its staff, and those who stayed on working became more careful in their spending. The commissary will continue to make profits simply because if sales fall employees will be laid off to bring down expenses accordingly. Let me give a small example of how the merchants of Panama exploit the pueblo. They know that even the very poor try to have a Merry Christmas, and brighten up the home with such small things as new curtains. W0hat did the merchants do this year to help these people have a merry Christmas ? Not much. Curtain material such as damask was sold at 75 cents a yard up to the first week in December. As the Caja de Ahorros started to pay out the Christmas savings, the price went up to $1.25 a yard. This is only one example. Do these merchants believe people are still spending their money without thinking? It is true that we buy toys for our children, but why are the toys so expensive? Most of them are from Japan or Hong Kong, and we know the cost price of such merchandise. Is it just for the exploiting merchants to try to make a whole year's profit in 1 month? They think that without our commissary privileges we will be forced to buy from them at any price. If they were established here back in the thirties they will remember when men bought empty flour sacks to make trousers. We can surely go back to those days. The real price control office in Panama is the competition offered by the zone's commissaries. So let us real Panamanians stop biting the hand that protects us.

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96 ISTHMIAN CANAL POLICY QUESTIONS Let us spend money industrializing our own country, and let us attract foreign capital here. But let no one string us along with talk of a common enemy, be it the United States or the national guard. Hitler used the common enemy gimmick to distract the Germans' attention from what he was really up to. POOR, SENSIBLE PANAMANIAN. [From the New York Times, Jan. 10, 1959] UNITED STATES WEIGHS STEP ON PANAMA ACTION-EXENSION OF THE TERRITORIAL WATERS LIMIT TO 12 MILES STRs SHIPPING CIRCLES PANAMA, REPUBLIC OF PANAMA, January 9.-It is believed here that the United States may soon send to the Foreign Ministry of the Republic of Panama a note concerning the latter's recent extension of territorial waters from 3 miles to a total of 12 miles. The geographical configuration of the isthmus is such that a rigid interpretation of the new law could box in both entrances of the Panama Canal. This would require international shipping seeking transit to traverse 9 miles of Panama waters each portal from high seas to reach the 3-mile limit off Canal Zone shores specifically granted by Panama to the United States in the basic treaty of 1903. It is understood that two other maritime nations, Japan and Britain, have already directed notes to Panama's Foreign Minister, Miguel J. Moreno, Jr., concerning the possible embarrassment to ships flying their flags. Merchant fleets of both countries rank high in canal transits. The measure unanimously passed December 13 by the National Assembly and signed December 15 by President Ernesto de La Guardia, Jr., provides that Panama's President will administer the law under certain conditions. These are in accordance with the constitution, existing treaties, commitments of the United Nations conference on rights of the sea held in Geneva in 1958, and Panama's historic position regarding special rights in the somewhat landlocked Gulf of Panama. PRESIDENT MUST RULE The law leaves implementation in the President's hands. He will determine the boundaries of the new territorial waters. No regulations have as yet been set forth on enforcement nor are the new boundaries charted. The latter fact supports the hope among envoys here of the world's maritime nations that boundaries may yet be so delineated as to leave assured access to the high seas to canal portals since protection of Panama's fishing rights is understood to have been one of the major motivations behind the law. A preamble to the law as introduced on behalf of a group of deputies representing all political factions would have extended the territorial waters without prejudice to commitment in international treaties in force for innocent passage of foreign ships which use the Panama

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ISTHMIAN CANAL POLICY QUESTIONS 97 Canal international navigation lane. This disappeared from the measure before passage. U.S. officials and others were surprised by Panama's enactment of the measure, which had the backing of her delegation at the Geneva Conference. It was thought participating nations would take no overt steps extending the territory until another sea conference had been held. The bill on which Panama acted was sparked by Deputy Aquilino Boyd, who recently resigned as Ambassador to Mexico. He is considered an active candidate for the 1960 presidential elections. NEWSPAPERS COMMENT Newspapers controlled by several or more nationalist political factions have been publicizing the possibilities of the rights Panama allegedly gained by claiming waters beyond the canal portals. One paper observed that ships and crews entering might be subject to Panama's immigration law. Another remarked that ships traversing the territory most now fly the Panama flag. A third noted customs launches stationed at an offshore Pacific island within 12 miles could stop canal-bound vessels and send inspectors aboard. The United States is understood to be basing its remarks to Panama partly on article XXIV of the 1903 treaty providing that no change either in the government or the laws of Panama shall, without U.S. consent, affect any U.S. right under the convention or under any treaty stipulation then or later. -4 Various other international commitments are reportedly considered pertinent in the issue. NO TROUBLE LIKELY NOW Shipping men whose vessels use the Panama Canal said they were not disturbed about any immediate prospect of trouble in the new territorial waters of the Republic of Panama. However, they noted that most of the nations were firmly opposed to a unilateral decision by any nation to extend its sovereign rights at sea. Technically, they said, the law gives Panama the right to control shipping crossing the 9-mile stretch while approaching or leaving the canal, at either end. A country with such a law might impose, for instance, transit fees. They might apply regulations calling for superfluous pilotage, for revenue purposes. They could control fishing in the area. They might, if they so chose for whatever reason, close the waters. Unidentified official Washington sources have been quoted in connection with the new Panama law as contending that the United StatesPanama Treaty of 1903 would still guarantee free and unlimited access to the canal. Nevertheless, the mere presence of the new territorial delineation is a source of anxiety, on principle. The extent of territorial waters is a major international problem. Most nations recognize a 3-mile limit. A world conference on sea law in Geneva last year attempted to solve it. Another effort will be made in 1960, under authorization voted by the General Assembly of the United Nations last month.

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98 ISTHMIAN CANAL POLICY QUESTIONS [From the Washington Sunday Star, Jan. 11, 1959] PANAMA NOTIFIED UNITED STATES REJECTS ITS 12-MILE LIMIT The State Department announced yesterday it has notified Panama the United States refuses to recognize the new Panamanian law providing for a 12-mile territorial sea limit. The note said passage of the law "is regrettable in view of the recent action of the United Nations General Assembly in voting overwhelmingly to call an international conference to consider the breadth of the territorial sea and fishery matters." The United States asked Panama to reconsider its action. Officials said the Panamanian action "cannot affect the rights of the United States with respect to the Panama Canal," under a 1903 agreement. The agreement provides that Panama may not upset U.S. rights by any means "without the consent of the United States." [From the Panama American, Jan. 12, 1959] PANAMA WILL REJECT FOREIGN PROTESTS ON 12-MILE LIMIT The Panama Government plans to reject all protests over the extension of Panama's territorial waters limit from 3 to 12 miles, it was learned today from informed sources. These sources revealed that in addition to the official U.S. protest received by the Panama Government last Friday, Japan has also sent an official note signifying its intention not to recognize the new territorial water limit. It was also understood that Great Britain and France also intended to make known their official views in notes to the Panama Government. According to the sources, Panama will reject all suggestions that the law extending territorial seas be reconsidered, as suggested in the note from the U.S. State Department. In a formal note to Panama last week, the United States said the action was regrettable. Furthermore, the U.S. note said, there was no obligation on the part of other nations to recognize the 12-mile Pan-American limit. The note said: EXCELLENCY: I have the honor to refer to your note No. 1096 dated December 23, 1958, transmitting a copy of Republic of Panama Law No. 58 of December 18, 1958, which has as it purpose extension of the territorial sea of the Republic of Panama to a distance of 12 miles from the coast. I have been instructed to state that the U.S. Government considers this action of the Republic of Panama is regrettable in view of the recent action of the United Nations General Assembly in voting overwhelmingly to call an international conference to consider the breadth of the territorial sea and fishery matters. It is the view of my Government, as expressed at the United Nations Law of the Sea Conference and on previous occasions, that no basis exists in international law for claims to a territorial sea in excess of 3 nautical miles from the baseline which is normally the low-water mark on the coast. Furthermore, in the U.S. view there is no obligation on the part of states adhering to the 3-mile rule to recognize claims on the part of other states to a greater breadth of territorial sea. My Government hopes that the Government of Panama will find it possible to reconsider its action and await the further consideration of the question of the breadth of the territorial sea by the international community. In the meantime the Government of the United States reserves all of its right in the area which is the subject of Republic of Panama law No. 58 of December 18, 1958.

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ISTHMIAN CANAL POLICY QUESTIONS 99 The State Department, in answer to questions, said the new Panamanian law cannot affect rights of the United States with respect to the Panama Canal. The Department pointed out that article 24 of the Panama Canal Convention of 1903 provides: No change either in the Government or in the laws and treaties of the Republic of Panama shall, without the consent of the United States, affect any right of the United States under the present convention. or under any treaty, stipulation between the two countries that now exists or may hereafter exist touching the subject matter of this convention. [From the Panama American, Jan. 12, 1,K9] MORE BRIDGE PLANS READY-FOURTH OF .IULy DUE To BECOME FoUnLANE BOULEVARD Plans and specifications are ready for distribution to prospective bidders on the construction of the east approach to the new Balboa bridge across the canal. This is one of five major contract jobs of the 520 million project. Bids are to be opened February 11 at Balboa Heights for this work which will include the widening of Fourth of July Avenue into a fourlane boulevard. Other major features of the work will be the construction of cuts and fills involving about 330.000 cubic yards of material: the relocation or construction of various facilities: and construction of the embankment upon which four roadways will be built later to tie in with Fourth of July Avenue and the street system in Panama City. It is estimated the east approach work will cost over Si million, being far more extensive than the work required in building the bridge approach on the west side of the canal. A contract for the west approach at a cost of S:3.000 was awarded last month to Louis Sommer. The contractor for the east approach work will have 440 days for completion of the job. This time limit will cover two dry seasons which will be needed for the proper construction and compaction of the extensive fills. The bid forms, which were issued Friday by the Engineering and Construction Bureau. list 70 individual bid'itens. These include 212.500 cubic vards of roadway excavation: the handling of over 100.000 cubic yards of rock or other borrow material: installation of over 2 miles of drains and culverts: placing ox er 2 .000 square yards of street and sidewalk pain: construction of retaining walls: replacements of various facilities such as sewer and water lines, electric cables, and the small buildings : and installation of i.10 linear feet of fencing. and 900 feet of ouard rail. The embankment. over which the new roadway w.ivi connect the street systems at the limits with the bridge. crosses the mud flats between the Balboa tank farm and the Gavilian residential area. It will pass immediately south of the houses in the Gavilian area. Some sections of the embankment will be about 50 feet high wit' most of the fill material being taken from the cut required in Chorrillo Hill near the limits and from Albrook and Curundu borrow areas.

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100 ISTHMIAN CANAL POLICY QUESTIONS The two approach roads to connect with Avenida de los Poetas in Panama City will be built to the boundary line, approximately 500 feet from the end of that street. The bridge connections with Fourth of July Avenue and Balboa Road at the limits will be at the existing grade level. A new connecting link is to be built from Balboa Road to the bridge approach. This will be a short, curving roadway to permit merging traffic from Fourth of July Avenue or Balboa to move onto the bridge approach. Because of the variety and extent of the work involved, the plans being issued contain no time schedules for the contractor other than the 440-day time limit for completionThe contractor will, however, be required to submit a general plan of operations and a time schedule for approval before beginning the work. [From the Panama Star and Herald, Jan. 13, 1959] REPRESENTATIVE FLOOD BRANDED REPUBLIC OF PANAMA's No. 1 ENEMY Representative Daniel J. Flood yesterday was denounced in the Panama National Assembly as Panama's No. 1 gratuitous enemy. The denunciation was made by Deputy Alfredo Aleman, Jr., in connection with Flood's remarks in Congress last week that Panama's decision to extend its territorial seas to 12 miles means another Berlin in the Canal Zone. Both Aleman and Deputy Aquilino Boyd submitted a motion setting aside this afternoon's assembly debate for a reply to Flood. The motion was carried. Aleman said yesterday that Flood rises in Congress to criticize bitterly the position of Panamanians who defend their country's rights stemming from relations with the United States. He added that just as Flood speaks unofficially, he also would speak as a representative of the people to protest Flood's assertions. The National Assembly last month approved overwhelmingly the extension of Panama's territorial seas to 12 miles. The bill was signed into law by President Ernesto de la Guardia, Jr. Over the weekend, the U.S. State Department disclosed it had officially notified Panama that the United States does not recognize the 12-mile sea limitIt asked Panama to reconsider its action. Official sources in Panama declined to comment for publication on the State Department announcement, but indicated that Panama will turn down the Washington request for reconsideration. It was understood that an official statement will be issued this week on the matter. [From the Christian Science Monitor, Jan. 13, 1959] PANAMA EXTENDS CLAIM TO CANAL APPROACHES WASHINGTON.-The Panama Canal may assume the status of a junior grade West Berlin issue, now that the Panama Government has officially extended its territorial limits 12 miles to sea.

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ISTEMIAN CANAL POLICY QUESTIONS 101 Under existing treaties, the United States h as rights only 3 miles seaward from the entrances to the great waterway. Traffic through the Panama Canal might be harried if not demoralized if Panama should attempt to stop ships passing through its territorial waters approaching the waterway for customs or maritime formalities. This possibility has been hinted at. The principal difficulty to the American authorities at the Canal Zone would be the delays to shipping which would inevitably ensue. Ship arrivals are pinpointed 24 hours in advance. Transit scehrdules are stated in terms of minutes to make maximum utilization of the facilities of the canal. Unannounced stops of ships by Panamanian authorities could ruin the plans of marine comptrollers and dispatchers at the ocean shortcut. CAREFUL PLANNING NEEDED Transiting of the present heavy traffic through the Panama Canal requires careful planning. The canal organization is proud of the exemplary service to shipping it has been rendering for 44 years. Any interference would impair the usefulness of the Panama Canal and blot the reputation for efficiency it has won in the world of shipping. It may result in reduced revenues for Uncle Sam, for the Panama Canal is not only maintained without cost to the American taxpayer but actually pays dividends to the Treasury annually. Panamanian legislation extending the watery jurisdiction mentioned that the additional 9 miles embraces an area rich in fish. This is seen by observers to be a diversionary tactic. Real purpose of the legislation is to provide a big stick to wallop Uncle Sam into revising the treaty with Panama to get the Panama Canal jurisdiction extended to 12 miles seaward, local observers believe. BENEFITS CITED The record shows that Panama receives major considerau c with each treaty signed with the United States. The 19)5 Kemon-Elsenhower Treaty brought Panama about .40 million in lands. buildings, and other benefits. In Panama. it is seen likely that a treaty could be arranged graning the United States jurisdiction 12 miles from the entrance of the Panama Canal. The only question iz the price tage attached. Panama quoted action by E ypt. the Soviet 1n1on d and saudi Arabia. amnc others. as precedent for the local legisiatien. Egyptian nationalization of the Suez Canal touched oiT a flame for nationalization wLer which las b een kt Qblaze y pliticosit privately that it would be impracticable). Saudi Arabian participation :n renes froil exploitation there las been the model for ever-increasing Panama ieman4cn the United States for exploitation of Panamai natural resource. the srateiic location of the land raiited for construction of the Pauna Canai. EM HANDS INCREA51NG Panamanian demands on the Unttedl Sates are not new. bu they are increasing in size and frequeuny. With a ne deruA ir tK aes

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102 ISTHMIAN CANAL POLICY QUESTIONS politicians here tell the people that the United States has not lived up to its obligations; that it has mistreated Panama. This has brought about a condition where anything which the United States may give to Panama in the form of technical assistance, direct grants of financial or other aid, long-term loans, etc., is often not received with gratitude and friendship, but as partial payment on a debt long outstanding. The new legislation was introduced by presidential aspirant Aquilino Boyd, who until May had been Foreign Minister in the present administration. [From the Panama American, Jan. 13, 1959] REPUBLIC OF PANAMA HIGH SCHOOL STUDENTS OK 12-MILE LDiIT Panama high school students were in agreement today that the Panama Foreion OfKfce should energetically reject a recent note from U.S. Secretary of State John Foster Dulles protesting the extension of Panama's territorial waters limit to 12 miles. In a conimunique issued yesterday by the Union of High School Students (UEU), the students said they would be behind any move taken by the Government to "demand respect for the sovereign rights of the Republic." Meanwhile, press dispatches from London indicate that Britain is considering what action to take against Panama's extension of the limit of her territorial waters. Britain has been informed of the Panamanian decision by her envoy in Panama, a British Foreign Office spokesman was quoted as saying. The spokesman added that Britain was now considering whether to protest against the Panamanian move, but no decision so far has been taken in London. France has also signified its intention of expressing its views on Panama's action. Up to now, only Japan and the United States have officially protested the extension of the territorial waters limit. Meanwhile, the National Assembly will consider a pronouncement against remarks made by U.S. Representative Daniel J. Flood regarding Panama's action, as the first item on the agenda of today's session. This was the result of a proposal by Assemblyman Aquilino Boyd, who introduced the territorial extension bill into the assembly, and his colleague, Alfredo Aleman, Jr. Some sources declared that the assembly will issue a "solemn oath" to uphold Panama's rights in exercising its sovereignty within the 12-mile territorial water limit. Flood last week protested the extension and said it would convert the Canal Zone into a maritime enclave-" another Berlin." The U.S. Congressman recommended that Congress pass a resolution refusing to recognize "the attempted stranglehold encirclement of the Canal Zone."

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ISTHMIAN CANAL POLICY QUESTIONS 103 [From the Panama Star and Herald, Jan. 14, 1959] ASSEMBLY AFFIRMs REPUBLIC OF PANAMA RIGHT TO 12-MILE SEAVOTE AGAINST RECONSIDERING LAW UNANIMOUs-FORMER FOREIGN MINISTER BomD CALLS FOR NATIONAL SUPPORT OF DEMAND FOR HALF OF PANAMA CANAL GROSS REVENUE The Panama National Assembly last night voted unanimously not to reconsider-for any reason whatever-the extension of Panama's territorial seas to 12 miles. The reconsideration had been requested by the U.S. State Department last week in a formal note to the Panamanian Foreign Office. A bill providing for the extension of Panama's territorial seas from 3 to 12 miles was passed by the assembly on December 18 and was signed into law 2 days later by President Ernesto de la Guardia, Jr. In the course of the 4-hour debate that preceded approval of the resolution, former Foreign Minister Aquilino Boyd, who is now in the assembly, called for national support of a demand for half the gross revenue of the Panama Canal as Panama's fair share of the benefits from the waterway. Boyd said the United States-Panama partnership over the canal involves one partner who is too rich and one partner who is too poorand this must come to an end. The assembly's full-dress debate on the territorial seas question was provoked by last week's remarks in Congress by Representative Daniel Flood, Democrat, of Pennsylvania, who said that Panama's action had created another Berlin by surrounding the Panama Canal entrances, under U.S. jurisdiction, with waters over which Panama claims sovereignty. The U.S. jurisdiction over the Panama Canal Zone extends 3 miles out to sea. The assembly's resolution castigated Flood as Panama's "Public Enemy No. 1" and presented him to the rest of the hemisphere nations as the personification of the bad faith which hais contributed and still contributes to bring about disunity and ill will among countries which because of their destiny should treat each other as brothers. Supporting the resolution which he helped draft, Boyd said last night. "Let not Mr. Flood doubt for a minute that the entrances to the Panama Canal are now surrounded by 9 miles of exclusively Panamanian waters in which Panama can exercise definite acts of sovereignty." Boyd enumerated these acts as folows: The raising of the Panamanian flag on ships which enter Panamanian waters, as is the international custom: exercising vigilance over shipping, in order to maintain internal security, regulating fishing activities, trying persons for offenses committed aboard ships within Panamanian waters: requiring foreign warships to comply with Panamanian navigation regulations; enforcig customs, fiscal, and sanitation regulations. Deputy Alfredo Aleman, Jr., who also participated in the debate, declared that what really is behind the protest of the United States and others against Panama's action is the fear that Panama will charge ships entering its waters for the cost of aids to navigation (lights, buoys, and so forth) and that it will enforce observance of Pana

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104 ISTHMIAN CANAL POLICY QUESTIONS manian labor laws aboard Panama-flag ships entering Panamanian waters. The Assembly's resolution called upon friendly nations to support Panama's pronouncement and "to extend to the Republic all the considerations and courtesies consecrated by international law." A copy of the resolution is being sent to all legislative bodies in the world. Both the text of the resolution and the remarks by the various deputies stressed one point: That Panama acted in exercise of its sovereign rights in extending its territorial seas. At the opening of the session, Deputy Harmodio Arosemena Forte, of the Liberal opposition, submitted a draft resolution, condemning Flood's "ignorance and bad faith." Arosemena and a Liberal coleague, Mario de Obaldia, spoke in support of the resolution, both attacking as ridiculous Flood's assertion that in extending the nation's territorial areas, the Assembly had been under Communist influence. Then Aleminn took the floor to submit another draft resolution, reasserting Panama's extension of its territorial waters and condemning Flood. Alemin repeated his previous refutiations of Flood's frequent anti-Panama pronouncements in the Congressional Record, saying the Pennsylvania Congressman is completely unaware of the historical, juridicial, and political truth of relations between Panama and the United States. Alemin digressed to discuss Panama's complaints over the application of the 1955 treaty legislation, asserting that "what was approved in good faith, is being applied in bad faith." He cited one example in support of his charge that in the application on the new uniform wage scale regulations, Panamanians were being downgraded to keep them from attaining jobs paid at U.S. wages. The example involved a Panamanian he said, with 20 years service, who was downgraded from warehouse lead foreman to lead stockman. "Not a step backward," Alemin exhorted assemblyman as he called for the reassertion of Panama's right on the question of the sea. Boyd was the next speaker. He pointed out that while there was no agreement at the 1958 Geneva Conference on the law of the sea as to the extension of territorial waters, there was agreement that a 12-mile limit did not violate the provisions of international law. The former Foreign Minister suggested that one reason for Panama's move at this time was the threat by the major powers of the world to call another conference at which present territorial waters would be frozen. Boyd declared that while henceforth both entrances [are] Panamanian waters, Panama is on record that it recognizes the right of innocent passage by ships using the Panama Canal. But, he added, Panama has full rights to carry out the acts of sovereignt y he had enumerated earlier. Boyd repeated the official Panamanian stand that the Canal Zone is Panamanian territory in which the United States has been granted limited rights. "When our neighbors go beyond those limited rights," Boyd said, "it is up to us to tell them: 'Here and no further.'" Brushing aside Flood's comparison of the situation here as another Berlin, as a scare attempt, Boyd went into a discussion of Panama's relationship with the United States over the Panama Canal.

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ISTHMIAN CANAL POLICY QUESTIONS 105 It is true, he said, that. Panama has dei-iNved ben efits from the canal which place it ai1ong, the most advanced nations of the hemisphere. But these benefits, he added, are not in proportion to what Panama has contributed to the canal enterprise and from which the United States has profited. Ile compared the United States-Panama relationship as being ruled by the law of the funnel-the wide part for them, the narrow parts for us. There must be an eifort made to create a national conscience, Boyd declared, in support of the demand that Panama is entitled to onehalf the gross revenue of the Panama Canal. When one partner gets more than n10 million and the other only $1,900,000, the partnership is not doing well, Boyd comnented. Mr. Flood is right when lie says that things are going from bad to worseand they will keep like that until there is a fair distribution of benefits. Boyd pointed out that Panama Canal transit tolls have not been increased since the waterway opened, despite the higher costs of every other activity. This, which he blamed on the shipping lobby in Congress, is tantamount to a subsidy to the American merchant marine-at the expense of Panama, Boyd declared. He noted that the Canal Company is one of the few Federal agencies that operates at a profit. The assemblyman stressed that Panama was not asking for participation in the administration of the canal, but for 50 percent of the gross revenue. Boyd concluded that if Panama strives tenaciously for this demand and seeks the help of its sister nations of Latin America, it will achieve success. After remarks by another deputy, Jorge Turner, in support of the extension of the territorial waters, Assembly President Elig Crepo called a recess and named a special committee, composed of those who had spoken during the debate, to draft a new resolution which combines the texts of the two proposals submitted at the start of the debate. This was accomplished and when the new draft resolution was put to a vote, it was approved unanimously. [From the Washington Post and Times Herald, Jan. 15, 1959] PANAMA STANDs FiUR ON NEW 12-MILE Lii1TS PANAMA, January 14.-The National Assembly unanimously rejected last night a U.S. request for reconsideration of its laws extending Panama's territorial waters. The extension to 12 miles boxes in the Panama Canal entrances. An Assembly resolution asked friendly nations to support the extension from the previous 3-mile limit. The law passed last month promised free passage to innocent shipping. During a debate on the U.S. request, former Foreign Minister Acquilino Boyd called for Panama to receive half of the gross revenue from the canal, which is operated by the United States under longterm treaty. Boyd asserted that the United States makes $100 million from the canal while paying Panama only $1,900,000 a year. He said Panama was not seeking a voice in canal administration.

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106 ISTHMIAN CANAL POLICY QUESTIONS The Panama Canal Company reported that in the year ended last July 1 it collected nearly $43 million in tolls and made a net profit of $2,656,000. The United States pays Panama $1,930,000 a year for use of the 10-mile-wide canal strip, which includes 3 miles of the water off each end. Other Assemblymen criticized U.S. Representative Daniel Flood, Democrat, of Pennsylvania, who touched off the debate by telling Congress the territorial waters extension created another Berlin. [From the Panama American, Jan. 15, 1959] ARMY CONCERNED BY 12-MILE LIMIT-BRUCKER AssuRIEs FLOOD UNITED STATEs DOESN'T RECOGNIZE CHANGE WASHINGTON, January 15.-Army Secretary Wilber M. Brucker said in a letter today that the United States does not recognize the law imposing a 12-mile sovereignty on Panamanian waters. In any case, he said the law cannot, by treaty, affect approaches to the Panama Canal. The letter was written to Democratic Representative Daniel J. Flood, and made public by Flood's office. It was in reply to a letter Flood wrote Brucker, expressing concern over the 12-mile law passed by the Panamanian Legislature. Brucker said his office had been concerned also. In addition to the terms of the legislation then under consideration, the published comments of individual members of the National Assembly and others gave rise to concern as to the anticipated application of the legislation with particular reference to the possible impairment of free access to the Panama Canal by vessels of the world arriving at the Isthmus to use the Canal under existing treaty commitmentsHe wrote. He said it appears that under the 1903 treaty the legislation in question "cannot adversely affect the interests of the United States in operation of the canal." Brucker said article 24clearly precludes application of unilateral action by the Republic of Panama extending its coastal waters to derogate in any manner from the rights and privileges of the United States in reference to the Canal. In any event I have been advised that the State Department has informed the government of Panama that the United States does not recognize the Panamanian law designed to extend the breadth of Panamanian territorial waters to a distance of 12 miles. I appreciate your interest and am glad to have this opportunity to assure you that I will continue to give the matter the closest scrutiny and to take all available measures to protect the interest of the United States Government in this vital area. [From the Panama American, Jan. 15, 1959] REPUBLIC OF PANAMA STUDENTs HURL CHARGES UNITED STATEs HURTs PANAMA's DIGNITY The Panama Students Federation yesterday resolved to denounce the brazen attempt by the United States against the dignity of Panama.

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ISTHLMLAN CANAL POLICY QUESTIONS 107 The resolution issued by the federation's executive council also gave support to a proposal by former Vice Foreign Minister Ernesto Castillero to ratify the conventions approved at the Geneva Conference on Rights of the Sea. and publish the minutes of the Foreign Relations Committee of the Assembly and other pertinent documents in the form of a white paper. A warning to the United States that irs policies only caved hate and rancor was also contained in the resolution. Other points in the resolution said the students wouldOrganize brigades to defend our sovereignty. Request local and foreign student organizations to support the stand of the federation. Demand a flat and energetic pronouncement front the Government against "Yankee arrogance." Request that this new aggression by the Yankee colossus against one of the weakest nations be denounced before the proper international organizations. [From the Panama American. Jan. 16. 19j5] SHIPPERs EYE REPUBLIC OF PANAMA WMTAR,->PECTLxTE ALKUT CONVENIENCE FLAG REPRIALS HERE NEW YoRK. January 16.-Shipping industry sources. eveinZ the current flags-of-convemence dispute, toda 5 peculated that Panama m-av try to close its newly extended territorial waters to rIags of cuntris opposing the use of the Panamanian flag in world shipping Such a move. they said, would be sure to touch off a seri> international dispute. However. Panama has t n e : plans any 4 such action. The United States. which operates the Panana Canal 4 rea-y with Panama, would be put in an embarrassing spot if Panrama vere to place any restrictions on foreign zhippin. aritimre lawyr -aid. The United States. Japan. and France have already nt pr1, to Panama about the extension of territorial walrs tlomi u t4 ie,, thus sealing off the Canal Zone from the open sea. The protests are under consideration by a se e ot Panama's Council of Foreign Relations. T e Commitee composed of Drs. Harmodio Arias. Ricardo J. Alfar ()tavio F rega andI Carlos Sucre.) It seems that the fight over tfhe use of flags of:venienc, qened a Pandoras box. The fight hazs turned into a real nightmare for diplomats. The battle started when traditional maritime nations such as Britain and Norway and labor unions protested against the growing use 07 Panamanian, Honduran. Liberian. and Costa Rican Iiaer. The argument put forth was that ship operators weie turning to these flags of convenience to avoid paying taxes and ieeting other restrictions as to safety and crews' living conditions. In December. labor imions around the world tried tc bcvcot ships flying these flags, but it was only partially successful. 6 7-_4 3-6 ra S

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108 ISTHMIAN CANAL POLICY QUESTIONS Ship operators contended they had to turn to these flags of convenience to avoid stringent regulations and general redtape which was forcing them out of business. The countries involved fought the move to boycott their vessels. Liberia and Panama were the most outspoken, charging the older maritime nations with trying to force shipowners to use only certain flags. There were some rumblings in the oil industry, a major user of flags of necessity, that oil companies might boycott British and Norwegian ships in their operations. [From the Star and Herald, Jan. 22, 1959] REPUBLIC OF PANAMA REJECTS PROTESTS ON 12-MILE SEA The Panama Government yesterday officially rejected protests by the United States, France, and Japan against this country's extension of its territorial waters to 12 miles. In almost identical notes, Panama reminded all three nations that they had approved a United Nations report setting 12 miles as the limit-under international law-for territorial waters. In the case of the U.S. protest, Panama said there is no ground for heeding the suggestion that Panama reconsider its action. The United states and France, which had served notice that they reserved all their rights in the 12-mile zone, also were told that Panama would appeal to international courts in the event its sovereignty or territorial integrity is violated in the extended zone. The notes were delivered yesterday to Julian F. Harrington and Lionel Vasse, Ambassadors of the United States and France, respectively, and Ken Ninomiya, Minister of Japan. All three notes were signed by Foreign Minister Miguel Moreno, Jr. The three protesting nations had called to attention that the U.N. General Assembly only recently agreed to call an international conference to discuss the breadth of international waters. Panama replied that this was no ground to maintain that the nations which had agreed to the calling of the conference should abstain from affirming their sovereign rights over territorial waters in keeping with acknowledged principles of international law. The Panamanian note pointed out that it was impossible to foresee how long it would take to attain an international treaty on the question and noted that the U.N. Conference on the Law of the Sea, held in Geneva in 1958 had rejected a motion providing specifically for such abstention. Panama argued also that the old doctrine of a 3-mile limit never had as foundation any universal international treaty. It. emphasized that at present, of 71 countries with seacoasts, only 18 still adhere to the 3-mile limit. Moreno's note quoted from a U.N. report on the law of the sea by the Commission on International Law which held that international law does not authorize the extension of the territorial sea beyond 12

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ISTIHIIAN CANAL POLICY QUI. isTIONS 1 9 miles. It was this report. More) called, that was app o\v by the United States, France, and Japan, :al well as Paniaimia. The note to the United States added: With regard to the statement by Your Exctdb. iay t ait ymtu -vern1ment "reserves all its rights in the area covered by Law oS of 1 )ecemiier 1, 19S" which provides for the 12-mile extension), my government, deeiiing that the old area of 3 niles is not a matter of divergetice between tie two ;overimeuts, must understand that *reservation of rights" as referriinsolely to lhe area that has been extended, namely. the additional 9 miles to the old area of 8 miles. Alid, in that understanding, my government deems that this additional area of 9 miles being not only under Panamanian sovereigmnty but also under the exclusive jurisdiction of Panama, neither the United States of America nor amy other State may reserve any right whatsoever over that area. My government hopes that this unjustified "reservation of rights" shall not manifest itself through facts or situations which Panama would have to deem as violating its sovereignty or its territorial integrity, and therefore, international law and the charter of the United Nations, and which would entitle Panama to utilize the resources authorized by international law, including that of recourse to the proper organs of international justice. The Foreign Minister's reply to the United States, France, and Japan followed reconnendations made by the N ational Council of Foreign Relations, an advisory body composed of the Nation's top international jurists. The protest notes had been referred to the Council for recommendations on the reply. The Foreign Ministry's official reply followed the emphatic stand by the National Assembly earlier this mondh against revising the law providing for the 12-mlile seas "for any reason whatsoever.7 That stand was taken on a unanimous vote after the State Department in Washington disclosed it had protested to Panama and had requested that Panama revise its action. A National Universitv student group is orgalizing a public rally Saturday afternoon at Santa Ana Plaza as a reaflirmation of the country's right to extend its territorial seas to 12 miles and of its sovcrehIig rights in the Canal Zone. [From the Panama American, Jan. 24, 1059] OPErAuIoN SOVEREIGNTY GrOUP To MARCH DowI wT CENTRAL AvENul: At 5 p.m. today the May 2 university group which was responsible for last year's Operation Sovereignty will gather at Plaza Porras and march down Central Avenue to Plaza Santa Ana. There a rally will be held to reaffirm Panama's sovereign claims. The demonstration will be specifically in connection with Paunam extension of its territorial waters to 12 miles. Panama has ofliciall Y rejected protests by the United States, France, and Japan. Speakers will include former Foreign Minister Aquilino 1oy l. representing the National Patriotic Coalition, and Carlos Arellano Lennox. who was president of the university students union at the t im. of the flag-planting Operation Sovereignty. Former President Arnulfo Arias, who arrived yesterday from his Boquete coffee plantation, has been invited to speak at the rally, but it is not certain that he will.

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110 ISTHMIAN CANAL POLICY QUESTIONS [From the Panama Sunday American, Jan. 24, 1959] STUDENT LEADER BLASTS STATE DEPARTMENT AND U.S. ARMY The U.S. State Department and the Department of the Army were branded as "racketeers" last night by Student Leader Carlos Arellano Lennox to climax a sovereignty rally which got underway several hours late. The rally, organized by the Dos de Mayo Movement, a faction of the Panama University Students Union led by Arellano, had been scheduled to get underway at 5 p.m., with a parade from the Legislative Palace along Central Avenue up to Santa Ana Plaza. The parade was apparently called off owing to the small number of demonstrators who showed up. However, the organizers managed to get a group estimated at about 150 to gather at Santa Ana Plaza more than 2 hours later to hear five of the seven scheduled speakers. In addition to Arellano, the speakers were Assemblyman Aquilino Boyd, Ramon Pereira, Jose M. Quiros y Quiros and Julio Sosa Lennox. Two others, Dr. Diogenes Arosemena, secretary general of the university, and former Ambassador to London Cesar Guillen, were not present. The crowd swelled to about 250 to 300 by the time meeting ended at 9:15 p.m. Arellano also blamed Wall Street for the attitude of the United States toward the recent extension of Panama's territorial water limit to 12 miles, and asked: "Why didn't the United States protest when strong countries like Peru extended their territorial waters to 200 miles? Arellano said it was because the extension did not affect the interests of Wall Street. The student leader, who is a science professor in a Catholic private school, argued that the United States claims rights in the Gulf of Mexico and now wants to deny Panama's right in Panama Bay. Referring to U.S. Representative Daniel J. Flood, Democrat, of Pennsylvania, Arellano said, he wished he was here to see if there were any political demagogs among the speakers. He insisted that Panamanians are a democratic people who are well aware of the dangers of communism, adding: "Although we are democrats we are not disposed to die of hunger because Wall Street wills it so." Following this remark, Arellano thanked his listeners and the meeting ended. [From the Panama American, Jan. 26, 1959] RICARDO ARIAS TERMS SEA LIMIT "JUST AND LEGAL" Panama's Ambassador to Washington, ex-President Ricardo Arias who arrived here early today is quoted as saying that Panama is within her sovereign rights on the 12-mile territorial water limit. "Panama's attitude on this issue is just and legal," he added. Arias said Panama has accepted the idea of holding a conference next year to discuss this touchy situation.

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ISTHMIAN CANAL POLICY QUESTIONS 111 Arias reported returned to Panama for a series of political conferences. He was greeted at the airport by a large gathering of influential political and personal friends. [From the Panama American, Jan. 27, 1959] PLOTS, GUNS IN ABUNDANCE-REPUBLIC OF PANA31A COPs POUNCE IN RIo AuBO, CIjiTUQUI, T OCUMEN Three men and a woman are being held today by the Panama secret police following the discovery of a -20,000 arms cache, including se.eral machineguns and 40,000 rounds of ammunition, in a cottage in Rio Abajo. One of the arrested men, Armando Aguilar, who lived in the cottage, has reportedly confessed that the weapons were to be used in a plot to overthrow the government of President Ernesto de la Guardia, Jr. Meanwhile 16 persons were arrested in the Cerro Pando region of Chiriqui, also charged with a subversive plot against the government. The 16 include Jose Gaitan Miranda, who has been nicknamed the "Fidel Castro of Chiriqui" for his association with the arms cache found on the Los Cerritos farm of former Deputy David Anguizola. At the weekend 101 revolvers were found by customs inspectors at Tocumen Airport. Under arrest along with Aguilar in the Rio Abajo arms fmd is Ruben Rosas, manager of the recently reopened El Rancho Garden, Aguilar's wife, Margarita, and a Chinese resident whose name has not been revealed. Rosas was arrested at Tocumen today when about to board a plane for Costa Rica. He is believed to have been implicated by Aguilar, who is also said to have implicated several others. The cache found in the attic of the Aguilar cottage at Seventh Street, Rio Abajo, included 4 machine guns, 9 submachineguns, 16 rifles, 31 revolvers, and 40,000 rounds of ammunition. Tho 16 persons, including both men and women, picked up in Cerro Pando, have only 1 gun between them, a .22 rifle. Equipped with knapsacks and camping cots, they claimed to have been searchingz for Indian huacas. National Guardsmen confiscated their equipment. Miranda is thought to have fled to the Chiriqui hills at the time of the arms discovery last October on the Anguizola farm. He was arrested later, but freed later under an amnesty declared by De La. Guardia. The .38 caliber revolvers found at Tocumen were hidden in bundles of clothing, shoes, and other merchandise were understood to be in transit from El Salvador to Colombia, addressed to one Antonio Arango. Inspectors opened the packages after they remained unclaimed from December 14. Police have found no trace of Arango. The shipment originated in Miami.

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112 ISTHMIAN CANAL POLICY QUESTIONS [From the Panama Star and Herald, Jan. 27, 1959] LARGE A MS CACHE FOUND IN PANAMA CrTY-MACIINEGUNS INC(:LIED iN i IAUL, BY POLICE-30,000 ROUNDS OF ArMUNITON SEIZED; SPECULATION Is ThAT SHIPMENT WAS SMUGGLED VIA COSTA RICA A large arms cache which included 14 machineguns and about 30,000 rounds of ammunition was discovered by the Panama Secret Police yesterday morning in a house in Rio Abajo. So far, two men have been Arrested. The arms were concealed in burlap bags which had been hidden in the ceiling. Most of the weapons were loaded, it was reported. The lot included four .30-caliber tripod machineguns, three M-3 submachineguns of the type used by parachutists in World War II, and seven .45-caliber Thompson submachineguns. In addition, searchers located 13 .45and .38-caliber pistols and revolvers, 13 Springfield and 3 Winchester .30-caliber rifles. One of the men under arrest, it was learned, is Armando Aguilar, who lives in House 25-34, Seventh Street, Rio Abajo, where the arms find was made at 10 a.m. Aguilar was identified as a former minor employee of the Immigration Department of the Panama Foreign Office. Investigators were reported to have found also a letter to Aguilar signed by a Costa Rican border official who is a former resident of Panama. This immediately started speculation that the arms were smugled into Panama by way of the border with Costa Rica. The arms were not new. They were wrapped in sheets of the New York Post of November 6, 1958, and other U.S. newspapers. Investigators declined to reveal the name of the second man under arrest. Some of the bags in which the weapons were concealed bore the penciled word "Mayo" (May). This was the month in 195S when bloody clashes occurred on the streets of Panama City between the National Guard and students. The Government said the clashes were inspired by the opposition. This is the second lot of arms uncovered by Panamanian authorities in less than a week. Over the weekend, officials found that a shipment which had arrived in Tocument Airport marked as wearing apparel, actually contained brandnew revolvers. Investigators confiscated 101 of them. There were indications that the revolvers, which were shipped out of Miami, were in transit to Colombia, consigned to one Antonio Arango. The shipment arrived at Tocument last December. [From the Panama Star and Herald, Jan. 27, 1959] "DICKy" ARIAS SAYS LOGICAL HE SHOULD RUN-THOUSANDS GREET PANAMA'S ENvoY To UNITrED STATES ON HIs ARRIVAL HERE Panama's Ambassador to the United States, Ricardo Arias, said yesterday "it is only logical" that his name should be mentioned among the 1960 presidential candidates of the National Patriotic Coalition.

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ISTHMIAN CANAL POLICY QUESTiONS 113 Arias returned to Panama City for 2 weeks of consultationi with Government officials. The Coalition is the administration party. Arias said the party has many members who meet all qualifications of honesty, capability, and service to the people for running for President. When he was asked if he would be a presidential candidae. Arias replied the Coalition is a democratic party and it's oml logical that his name should be included among those party members who are qualified to run for the country's highest office. Arias served as Acting President from 1955 to 195S. Thousands of friends welcomed him at the airport. The Ambassador returned with his wife, Mrs. Olga Arias. Arias said there is no problem between the United St ates and Panama over this country's recent extension of its territorial seas from 3 to 12 miles. The Ambassador said Representative Daniel Flood. whose criticism of Panama's action aroused resentment here, is only 1 among 430 Members of the House of Representatives. One man's opinion, he said, no matter how respected he may be, is not the opinion of the United States. Arias added that Flood was entitled to voice his opinion, just as much as Panamanians have a rightto express their opinion. [From the Houston Chronicle, Feb. 4, 1959] LATIN AMERICA-CANAL OFFICIALS CONVENE (By Marshall Bannell) BALBOA, C.Z.-The Board of Directors of the Panama Company. U.S. Government-owned corporation which operates the Panama Canal, flew from Washington and other points to the Canal Zone this week and is meeting in private sessions. A major point on the agenda is believed to be the problem posed by Panama's recent extension of the Republic's territorial waters to 12 miles off both the Caribbean and Pacific coast lines. Previously it claimed only to a limit of 3 miles. The U.S. State Department protested and asked that the matter be reconsidered. Panama rejected the protest. THEORETICAL RIGHTS Through its treaty with Panama, which gives, for all practical purposes, the United States title to the 10-mile-wide, 50-mile-long strip of land from ocean to ocean that makes up the Canal Zone, the United States has offshore rights only to the 3-mile limit: Once a vessel passes this point it will be in Panamanian territory and theoretically Panama has the right to stop any vessel in its waters. In fact, in speeches in the Panamanian National Assembly last week, this was proposed "to make sure all ships passing through our waters are observing or laws." To back up the new territorial claims, a mass demonstration was held in downtown Panama City and speakers endorsing the program were wildly cheered.

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114 ISTHMIAN CANAL POLICY QUESTIONS Aquilino Boyd, a member of the National Assembly, stressed in his speech that Panama still holds sovereign rights to the Canal Zone and said Panama is entitled to half of its annual gross income. He estimated this would amount to about $50 million a year for Panama. At present Panama receives slightly under $2 million a year from the United States, plus many indirect benefits. SCOFF AT PROPOSAL Privately U.S. officials term the proposal as "ridiculous" and point out that last year the canal's net profit was under $4 million. Unquestionably, observers here agree, the 12-mile offshore territorial claims by the Government have full public support in Panama. The proposal has been passed by the national assembly and signed by President Ernesto de la Guardia. The flaw in the claims, observers point out, is that Panama has no coast guard, navy, or patrol boats and is hardly in a position to detain any vessel. However, it is reported that Panama is negotiating with Norway for the purchase of several patrol boats. [From the Panama American, Feb. 17, 1959] BEARDs' VSIsT SHAVED -REPUBLIC OF PANAMA GROUps ALLEGE FiDELISTAS UNDER GOVERNMENT WRAPs HERE Student and labor groups complained today that the Panama Foreign Office has arranged the program for delegation of Cuban revolutionary soldiers to keep them from mixing too freely with non-Government groups. The delegation of eight men and two women soldiers who participated in Fidel Castro's successful revolt to overthrow Dictator Fulgencio Batista arrived here this afternoon as official guests of the Panama Government. The groups complained that the official program mapped out by the Foreign Office took no cognizance of the activities planned beforehand by a number of private organizations and civic groups. The official program includes a press conference tonight at the Cuban Embassy here, and Thursday a meeting with labor leaders, followed by a mass meeting in the Olympic Stadium. One student leader argued that there is a widespread desire to have the "barbudos" (bearded ones) address the people of Panama from Santa Ana Plaza today. Today's program also included a tour through Panama City about 4:30 p.m., starting at Via Espafia, up along Central Avenue, and returning via Avenue B and Justo Arosemena Avenue to Hotel El Panama. Meanwhile, in Havana the Cuban Cabinet, with new Premier Castro presiding, voted early today to slash its salaries 50 percent. The decree reducing Cabinet pay, one of nine approved at an all night Cabinet session, also ordered the suspension of all Government secret funds. Other decrees approved at the meeting provided for:

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ISTHMIAN CANAL POLICY QUESTIONS 115 Establishment of a national institute for saving and housing, replacing the traditional lottery, which will regulate gambling in Havana's multimillion-dollar casinos. A maritime promotion office to seek to build up the tourist trade. Civil service security for Govermnent workers, who in future may be dismissed only for "high convenience of the Governme," with :3 months' severance pay. Top officials appointed by ousted ex-President Fulgencio Batista were exempted from the provisions of this decree. Ratification of all acts committed by the rebels during their 2 years in the Sierra Maestra and cancellation of all prison sentences resulting from their acts. Castro, who at 32 is the youngest man ever to hold the post of Premier, had said earlier that he expects his new job to be "the toughest test of my life." [From the Panama American, Feb. 18, 1959] FIDELISTA BRANDS UNIFRUCO AS HUGE FOREIGN MONOPOLY The spokesman of the Cuban rebel delegation which arrived in Panama yesterday singled out the United Fruit Co. as one of the huge foreign monopolies which naturally feel hurt over the fall of Dictator Fulgencio Batista. Slickly fielding questions at a press conference at the Cuban Embassy here last night, Cuban rebel Capt. Jorge E. Mendoza rejected the idea that there was a widespread plot to discredit the revolutionary Government of Fidel Castro in Cuba. Mendoza emphasized that the rebel movement is not anti-Yankee, but he blamed a press campaign against the rebels on those large foreign concerns which he said used to dispossess farmers from their lands at will with the aid af Batista officials. This morning, Mendoza and the rest of the delegation amended a wreath-laying ceremony at the bust of the late PreZident Manuel Amador in Cathedral Plaza. They are scheduled to meet with student groups this afternoon at 5 p.m. and attend a dinner tonight as guests of the Panama Lions Club. Questioned about granting permission to the Cuban Conninnsts to organize politically, the bearded, long-haired Mendoza said last night: We decided it was better to know who they are than to have them operating underground. The delegation of one woman and eight men, including Catholic Chaplain Guillermo Sardifias, arrived at Tocumen Air, port about 2:30 yesterday afternoon. They were met by an official Government reception committee and a crowd of about 2,000 persons who insisted that the rebel
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116 ISTHMIAN CANAL POLICY QUESTIONS The rest of the delegation includes Capt. Mario Hidalgo, Lt. Orlando Benitez, Lt. Violeta Casals (a TV star who joined the rebels), and Pvts. Ricardo Valladares and Cesar Fonseca. At the end of the motorcade, the group were guests over a local radio station. In answer to another question, Mendoza said the new Cuban Government hoped to solve the problem of the millions of dollars stolen from the Cuban treasury by those who fled the country with the fall of Batista by devaluating all Cuban pesos now stashed away in foreign banks. A possible disturbance was averted by Mendoza's companions during the press conference when a crowd of about 500 persons who had gathered outside the Embassy started clamoring for them to come out. The press conference was interrupted briefly when two of the rebels intervened in a brief clash between the National Guardsmen who were guarding the half closed door to the Embassy and two student leaders. One of the bearded rebels and Miss Casals mounted at the base of a pillar and asked the crowd to emulate the discipline which had resulted in the victory of their cause by dispersing and going to their homes. The crowd paid some heed and by the time the press conference was over late last night only a handful remained outside to cheer the group as they went back to Hotel El Panama where they are staying as guests of the Panama Government. Meanwhile, UPI reports from Havana said Maj. Jesus Sosa Blanco, Cuba's twice-convicted war criminal No. 1 was executed early today by a firing squad to which he gave the order for his own death. Sosa was shot at 2:16 a.m. in the dry moat surrounding Havana's Cabafia fortress prison. Reports from the scene said he faced the firing squad bravely. "I forgive you, and I hope you forgive me," he said in a clear, steady voice, and a moment later spoke his last word: "Fire." The regular commander of the firing squad administred the coup de grace, firing a .45 caliber bullet into Sosa's head to make certain he was dead. FivE THOUSAND SEIZE PANAMA's CrrY HALL-JUNTA SET UP IN Row OVER USE OF FUNDS-MEMBER OF COUNCIL ACCUSED OF ATTACK IN RADIO STATION PANAMA, February 19.-Several thousand demonstrators seized city hall in the Panamanian capital last night after the beating of a radio commentator who had charged municipal funds were being mishandled. The crowd-which swelled to 5,000-demanded the ouster of the 15 city councilors and set up a rump council to run municipal affairs. They kept control of the building until President Ernesto de La Guardia, Jr., pledged that the regular councilors would be barred from their offices pending an investigation. The President ordered the national guard to leave the demonstrators alone.

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ISTHMIAN CANAL POLICY QUESTIONS 117 JUNTA TAKES CHARGE The self-described "Revolutionary Municipal Junta" announced it was taking over administration of municipal affairs until the present council was replaced. The group is headed by Guillermo Marquez Briceno, a lawyer who gained national prominence in 1957 for successfully defending seven persons charged with the assassination of President Jose Antonio Remon. The municipal junta began issuing sweeping ordinances, but there was no indication how they would carry them out. The march on city hall was led by Ramon Pereira, a young radio commentator who had denounced the councilors at a rally Tuesday night. Bleeding from a head wound, lie charged that Councilman Mario Velasquez and five men invaded his radio station yesterday afternoon, fired revolvers, blackjacked him, and attacked his wife and daughters. Radio listeners heard the sounds of the fight and gunfire. BROTHER ARRESTED A brother of Mr. Velasquez has been arrested on a charge of assaulting Mr. Pereira, but the councilman is immune from arrest while holding office. Marion Velasquez and 11 other councilmen issued a statement that they were not resigning. They were elected in 1956 for 4-year terms. The municipal building was deserted when the crowd reached it, the working day having ended. The demonstration was orderly. but many store owners, fearing violence, shuttered their windows as the excitement built up. Most of the crowd went home before midnight, but the leaders said they would carry on their campaign until their demands are met. [From the Panama Star and Herald, Feb. 19, 1959] DEMONSTRATORS TAKE OVER CITY HALL HERE-MOvE FOLLOWS ARMED ArrAcK ON RADIO MAN-COUNCILMAN BEATS UP COMMENTATOR OVER CHARGES ON HANDLING OF Crr FUNDS; JUNTA SET UP Thousands of demonstrators took over the city hall building in Panama City yesterday in the aftermath to an armed attack upon a popular radio commendator who denounced mishandling of city funds. The crowd, which at its peak numbered about 4,000 men and women, started a vigil in Cathedral Plaza, opposite city hall, at 2 p.m. It was still on watch at midnight and leaders said the vigil would be kept indefinitely. The en masse removal of the 15 incumbent members of the municipal council was the avowed purpose of the demonstrators. A revolutionary municipal junta announced it was taking over municipal affairs, pending the replacement of the present council membership. The junta is headed by Guillermo Marquez Bricenlo, a local attorney. Briceflo gained national prominence as defense coun

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II SISTHMIAN CANAL POLICY QUESTIONS 1,,n Ie ofra t If the defendant wNho were charged with the assassi1 ion ol Ir ide"t Jose A. leion. The defendants were acquitted. The jujta I>ued a series of sweeping ordinances, among them one suspen din al ;Ll unfinished muneipal contracts and another ordering t he IOSng~ ioday of municipal offices. The only concrete result of the demonstration was an official pledge that. pending a decision on the ouster, none of the incumbent councilMen will be allowed to enter the municipal headquarters. The pledge was first made by Attorney General Hermogenes de la Rosa and was confirmed la by President Ernesto de la Guardia, Jr. The Presidentalso sent word that the national guard would not be ordered out to interfere with the demonstration. He was visited by a committee from the "Revolutionary Municipal Junta." The Presidential Palace is 2 blocks from the city hall. The demonstrators rallied to the support of Ramon Pereira, a young radio station proprietor, who was attacked in his office in Radio Mia shortly after 1 p.m. Pereira named among his attackers Councilman Mario Velasquez, and the latter's brother, Homero. Pereira, his face smeared with blood from a head injury, stood on the city hall balcony and told the crowd he was threatened at gunpoint and beaten with a blackjack. He punctuated his remarks with a blackjack he said he wrested from one of the Velasquez brothers. Pereira's wife, who tried to defend her husband, also was dealt some blackjacks blows. Their daughter was threatened at gunpoint, Pereira reported. The attack appeared to have been motivated by Pereira's scathing denunciation of Velasquez, among other councilmen, at a public meeting Tuesday night at Santa Ana Plaza protesting alleged mishandling of municipal funds. Pereira said the assailants stormed into his office and fired shots. As the men fled after beating him up, Pereira said he pulled out his own gun and fired at the assailants' car. Some of the scuffle in Radio Mia's office was heard over the station's microphones. Immediately after the attack, Pereira went on the air to call his supporters to a march on the city hall. Pereira's station operates a listeners' club, with about 1,000 dues-paying members. The dues-50 cents a month-entitle members to certain services. The demonstration, initially small in numbers, reached the city hall at 2 p.m. By that time municipal employees had quit work and the building was empty. The crowd grew rapidly in numbers. The demonstrators' mood was one of violence at the start. But Pereira's repeated urging and pleading for order were heeded and sticks which had been freely brandished, quickly disappeared from view. The only poster visible among the crowd was a large piece of cardboard inscribed: "For the rats of the municipal council--the noose." A hangman's noose hung from the poster. By Pereira's order, the crowd was kept from storming the city hall. He and other leaders, however, took over the council offices. As the demonstration built up, steel shutters and heavy wire screens went over the glass windows and entrances of stores along Central Avenue.

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ISTHIAN CANAL POLICY OUVETIONs 119 The National Guard, wivlch perfI*orii pole diii e (iiik y witjidrew its personnel from the street -, ai)p)arenl1y to e1 imiithat aly p sibility of incidents with the demonstrators. During the time that the crow d was gathered in front of lhe city hall, it was harangued by many speakers, including leaders of the student federation which fought a, bloodv action on the streets with the National Guard in May 1058. Apparently in an effort to satisfy the crowd's clamor for sweeping away the council's present membership, leaders of the movementwhich was termed an open town meeting-formed a citizens committee and named a new slate of councilmen. Theappointed councilmen were for the most part the leaders of yesterday's movement. But nothing was said on how or when or by what authority the newly named council members would take office. The main legal obstacle to the immediate removal of the councilmen seemed to be that, having been elected to office by popular vote, there is no legal authority to oust them by executive action, as was demanded last night. Most observers agreed that a judicial indictment on specific charges would be needed before any action could be taken against one or more councilmen. Meanwhile, 12 of the incumbent councilmen, meeting at a private residence, issued a statement last night saying they were determined to retain their posts. They called the demonstration yesterday a grotesque comedy. They said there was no justification for arousing public passions over a personal incident. They declared they had never opposed the current investigation into the handling of city funds. The councilmen also scored the attorney general for his announcement that, pending the solution of the issue of the removal of the city fathers, none of them will be allowed access to the city hall. They called the order arbitrary. The councilmen's statement was signed by Jose Rogelio Arias. Jr. Carmen Arosemena, Luis Branca, Luis Del Rio, Ricardo Gaitnn, Samuel Lewis Galindo, Rene Luciani. Juan M. Martinez, Ternando Martiz, Germinal Sarasqueta, Eduardo Stagg, Jr., and Mario Velasquez. The last named councilman was the one whom Pereira identified as one of his assailants. Earlier Attorney General de la Rosa had announced arrest orders were issued against the assailants. Only Velasquez's brother. Mario, was under arrest last night. how ever. It was pointed out that councilmen are immune from arrest while 1holding office. Three councilmen did not sign the statement. They are Manuel de J. Espinosa, Carlos Pretelt, and Mario de la Guardia. [From the Washington Evening Star, Feb. 20, 19591 CROWD INSTALLS OWN PANAMA C'rIY COUNCIL-OLD COUNCILMEN, BARRED FroM HALL, REFUSE To RESIGN PANAMA, February 20.-An orderly crowd of thousands early today defied President Ernesto de la Guardia, Jr., and installed 11 new city councilmen for the Panamanian capital.

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120 ISTHMIAN CANAL POLICY QUESTIONS The crowd had seized control of city hall Wednesday after the blackjacking of a radio commentator who accused the council of mishandling city funds. The council refused to resign and the President said he had no legal power to remove it since the councilmen's elected 4-year terms do not end until next year. The President had appealed for the people to wait until an investigation could be made of the financial charges. It was not known what he would do about the worsening situation, but early today he had not ordered troops into action. STRIKE THREATENED Leaders of the popular movement announced a general strike would be called in Panama City today if necessary to put the new council in full control. The march on the municipal building Wednesday came after office hours. All offices were deserted, and there was no violence. Leaders of the demonstration constituted themselves as a revolutionary municipal junta and said they would run the city until the council was replaced. Throughout yesterday the crowd around city hall alternately diminished and grew, but remained orderly. All municipal offices except the courts stayed shut. A special detail of demonstrators prevented access to the building. PRESIDENT CITES LAW Mr. de la Guardia, meanwhile, told the junta he had been unable to obtain the resignations of the 12 council members from his own government party. Nor was there any capitulation by the other three council members-two from opposition parties and an independent. The President said his legal staff unanimously had advised him he could not remove the council legally by decree. Mr. de la Guardia insisted he would not go against the law. The crowd around city hall numbered about 5,000 at midnight, when the junta announced it had selected a panel of 25 citizens from which it would choose a new council. Amid loud cheers, the list was read over the radio, and loudspeaker cars helped to spread the word. CHAIRMAN ELECTED By 1 a.m., 11 men from the list had answered the call. A municipal judge swore them into office and they went into session in city hall, electing Carlos Enrique Adames, a lawyer, their chairman. The next move apparently was up to the President. Mr. de la Guardia had trouble on another front, too. The University of Panama canceled its annual commencement-scheduled for tonight-after student leaders warned they would not be responsible if the President showed up to make the traditional presentation of diplomas. The university authorities replied that they could not accept impositions from within or without and called off the ceremony.

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ISTHMIAN CANAL POLICY QUESTIONS 121 [From the New York Times, Feb. 21, 1959] STRIKE IN PANAMA CONDEMNS GRAr-BUSINESS HALTED B, PROTEST ON CORRUPTION-PRESIDENT INSISTS COUNCIL QUIT (By Paul P. Kennedy) PANAMA, February 20.-Retail and wholesale business came to a standstill here this morning in a near-general strike in protest against the alleged corruption of the city council. President Ernesto de la Guardia made a nationwide emergency broadcast in the midst of the shutdown of business, appealing for caln and demanding that the city council resign. While the President was speaking, his mother, Isabel Navarro de la Guardia, died of a heart attack in the Panama Hospital. She was visiting the President's father, who has been ill in the hospital for some time. COUNCIL REFUSES TO QUIT President de la Guardia acknowledged that he did not have the power to make the council resign. He asked privately last night for the resignation of all council members, but they refused. The President said today that he would be "attacking the very foundation of the Republic" if he forced their resignation. The difficulty began Wednesday when a councilman attacked Ramon Pereira, owner of a radio station, with a blackjack, while the councilman's brother held a pistol on him. Senor Pereira's station had been attacking the city council for alleged corruption in construction contracts and payroll padding. Following the attack, Senor Pereira appealed on the radio for a mass meeting and several thousand citizens responded. The city hall was taken over by the citizens emergency committee, which has held it since. RIVAL COUNCIL FORMED A new council was to be sworn in soon, headed by Carlos Enrique Adames, president of the National Bar Association. But a spokesman for President de la Guardia said he could not recognize it as constitutional. The old council, after an all-afternoon meeting, agreed to ask a 90day leave of absence pending an investigation of the charges against it. Luis A. Branca, one of the councilmen, said the action was not a renunciation of legal rights and that the new council could not be considered legal. The discontent is directed as much against the national administration as against the city council. The virtual certainty that Ricardo M. Arias Espinosa will succeed Senor de la Guardia in the Presidency has set off a wave of resentment. Senor Arias, who was President before Senor de la Guardia, is a member of the set that has ruled Panama since she won her independence from Columbia. The strike was particularly harmful to business because Panama depends largely on tourist trade.

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122 ISTHMIAN CANAL POLICY QUESTIONS [From the Washington Evening Star, Feb. 21, 1959] PANAMA EASES AFTER CHANGE IN CITY CoUNCIL PAXAMA, February 21.-The national government ordered out armed troops today to enforce its appointment of a new council for this capital city, and appeared to have the upper hand in a 4-day municipal revolt. Troops in battle array surrounded the Cathedral Plaza opposite city hall and closed a radio station the revolutionary municipal junta had been using to rally the populace. There was no violence and crowds, which had numbered several thousand, dwindled to about 100 persons. Leaders of the movement, who indicated last night they would defy the Government, decided to move out of the city hall. They had occupied it since Wednesday. The Government stepped into the crisis early today by naming a new city council after the old councilmen, whose removal was demanded by the junta, agreed to step aside. The old council was accused by the junta and its supporters of mishandling municipal funds. The Government announced that a new mayor and a new municipal treasurer also will be appointed. The announcement was made by Government Minister Max Heurtematte, who said the former councilmen were "separated" from their posts. There was no immediate explanation of that term, but earlier an official source said the councilmen requested a leave of absence. Six members of the new city council were among a panel which was chosen yesterday by the junta to install its own council. The Government acted after a popular demonstration against municipal maladministration had paralyzed the capital with a general strike. Businesses and public transport shut down tight yesterday afternoon. [From the New York Times, Feb. 22, 1959] TROOPS IN PANAMA BAR ANGRY CROWD-ACT IN RIOT THREAT NEAR CIrY HALL-STRIKE CONTINUES (By Paul P. Kennedy) PANAMA, February 21.-The Panamanian National Guard was brought out in force today to prevent threatened rioting near city hall. Several truckloads of armed troops sealed off city hall plaza, where a new city council had been sworn in last night by a citizens emergency committee. It attempted to meet today. The committee, which had held city hall since Thursday, was evicted by the National Guard. Still another city council was sworn in today. This one was selected hurriedly by Provincial Governor Jose Cajar Escala. It became the third body to contend that it was the legal council. Charges of corruption against the original council were the cause of unrest since Thursday, and a near-general strike yesterday. Last

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ISTHMNIIAN CANAL POLICY QUESTIONS 123 night this council told the. Governor that it would take a 9(-da leave of absence while the charges against it were investigated. Several thousand persons gathered at two points downtown this morning. At times it appeared that the crowd would attempt to rush the troops. At one point, officers pointed their pistols at the crowd. The site of most tension was a block from city hall plaza. Soldiers on foot, backed up by mounted troops, held back about 1,500 persons there. The crowd would surge to within a few feet of the troops, then fall back. After considerable haranguing by speakers, the crowd would move forward again. The tension eased when the citizens committee left city hall. Led by Guillermo Marquez Briceno, the crowd marched uptown to Santana Plaza, where loudspeakers were set up and a meeting took place. THREE BANKERS ON COUNCIL The new council includes three bankers, a physician, the head of the National Nursing Association, two college professors, and several merchants. One of the bankers is Ruben Dario Carles, Jr., general niana'er of the Chase Manhattan Bank here and former minister of finance. He said the first he knew of being on the council was when he read about it in the morning newspapers. He characterized the new group as "caretaker council' to run the city until a permanent council is installed. Meanwhile, a citywide strike continued. All retail stores except grocery were closed yesterday and remained so today. Banks were closed yesterday because of the strike, but remained closed today because of national mourning for the mother of President Ernesto de la Guardia, Jr. She died yesterday. [Translation] Ex-PRESIDENT OF PANAMA'S SOBER COMMENTS ON OPINION OF U.S. CONGRESSAN-DR. KARMODIO ARIAS DEFENDS THE NEW LAW ON TERRITORIAL WATERS PANA-M.-Harmodia Arias, ex-President of the Republic, director of Panama-America, and one of the most prominent jurists of the continent, commented in an editorial of his newspaper on the views advanced by Representative Flood in the following terms: Once again, Mr. Flood is firing his charges against the Republic of Panama. This time his pretext is the measure by which the National Assembly has, as a just affirmation of sovereignty, extended the mileage of the territorial waters to 12 miles. Mr. Flood denounced this measure as part of a Communist plot designed to isolate or lock off the Canal Zone, and the anal itself, and to convert it, he said, into another Berlin. And he adds. among [other] threats. that the President of the Republic would have vetoed the measure if he had not been prevented from doing so by insuperable pressure from the radical groups dominant in Panama. We do not deny the right of Mr. Flood, as Representative of the people. to freely express in the Congress of his country whatever views he may have. As 67-84---6-9

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124 ISTHMIAN CANAL POLICY QUESTIONS we do not deny the right of our Assembly to burst out, when feeling justly hurt by Mr. Flood's constant attacks against Panama, in strong criticism against him, even going so far as to call him Public Enemy No. 1 of our country. All these are natural phenomena in democracies where there is freedom of speech and where it happens that, in the heat of passion. reason. logic, and serenity do not always exercise the moderating force which they should. But this is not. so far as we are concerned, the most important aspect of this new incident created by Mr. Flood. We deem it of greater importance to analyze very thoroughly the stubborn attitude of the North American Congressman, with a view to deriving conclusions. from such analysis, which will prove constructive for the good relations between the two countries. And if Mr. Flood would care to change his course of action and address his impetuousness to constructive action, I wish he would, first of all, think over the unfair lack of equilibrium existing between Panama and the United States of America in the distribution of profits resulting from the operation of the canal; I wish he would ponder, for example, over the pitifully small annual allowance which Panama receives, which is less than half of what a private banana company pays whose concession seems modest, almost insignificant, as compared with the enormously large canal concession. And. following this course, he might stop to look with amazement at the series of injustices perpetrated by the United States against Panama. We should presume that Mr. Flood, as a citizen and representative of the people, would want his country to have the highest possible advantages; and that, in the matter of foreign relations, he would want to see those advantages crystallized in the existence of firm and cordial relations with the nations of this continent, especially with the Republic of Panama. And if that is so, the gentleman would then have to be told what history repeats with constant illustrations: that a befuddled, impassioned, blind, extremist, unrelenting patriot may-even if his intentions are the best-do as much damage to his country as the cynical or unworthy citizen who betrays it deliberately. Still recent (fresh in our memories) is the case of Senator McCarthy who, for many thinking North Americans, was one of the reasons why the United States could not be prepared in the field of science at the proper time in order to meet the terrifying Soviet progress in the conquest of outer space. If Representative Flood really wanted better and more cordial relations between Panama and the United States he would take a closer look at the causes for the deterioration of those relations: he would scrutinize the facts which speak for themselves and point to where the sources of trouble, resentment, and protests of the Panamanians are lodged, and would try to do something about eliminating them. I wish he would see how, while a treaty clearly gives Panama commercial benefits (privileges) in the market of the zone, that same zone imports meat from Australia and engages in all sorts of legerdemain in violation of the letter and the spirit of the treaty. I wish he would see how the equality of wages and job opportunities, agreed upon by treaty over 20 years ago. suffers setbacks. procrastinaTions, and infringements to a point where, irrespective or what had been agreed upon. this equality is operated, in essence. on the basis of local wages for Panamanians and U.S. wages for North Americans, despite the diffuse language of the rules and regulations which have been issued. And inequality of wages is translated, of course, into inequality of retirement or pension payments, which depend on those wages. I wish he would see how the [equality of] job opportunities [is] are being ridiculed by way of rules and regulations which pad and extend in a terrifying manner, far beyond the agreements, the concept of security jobs, so as to reserve these exclusively for the North Americans. I wish he would see how in the Canal Zone the duty-free import of diamonds and jewelry is continuing: and how, upon our protests. a U.S. diplomatic officer has gone so far as to say-no doubt with inaudible sarcasm, under his breaththat diamonds contribute to maintaining soldier morale. I wish he would see how the moving of the railroad station. the deadline for which has long since passed, continues to be stymied by artificial procrastinations and controversies. I wish he would see how, notwithstanding that the treaties state that both countries have "a joint and vital interest" in the canal. Panama is denied flying

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ISTH-MIAN CANAL POLICY QUESTIONS 125 its flag, together with the U.S. flag, in the zone, despite the reservation of I'lama's sovereignty over the Canal Zone. So as not to overdo it: I wish Mr. Flood would consi nd and et on these anl other important questions which have a fundamental ect on te beW openly deteriorating relations between the two coutils. He wruld tl d a costrutive and positive piece of work-instead of waLsting tnie by hurli: gbus against our country; instead of continuing to use the boastful, riiilous d aburd .cCarthyist chant that there is a Communist plot here [in Panaina] do>ainating everything; instead of offending the President of the Republic by stating that deep in his heart he was harboring the unpatriotic desire to veto the 12-:mile bill, but that he would not dare to do so because he was afraid of radical and pro-Communist elements: and-which is even worse-instead of devoting hmiiself to hurling open or veiled threats against our Republic, which, in our world of today, don't scare anybody any more.-(Source: Diario de las Amiricas. Jan. 22, 1959.) Mr. Bow. Mr. Speaker, will the gentleman yield? Mr. FLOOD. To my colleague upon the Subcommitee on Appropriations having jurisdiction over the Panama Canal and the Panama Canal Government, the gentleman from Ohio [Mr. Bow], I am happy to yield. Mr. Bow. Mr. Speaker, I am delighted that the gentleman has seen fit to yield at this time, for I must leave the floor in a minute to attend a meeting of the Committee on Appropriations. But I wanted to commend the gentleman for bringing this important matter to the attention of the House and of the country. As to the statements that he has been declared public enemy No. 1 in Panama, I think the people in Panama some day will find out that the action which he has taken and the position which he takes will prove that he is the best friend that Panama ever had in this Congress. If these things to which the gentleman is referring should develop. then Panama would suffer irreparable damage. I support the gentleman in his position on this matter, to keep the Panama Canal free, and under the treaty rights this country has entered into, we would keep the way clear to the canal at all times. The extension of the limits would create a real hazard. If the gentleman from Pennsylvania will permit, may I at this time pay a tribute to a very fine Governor of the Panama Canal, Mr. Potter, who I believe has been doing an excellent job not only in the maintenance of the canal but in the work with the people around the canal and in connection with the projects for the future. Mr. FLOOD. I am very grateful to my distinguished colleague from Ohio, because no one is better versed on this problem and the potential hazards than the gentleman from Ohio. I appreciate his very kind remarks with reference to my position on this subject. Certainly I concur in his tribute to the distinguished Governor, representing the United States in the Canal Zone. Mr. Mr:NA. Mr. Speaker, will the gentleman yield? Mr. FLOOD. I yield to my neighbor and colleague from the great State of Pennsylvania. Mr. MrmnA." I want a little information. Where does this 3 miles start now? As I remember, on the Pacific side there are a lot of islands off the mainland. Some of them may be over 3 or 5 miles away. Was that the reason they may have taken this action? I am looking for a reason why they may have taken this action.

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126 ISTHMIAN CANAL POLICY QUESTIONS Mr. FLOOD. The reason they did this, in my opinion, is that there is no question of a pronounced infiltration of the Red Communist cause all through the Caribbean and Central and South America, and it is becoming progressively worse. The pattern for this was raised by Soviet Russia in unilaterally declaring, in violation of all international principles, a 12-mile zone in the Baltic Sea, regardless of the shore rights or the island rights at the point of extension. This is an example, and they are using that as exhibit A. There is no question of where it begins. There is no rhyme or justification for this. It is a clear pattern of aggrandizement, and nothing else. Mr. MumMA. I thank the gentleman.

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[From the Congressional Record, 86th Cong., 1st Sess., June 23, 1959] PANAMA CANAL ZONE SOVEREIGNTY Mr. FLooD. Mr. Speaker, start ing on Mac r 2(i, .1958 1 have del i vered to the House a series of addresses dealing comprehensively with the question of sovereignty over the Panama Canal enterprise. Aimed at clarifying the issues of this vital question, these addresses sitinarize its diplomatic and legislative history. They establish that the Canal Zone is constitutionally ac( 1 ired territory of the United States and urge passage by the. Congress of ffouse Coicrrent Re5Olmitit ::. 4i h Congress, reaffirming i .S. pol yIV. Notwithstanding these efforts, world-wide a2,itations for wrest ilg control of the Panama Canal from the I ni ed States havi .O11ti inu"d and made that waterway a focus of confilct. including an ac nal invasion of the Republic of Panma by mercenaries from Cuba. Commenting on this invasion, President Ernesto de ]a Guiardia, Jr. of Panama, has stated: This was not just a group of adventurers from our own country or even from Cuba. These people were mostly Cubans, but directed by and led by militant Communists. Their ambition is the long stated one of taking over the iPaniima Canal. These, Mr. Speaker, are the very pointthat I have repeatedly presented to the Congress. They could noi be nore cheary or authoritatively stated, for President de la Guardia has observed the sitiiat ion on the isthmus at first hand during a series of crucial situations. The reactions to my addresses on Panama Canal sovereignty have been indeed gratifying so far as popular response is concerned. They have aroused extensive favorable comments from the isthmus and the United States. Many of our leading magazines and newspapers, in articles and editorials, have suipported the stand laken by ne. But not all. A notable exception is an article in the April 1959 issue of Foreign Affairs, the quarterly of the Council on Foreign Relations, in which the cause of internationalization under t i Organization of A mcercan States or the United Nations was strongly advocated. Studied in the chancelleries of the world, this and like statements will stand as per7manent sources of political infection until adeqnit ely met by authoritative declaration. The most significant coi)sequeince of the Panama Canal scvereiontyx debate was a May 12. 1959, legal memorandrmn prepared in the Canal Zone Government and supplied me hy the chairman of the C mmnmitee on Merchant Marine and Fisheries (Mr. Bonner). to who-e wimminee House Concurrent Resolution 33 was referred. This memorandum records the fong-established ofhcial position of the, United States that the exclusive sovereign right its. power. and ant hority of the United States in the ('anal Zone do not present an open 127

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128 ISTHMIAN CANAL POLICY QUESTIONS or doubtful question, and that the United States is not disposed to alter these basic rights in the Canal Zone. In this light, this memorandum is a State paper of high importance that merits a permanent place in the annals of the Congress. Mr. Speaker, I am, of course, grateful that the views set forth in the excellent Canal Zone Government memorandum are similar to those which I have long and consistently expressed in this Chamber. Indeed, it is quite inevitable that any rational study of the subject must lead to a like conclusion. In order that it may be easily accessible to all students of the canal question as well as official bodies of the legislative and executive branches of the Federal Government and the public press, under leave granted, I quote the indicated memorandum: CANAL ZONE GOVERNMENT, OFFICE OF THE GOVERNOR, Balboa Heights, C.Z., May 12,1959. MEMORANDUM Subject: Sovereignty Over the Canal Zone. The treaty provisions 1. The treaty provisions bearing on the question of sovereignty over the Canal Zone are few and brief : (a) By Article II of the Convention of November 18, 1903, the Republic of Panama granted to the United States in perpetuity the use, occupation and control of the zone of land and water now known as the Canal Zone, for the construction, maintenance, operation, sanitation and protection of the Canal to be constructed. (b) Article III of the aforesaid treaty, which is the sole existing provision dealing comprehensively with the matter of sovereignty, reads as follows: "Article III "The Republic of Panama grants to the United States all the rights, power and authority within the zone mentioned and described in Article II of this agreement and within the limits of all auxiliary lands and waters mentioned and described in said Article II which the United States would possess and exercise if it were the sovereign of the territory within which said lands and water are located to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority." (c) The 1936 and 1955 treaties do not even cite article III of the 1903 convention and contain no provision affecting sovereignty, other than paragraph 4 of article V of the 1936 treaty granting Panama limited rights to maintain two customhouses in the Canal Zone for specific, restricted purposes involving persons, merchandise and baggage arriving at Canal Zone ports destined to Panama. This and other concessions in effect emphasis U.S. sovereignty, being actions that necessary and inherently depend upon a legal and factual status of the United States as the party having the right to exercise sovereign jurisdiction. Article XI of the 1936 treaty confirmed that, without prejudice the full force and effect of that treaty's provisions, they should not affect, nor be considered a limitation, definition, restriction or restrictive interpretation of, the rights and obligations of either party under the treaties then in force between them. U.S. construction of the treaty provisions 2. There have been numerous constructions and applications of article III of the 1903 convention by the courts, the Attorney General, the Department of State, and the Comptroller General. Certain of the principal and representative constructions are briefed below. It is not practicable to attempt to collect all such

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ISTHMIAN CANAL POLICY QUESTIONS 129 constructions, and it is likewise not necessary, because (a) the constructions all reach the same basic conclusion, and (b) "the sovereignty over the Canal Zone is not an open or doubtful question" (26 Att'y Gen. 376, hereinafter briefed. 3. In a decision dated July 26, 1904 (11 C.D. 36), the then Comptroller of the Treasury, after quoting articles II and III of the 1903 convention, said: "The United States has thus become vested in perpetuity with the use, occupation, and control of the Canal Zone, and is now authorized to exercise all the sovereign powers in and over said zone which were inherent in the Republic of Panama prior to the release, waiver, and transfer thereof to the United States by the terms of the treaty." 4. In the early construction of the 1903 convention a very important role was played by John Hay, Secretary of State, who as U.S. plenipotentiary had represented the United States in the negotiation and conclusion of that convention. Mr. Hay's views respecting the nature of the grants to the United States in that convention, and with reference to sovereignty in the Canal Zone. are represented in his well-known letter of October 24, 1904, to Jos6 Domingo de Obaldia, then Panamanian Minister to the United States, which was in reply to a comnunication from the latter dated August 11, 1904. The entire letter appears in Senate Document No. 401, 59th Congress, 2d session (vol. III, beginning at p. 2378). The following extracts from that letter are sufficient to disclose Mr. Obaldia's contentions and Mr. Hay's principal views thereon: "I have read with the care and consideration its importance required the argument set forth in your communication in support of the contention that the United States is acting in excess of its authority (1) in opening the territory of the Canal Zone to the commerce of friendly nations; (2) in establishing rates of customs duties for importations of merchandise into the zone; (3) in establishing post offices and a postal service in said zone for the handling of foreign and domestic mailable matter. "The right of the United States to adopt and enforce the provisions of said orders is dependent upon its rights to exercise the powers of sovereignty as to the territory and waters of the Canal Zone, and whether or not the United States is authorized to exercise sovereign powers in that territory is to be determined by the terms of the convention of November 18, 1903, between the Republic of Panama and the United States, referred to in your communication as the HayVarilla convention. "The Government of the Republic of Panama having seen fit to object to the exercise by the United States within and over the Canal Zone of the ordinary powers of sovereignty, this Government, while it cannot concede the question to be open for discussion or the Republic of Panama to possess the right to challenge such exercise of authority, considers it fitting that the Republic of Panama should be advised as to the views on the subject entertained by the United States and the reasons therefor. "The United States acquired the right to exercise sovereign powers and jurisdiction over the Canal Zone by the convention of November 18, 1903, between the Republic of Panama and the United States. "The character and extent of the grant of governmental powers to the United States and the resulting right and authority in the territory of the zone are set forth in a separate article, as follows: (quoting art. III). "Let us test the existing controversy by the provisions of this article. 'If the United States * were the sovereign of the territory,' would it possess the right and authority to regulate commerce therewith, establish eustomhouses therein, and provide postal facilities therefor? This question must be answered in the affirmative. "If it were conceded that the abstract, nominal 'rights, power, and authority of sovereignty in and over the zone' are vested in the Republic of Panama. there would still remain the fact that by said article III the United Sres is authorized to exercise the rights, power, and authority of sovereignty 'to the entire exclusion of the exercise hy the Republic of Panama of any such sovereign rights, power, or authority.' "If it could or should be admitted that the titular sovereign of the Canal Zone is the Republic of Panama, such sovereign is mediatized by its own act, solemnly declared and publicly proclaimed by treaty stipulations, induced by a desire to make possible the completion of a great work which will confer inestimable benefit upon the people of the isthmus and the nations of the world. It is difficult to believe that a member of the family of nations seriously contemplates abandon

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130 ISTHMIAN CANAL POLICY QUESTIONS lug so high and honorable a position in order to engage in an endeavor to secure what at best is a 'barren scepter.' "Under the stipulation of article III, if sovereign powers are to be exercised in and over the Canal Zone, they must be exercised by the United States. Such exercises of power must be, therefore, in accordance with the judgment and discretion of the constituted authorities of the United States, the governmental entity charged with responsibility for such exercise, and not in accordance with the judgment and discretion of a governmental entity that is not charged with such responsibility and by treaty stipulations acquiesces in 'the entire exclusion of the exercise by it of any sovereign rights, power, or authority' in and over the territory involved. "That the plain and obvious meaning of article III was the one originally intended by the parties to the treaty is further shown by the provisions of article IX, X, XII, XIII. "The United States at all times since the treaty was concluded has acted upon the theory that it had secured in and to the Canal Zone the exclusive jurisdiction to exercise sovereign rights, power, and authority. "JOHN HAY." (From letter Oct. 24, 1904, to J. D. de Obaldia.) In an opinion rendered on January 7, 1907. the Supreme Court of the United States, after paraphrasing articles II and III of the 1903 convention said: "Other provisions of the treaty add to the grants named in these two articles further guarantees of exclusive rights of the United States in the construction and maintenance of this canal. It is hypercritical to contend that the title of the United States is imperfect, and that the territory described does not belong to this Nation, because of the omission of some of the technical terms used in ordinary conveyances of real estate. "Further, it is said that the boundaries of the zone are not described in the treaty: but the description is sufficient for identification, and it has been practically identified by the concurrent action of the two Nations alone interested in the matter. The fact that there may possibly be in the future some dispute as to the exact boundary on either side is immaterial. Such disputes not infrequently attend conveyances of real estate or cessions of territory. Alaska was ceded to us 40 years ago, but the boundary between it and the English possessions east was not settled until within the last 2 or 3 years. Yet no one ever doubted the title of this Republic to Alaska." (Wilson v. Shaw, 204 U.S. 24; 27 Sup. Ct. 233, 235.) It is of interest to note the statement of Senator Morgan in asking to have the foregoing opinion printed in the CONGRESSIONAL RECORD, as follows: "Mr. MORGAN. Mr. President. I desire to have printed in the RECORD an opinion of the Supreme Court of the United States, delivered on the 7th of January 1907, in which opinion the Supreme Court settled finally and forever the question of the sovereignty of the United States over the Panama Canal Zone, affirming the sovereignty of this country absolutely over that territory." (CONGREssIONAL RECORD for Jan. 22, 1907; p. 1518). 6. The subject of sovereignty over the Canal Zone was covered briefly and comprehensively by Attorney General Bonaparte in 1907; and no occurrence since that time has detracted in any way from the accuracy or aptness of his statements. Mr. Bonaparte's entire discussion respecting sovereignty is here quoted: "In my opinion the sovereignty over the Canal Zone is not an open or doubtful question. "Article 3 of the treaty transfers to the United States, not the sovereignty by that term, but 'all the right, power and authority' within the zone that it would have if sovereign, 'to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority.' "The omission to use words expressly passing sovereignty was dictated by reasons of public policy, I assume; but whatever the reason the treaty gives the substance of sovereignty, and instead of containing a mere declaration transfeiing the sovereignty, descends to the particulars "all the rights. power, and authority' that belong to ,sovereignty, and negatives any such 'sovereign rights. power, or authority' in the former sovereign.

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ISTHMIAN CANAL POLICY QUESTIONS I I "The *rights' so transferred are to be enjoyed (art. 2) 'in perpetuity,' m lo 1 exception is made of any persons or things in the zone. "I am tlnable to perceive that this langatiage is oblsc're or a'1ibiutols ()I that we are warranted in resort ing to any construction of it except by the tirst rule of (:oiistruction--that plaiii and seii,-ible words shmild be taken to niean wvlhat they say." (Opinion, Sept. 7, 1907 (26 Atty. Gen. 37(;).') 7. The Anierican consul g,-eneral in charge of Greek interests in the Repuiblic of Panama received in 1908 instructions from the Mlinister of Foreign Affairs of Greece to take charge of tle estates of Greek subjects wio had died within the Canal Zone. The Department of State asked the Greek Minister in W\a sliingiton to inform his Government that, as the Canal Zone was "under the sovereiglnty of the Government of the United States," it would ]lot be feasible for die American consul general at Paiiama to awt therein in representation of Greek interests digestt of Ititernational Law. 1I:b kworthi, vol. IV, p. 19:'. S. In an opinion dated July 14, 1914 3 Atty. Gen. 271), Attorney (eneral Mcleynolds considered the applicability to the Canal Zone of the Narcotic Drugs Import-Export Act of 1914. and said : "I am clearly of the opinion that these sections are apI)licable to the tanal Zone. That the Canal Zone is 'territory under the control or jurisdiction' of tile United States has been held in a loug line of opinions by the Attorneys (jeneral tsee 25 Op. 441. 444, 47-1: 26 Op. 113, 1W(: 26 Op. 176, 377 : 27 Op. 130, 1:18). The opinions. seemingly contra. rendered with relation to the Tariff Act of 190! and the 8-hour law of 1913. in 27th Opinion 594. and :0th Opinion 142. were concerned with constructions of special statutes. anid were not determinative of the general question. "That Congress in recent statutes clearly regards the Canal Zone as a possession of the United States, and therefore subject to its jurisdiction. is seen in the explicit provisions of the Employer's Liability Act of April 22. 1908 ( ch. 149. see. 2 (35 Stat. 65) ), that 'every common carrier by railroad in the Territories, the District of Columbia. the Panama Canal Zone, or other possession of the United States,' etc., and of the Ininiigration Act of February 20, 1907 ih. 1134, see. 33 (34 Stat. 908) ), that the terin *United States' 'shall be construed to mean the United States and any waters. territory, or other place subject to the jurisdiction thereof, except the Isthmian Canal Zone.' 9. Relative to the authority of ithe J ited Statos i( )na -al eeiqna tirs to fmrcin'i ('Ol suls for the Canal Ztlme. a c(4itn i iczittioii if .July 21. 1P21. frni the Secte tary of State ( Hughes) to the l'ana anian t'ha r ( d'Affaires ad i terim Lefevre), is reported in the L)i(est of liternlat ionial Law, volume IV. pag G-40, as follows : "By the provisions of this article (f Ile t re'ty f or[. tit 'd the ctn Viientil 'i ()f November IS. 1903). the t'nited States i-ra ut ed. ill ilte Camila Zone, a l tilt, rights, power and authority of a si vereignl. anti tihe RepIblic () f anaia is ontirely excluded from the exercise of such rights. liwier, and a Iitliority. It wNoiild therefore, seem clear that this article confers aittlde althliority 1po1 the G(vcrnnient of the United States to grant exequaturs to foreigii conisuls exercisihiconsular functions in the Ca nal Zone. 10. In 1923, Secretary of State Hughes (declred t,a tHie I united States 'wmil never recede from the position which it had ta ken in thle note of Secrel a ry I ivy in 1904. This Government could 1101. and wou l not. enter into any discussion affecting its full right to deal with the Canal Zone inider article Ill 4f te treaty of 1903 as if it were sovereign of ihe Canalo Zone and to the entire exclusion of aiy sovereign rihllts or authority on the ipa rt (If Panamlila"1i Forvi;.Il Relations, 1923, vol. III, p. 684). To this Secretary Hughes added: "It was an absolute futility for the Pania manian ( TovernmieIII to expect aliy American administration, no matter what it was. any President or ally Secretary of State, ever to surrender any part if these rights which tit nited Sries had acquired under the treaty of 1903." 11. In a decision rendered to the Sevret ary if I le Navy n July 17. 195 15 Co!op. Gen. 30). Comptroller General McCarl said "Since the rights (f the iiii ed States wit 1i resq ect to he Z /mn' arc all iinlusive. and the territory is subject to such Iavs 7s may he mia de apjlicab1ie thlret' by the congress it imiust he ins idered as itinelded il lhe roai termi 'err iti and Iwssessi'n-' of the United St Ies as used in 'ecti''I 2 if the Eli! I'*1'VrIlcY Relief Appropriation Act of 1935."

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132 ISTHMIAN CANAL POLICY QUESTIONS 12. In a decision rendered on November 21, 1936, to the Secretary of State on the question whether the Canal Zone was a "foreign country" within the meaning of an act authorizing the furnishing of quarters to Government employees without cost, Acting Comptroller General Elliott said: "The United States exercises by virtue of article 3 of the aforesaid treaty a jurisdiction within said zone as complete as 'if it were the sovereign' therein to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, powers, or authority. See Wilson v. Shaw, 204 U.S. 24, at pages 31 and 33. wherein the Supreme Court in an opinion by Mr. Justice Brewer used the following language (quoting substantially the same portion of the opinion as is Lereinbefore shown in this memorandum) : "Accordingly, you are advised that the Canal Zone may not be considered as a foreign country within the meaning of the act of June 26, 1930, supra." 13. An incident in 1936, respecting attempted extension of the divorce jurisdiction of the Panamanian courts to cases arising in the Canal Zone is reported in the Digest of International Law, Hackworth, volume 11, page 172, in the following language: "In 1936 the Supreme Court of Justice of Panama, in a divorce action instituted by a woman resident in the Canal Zone, took the position that the jurisdiction of the Panamanian courts might be extended to cases arising within the Canal Zone and involving residents thereof. The Department of State, on June 30, 1936. instructed the Minister in Panama to present a note to the Panamanian Minister of Foreign Affairs saying that this attempted extension of judicial jurisdiction of the Panamanian courts appeared to be contrary to the provisions of the convention of November 18, 1903, between the United States and Panama, two treaties, etc. (Malloy, 1910) 1349. After quoting article III of that convention the note stated: "'Since the foregoing article III grants to the United States all the rights, power and authority within the Canal Zone which it would possess and exercise if it were the sovereign of that territory, to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority, and since the exercise of judicial jurisdiction through the courts is undoubtedly one of the attributes of sovereignty covered by that article, it is apparent that the extension of the jurisdiction of the courts of Panama in the manner apparently contemplated by the Supreme Court of Justice would not only be inconsistent with the broad treaty provisions referred to above, but would also give rise to an overlapping of judicial jurisdiction, since the competency of the Canal Zone courts to render judgment in cases such as that of Beatrice Harris versus Chester M. Buel is not open to question. Therefore, not only would the extension of Panamanian judicial jurisdiction to the Canal Zone be in violation of specific treaty provisions, but the consequent legal confusion would unquestionably prove an obstacle to the effective administration of justice.' "It was also pointed out that it was very doubtful whether the divorce decree in question would be recognized as valid in the Canal Zone or in the United States. The Minister was accordingly instructed to protest against the position taken by the Supreme Court of Justice of Panama and to express the hope that the Panamanian Government would take appropriate steps to dispel any misunderstandings or inconveniences resulting therefrom. "The Minister of Foreign Affairs replied stating, inter alia, that the spokesmen of the Republic of Panama in respect to foreign relations was the Panamanian Foreign Office and not the judiciary and that the executive branch of the Panamanian Government had never agreed with the Government of the United States in its interpretation of article III of the convention of 1903 but that, as an act of courtesy, a copy of the Minister's note (written in compliance with the instructions of the Department of State) would be sent to the President of the Supreme Court of Justice of Panama." 14. There have been, as hereinbefore indicated, numerous other occasions, including recent occasions, whereon the Department of State has had occasion to construe and apply article III. It would serve no purpose to abstract more of them. The uniform position of the U.S. Government has been (paraphrasing the language of Attorney General Bonaparte in 1907 in 26 Atty. Gen. 376) that the sovereignty over the Canal Zone is not an open or doubtful question; and that the language of article III is not obscure or ambiguous. and that there is no warrant for resorting to any construction of it except by the first rule of construction-that plain and sensible words should be taken to mean what they

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ISTHMIAN CANAL POLICY QUESTIONS 133 say. That the United States has, from the beginning, acted upn these views is apparent from the letter of Secretary of State Hay to Minister Obaldlia on October 24, 1904, wherein it was said: "The United States at all times since the treaty was concluded has acted upon the theory that it had secured in and to the Canal Zone the exclusive jurisdiction to exercise sovereign rights, power, and authority." 15. All requests by Panama during the 1955 treaty negotiations that Nvould have involved a concession to Panama of any right to exercise sovereignity in the Canal Zone were unequivocally rejected by the United States on the basis of the officially reaffirmed position of the United States that no uisefl purpose would be served in debating the question of sovereignty, that such iiiattrS were resolved by article III of the 1903 convention giving to the United States the right to exercise all sovereign rights, power, and authority in the Canal Zone "to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power, or authority," and that the United States is not disposed to alter its basic rights as described in said article III. The theory of titular sovcreignty 16. Some discussion is believed indicated at this point of the concept, adopted by some and rejected by others, that the grants in the 1903 Convention left a "titular sovereignty" in the Republic of Panama. The principal references to this theory are abstracted below. 17. Secretary of State Hay discussed this theory in the following terms: "If it were conceded that the abstract, nominal 'rights, Ipower, and authority of sovereignty in and over the zone' are vested in the Republic of Panama there would still remain the fact that by said article III the United States is authorized to exercise the rights, power, and authority of sovereignty 'to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights. power, or authority.' "If it could or should be admitted that the titular sovereign of the Canal Zone is the Republic of Panama, such sovereign is mediatized by its own act, solemnly declared and publicly proclaimed by treaty stipulations, induced by a desire to make possible the completion of a great work which will confer inestimable benefit upon the people of the Isthmus and the nations of the world. It is difficult to believe that a member of the family of nations seriously contemplates aban4 doning so high and honorable a position in order to engage in ai endeavor to secure what at best is a 'barren scepter.'" (Letter, Oct. 24, 1904, from Secretary of State Hay to Minister Obaldia.) 18. It is to be noted, first, that Secretary Hay did not concede or admit the correctness of the theory, and, second, that he deemed titular sovereignty "at best, a 'barren scepter.' 19. William Howard Taft, then Secretary of War. discussed this theory in the course of a long statement presented on April 18, 1906. to the Senate Committee on Interoceanic Canals. In a part of that statement devoted to the Executive order or modus vivendi of December 3, 1904 (Taft agreement), Mr. Taft, after quoting article III, said : "It [art. III] is peculiar in not conferring sovereignty directly upon the United States, but in giving to the United States the powers which it would have if it were sovereign. This gives rise to the obvious implication that a mere titular sovereignty is reserved in the Panamanian Government. Now, I agree that to the Anglo-Saxon mind a titular sovereignty is like what Governor Allen, of Ohio. once characterized as a 'barren ideality,' but to the Spanish or Latin mind poetic and sentimental, enjoying the intellectual refinements, and dwelling much on names and forms it is by no means unimportant." (S. Doc. No. 401, 59,th Cong., 2d sess., vol. III, p. 2526.) 20. The foregoing abstract was placed in the Congressional Record by Senator Brandegee in 1912 (Congressional Record for July 24, 1912, at p. 10119). It may be observed that Mr. Taft, unlike Mr. Hay, thought it obvious that a titular sovereignty remained in the Republic of Panama; but that Mr. Taft agreed that a titular sovereignty is like a "barren ideality." 21. Mr. Taft again discussed this theory in the year 1930, when as Chief Justice, he delivered the opinion of the Supreme Court in Luckenbach S.S. Co. v. United States, 280 U.S. 173; 50 Sup. Ct. 148. He said : "Whether the grant in the treaty amounts to a complete session of territory and dominion to the United States, or is so limited that it leaves at least titular

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134 1STHMIAN CANAL POLICY QUESTIONS sovereignty in the Republic of Panama, is a question which has been the subject of diverging opinions (citing 20 Am. Journal of International Law, pp. 120-122; Isthmian Highway, Miller, p. 221; Wilson v. Shaw, 204 U.S. 24, 32, 33, 27 S. Ct. 223. 51 L. Ed. 351) and is much discussed in the briefs." The opinion proceeds to say that for the purposes of that case the construction of the treaty in that regard need not be examined as an original question. 22. Two further observations are believed important regarding titular sovereignty: First. If it were to be conceded or admitted that the Republic of Panama has titular sovereignty over the Canal Zone (the United States has never officially so conceded or admitted), the facts would remain that the titular sovereignty of Panama would be wholly naked or barren ("a barren scepter" and "barren ideality") ; that such sovereignty would be wholly latent or dormant (reversionary in character) so far as practical effect is concerned; and that the Republic of Panama would derive therefrom no (present) sovereign right, power, privilege, or perquisite whatsoever. Second. The Republic of Panama has never at any time, so far as available records show, contended that it possessed titular sovereignty over the Canal Zone. Instead. the Republic of Panama, after observing that article III did not use words expressly transferring sovereignty, has contended, in various terms and in various connections, that it is the sovereign over the Canal Zone; that is, has claimed what Attorney General Bonaparte called the substance of sovereignty. Conclusions 23. The United States has the exclusive right to the exercise of sovereign rights, power, and authority in the Canal Zone. The Republic of Panama has no right to the exercise of sovereign rights, power, and authority in the Canal Zone. and no right to the perquisites or privileges of a sovereign in the Canal Zone. Any titular sovereignty which the Republic of Panama may possess in the Canal Zone is wholly barren and dormant (reversionary in character) at least so long as the convention of 1903 remains in effect. The United States sees no useful purpose to be served in debating the question of sovereignty, as such, over the Canal Zone, a matter fully resolved by article III of the 1903 convention. The United States is not disposed to alter its basic rights in the Canal Zone as described in article IV of the 1903 convention.

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[From the Congressional Record, 86th Cong., 2d sess., Apr. 19, 19601 PANAMA CANAL: KEY TARGET OF FOURTH FRONT Mr. WALTER. Mr. Speaker, for many months, as chairman of the House Committee on Un-American Activities, I have watched with increasing concern, the rising Red tide to the south of us that is now converging on the Isthmus of Panama. Thus, it has been with gratification that I have noted a growing understanding on the part of many Members of the Congress to this threat to hemispheric security as evidenced by their passage on February 2, 1960, by a vote of 381 to 12 of House Concurrent Resolution 459 concerning sovereignty over the Canal Zone territory. Among those who have spoken out boldly in this regard. no one has presented a more comprehensive analysis of the questions involved than my colleague, the gentleman from Pennsylvania [Mr. FLOOD]. His many statements on this matter over a period of years are a valuable source of documented information on our isthmian and Latin-American policies. His latest contribution is a notable a(ddress on the "Panama Canal: Key Target of Fourth Front," on April 18, 1960, before the National Defense Committee luncheon meeting of the National Society of the Daughters of the American Revolution at the Sheraton-Park Hotel, in Washington, D.C. Presiding over this distinguished gathering from various sections of the country was Mrs. Wilson K. Barnes. national defense chairman of the national society. The chairman of the committee on arrangements was Mr. B. Harrison Lingo. In order that the full text of our colleague's latest contribution may be available to the Nation at large, especially to libraries, editorial desks, schools, colleges, universities, and Government agencies concerned with Isthmian Canal policy questions, I quote the in(licated address: On the morning of November 4, 1959, the people of the United States were surprised to read press dispatches from Panama about Canal Zone border violence on the previous day under large headlines, such as, "U.S. Troops Guard Canal Zone Against Mob." This news was not surprising to those in close touch with Isthmian developments. Even though my studies had made it possible to foresee the disorders that occurred on November ", 1959. and to warn proper authorities of the executive department as well as the Congress far in advance. it is indeed a sterile satisfaction to state that those grave disturbances occurred precisely on the day as predicted; precisely in the manner prophesied: and precisely with the results expected. It would have been far better had timely action by the Congress or Executive been taken to prevent this distressing incident from occurring. Unfortunately, the events of that tragic day and the long series of developments leading to them have not been adequately presented by the mass media to the people of our Nation-a failure that has the savor of a conspiracy of silence. Because they are fundamental and transcend all lesser considerations, their adequate clarification is imperative and requires some frank speaking. 135

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136 ISTHMIAN CANAL POLICY QUESTIONS In so doing, I wish to emphasize that I am not an enemy of Panama, nor of any Just aspirations of its people, among whom I have made numerous and treasured friendships extending back many years. I sincerely trust that what I say today will add to public knowledge in both Panama and the United States and lead to better understanding of the issues involved. JURIDICAL BASE OF U.S. ISTHMIAN CANAL POLICY The foundations of our Isthmian canal policies are rooted in four centuries of history and rest upon three important canal treaties. First. The Hay-Pauncefote Treaty of 1901 between Great Britain and the United States, which facilitated construction of the Panama Canal. In this agreement, Great Britain relinquished its own rights for construction and control of an isthmian canal and recognized the exclusive rights of the United States thereto. The United States, in assuming this obligation, adopted the main points of the Convention of Constantinople of 1888 for the operation of the Suez Canal as the rules to govern the operation and management of the American canal. These provide that the canal shall be "free and open" to "vessels of commerce and of war" of "all nations" on terms of "entire equality" with tolls that are "just and equitable." It also authorizes the United States to protect it against "lawlessness and disorder." Second. The Hay-Bunau-Varilla Treaty of November 18, 1903, between the Republic of Panama and the United States. On the part of Panama, this convention granted to the United States "in perpetuity" the "use, occupation, and control" of the Canal Zone for the construction of the Panama Canal and its perpetual maintenance, operation, sanitation, and protection, and, most significantly, as if the United States were the "sovereign of the territory" and to the "entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power, or authority." On the part of the United States, the main points for the purpose of this address were that it guaranteed the independence of Panama, which had just seceded from Colombia and whose existence depended on the protection of the United States and the success of the canal undertaking. The United States also was authorized to enforce sanitary ordinances and to maintain public order in the terminal cities of Panama and Colon and in the territories and harbors adjacent thereto in event of failure of the Republic of Panama to do so, as well as to acquire property within these cities and adjacent areas for canal purposes through the exercise of the right of eminent domain. Third. The Thomson-Urritia Treaty of April 6, 1914, proclaimed March 30, 1922, between the United States and the Republic of Colombia, the sovereign of the isthmus prior to the Panama Revolution of November 3, 1903. This treaty aimed at removal of all misunderstandings growing out of the political events in Panama in November 1903, restoration of the cordial friendship that had previously existed between Colombia and the United States, and definition and regulation of their rights and interests with respect to the Panama Canal and Panama Railroad. The negotiations of these three treaties were the contributions of some of the ablest men of their times. They knew the history of the isthmus as a land of endemic revolution and political instability. They understood the lessons of the Suez Canal, and benefited by them in adopting policies for administering the Panama Canal. They knew the difficulties experienced in the negotiations with Colombia for a satisfactory canal treaty, which was finally rejected by the senate of that country, and thereupon determined to solve permanently the problem of sovereignty in the Canal Zone. With duality of control as originally proposed in the rejected Hay-Herran Treaty removed, the framers of the Hay-Bunau-Varilla Treaty were justified In feeling that what would have been a perpetual cause of conflict and recrimination, which always accompanies extraterritorial rights, had been eliminated forever. The Canal Zone is a constitutionally acquired domain of the United States. Under our Constitution, the treaties and statutes that relate to its acquisition, the subsequent construction of the Panama Canal, and its perpetual operation, are "supreme law of the land." Moreover, the framers of the Hay-BunauVarilla Treaty were far visioned. They discriminated between the "grant" of the Canal Zone "in perpetuity" and the "life of this convention," which they realized would probably be modified. They even provided against the pos

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ISTIHAMIAN CANAL POLICY QUESTIONS I3 sibility of Panama entering "any union or confederation of states, so as to merge her sovereignty or independence," in which ease the treaty provides that "the rights of the United States * shall not be in any respect lessenied or impaired." CANAL ZONE: U.S. GOVERNMENT RESERVATION Despite the clear wording of the Panama Canal treaties, so many misconceptions of their key features have characterized press coverage in recent years, even including some of the most respected encyclopedias, that clarifications are essential. In this, the first fact of importance to note is that the original recommendation to secure control of the Canal Zone "in perpetuity" was made by the Isthmian Canal Commission in early 1902. This was followed by the Spooner Act, approved June 28, 1902, authorizing the President to secure by means of a treaty the "perpetual control" of the Canal Zone for the construction and "perpetual" maintenance, operation, sanitation, and protection of the Panama Canal. It is true that the preamble of the 1903 treaty acquiring the Canal Zone describes the "sovereignty of such territory as being actually vested in the Republic of Panama." This description was used, however, to indicate the transfer of sovereignty over the area from Colombia to Panama as the result of the secession of Panama from Colombia and thereby to show the authority of Panama to cede to the United States that jurisdiction for canal purposes. Certainly it was not used for the purpose of establishing the sovereignty of Panama over the Canal Zone after its occupation in 1904 by the United States. The fact that U.S. sovereignty over the zone is absolute was clearly indicated by Bunau-Varilla, Panama's Minister to the United States and one of the principal draftsmen of the 1903 treaty, who stated: "After mature thought, I recognized that if I enumerated in succession the various attributes of sovereignty granted, I ran the risk of seeing in the U.S. Senate, some other attributes asked for. "To cut short any possible debate I decided to grant a concession of sovereignty en bloc. "The formula which seemed to me the best one was to grant to the United States in the Canal Zone 'all the rights, power, and authority which the United States would possess and exercise if it were the sovereign of the territory; to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power and authority.' Thus, it is definitely established that the Canal Zone was not sold, ceded, or leased, but granted in perpetuity to the United States for perpetual operation of the Panama Canal. Not only that, all privately owned properties in the Canal Zone were later bought by the United States, and these included the Panama Railroad. In addition to the titles thus secured, Colombia, in the Thomson-Urritia Treaty recognized the title to both the Panama Canal and Panama Railroad as "vested entirely and absolutely" in the United States "without any encumberances whatever." Moreover, President Taft, by Executive order of December 5, 1912, pursuant to the 1903 treaty and the Panama Canal Act, declared that "all land and land under water within the limits of the Canal Zone are necessary for the construction, maintenance, operation, protection and sanitation of the Panama Canal." All these points, Madam Chairman, and many others that could be stated, remove all doubt as to the sovereign control of the entire Canal Zone. Its status is that of a U.S. Government reservation with full and exclusive sovereign control vested in the United States. The only authorized symbol of such absolute authority is the flag of the United States. SECRETARIES HAY, TAFT, AND HUGHES: CANAL ZONE SOVEREIGNTY VIEWS The current agitation about the sovereign control of the Canal Zone is not a new issue but an old one periodically dragged out of its tomb for political purposes. Notwithstanding the fact that this subject has been repeatedly clarified, recent references to Panama as the "titular sovereign" of the Canal Zone, or whatever that is, by high officials of our own State Department and others, cannot be dismissed as effusions of the ignorant, for they have been presented as

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138 ISTHMIAN CANAL POLICY QUESTIONS reaffirmations of the views enunciated in 1906 by Secretary William Howard Taft. What are some of the key facts in the history of this matter? Secretary of Government Tomas Arias of Panama, one of the revolutionary junta of 1903, in a note dated May 25, 1904, addressed to Gov. George W. Davis of the Canal Zone stated: "The Government of the Republic of Panama considers that upon the exchange of ratification of the treaty for opening the interoceanic canal across the Isthmus of Panama. its jurisdiction ceased over the zone." Ratification of this treaty, it may be stated. were exchanged on February 26, 1904. In spite of this clear, unequivocal declaration, Secretary Arias later presented the "sovereignty" question to the United States. In a comprehensive reply to the Panamanian Government on October 24, 1904, Secretary of State Hay asserted that "the great object to be accomplished by the treaty is to enable the united States to construct the canal by the expenditure of public funds of the United States-funds created by the collection of taxes" and that "the position of the United States is that the words 'for construction, maintenance, operation, sanitation, and the protection of the said canal' were not intended as a limitation on the grant. but are a declaration of the inducement prompting the Republic of Panama to make the grant" of the Canal Zone to the United States in perpetuity. Though Secretary Hay mentioned the term, "titular sovereign of the Canal Zone." he stated that such sovereipn is "inediatized by its own acts. solemnly declared and publicly proclaimed by treaty stipulations, induced by a desire to make possible the completion of a great work which will confer inestimable benefit on the people of the isthmus and the nations of the world." He also stated that it was difficult to conceive of a country contemplating the abandonment of such a -high and honorable position, in order to engage in anl endeavor to secure what at best is a 'barren scepter'." Later. on April 18, 1906, while testifying before the Senate Committee on Interoceanic Canals, Secretary of War Taft. when commenting in article III of the Hay-Bunau-Varilla Treaty, stated: "It is peculiar in not conferring sovereignty directly upon the United States, but in giving to the United States the powers which it would have if it were sovereign. This gives rise to the obvious implication that a mere titular sovereignty is reserved in the Panamanian Government. Now, I agree that to the Anglo-Saxon mind a titular sovereignty is * a barren ideality, but to the Spanish or Latin mind. poetic and sentimental, enjoying the intellectual refinements, and dwelling much on names and forms, it is by no means unimportant." Prior to that, on January 12, 1905, Secretary Taft, when commenting on the question of Canal Zone jurisdiction to President Theodore Roosevelt, stated: "The truth is that while we have all the attributes of sovereignty necessary in the construction, maintenance, and protection of the canal, the very form in which these attributes are conferred in the treaty seems to preserve the titular sovereignty over the Canal Zone in the Republic of Panama, and as we have conceded to us complete judicial and public power and control over the zone and the two ports at the end of the canal. I can see no reason for creating a resentment on the part of the people of the Isthmus by quarreling over that which is dear to them but which to us is of no real moment whatever." This is not the last significant statement by Mr. Taft on this matter. On February 9. 1909, in an address delivered in New Orleans when he was Presidentelect, he said: "If the Hay-Herran Treaty of 1903 had been confirmed by the Colombian Senate, a failure to do which aroused our national indignation, we would not have been at all in the favorable position we are now to complete the canal. "Because under the treaty with Panama, we are entitled to exercise all the sovereignty and all of the rights of sovereignty that we would exercise if we were sovereign, and Panama excluded from exercising any rights to the contrary of those conceded to us. Now that may be a ticklish argument. but I do not care whet her it is or not. We are there. We have the right to govern that strip, and we are going to govern it." Now, Madam Chairman. these forthright words of Mr. Taft, who was associated with the Panama Canal in responsible capacity longer than any other high U.S. official, should still the clamor of those who have been quoting him out of context. 11u1 Mr. Taft was ot the last high official to speak out vigorously on Canal Zone sovereignty questions. On December 15, 1923. Secretary of State Hithcs.

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ISTIMIAN CANAL POLICY QUESTIONS 139 in a conversation with Dr. Ricardo J. Alfaro, their Alillister of IPaiiaina to the United States, declared with a refreshing degree of ca i"dor Ihat the U.S. ; overlment "would never recede from the position which it had taken in tle 11o0e of Secretary Hay in 1904. To this le added: "This Government could lnot Ilil would not enter into any discussion affecting its full right to de.t I wit i t Ih. Can al I Zone under article III of the treaty of 1903 as if ii were sovereign of tilit Canal Zone and to the entire exclusion of any sovereign riIghts or authority on tle pa rt of Panama." Moreover, Secretary Hughes declared: "It wvas anii absolute fin ility ftIor lhe Panamanian Governiienit to expet aiy Aniericii IiIIuiiliisti.,itioli. 1t0 mair what it was, any President or Secretary of State, ever to sltirelnder al *v partl of these rights which the United States had acquired tinder tile Ireaty of 1911." In view of all the facts, AH11d1 Ci t. 1he i test cose th;it a I 1e iii a e fill. Panama's claim of sovereignty over the C 1 anal Zonte is that of a reverse ion r r character in the sole event of the tIinitedI States ceasingi to Itiaint;iw ali operate the canal. Should hiti over occuir. the llitel St a ites would robtly tffcr ut objection to reassumption by Panulat of sovereign control of the t'anat Zot e. Meanwhile, to encourage Panamianians to think that titular s overeigitv is something that it is not. i" l:ckilnl in ortthrilhiess all country to tlle T interests of the United St a tes. DIPLOMIATIC DIKE iS 'N ThI eomipletioi of te Pl1iitiia 'ail \witi ill t lie nost a lid tilli et ilnaltes ali its successful in illtenal ce anld operation siiice open iii to traiil i iii 1914 foriln on1e of the most brilliault chapters of tlie neitedi tates listory. Voriuler Pr esident Theodore Roosevelt Al way s coisiderI th of ali imIipor't :uice conipa ra ble t4 the Louisiana 'i Ilrl ha se. Ie a nid ItIher it tesnimen who co n rib hiuted to Ihe sUccess of the enterprise ha tI every rea so JI he 1)r )1tit of their achievelmient. For mntty years the proiet ent ahir old hI li'oce of its iJ ial imipietu. The gi8 lits of the eariy ycze8rs i4 Va du il ly I a ssed frtit the scei ie ait11 the coi iduct If our isthtiian police's fIll into le's cai.Iie hai d.s. Even so, it required he impact of the great diepressi ion of 1929-12 a nil Ihe C'iim revftlution of 19:8 to start a chain of events at Panama that are still in inot ion. Iin this connection. it should be recalled thai Intil i the abrogaation of i the 19litt amendment of the Cubti Constittilion. iy trea ty oin May :1. 1984. fIollOwiia a period of violence ini Cba. tlie 1 iiited States hd 1)(he right to intervenie for tite "preservation of Chilm indepenelnce. tlie nia it etnan1it Ie of I vermiliet adI qua te for the protectioil of life, pro ertlv. a11i indtIiviiitial liberty. It was after this policy of abaiidoniiimirt in ('nba tht the Hlull-Alfaro Treaty of 1936 between Panania aid the United States was negotiated. Its first article abrogated artile I of the 1909 1ly-Buiau-arilia Treaty. by wlit hte I litel States had undertaken to rtilee .ii1ci t 1 niiilit in the inIidep endence of the lNpublic of Panama-a provisit 'n inc in' led ill tlit Pani.amii a 'Conistirittti i anid kilown to Panamanians as the Platt amendment of PIanama. This treat w as tl irs't breach ill the juridical foull(ltioll fo rlie Panld la l ( I lter'l'1 Other surrellders ill ithe 19:"l; treaty i ll ide loss oil ille pa t f lie I 'nitcid States of important soverviit powers a;td ri-lits effect i ng the Pllwiiwain caiiazi especially that of emiiltenitlaii witlin he Republic of P a nia. all withioit ;tdeqna Ite comiipelt;I tiOnu to 1le Inited Sr ates. wbhi d bornt all osTs of t structiol. sanitat ioin. anti tecfe rse. IiH tile rosioln ditI nIot stop thlre. Aftor prolotiged secret nle'otiiltions stzirted iii 1953, the prot-c was flrtlie r aIvanceI in the Eiseihower-Remnon Treaty of 1955. While in m1 iw ab ridingi ii the sovereign11 authority of the I ilt eI Stares Iver tile C:)1'anal ZIAn1i aid Plainamtral Canal grated ii articls 11 111d Ill of tiii 190.3 treaty. tit' 1955 rcat wcint Tniicii furt her in its surrenders r han tle 1936 treaty. The 1955 treaty, which was ratifiel wiithuIt adequate debate '. gIxvt ty ;id ditiotia l rights and properties of ilie I'nited Stat es aniid inc rec:1 t1 111nuity front $4:0,000 allowed il the 1!9;;6 1 reaty to "s-1,910,000. Ai it4 llwt re-ret table fea tures was surrend or to IP;ia tint, witiloit proper iii\e ti ati' '1 ali without authorizait-ion by Conglr-t's of valuabta iaia a ila re ti e ili the citie of Pa '1ama and 'Ilo, inicludI iing tihe I e ait urinal fre ittr tit passenger '41ations in tlhose oit lis, valued not Isrhan 524 iili. Not only that. the 1955 reamy even 0ontcm (tl ted the 8b'ndoiii't of 0hi ri rola itself. Fortunately, the 1'onge sis intervened ai td prrventei tile liqutnl tion of Ih; vital railro.ttl. Bit itaction Wis tt' :ite to 'aive Ilte ttrilitiI y;11i 1 a 1 p 6;7-8436 -1i

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140 ISTHMIAN CANAL POLICY QUESTIONS senger stations. Now, because there was no treaty requirement for their replacement by Panama, we are going to have a transisthmian railroad without its originally designed and adequate terminal stations and yards. Can you imagine, Madam Chairman, anything more absurd, or more ominous for the future conduct of our isthmian policies? To say the least, our treaty power was grossly derelict, not only of U.S. interests, but also of the treaty rights of Colombia in the Panama Railroad. Why is it that our Government failed to have competent negotiators? We had the men of proper qualifications and experience in the United States. Why did we not use them? The overall results of our sustained surrenders at Panama have been withdrawal of U.S. activities to the Canal Zone and serious impairment of them within the Canal Zone. The costs involved will have to be borne by American taxpayers, Canal Zone residents, the Panamanian masses, and interoceanic commerce that has to pay tolls. But even more important, we have given away our bargaining powers for dealing with Panama. The results of these diplomatic failures are not accidental, but are part of a calculated plan. This was revealed by Ambassador Ricardo M. Arias of Panama in a major political address on April 29, 1958, at the Edmund A. Walsh School of Foreign Service of Georgetown University, which was featured by hostile propaganda against the United States. Among his revelations was this significant statement: "The foreign policy of my country during the last 50 years has been to exert every effort in order to obtain at least for Panama conditions similar to those granted by the United States to Colombia in January 1903." This pronouncement of Panamanian policy, Madam Chairman, should not be taken lightly, but as a serious warning. Its objectives are rescission of the perpetuity and sovereignty provisions of the 1903 treaty, early establishment of dual sovereignty over the Canal Zone, and finally nationalization of the Panama Canal. It is no wonder that many North Americans have become disturbed about the Panama Canal and wish to know how the present turmoil and uncertainty were ever allowed to develop. PANAMA CANAL ZONE NOT AN OCCUPIED TERRITORY World War II commenced in September 1939, which was shortly after the 1936 treaty was finally ratified by the U.S. Senate. In preparation for possible involvement, the United States had to obtain sites for defense installations in the Republic of Panama, all necessary for protection of the Panama Canal. Because of the loss of the right of eminent domain in the Republic of Panama, the United States was denied that method for securing bases and had to obtain them through diplomatic channels, amidst mounting difficulties and exhorbitant demands for rentals. It was not until May 18, 1942, that a defense sites agreement was at last signed. After the war, anti-American clamor erupted, with unanimous demand by the Panama National Assembly for evacuation of all sites. The President of Panama also was quoted as demanding that the 1936 treaty be made "more effective in terms of benefits for Panama." All of this agitation led to negotiations between Panama and the United States for a defense base treaty. On December 9, 1947, Foreign Minister Ricardo J. Alfaro of Panama resigned in protest against his government's agreeing to extend the leases on the most important bases still held by the United States. Following this lead, the Panama National Assembly, surrounded by anti-American mobs, threatening to lynch any member who voted for leasing the bases to the United States, unanimously rejected the treaty. The United States had no legal recourse except to evacuate all military bases in the Republic. It is but fair to state at this point, however, that the mobdictated action of the Panama National Assembly was counter to the wishes of many thoughful Panamanians, who recognized that the higher interests of their country required approval of that treaty and not its rejection. It was in the midst of the defense base agitations in Panama that another more threatening event occurred in Washington. In November 1946, the State Department, following a furious Soviet attack in the U.N. on the United States, charging that American defense bases around the world were evidence of aggression, sent to the U.N. a report of bases listing the Canal Zone as one of the U.S. occupied territories.

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ISTHMIAN CANAL POLICY QUESTIONS 141 Is there any wonder, Madam Chairman, after our own Stare Department classed one of the most vitally important constitutionally acquired domains of the United States as an "occupied territory" that we should have trouble in defending the legal status of the Canal Zone as a grant in perpetuity? In view of its juridical history, it would be just (Is logical to list Alaska or the Gadsden Purchase as "occupied territories." Certainly, there could be no such turning back of the clock of history. IMPACT OF NATIONALIZATION OF SUEZ CANAL AT PANAMA Despite the generous treatment afforded Panama in the 1955 treaty already discussed, events having a great impact on the isthmus did not stop. On July 21-22, 1956, Presidents of the American nations met at Panama City in the Republic of Panama, attracting world attention to the great canal project on which the economic well-being of Panama largely depends. While public interest was thus focused toward the West, events of far greater significance were in making in the Near East. Four days later, on July 26, Egypt nationalized the Suez Canal. Officially endorsed by the Government of Panama, this seizure of the Suez Canal started a chain of events affecting the Panama Canal, which accelerated trends already evident. Nationalization thus became the battle cry of radical elements in Panama, especially by students at the Panama University, where, backed by Communist influence, they proudly displayed a large sign: "The canal is ours." Foreseeing the pending dangers and realizing the imperative need for a congressional reaffirmation on our Isthmian Canal policy, on June 27, 1957, I introduced a resolution to that effect (H. Con. Res. 205, 85th Cong.). In the light of subsequent developments, it is indeed unfortunate that no action was taken on it. This failure was interpreted on the isthmus as lack of leadership and psychological weakness. It served to encourage radical agitators to continue their course. In a carefully organized raid into the Canal Zone on May 2, 1958, called Operation Sovereignty, Panamanian University students planted 72 Panamanian flags at places of prominence, including one in front of the Canal Zone administration building-an eventuality that I had foreseen and had sought to prevent by sending timely warning to proper officials. Though this highly provocative incident was witnessed by Panama Canal authorities, the trespassers were not interfered with by Canal Zone police and were allowed to leave the zone without obstruction. This 1958 flag-planting mob invasion of the Canal Zone, Madam Chairman, was not a simple student prank as some of our officials tried to explain, but a calculated move in worldwide psychological warfare of Communist form against the United States. It received extensive coverage in Latin America, and also in the Soviet press, further emboldening Panamanian agitators to plan new measures of mob violence. It is, indeed, significant that in this same month of May 1958, that the Vice President of the United States, and his wife, during the latter part of his visit of good will to Latin America, were subjected to the grossest forms of indignity, also perpetrated by students of Peruvian and Venezuelan universities, with the ruthless skill of the trained leadership so characteristic of the Red pattern. It is extremely pertinent to state at this juncture that had the United States in the 1936 treaty not abandoned its 1903 treaty obligations for the maintenance of public order in the cities of Panama and Colon, the May 2, 1958, mob invasion would have been unthinkable. As it was, the wolves of disorder had tasted blood. Subsequent to these grave disturbances, Dr. Milton Eisenhower, brother of the President and president of Johns Hopkins University, visited the isthmus as a special representative of the U.S. Government. What useful purpose his visit served is not clear, but we shall hear of him later. CONGRESS FAILS TO REASSERT U.S. ISTHMIAN POLICY The situation on the isthmus, meantime, did not stabilize. In a Panamanian enactment signed by President Ernesto de la Guardia, Jr., on December 18, 195S. Panama, by unilateral action, attempted to extend its territorial bound ries by sea from the internationally recognized 3-mile limit to a 12-mile limit. This extended area completely encircled the Canal Zone and, in fact, was aimed at

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142 ISTHMIAN CANAL POLICY QUESTIONS making the Panama Canal another Berlin. Because I so described it in an address to the House of Representatives of the United States, I was formally declared by the National Assembly of Panama as "Panama's No. 1 gratuitous enemy." Here I wish to assert again that I am not an enemy of Panama and that, if Panama has any enemy No. 1, he is among its own radicals, demagogs. and revolutionaries who seem willing to bring their country to the brink of ruin in orderr to enhance their own political fortunes. In a note to Panama delivered on January 7, 1959, the United States refused to recognize the Panamanian claim for wider territorial seas. In addition to the technical objections raised by the State Department to the attempted extension. I would say that it is a clear violation of the sovereignty provisions in articles II and III of the 1903 Hay-Bunau-Varilla Treaty, which because of their basie importance T shall quote in part for ready availability: "ARTICLE II "The Republic of Panama grants to the United States in perpetuity the use. occupation, and control of a zone of land and land under water for the construction, maintenance, operation, sanitation, and protection of said canal to the width of 10 miles extending to the distance of 5 miles on each side of the centerline of the route of the canal to be constructed; the said zone beginning in the Caribbean Sea 3 marine miles from mean low water mark and extending to and across the Isthmus of Panama into the Pacific Ocean to a distance of 3 marine miles from mean low water with the proviso that the cities of Panama and Colon and the harbors adjacent to said cities * shall not be included within this grant. * "ARTICLE III "The Republic of Panama grants to the United States all the rights, power, and authority within the zone mentioned and described in article II * which the United States would possess and exercise if it were sovereign of the territory * to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power, or authority." It is well here to point out that in 1903, when the Hay-Bunau-Varilla Treaty was ratified by Panama, the limits of the territorial waters of the Republic and Canal Zone were coterminus. No subsequent agreement has changed these limits. Any change in them would necessarily apply to the Canal Zone as well as to the Republic. The Department of State acted wisely in refusing to recognize the Panamanian claim for which action it deserves to be commended. On the same day on which the U.S. note was delivered to Panama, January 9. 1959. I again introduced a concurrent resolution to reaffirm our Isthmanian Canal policy. (H. Con. Res. 38, 86th Cong.) A concurrent resolution, it should be stressed. does not require Executive approval, but is an expression of the sense and judgment of the Congress. Despite this fact, the cognizant committee referred it to the executive department for consideration and recommendation. Of course, Madam Chairman under the prevailing attitude of appeasement here, appeasement there, and appeasement everywhere, the response was negative and the Congress was not given an opportunity to vote on a measure to declare its own sense and judgment concerning this crucial question. Thus, radicals in Panama had the way cleared for further advancement of their plans in a situation which could only end in tragedy for all concerned. PANAMA RADICALS CREATE SERIOUS INCIDENTS Meanwhile, in the Republic of Cuba. the great island country on the northern flank of the Atlantic approaches to the Panama Canal. a revolution was nearing the end. Its recognized government was overthrown by a radical group headed by Fidel Castro. His administration. now revealed as Communist slanted, has engaged in the process of liquidation of its enemies by firing squads and extensive confiscation of American property by expropriation. With international comnnunism previously entrenched in Venezuela on the southern flank, the conquest of Cuba through subversion saw both flanks of the Atlantic approaches to the Panama area controlled by alien revolutionary systems, which now are converging toward the canal itself.

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ISTHMIAN CANAL POLICY QUESTIONS I Th Thus, it is not strange. Aladaim Cha irma In. 1ha a ly a y' r a 1'r ie. 111.5 Paamimanian flag-planting mob invasion of the Canal Zone, on April *I. 1 0, armed mercenaries from Cuba. in collaboration with ralical elements il Pa iu oi. invaded that Republic. One part of their plan was to make token t I (iI of the Canal Zone: another to overthrow the co1nst it (d, al navir i ii I r ident de la Guardia. But underlying all was tie itimnaite ohjec ivy o: divi the United States from its co ntrol of the Panamia Canal. The landing of the invaders threw political leaders and the upper cia Panamanians into hysteria and infusion. The inan in the Fortunately. the attempted invatsion proved a bortive, with the inuva lers stirrendering to Panamanian authorities after intervention by the Organizal ion of American states and the Iited States. But they were released wilh protically no punishment. Will there be more invasions of the American Istlilns The indications are that there will. Who were those invaders is a quest in frequently asked. The best answer i, that query was supplied by President de la Gluardia himself who, after the invasion, stated : "That was not just a group of adventurers from our country or even fr, 4 Cuba. These people were mostly Cubans. but directed and led by militant 0omimunists. Their ambition is the long-stated one of taking over the Panaim Canal." Nothing, Madam Chairman. could be more positive and clear cut timan this statement by one in a position to know. Moreover, President de la Guardia* opinion is supported by overwhelming evidence. The formation of Comu mmistoriented governments in the Caribbean on both flanks of the lPanama Canal t;)proaches and recent attempts to invade several 14hmian countries constit ute serious threats. not only to the United States, but also to all the Americas. As such, they are clear violations of the Monroe Doctrine. Unfortunately. the moves in the conquest of Latin American countries thron-A infiltration and subversion have been made vith such skillful secrecy as to lv guile our people with a false sense of security. But they should no longer taken by surprise by seemingly sudden invasions, disorders, and extreme nationalistic agitations. Mr. Allen W. Dulles. Director of Central Intelligence, recently stated: "'Nationalism'-as a slogan for the breaking of lhe ties of friendship between US and the countries of this hemisphere wxas the ]ine given the Latin Amnericana Communist leaders who attended the 21st Party Congress in Moscov last February (1959). Details for the execution of this policy were then outlined to these leaders and somle of the fruits of this planning cIl be seen today in Pan ma. Cuba, and elsewhere in this hemisphere." By the time the impact of the April 26. 1959 Cuban invasion of the isthmus was over, the stage was being set for the next move. This was to be a "peaceful occupation" of the Canal Zone by Panamanian mobs on November 3, 1959-th0 56th anniversary of Palama's independence from Colombia. The leaders for this were Aquilino Boyd, a former Minister of Foreign Affairs of Panama and then a candidate for President, also Ernesto J. Castillero. They published their plans. Thus, it is not remarkable that it was possible for me to address the House of Representatives on July 29, 1959, warning against exactly what was to occur, also again to notify proper executive authorities of the pending danger. Yet these various and most grave incidents, threats and warnings seem to ha vc made no impact on the minds and consciences of those in positions of respomsibility in the executive epartments or even in the Congress itself. NoVEBt 3 A\ 2S. 1959 Independence Day celebration in I'anamna started normally. with President de [I Guardia. the officers of his government. and the diplomatic corps attending colorful ceremonies in and near the historic Panama Cathedral. In the .suburbs of the city. all was quiet, but alongside the Panama-Canal Zone border at the Pacific end of the canal, radical demonstrators were gathering in defiance of what the Iaianianian governmentt had advised.

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144 ISTHMIAN CANAL POLICY QUESTIONS Canal Zones authorities had taken precautions against the entrance of unruly groups into the Canal Zone, with police and firemen ready for eventualities. A demonstrator made a grab for the pistol of a Canal Zone policeman, who plucked him from a marching group, and the worst boundary violence in isthmian history was immediately underway. Pummeled with rocks and insulted with profane and obscene epithets, Canal Zone police used remarkable restraint in repelling the assault. But they and firemen alone were not strong enough to withstand the attack, which forced the Governor of the Canal Zone to call upon the U.S. Army to take over the task of protection against the mob. Frustrated in their designs, the mob then turned upon American property in Panama. They burned a Panama Railroad passenger car in the railroad terminal, looted stores, and, with Aquilino Boyd among them, stormed the U.S. Embassy where they tore the American flag from the Embassy mast, ripped it to pieces, and hoisted the Panamanian flag. Lesser disturbances occurred at the Atlantic end of the canal. It is indeed regrettable that the Panama National Guard did not make timely attempts to maintain order on that fateful day. It was later learned that it received orders not to appear. Further details of these disorders are not needed for presentation here, for they are covered comprehensively in the papers of Panama. They were generally ignored in the press of the United States, which has long maintained a near blackout of important news from the isthmus. Did the U.S. administration issue a prompt and courageous statement backing up Canal Zone authorities to the hilt and warning that further efforts to invade the zone would be repelled by force if Panamanian authorities were unable or unwilling to hold radicals and their Communist monitors in check? It did not. Instead, the President, at his news conference of November 4, minimized the disorders as "really only an incident" and later sent a diplomatic emissary to Panama to appease those stirring up the trouble. Is there any wonder that the Panama National Assembly, by resolution on November 5, condemned Canal Zone authorities and vowed "not to rest until the Panama flag is raised on our territory on the Canal Zone." Finally, on November 28, Panamanian mobs attempted to invade the Canal Zone a second time. On this occasion, the U.S. Army initially repelled the invaders until, at U.S. Army request, it was joined in restoring order by the Panama National Guard. The Panamanian forces won prompt public commendation from U.S. Government officials who had not seen fit to commend American authorities. Now, Madam Chairman, while standing before this splendid body and speaking from a knowledge gleaned from the press of Panama, both English and Spanish, as well as from an extensive correspondence with witnesses, I wish to express my high admiration of the manner in which Canal Zone authorities, both civil and military, stood their ground during these crucial tests, especially the members of the Canal Zone Police and Fire Departments and the soldiers of the Army. They fought with their backs to the wall and measured up to the highest traditions of patriotism and service, also with the restraint and forbearance that comes with responsibility and power. Pummeled with rocks and insulted with profane and obscene epithets, Canal Zone police used remarkable restraint in repelling the assault. But they and the firemen alone were not strong enough to withstand the attack, which forced the Governor of the Canal Zone to call upon the U.S. Army to take over the task of protection against the mob. Frustrated in their designs, the mob then turned upon American property in Panama. They burned a Panama Railroad passenger car in the railroad terminal, looted stores, and, with Aquilino Boyd among them, stormed the U.S. Embassy, where they tore the American flag from the Embassy mast, ripped it to pieces, and hoisted the Panamanian flag. Lesser disturbances occurred at the Atlantic end of the canal. It is indeed regrettable that the Panama National Guard did not make timely attempts to maintain order on that fateful day. It was later learned that it had received orders not to appear. Further details of these disorders are not needed for presentation here, for they are covered comprehensively in the papers of Panama. They were generally ignored in the press of the United States, which has long maintained a near blackout of important news from the isthmus.

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ISTHMIAN CANAL POLICY QUESTIONS 145 Did the U.S. administration issue a prompt and coura ous statement backing up Canal Zone authorities to the hilt and warning that either efforts to invade the zone would be repelled by force if Paianianian auithorities were unable or unwilling to hold radicals and their Coiinmit ioit ors iii cek? It did not. Instead, the President. at his news conference of November 4, mi!iriized ihe disorders as "really only an incident" and later >ont a diplo1ati eLuissar to Panama to appease those stirring up the trouble. Is there aiiy wo Iiir ihat the Panama National Assembly, by resolution on November 5, co-wed C 'anal Zone authorities and vowed "not to rest until the Paiama flag is raised on our territory on the Canal Zone." Finally, on November 28, Panamanian mobs attempted to ilvade the Canal Zone a second time. On this occasion the U.S. Army initially repelled the invaders until, at U.S. Army request, it was joined in re-toring order by the Pamana National Guard. The Panamanian forces won prompt public condemnation from U.S. Government officials who had not seen tit to commend American authoriti-'. Now, Madam Chairman, while standing before th2 splendid body and speaking from a knowledge gleaned from the press of Panama, bo h Enllish and Spanish, as well as from an extensive correspondeiir'e with witness I wish to express my high admiration of the manner in which Canal Zone authorities, both civil and military, stood their ground during these crucial -to-s, especially the members of the Canal Zone Police and Fire Departments and the soldiers of the Army. They fought with their backs to the wall and measured up to the highest traditions of patriotism and service, also with the restraint and forbearance that comes with responsibility and power. TITULAR SOVEREIGNTY AND THE PANAMA FLAG Meanwhile, amid a tremendous buildup in the Panama press, a State Department emissary arrived on the isthmus for a series of conferences. What special qualifications he had for such a mission are not shown by his record. But after 3 days of discussions, on November 24, he asserted that the United States "reiterated U.S. recognition, stated more than 50 years ago. of Panamia's titular sovereignty over the Canal Zone," which was not acceptable to Panamawnian d<-.ma)n Canal Zone residents were shocked by the implied surrender f Ameri,an sovereign rights without the authorization of the Congress. And, I should add, this emissary was acting under orders of the Secretary of State. Of special interest, Madam Chairman, were sonie unexpected reveortions that events on the isthmus at this time were to stimulate. One was that on November 3, 1959, Panama was expecting a declaration by the Uniu d StaLackiiowledging Panamanian sovereignty over the Canal Zone and that this expectation was based on conversations of the Minister of Finm-e, Fermndi ILb-ta, willh Dr. Milton Eisenhower on September 13, 1158, at Dr. Eisenhower's home in Baltimore. So startling was this disclosure that the State Department -j-as apparetly constrained to issue what seemed to be a formal denial that ')r. Ei-enlhower had made "any statement which could be con-trued to commit the U.S. Government to any course of action." Such an assertion was not a forthright denial of the statement attributed to the brother of the President, but a cleverly worded phrasing that is definitely misleading. Of course, the United States cannot be bound by the statement of a private citizen, even though he is the brother of the President. Nor, may I say, can any official of our Government abrogate, surrender. or annul the solemn obligations of our treaties with other nations. That, under our Constitution, can be done only by means of new treaty provisions promulgated by and with the advice and consent of the U.S. Senate. Otherwise, chaos would follow. Thus, a controversy over what the President's brother said has added so much fuel to the flames of the ugly situation in Panama that nothing short of open declaration on the subject of sovereignty will meet the situation presented. Because the State Department has made such a complete fiasco over many years on this matter, this question is raised: What are the influences that have been controlling, and still seem to be controlling, the State Department's actions? Regardless of what the intentions may have been, they give aid and comfort to the avowed enemies of the United States, and. indeed, of the entire free world, at a most critical hour, and render our country's ta-k of maintaining this great

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146 ISTHiMIAN CANAL POLICY QUESTIONS ;at erwa -(or the shipping of all la nd, a nd the defense of each and every country of the eslern Hemisphere more difficult. What silore could be accomplished by open. h;1d. and -hamelvss treason than has thus been done' We have comipetelit, couragcoiis, and well-iformied men 1nid women on isthmiani questions in this country. Why is it that sm-h exceptional persons are not used for such exceptional situations instead of relying on routine underlings and anonymous advisers? Surrenders can only lead to further extortions. Why do we not lea rn this lesson of history? A after the ntoj'tu tate "titular sovereignty" statement of the diplomatic emissary. wAhich rraees back to an eC(l]11y unfortunate statement by Secretary Taft in 9i'. that iis-aly Iiloted out of context. the point chosen for special emphazi' by Panintniian publicists was not "titular sovereignty.*' but "sovereignty." for which :,i:tus the Panamanian flag would be the symbol. They have emphasized that raising the flag vould be only the first step in a movement that would include appointments as judges. postmasters, customs inspectors, and police. and. in fact. the control of all civil activities with eventual jurisdiction ov r all a al Zone territory, followed by nationalization of the canal itself. Because of the importance that the first hoisting of the first Panama flag would have, they urge the flag raising be made a notable occasion, with the President of Panama hoisting it, and an Under Secretary of State of the United States dignifying the ceremony with his presence and partir ipation. iina ine. Madam Chairman, the feelings among well-informed, capable residents of the Canal Zone when they read how the President of the United States, at his December 2. 1959, news conference, stated that the United States had recoginized the "titular sovereignty" of Panama over the Canal Zone for 50 years mad that he believed that "we should have visual evidence that Panama does have tinilar 'ereignty over the region." Is it strange that the Spanish language press of Palan.a which is used as a weapon of warfare against the United States, promptly boasted that the disorders of November 3 and 28 have at last made the Governimft of our Nation sit up and take notice? Certainly not. An-rians in the Canal Zone. of course, became profoundly concerned, for they know the implications of any such surrender. As patriotic citizens, they felt bound to organize committees to keep the U.S. flag flying with undiminished stature and for U.S. retention of the Panama Canal. They have circularized the Congress. high U.S. officials, and the press, distributed pertinent news clippings. and written many illuminating letters to important leaders., all in protest o what they consider could become the biggest steal in the 20th century. ('an you imagine. Madam Chairman. the picture of American citizens resident on a F.S. Government reservation that is part of the constitutionally acquired domain of the United States being forced to organize and fight to keep the American flag flying and against a pending loss of jurisdiction of the Canal Zone? Certainly we have made ourselves the laughing stock of the world. Our leaders. in their public utterances. have strayed far away from the historic policy of exclusive U.S. control stressed by American statesmen, starting with President Grant in 1881, when he commended "an American canal, on American soil. to the American people." Now, Madam Chairman and Daughters of the American Revolution, make no mistake about it, the day that the Panama flag is formally hoisted in the Canal Zone marks the beginning of the end of exclusive U. S. control over the Panama Canal. To prevent that I introduced another resolution declaring that the official display of any flag over the Canal Zone other than that of the United States as violative by law, treaty, international usage. and our historic canal policy (H. Con. Res. 450. 86th Cong.). What the official display of the Panama flag over the Canal Zone would mean for the Panama Canal and world commerce, every realistic student of the subject, every experienced Panama Canal employee, and every thoughtful member of the Armed Forces on the isthmus knows. To say the least. it would be the climax of one of the most disgraceful chapters in the U.S. diplomatic history. It i,, appropriate at this point, Madam Chairman, that I should express the fullest admiration for the vitally important work of the U.S. civil employees on the isthmus who, taking their careers in their hands, have courageously endeavored to alert the Congress and the Nation to the true situation at Panama. If for -nch partiotic services any element in our Government decided to engage in official reprisals, those of us in the Congress who are familiar with canal problem. will he glad to have full information.

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ISTHMIAN CANAL POLICY QUESTIONS 47 INTERNATIONALIZATION OR REG lIONALIZATION? Nationalization by Panama is not the real issue. l' hderlying agila:ion, fPr it are demands by powerful groups. including high political personali* ies in 1h United States. for internationalization under the U*.N. or other international authority. It is significant, Madam Chairman, thot one of those who has pokei out for such internationalization is an asi ram for the Presidency of tit Ulnited States. Moreover, he has recently come out for annulment of the 14ti Connilly reservation to the United Nations World Court resolution. This reservation provided that the United States would not accept compulor' jurisdiction of the International Court of Jusic "oIll In atters which ar e'senially within the domestic jurisdiction of the Vinited States as determ1ined by the United States. If the Connally reservation shoubl ever be rovkael and he un'i1 hiii of the U.N. International Court of JUstice thereby ext ended witlii mt hliiT Panama would be in a position to hail the Illited States Kforc Ihai tribunal, to which a distinguished Panamanian jurist has just been added as a member. Then Panama could demand that all the Panama Canal treaties be revised according to the latest Panamanian desir.>. This. Madam ('hairman is a real danger to w-hicih all Americans sold b4 a len i' before it makes forlier headway. The latest proposal for the Panama Canal is its nmltilareraliza throdi regionalization under the aegis of the or-a nization of Ainrhan States. I wvhich body. by the way. Fidel Castro. if Cuba. is a member. Reimmended by three professors in the department of politic al science of Northwestern 1.Iversity, their views reflect scant knowledge and little underslandinz of the actual problems involved in the maintenance and operation of the gr'a waterway. These so-called experts. lacking any practical knowledge of the conditions involved. have accomplished no More than r(, add some new terms ti the already overburdened bureaucratic jargon on the subject. and Tn make confusion worse confounded. Panama itself. it should be especially noted. does not wish either intern: tIn n;1ization or regionalization for it is far en 'ier to deal with one nation than vith some 82 countries in the U.N. or with 20 other nations in the ()AS. Nor is It likely that the larger nations of Latin America would permit PanmUna to nari mize the Panama Canal. which means that the recent agitations and mob violence in Panama have played into the hands of those whose aim is to place the Pana ma Canal under international control. At this point. Madam Chairman. I wish to urge thoughtful leader of PaiiaiMa. who understand this situation well, to do their utmost to still the irresponsible agitations within their midst. They recall the facts of their history anl should take them into account. They know that Panama grew out of the Panama Canal undertaking and not the canal out of Panama. They realize that the cream sources of their income are from the United States,. and that were those disrupted all of Panama would suffer and even the independence of Panama mih': be lvorthrovn. Moreover. should the United States ever withdraw from the isthmimi-. the flag that would ultimately fly over the Canal Zone would not be that of Panama. but that of an international organization or of Colombia. One angle of Isthmian history that few Panamanians or North Americans know is that the idea of internationalization is not new. It goes back to the Russian Revolution of 1917. when the Red Guard in Perrograd discussed it with John Reed. notorious North American Communist newspaper reporter. It is still t he objective of Communist monitors that underlies much of the forrtti n r nationalization. for should the internationalization of the Panama Canal be brought about by an indirect process. that would serve as a pre-edeon fr intrnationalization of the Suez Canal and the Dardanelles. Cowrol Of th, lzit ha been a principal objective of Russia for centuries. PANAMA CANAL NOT A PANAMANIAN RELIEF AGENCY In the past few years. Madam Chairman. U.S. leadership in Panama polnv matters has failed. Much time has been lost and we have given away oir bargaining power to a country that has tragically defaulted on its pr:w ttv obligations to maintain order in the terminal cities of Panama and C do Wht should be done?

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148 ISTHMIAN CANAL POLICY QUESTIONS Basic to proper action is an understanding of the mission of the Panama Canal. It is an interoceanic public utility operated and maintained by the United States pursuant to treaty as a mandate for civilization. Moreover, it forms a part of the coastline of the United States. As such, Panama Canal operations must not be confused and weakened through ill-advised policies of placation, for it is not a local enterprise for local political exploitation. Instead, it is one required by law, pursuant to treaty, to be selfsustaining with tolls that are "just and equitable" for the transit of vessels of all nations on terms of equality. For many years the foreign policy of Panama has been fixed by mobs, with the Panamanian Government in general forced to accept mob dictation. The United States, in its dealings with Panama. instead of leading from the strength of an impregnable legal position with policies derived from reason and logic, has merely reacted to mob-instigated policies of Panama with surrender after surrender. This process, Madam Chairman, must stop and stop now, for the Panama Canal is not a Panamanian relief agency, but a business activity operated for the economic transit of vessels and for no other purpose. Its management, reorganized in 1951 on a self-sustaining basis, pursuant to law, is an important treaty responsibility of the United States that must not be violated by any country or interest. Some of the 1955 treaty provisions violated sound business principles, notably the additional $1,500,000 annuity, which violation the Congress partially corrected by transferring budgetary supervision for it from the Panama Canal Company to the Department of State, which was responsible for its perpetration. The current attempts to force Panama Canal purchases in the Republic of Panama may well become the cause of other violations of the act of 1950, for it is inevitable that prices in Panama will be raised and, as a precedent, might be used to require all U.S. purchases abroad at exorbitant prices. Though the geographical location of the Republic of Panama places it in a favored position to do business with the Panama Canal enterprise and other U.S. Government agencies in the Canal Zone, this must rest on sound business practices. Otherwise, the possibilities for evil are great, among them the question of tolls and the cost of servicing vessels at Canal Zone ports. The businesslike operation of the Panama Canal enterprise is one thing; relief for the Republic of Panama is another. The two must never be confused, and the Panama Canal must never be allowed to degenerate into a relief agency for the Republic of Panama. PANAMA CANAL: SYMBOL OF FOURTH FRONT In our concern, Madam Chairman, about the status of the Panama Canal, we cannot view it as an isolated question, but as one directly related to events elsewhere. For many months, the nations of this hemisphere have watched the steadily rising Red tide in various parts of Latin America, especially among the countries of the Caribbean. It is indeed significant that the campaign of the communistically controlled press in Cuba to end the "Yankee occupation" of our Guantanamo Naval Base and of the U.S.-educated, but Yankee-hating Chief Minister of Trinidad to take over our Chagaramus Naval Base on that island, have coincided with the Panamanian campaign of violence to gain "sovereignty" over the Canal Zone. Prior to World War II, the great fear of the nations most likely to be involved was that of a two-front war-East and West. As to that danger, the United States was protected by two ocean barriers, patrolled by the Atlantic and Pacific fleets with provisions for a quick shifting of forces between the oceans by means of the Panama Canal. Since World War II, that strategic setup has changed radically, incident to the advent of powerful aircraft, nuclear submarines, ballistic missiles, and other modern weapons. The protective barriers once afforded by the vast exInanses of the Atlantic and Pacific Oceans and the icy wastes of the Arctic have in substantial degree been overcome, making them avenues for attacking the I united States from three directions. To provide defenses on these three fronts, the Congress has appropriated billions. While thus preoccupied, what has happened in our backyard to the south? In the vital area of the Caribbean, the forces behind the world revolutionary movement have focused on countries there with oft-repeated aim of bringing about the destruction of the United States and our system of constitutional lib

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ISTHMIAN CANAL POLICY QUESTIONS 149 erty. Encouraged by the formation of communistically oriented governments in Cuba and other western hemisphere countries, these forces, recognizing the Panama Canal as the strategic center of the Americas, have concentrated on the Isthmus of Panama. In this light, Madam Chairman, the Panama Canal has become the principal target and symbol of a fourth front in a situation comparable to that which, in 1823, was faced by President Monroe when he proclaimed the Monroe Doctrine. The time has certainly come to extend that doctrine to guard again against the intervention of international communism by means of penetration and subversion. To that end, the United States, as the most powerful leader among the nations of the free world, should make clear to our friends and enemies all over the world, that in the exercise of our inherent right of self-defense and in the maintenance of the Monroe Doctrine, we are determined not to permit the intervention of international communism to endanger the peace and safety of our Nation or of other countries of the western hemisphere. For that purpose, I introduced a resolution (H. Con. Res. 445, 86th Cong.), which embodies the language and principles of our historic foreign policies. This measure, Madam Chairman, is not based on a blind devotion to the past, but on a realistic appraisal of the present with a view of the future. Not only that, the necessity for such reaffirmation of the Monroe Doctrine was indicated by the President of the United States recently when addressing the Brazilian Congress. PROGRAM FOR ISTHMIAN SECURITY The history of the United States-Panama relations since 1936 conclusively shows that they have not been improved by sustained surrenders. Rather, they have progressively worsened in proportion to these surrenders. The time has come for all appeasement to end and for positive measures, because the Panama Canal is a symbol of U.S. power and prestige. To that end, we must be definite and firm. The program which I would suggest should include: First. Reaffirmation of our historic policy of exclusive sovereign control of the Canal Zone and Panama Canal by the Congress (H. Con. Res. 33 and 450, 86th Cong.). Second. Announcement by our Government that no hostile or other provocative demonstrations or invasions will be tolerated in the Canal Zone or within the strategic vicinity of the Panama Canal. Third. Reactivation, under the direct control of the Chief of Naval Operations, of the Special Service Squadron for continuous display of the flag in the Caribbean area and other missions of diplomatic character. Fourth. Proclamation by our Government that the Canal Zone is constitutionally acquired territory by the United States. Fifth. Extension of the Monroe Doctrine to include penetration and subversion by means of a concurrent resolution of the Congress (H. Con. Res. 445, 86th Cong.). As to the urgency for action on this program, the unfortunate events at Panama November 3 and 28, 1949, and recently in Cuba, speak far more eloquently than anything I can say. The questions that I have described are not local, but developments in a worldwide movement focusing on Panama. So far, the forces for undermining U.S. authority have had a virtually unobstructed field, with no organized counterforce. We must supply the countermeasures now, and, in doing so, we act not only for the just and indispensable rights of the United States to the Panama Canal, but as well to safeguard the peace and safety of the world.

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[From the Congressional Record, 87th Cong., 2d sess., Apr. 12. 1962] MONROE DOCTRINE OR KHRUSHCHEV DOCTRINE? Mr. FLOOD. Mr. Speaker, over a period of years I have made many statements in the Congress concerning various aspects of U.S. policies in the Caribbean area. These have included discussions of the world revolutionary program for conquest of that hemispheric crossroads in which the Panama Canal has long been a key target. Certainly, a matter so charged with serious implications as the control of the approaches to tle Panama Canal, which are essential for its successful operation and protection, cannot remain unchallenged. The perspective afforded by prolonged study and close observation has enabled me to predict important events in the Caribbean and to give timely warnings of them to the Congress and the executive branch, ineluding the introduction of measures to reaffirm and make definite our policies. It is indeed regrettable that those warnings were not heeded and measures not adopted, but any satisfaction that might be derived by me from having been right is a barren one, for my foremost concern is the security of my country at this time of peril. As much of what will follow relates to the Republic of Panama, I wish to stress at the outset. that I am in no sense an enemy of that country, or of its people. On the contrary, I am devoted to the best interests of both and believe that those interests can be served only by the unhampered control of our Government of the maintenance, operation, sanitation, and protection of the Panama Canal in accordance with our historic and tested Isthmian policies as embodied in basic canal treaties. To the task of clarification of what is an explosive situation in our own backyard, I now address myself. PANAMA REACTS TO CUBAN INSULTS In the crisis now mounting in the Caribbean, significant events requiring decisive measures have thronged upon us. But. as so often happens in a storm. a rift in the clouds shows some blue sky. This appeared in Panama on December 14, 1961, when the Government of that country under the leadership of President Roberto F. Chiari reacted to studied insults from Fidel Castro and broke diplomatic relations with Soviet Cuba, retroactive to December 9. Thus. once again world attention, despite preoccupations with Berlin, the Congo, Goa, Indonesia, Laos, and other distant trouble spots, has focused on the crucial Caribbean. long ago recognized by Admiral Mahan as the Mediterranean of the Americas. FYITED STATES--ULTIMATE OBJECTIVE AVhat is the nature of the sinister force which, through expertly conducted centralized direction, is exerting its pressures in so many -trategic points in the world today? It is not a political party in the 150

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ISTHMIAN CANAL POLICY QUESTIONS 151 grenerallv understood sense but pervasive act ion and initelligence arms of communistic revolution iary Inperialism, Which constitute coilspiratorial fifth coluiniis in every key spot, soie government agencies. and influential sections of the iiass news media. Its objective in warfare is destruction of the w\iII to resist in advance of possible hostilities. Emboldened by a long train of successes resulting from its calculated aggressiveness and encouraged by Western policies of placation and vacillation, this destructive force has taken over tremendous areas and great masses of population and imposed despotic governments of the most violent communistic character. These successes have iIIdeed fed the fires of coniiunistic revolutionary fanaticism ad immeasurably strengthened the zeal and effort to bring the eiIIr ye wvor ld under the yoke of despotism. As has been aptly stated by an eminent theologian, "its cure for poverty is to increase it. Its cure for oppression is to universalize it. Its cure for injustice is to legalize it. Its (ure for evil is to systematize In every way, Mr. Speaker, Comuniinist parties all over the world serve as Trojan horses, filled witi trai ned and disciplined revolutionaries dedicated to the overthrow of all constitutional governmentss 6v force and violence, with the United States as its chief and ultimate objective. For this aim, the conquest of the Caribbean is but the first stage in lie long-range program for encirclement of our country-the bastion of constitutional liberty. CRISIS IN TIE CARIBBEAN What is the record of the mounting crisis in the Caribbean? Some of its factors will be enumerated: First. Failure and refusal by the Organization of American States to castigate Soviet Cuba for its lawless and violent actions against life and property. Second. Display, under Executive order of September 17, 1960, by the United States, of the Panama flag over the Canal Zone territory. against the overwhelming opposition of the House of Representatives formally expressed. Third. Withdrawal by the United States of recognition of Communist Cuba. Fourth. Issue in April 1961 by the Department of State of a white paper indicating U.S. support of "authentic and autonomous revolution" throughout the Americas, which action is certainly not a valid function of our Government. Fifth. Failure on April 19, 1961, of the attempted liberation of Soviet Cuba under circumstances indicating subversive penetration of the U.S. security agencies. Sixth. Declaration on May 1, 1961, by Premier Castro, following capture of the liberators, that Cuba is a Soviet satellite and his later admission that he has long been a secret Marxist-Leninist and that lie had deliberately concealed this fact from the Cuban people during the course of the recent Cuban revolution.

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152 ISTHMIAN CANAL POLICY QUESTIONS Seventh. Establishment of a Communist beachhead in British Guiana by Cheddi Jagan, the newly elected Communist premier. Eighth. Assent on November 2, 1961, to Communist-stimulated demands of Panama for new treaty negotiations, despite our generous concessions in 1936, 1942, and 1955. From this cursory summary, Mr. Speaker, it is clear that the Caribbean is well on its way to becoming a Red lake, with Cuba and British Guiana, now admittedly Soviet satellites, covering both flanks of the Atlantic approaches to the Panama Canal, itself under bolshevist-inspired juridical attack. PANAMA FLAG ENDANGERING CANAL ZONE SOVEREIGNTY Of the long series of events contributing toward the present crisis in the Caribbean, the precedent set by Executive order on September 17, 1960, directing display of the Panama flag over the Canal Zone territory, is transcendent. In Panama, this action was taken as a complete reversal of the U.S. position on the question of sovereignty and as formal recognition of basic sovereignty of Panama over the Canal Zone, as well as a lever for wringing future concessions, including setting a time for the transfer by the United States to Panama of the canal as a gift, pure and simple. Imagine, Mr. Speaker, the implications of this demand from a country whose very creation grew out of the movement to construct the Panama Canal. In other countries, the action of the President made the United States a diplomatic laughing stock and it encouraged an extraordinary display of arrogance by Premier Castro in Cuba and alarmed shipping interests that have to pay tolls. In our own country, it raised questions as to the identity of the influences in the Department of State that led to signing the ill-advised order and to constitutional issues of the highest importance for the future conduct of our foreign policy. Certainly, every realistic consideration demands that the order to raise the Panama flag over the Canal Zone must be disavowed. For such disavowal, Mr. Speaker, recent studies by the House Committee on Foreign Affairs-House Report No. 2218, 86th Congress, August 31, 1960-supply ample justification. Further reasons of more impelling character will be found in our diplomatic history in the period immediately following World War II, when Alger Hiss was in charge of the Office of Special Political Affairs, in the Department of State. Transmitting a 1946 report of the Governor of the Panama Canal to the United Nations, this office, which is to say, Alger Hiss, erroneously described the Canal Zone as "occupied territory"-Senate Interior Section Subcommittee, hearings on "Interlocking Subversion in Government Departments," part 19, March 25 and April 6, 1954, page 1365. Enraging patriotic Panamanians, who oppose any move toward internationalization of the Panama Canal, this strange action gave the chairman of the Panamanian delegation to the United Nations an unexpected opportunity to declare in an address to the Political Commis

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ISTHM-IAN CANAL POLICY QUESTIONS 153 sion of the General Assembly that Panama retains its sovereijntv over the Canal Zone. More important, however. is the fact that the official listing of the zone by our Department of State as "occupied territory" played into the hands of the Communist revolutionaries whose ultimate aim since 1917 has been internationalization. RADICAL DEMANDS ADVANCE COLOMBIAN OCCUPATION OR INTERNATIONALIZATION If there is any force whatsoever in the argument for Panamanian sovereignty over the Canal Zone, it must relate back to the parent country, Colombia, from which Panama seceded in the political developments preceding the actual building of the canal. It may be safely predicted that if the United States should ever be so unmindful and recreant of its solenm treaty obligations for the maintenance and operation of the canal for the entire world as to attempt to transfer the canal to Panama as a gift, Colombia will promptly follow such action with a reassertion of its complete sovereignty over the entire territory of Panama and claim the canal as its own. Nor should it be overlooked that Colombia has important treaty rights with respect to the Panama Canal and Railroad, as well as Panama. As I have often stated and emphasized, Panama, in its ever-increasing effort to wrest control of the canal from the United States is not serving its own best interests, but on the contrary, strengthens Soviet policy and advances the movement for the internationalization of the canal. Even the advocates of these excessive Panamanian demands declare that it would be far better for Panama to deal with the United States as regards the operations of the canal than with an international organization. This undoubtedly is true. It is strange indeed that, even though our Government during recent years has made many important concessions to the Panamanian demands, it has never required any compensating Panamanian concessions. On the other hand, Panama has accepted the great benefits as signals for making new and greater demands. The latest are listed in a resolution of the Panamanian Assembly on Noveimiber 16, 1961. which is quoted in documentation appended to my address. Certainly, Mr. Speaker, no revolutionary influence in our Government, determined on a piecemeal liquidation of our sovereign rights, power, and authority on the isthmus, could have done a better job than has been accomplished over a long period of years. CHARLES EVANS HUGHES AND ISTHMIAN CANAL POLICY In this general connection,. Mr. Speaker, it is highly pertinent to consider what one of our country's ablest and most forthright Secretaries of State, Charles Evans Hughes, once stated. In a conversation with the then Minister of Panama to the United States on December 15, 1923, in response to formal demands by Panama for increased sovereignty and increased sovereignty attributes over the Canal Zone, Mr. Hughes spoke with a refreshing degree of candor and vigor. He declared: Our country would never recede from the position which it had taken in the note of Secretary Hay in 1904. This Government could not, and would not, enter

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15 4 ISTHMIAN CANAL POLICY QUESTIONS hito a iy discussion affecting its full right to deal with the Canal Zone and to t he entire exclusion of any sovereign rights or authority on the part of Panama (Foreig-n Relations, 1923, vol. III. ). 684.) To this Secretary Hughes added: It was an absolute futility for the Panamanian Government to expect any American administration. no matter what it was, any President or any Secretary of State. ever to surrender any part of these rights which the United States had a-quired under the Treaty of 1903. That is the type of statement that should be forthcoming from our statesmen today, especially from those in executive authority over the canal. On another occasion, Mr. Speaker, when writing about the Monroe Doctrine. Mr. Hughes made this telling statement about Isthmian Canal policies: The construction of the Panama Canal has not only established a new and convenient highway of commerce but has created new exigencies and new conditions of strategy and defense. It is part of American policy not to yield to any foreign power the control of the Panama Canal, or the approaches to it, or the obtaining of any position which would interfere with the right of protection on the part of the United States or would menace the freedom of its communications (Enevelopaedia Britannica, 1957, vol. 15, p. 738). All the exigencies foreseen by former Secretary Hughes, in clear violation of the Monroe Doctrine and our solemn treaty obligations with respect to the canal, have now come to pass. The questions that now face us are what steps should be taken to protect our country against the loss of its undoubted rights in the Caribbean and against the chaos that will inevitably follow if the United States ever abandons its operation and control of the Panama Canal. J ,iIN F. STEVENS ALERTED US TO MARXIST DANGERS At this point, Mr. Speaker, it is appropriate to examine some important historical antecedents of the world crisis, which show that current problems are not new, but old. It was John F. Stevens, famed basic architect of the Panama Canal, who, while serving as head of our railroad missions in Russia and Siberia, 1917-23-Congressional Record, May 29, 1956, page 9285had a unique opportunity to observe the early years of the Russian Bolshevik revolution. He was thus able, in his reports and during periodic visits to Washington, to alert important leaders in our country. among them Ira E. Bennett, great editor of the Washington Post, to its international organized conspiratorial nature and the dangers thereby involved. Ideas about communistic subversion that Stevens started through EI tor Bennett still reverberate. KARL MARX FORESAW SOVIET IMPERIALISM Before Stevens there was Karl Marx, who, from 1853 to 1856, was 11uopean correspondent of the New York Daily Tribune. Among his perceptive writings are found these startling statements: Russian imperialism * is not a movement that strives for national indepcndeuce. but a movement which. directed against Europe, would destroy all

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ISTHMIAN CANAL POLICY QUESTIONS 155 cultural values that history has created through thousands of years. This could not be achieved without eradicating Austria, Hungary, Turkey, and a major part of Germany from the [political] map. There is only one way of dealing with absolute power like Russia and that is by absolute fearlessness. These telling words give the key to withstand aggressiveness: absolute fearlessness must confront absolute power. COMMODORE PERRY FORESAW EAST-WEST CONFLICT Mr. Speaker, by far the most revealing of all the prophetic statements on the question of East-West conflict is that of Commodore Matthew C. Perry, after return from his famous voyage to Japan. Speaking before the American Geographical and Statistical Society on March 6, 1856, he expressed views that should ring through thet centuries and I quote: It requires no sage to predict events so strongly foreshadowed to us all; ;iill "westward" will "the course of empire take its way." But the last act of the drama is yet to be unfolded; and notwithstanding the reasoning of political empirics, westward, northward, and southward, to me it seems that the people of America will, in some form or other, extend their dominion and their power. until they :djali have brought within their mighty embrace multitudes of the i-lands of the grea-t Pacitie, and placed the Saxon race upon the eastern shores of Asia. And I think too, that eastward and southward will her great rival i] future aggrandizement (Russia) stretch forth her power to the coasts of China and Siam; and thus the Saxon and the Cossack will meet once more, in strife or iii friendship, or another field. Will it be in friendship? I fear not. The antagoaistic exponents of freedom and absolutism must thus meet at last, and then will be fought that mighty battle on which the world will look with breathless interest; for on its issue will depend the freedom or the slavery of the worlddespotism or rational liberty must be the fate of civilized man. I think I see in the distance the giants that are growing up for that fierce and final encounter ; ii the progress of events that battle must sooner or later inevitably be fought. These words, Mr. Speaker, so meaningful today, were uttered more than a century ago. Surely no one who has studied world history should be surprised at what has happened in eastern Asia, the Southwest Pacific, Africa, or in Cuba. The last, being closest to our shores and located near one of the historic invasion routes of North America, the valley of the Mississippi, and in a position to menace the communications of the Panama Canal, is of prime importance. The domination of Cuba by a fanatical Communist power is a clear violation of the Monroe Doctrine and cannot be safely Iinorei or tolerated. Cuba can serve not only as a base from which to launch atomic missiles against vital points in the continental United State;. but, also as a beachhead from which to conduct further conquests through subversion. Such conquests would oocur first in remaining Caribbean countries and later throughout Latin lands. In this connection. Mr. Speaker, it should ever he borne in mind that Premier Khrushchev declared with exultation that the Monro" Doctrine is dead. The failure to make an adequate reaflirmiation of this historic policy and the succession of recent Communist victoriein the Caribbean can only mean that the transcendent issue on our fourth front has become the Monroe Doctrine versus the Khrushchev doctrine. 67-843--6611

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156 ISTHMIAN CANAL POLICY QUESTIONS SUBVERSIVE PERSONNEL MUST BE REMOVED What are the explanations for the collapse of our Caribbean policies? Of course, they are many but basic to any sustained deterioration in policy matters there is always the question of the character of the personnel conducting these policies. Clearly, Mr. Speaker, so long as men of this character are in positions of power or influence with respect to the conduct of our foreign policies, we may expect continued retrogression. The personnel situation presented is not one that can be corrected by a mere shifting of personnel or changing of official titles under procedures known as reorganizations. It is one that calls for the identification by investigating committees of the Congress, of the individuals in the Department of State, and the mass media who are responsible for our tragic failures in policy and their removal from positions of power. Regardless of whether those responsible for these tragic failures in American foreign policy have been well meaning but stupid or definitely subversive, the results are the same and our Nation has suffered accordingly. Such individuals should be absolutely eliminated from any position of power in our Government and public opinion should prevent their employment in mass media operations. PARALYSIS AND CONTRIVED CONFUSION MUST BE OVERCOME In considering the ways to meet the challenge in the Caribbean, can we rely on the Organization of American States for remedial action? The answer is "No." That agency, I regret to say, is nothing but an instrument for paralysis. Moreover, we should not delude our people by pretending to rely on an organization for the performance of tasks that we know are beyond its desires, intentions, or powers. GUATEMALA OVERCOMES THREAT Mr. Speaker, in viewing the problems now facing our country. it should be borne in mind that everywhere in Latin countries where, under a false notion of liberty, communism has been permitted to infiltrate, trained and disciplined Soviet agents have meddled in the affairs of those countries and plotted for the overthrow of all legally constituted authority. In executing their designs for conquest, these agents have constantly resorted to bloody violences to attain their ends. The governments involved too often seem to have become unnerved and paralyzed when faced with the deadly peril. A recent example of the Communist policy of violent overthrow of constitutional government was the effort on June 11, 1961, in Guatemala to drive the administration of President Miguel Ydigoras from power and to supplant it with one like that in Cuba, which is completely subservient to orders from its Kremlin overlords. In contrast to what has taken place in some other Latin countries, the effective reaction of the Guatemalan Government to that threat was highly commendable and encouraging.

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ISTIMIAN CANAL POLICY QUESTIONS 1 57 Mr. Speaker, I think that I voice the view of all patriotic Americans. North, Central, and South, when I publicly praise. on the floor of tle House, President Ydigoras and his administration for their alertness to the danger and for their success in surmounting that threat. They contributed to the security of all the Aniericas. OUR PEOPLE DEMANtD ACTION Subversive forces in Cuba are becoming consolidated in their beachhead and preparing for their next moves. The well-publicized moves of our Department of State in Dominicnn affairs and the Ciw afl out in bold relief. What of Cuba. which is a storm center for American subversion? In this connection, the Oriranization of American States has been proved absolutely impotent. Indeed it is fortunate that the people of our country are far alead of our agencies of Government, both legislative and executive. They perceive the hazards and are demanding immediate remedial action. This I know, not only from observations and discussions during 1my travels, but also from numerous letters from thoughtful men ald women in various parts of the Nation. They are also demanding remedies in line with our historic policies and the inherent right of self-defense. They will not tolerate supplanting the Monroe Doctrine with the Khruschchev doctrine in any part of the Americas. MONROE DOCTRINE MUT BE REAFFIRMED World War II ended more than 15 years ago with the peoples of all lands, including the Soviet, yearning for a lasting peace. But instead of peace, the two strongest nations in the world today face each other in undisguised hostility. This makes it imperative that our country look first to its own vital interests, for it is the only hope of the free world to remain free. In the first quarter of the 19th century. when our country was weak. it faced a crisis of the gravest character. Not only was the United States threatened by European imperiahsm from across the Atlantic, but also by Russian penetration from the Pacific Northwest. which had reached as far south as Fort Ross, just north of San Francisco. American statesmen rose to the occasion and, on December 2. 1823, President Monroe, in a message to the Congress. issued a diplomatic warning to all nations that our country would resist any further conQuests in the Western Hemisphere. Monroe did not wait until strategic spots in the Caribbean had been occupied, but, by a forthright declaration, made our position unmistakably and efectively clear. Such realistic treatment is sorely needed today. To this end, I urge the Congress to take immediate steps to correct the dangerous legislative delinquencies which have diverted the conduct of our foreign policies from their destined course. In 1823 we were weak: today we are strong, but losing in relative strength. Why wait until the strength ratio is further reduced? Why wait for another Goa to demonstrate more dramatically the futilitv of relvinz for protection on nations which proclaim peace, but practice aggression, or on an international organization dominated by Soviet controlled vetoes or votes? We mutv aot now.

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156N ISTmf N CANAL POLICY QUESTIONS YN-DAMENTAL QUESTION IS SOrVEREGNT Mr. Speaker. underlying the Panama Canal soverei'ty question is a fniamental principle. Our country is in the Canal Zone properiv and lawfu11y. as of right, fully and explicitly defined in basic treaty agreements between two overeign states. or else it is occupying territory to which it has no flawless title. territory upon which its armed forces and civil employees have been quattmg since 194. territor for which it pays a mere rental so that it might be pemi ted to mauita n. operate, and protect the interoceanie waterway. If time pe-mitted going into the early hiStory of the negotiations which lt the acquisition of the Canal Zone. it could be shown that the IinleQ States could have rented the required strip across the Isthmus from Colombia for construction of the Canal. if mere leasing of the territorfrom another sover-state was what our Governrnt had :nlen ed nearly 60 years ago. It anot be oo stronglyy emphasized 4 Mr. Speaker. that the idea of sovereizn jurisdiction over the Canal Zone. subject to no limitation e r sbstance, was the prime objective of our Government. The reason for this is the basic fact that the United States could not ard. ad was therefore, unwilling to undertake the great obligation t t Panama Canal a the expense of the Arerdcan taxpayers ain and operate it in a land of endemic revolution and Sab1izy except on the basis of exclusive sovereigty in prpThis consideration was fully recognized by both Panama and ed States in the formulation of the 19)3 treaty and any ot ierj firrt is absolutely rnaive except to the extent that it may b'e Lened v cPxunistic revolutionary forces. Our obliations to the other countries involved and with which we had to ea n regard to the canal enterprise require that our country have untermeled sovereignty and authority. A divided sovereignty w e fulillrment of our treaty obligations to operate the canal fo ~;rd hoping on terms of equality utterly impossible. Our count ere tenant on the isthmus nor a squatter, but a grantee er: n in p ut frthe perpetual maintenance. operation. andp ot :tonofthe Panamna Canal. In re rrspctie that is now possible. the arzurnent of Alger Hiss mar:r~r rtile7:8 of the ured Nations Charter. the United States sha il a admnstratie reprtrs with the Secretary General of that orza~za~on because the Canal Zone is an -occupied area.,was a monsrou reson of commrunistic revolutionary conspiracy upon. ~urvald ad ublemished title to that part of the onsitutionally As wa larly foresee by competent students. for more thnr 1 vers ur Nationt and itS Government have been harassed by those n -I make the flag of the U united States a symbol of imperialistic expo atiorn. Some of them. unfortunately. enjoy the =tatmi and her taze of citizenship in our republic. At his point. Mr. Speaker. many have wondered whether the 19% Execuues (rder to hoist the Panama flag over the Canal Zone was

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a':'*,a. a a ~ aI a t a* aa a .,;ta I I at a a a a , : I t~t l'aa' ~ a;p a, ~ f i 'I' 'I i t ia, a a', v Ia,-' 1 'tt1at ta a a *t l ~ '' P a t a la' a a a S I a',e a (I 'a I

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160 ISTHMIAN CANAL POLICY QUESTIONS HOUSE CONCURRENT RESOLUTION 225 (In the House of Representatives, 87th Cong., 1st sess., April 26, 1961) Whereas the subversive forces known as international communism, operating secretly and openly, directly and indirectly, threaten the sovereignty and political independence of all the Western Hemisphere nations: and Whereas the American continents, by the free and independent position which they have assumed and maintained, are not subject to colonization or domination by any power; and Whereas the intervention of international communism, directly or indirectly, or however disguised, in any American state, conflicts with the established policy of the American Republics for the protection of the sovereignty of the peoples of such states and the political independence of their governments; and Whereas such a situation extended to any portions of the Western Hemisphere is dangerous to the peace and safety of the whole of it, including the United States: Now, therefore, be it Resolved by the House of Representatives (the Senate concurrng ), (1) That any such subversive domination or threat of it violates the principles of the Monroe Doctrine, and of collective security as set forth in the acts and resolutions heretofore adopted by the American Republics: and (2) That in any such situation any one or more of the high contracting parties to the Inter-American Treaty of Reciprocal Assistance may. in the exercise of individual or collective self-defense, and in accordance with the declarations and principles above stated, take steps to forestall or combat intervention, domination, control, and colonization in whatever form, by the subversive forces known as international communism and its agencies in the Western Hemisphere. HOUSE CONCURRENT RESOLUTION 33 (In the House of Representatives, 86th Cong., 1st sess., January 9, 1959) Whereas there is now being strongly urged in certain quarters of the world the surrender, by the United States, without reimbursement, of the Panama Canal, to the United Nations or to some other international organization for the ownership and operation of the canal: and Whereas the United States, at the expense of its tax payers and under, and fully relying on, treaty agreements, constructed the canal, and since its completion, at large expenditure, has maintained and operated it and provided for its protection and defense: and Whereas the United States, following the construction of the canal, has since maintained, operated, and protected it in strict conformity with treaty requirements and agreements, and has thus made it free, without, restriction or qualification, for the shipping of the entire world: and, in consequence of which, with respect to the canal and the

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ISTHMIAN CANAL POLICY QUESTIONS 161 Canal Zone, every just and equitable consideration favors the continuance of the United States in the exercise of all the rights and authority by treaty provided, and in the discharge of the duties by treaty imposed: Now, therefore, be it Resolved by the House of Representatives (the Senate concurring), That (1) it is the sense and judgment of the Congress that the United States should not, in any wise, surrender to any other government or authority its jurisdiction over, and control of, the Canal Zone, and its ownership, control, management, maintenance, operation, and protection of the Panama Canal, in accordance with existing treaty provisions; and that (2) it is to the best interests-not only of the united States, but, as well, of all nations and peoples-that all the )o\e rs, duties, authority, and obligations of the United States in the premises be continued in accordance with existing treaty provisions. HoUsE CONCURRENT RESOLUTION 450 (In the House of Representatives, 86tCoiig. January 11. 1960) Whereas the United States, under the Hay-Bunau Varilla Treaty of 1903 with Panama, acquired complete and exclusive sovereionitv over the Canal Zone in perpetuity for construction of the Panamna Canal and its perpetual maintenance, operation, sanitation, and protection; and Whereas all jurisdiction of the Republic of Panama over the Canal Zone ceased on exchange of ratifications of the 190-1) treaty on Febrmary 26, 1904; and Whereas since that time the United States has continuously exercised exclusive sovereignty and control over the Canal Zone and Panama Canal; and Whereas where responsibility is imposed there must be given for its effectuation adequate authority: and with respect to the Panama Canal the treaty of 1903 so provided; and Whereas the United States has fully and effectively discharged all its treaty obligations with respect to the Panama C'anal and the only legitimate interest that Panama can have in the sovereignmty of the Canal Zone is one of reversionary character ihat can never become operative unless the United States should abandon the canal enterprises; and Whereas the policy of the united States sinc& President Haves message to the Congress on March 8, 1880, has been for an interoceanie canal "under American control," that is to say. under tho control of the United States; and Whereas the grant by Panama to the Inited States of (xclH ive sovereignty over the Canal Zone for the aforea i( purses waa! absolute, indispensable condition pirecedent to ihe 'ro tiask undertaken by the United States in the construction and perpetual maintenance, operation, sanitation, and proteci(Yii 4 I' :1 h Panma ('anal. for the benefit of the entire world: Now. there fore, be it Resolved by the Howse of fRe prIl C/).tat'm th S ,,/ '0l In. (1) That the United States, under treaty provisions, constitutionally acquired. and holds, in perpetuity. IxclV ive tvcrci'n anl conmra1

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162 ISTHMIAN CANAL POLICY QUESTIONS over the Canal Zone for the construction of the Pananta Cainal and its perpetual maintenance, operation, sanitation, and protection; and (2) That there can be no just claim by the Republic of Panama for the exercise of any sovereignty of whatever chari-cer over the Cnal Zone so long as the United States discharges its duties and obligations with respect to the Canal; and (3) That the formal display of any official flag over the Canal Zone other than that of the United States is violative of law, treaty, international usage, and the historic canal policy of the United States as fully upheld by its highest courts and adininistrative officials; and would lead to confusion and chaos in the administration of the Panama Canal enterprise. [From the Star & Herald. Panama. Republic of Panama, Nov. 16, 19611 TEXTS OF LETTERS CmIARI's PANAMA, September 8, 1961. To His Excellency, JoHN F. KENNEDY, President of the United States of America, The W hite House, Washington, D.C. Youm EXcELLENCY: Relations between the Republic of Panama and the United States of America have been governed, basically, since 1903, by the Isthmian Canal Convention, signed in Washington on November 18 of that year, by the Secretary of State, Mr. John Hay, and the French citizen, Phillippe Bunau Varilla who was acting temporarily as Envoy Extraordinary and Minister Plenipotentiary of Panama, The provisions of that convention have been, from the moment of its signature, and will continue to be, as long as they remain in force, a source of constant frictions, disagreements and conflicts between the two Government and between the Panamanian people and the North American population residing in the Canal Zone. In 1936, thanks to the dedicated efforts of the then President of Panama, Dr. Harmodio Arias, and his advisers, Drs. Ricardo J. Alfaro and Narciso Garay and thanks also to the clear understanding, ample spirit of fairness and the great kindness of President Franklin D. Roosevelt, Panama succeeded in abolishing three rights which the 1903 convention granted to the Government of the United States, namely: (a) The right of intervention in the internal affairs of the Republic of Panama when in the judgment of the United States this became necessary to maintain order: (b) the right to occupy any Pana manian lands or waters which in the judgment of the United States were necessary for the construction, maintenance, operation, sanitation, and defense of the canal; (c) the right of "construction" of a canal through the Isthmus of Panama. In 1936, and again in 1942 and 1955, Panama obtained other amendments as to detail in the interpretation and implementation of certain provisions of the 1903 convention. But there still remain in full force the provisions of that convention which in practice have had and still have the effect of having

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ISTHMIAN CANAL POLICY QUESTIONS 163 divided the Republic of Panama in two parts separated by the interpolation between them, of a zone in which the Government of the United tates considers that it has the right of exercising full sovereign authority and jurisdiction, notwithstanding that all of the rights which were granted it by Panama are limited to the purposes, expressly agreed upon, of the "maintenance, operation, sanitation, and defense of the canal." Te real cal1Se of all t 1 le V ices and errors of thI e 190:) con11 tlltn(fl lies in that such convent ion was i'Vt'i lle(rot lat ed. WIhen in in ied iat "d v following the prociflamatio of Panaia s independence, the P1anmauiian representatives who were sent to negotiate t lie treaty arrive(Id in Washington they faced the tragic surprise that on the previous day, just as they landed in the port of New York Secretary of State John Hay and the Frenchman llunan Varilla had hurriedly signed the Isthmian Canal Convention, with no previous negotiate on, but after a quick confabulation between them both, handing over the new Republic of Panama, bound hand and feet, to tle mercy of the Government of the United states, in perpetitity, as if there cold be perpetual human things. For these reasons, the isthiia i con ventio of 190.3 carries w\ itlii 1 it the causes of its own extinction. ft is not necessary for me to go into details on t ile manner ill wilch that wholly unfair convention was drafted and signed, because the turn of this century saw the peak of the colonialist expansion of s5roiiU2 states to the detriment of nations rendered weak by the ignorance and submission of the popular masses. At that time, no voice was raised p in support of countries subjected by brute force or by unsuriount able causes to the domination of a powerful state. After half a century and two world wars, the panorama is wholly different: Colonies are on their way out, respect, for the personality of each state is now an axiom in international law, the principle of nonintervention in the internal affairs of another state has vietorousl v surged forward, and the structure of the world organization of nations is slowing ever more effectively, the influence of united small nations on international problems and conflicts. There is no place in the mentality of man in this second half of the 20th century for the proposition that a state, no matter how strong. can exert. sovereign rights over any part of the territory of anot her sl ate, no matter ohow small or week. This does not mean, however, that two sovereign and independent states having common interests cannot reach understandings which. without being detrimental to the sovereignty and the dignity of either one, enable both to defend and protect their fair interest and rights without disregarding or damaging the fair interests and rights of the other. It was for these reasons that, in the face of the indissoluble community of interests between Panama and the United States: in the face of the increasingly urgent need for establishing and maintaining reciprocal relations on a basis of sincere friendship, mutual respect. and well-reciprocated consideration: and in the face of the permalnent source of discord which is the 1903 convention, that I took the liberty of forwarding to you. through your persoiial representative\ e at thic

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164 ISTHMIAN CANAL POLICY QUESTIONS Conference of Foreign Ministers and Economy held in Tegucigalpa in July of this year, my personal message suggesting how convenient and necessary it is for Panama and the United States to converse without prejudice, without resentment, setting aside past problems and offenses, as nations sincerely friendly and sincerely determined to search for fair solutions, to analyze and discuss their present-day relations in the light of the doctrines which now governi the world, with a view to attaining permanent understandings, on just bases, which will assure to each party the attainment and enjoyment of what in justice and fairness is due each one, without a prior agenda, so that each may openly place the cards it wants on the table. I have the deep personal conviction that if Panama and the United States were to cast aside the interminable and up to now almost fruitless discussions on what should be the correct interpretation of existing treaties, and disposed themselves to undertake the analysis of existing relations between both with a realistic approach and in the light of the principles and norms of international law, already universally recognized, they will find adequate formulas to resolve, once and for all time, a stable and lasting association which will enable them to carry out harmoniously the common destiny set out for them by the Panama Canal. The bias-whether justified or unjustified-that such results are either difficult or impossible of attainment, should not be an obstacle for the attempt. The Alliance for Progress you have so wisely proposed, which was set in motion in Montevideo with the cooperation of all the American nations, could find no better realization in the relations between Panama and the United States through a formula that will place these relations on a level of clear and just understandings permitting Panama a fuller use of its economic potential, without diminishing the consideration that is due to the interests of the United States by reason of the canal enterprise made possible by both countries and in whose operation both have a common interest. It is a source of real pleasure for me to reiterate on this occasion the sentiments of my highest consideration and great appreciation. ROBERTO F. CHIARI, President of the Republic of Panama. KENNEDY'S THE WHrriE HOUSE, November 2, 1961. DEAR MR. PRESIDENT: I have read with great interest your letter of September 8, 1961, which your brother delivered to me on September 15. 1 am also very pleased to have had a personal conversation with your brother at that time. I agree with you that an unusual community of interests exists between the Republic of Panama and the United States. Our respective governments and peoples have been closely associated since the very beginning of your nation. The Panama Canal has been an important element in the development and growth of the relationship between our two countries, and has also contributed to the bonds of unity which link all the American Republics.

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ISTHMIAN CANAL POLICY QUESTIONS 165 The Government of the United States hopes to maintain and strengthen the relations between our two nations on the basis of mutual respect and sincere friendship. I feel sure that the Government of Panama shares this objective. Once again on behalf of the Government of the United States,. I reaffirm our willingness to cooperate wholeheartedly with the Government of Panama to insure the full enjoyment of the various ljenefits which the canal should afford to the two nations that made posile its construction. We also wish to make these benefits availa>A to all nations interested in international trade. As I pointed out to your brother on September 15, 1 realize liat the historic friendship and cooperation between our two countries has sometimes been marred by dilI'erences concerning the interpretrt0i11on f the rights granted to the United States by the Republic of Panama. In past years these problems have been resolved in vaIm u aysometimes through formal treaty negotiations and sometimes tirougih friendly discussions and the subsequent implementation of specific measures agreed upon by representatives of the two Governments. My Government recognizes that difference will inevitably arise between even the friendliest nations, and believes that these differencemust be discussed thoroughly and frankly, in order to clarify the interests and attitudes of both parties. It seems clear therefore. that when two friendly nations are bound by treaty provisions which are not fully satisfactory to one of the parties, arrangements should be made to permit qualified representatives of both nations to discuss these points of dissatisfaction with a view to their resolution. I have instructed the various responsible departments and agencies of the U.S. Government to make a complete reexamination of our current and future needs with respect to Isthmian Canal facilities. I expect this study to be completed within a very few month. at which time my Government will communicate promptly with the Government of Panama. I am confident that representatives of our two Governments, after a frank exchange of views and a careful assessment of our mutual needs and interests, can reach fruitful conclusions which will promote the mutual welfare of both countries. With cordial good wishes, Sincerely, JOHN F. KENNEDY. [From the Panama (Republic of Panama) Star & Herald, Nov. 16, 19611 KENNEDY AGREES ON NEED FOR RP TALKS-NEGOTIATIONS APPEAR ASSUMED DURING 1962 President John F. Kennedy has agreed with President Roberto F. Chiari that differences between their two nations must be discussed thoroughly and frankly. In a reply to the Panamanian Chief Executive, Kennedy announced he has called for a complete reexamination of U.S. current and future needs with respect to Isthmian Canal facilities prior to entering into negotiations with Panama: I expect this study to be completed within a very few months, at which time my Government will communicate promptly with the Government of Panama

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166 ISTHMIAN CANAL POLICY QUESTIONS Kennedy wrote Chiari: I am confident that representatives of our two Governments after a frank exchange of views and a careful assessment of our mutual needs and interests, can reach fruitful conclusions which will promote the mutual welfare of both countries. Thus, new negotiations over U.S. rights in the Canal Zone and Panamanian benefits from the Isthmian Waterway appeared assured for 1962. President Kennedy answered the Panamanian President's letter of September 8, calling, in effect, for negotiations from scratch. I have the deep personal convictionChiari had written Kennedythat if Panama and the United States were to cast aside the interminable and up-to-now almost fruitless discussions on what should be the correct interpretation of existing treaties, and disposed themselves to undertake the analysis of existing relations between both with a realistic approach and in the light of the principles and norms of international law, already universally recognized, they will find adequate formulate to resolve, once and for all for all time, a stable and lasting association which will enable them to carry out harmoniously the common destiny set out for them by the Panama Canal. And he added: The bias-whether justified or unjustified-that such results are either difficult or impossible of attainment, should not be an obstacle for the attempt. Chiari's letter was hand delivered to President Kennedy at the White House on September 15 by his brother, Richardo Chiari. Kennedy's letter was hand delivered to President Chiari at the Presidencia by Philip Clock, Acting Charg6 d'Affaires of the United States in Panama, Tuesday afternoon. Announcement of the text of the Presidential correspondence was made simultaneously yesterday afternoon in Washington and Panama City. Press Secretary Fabian Velarde, Jr., distributed copies of both letters to newsmen at 4:30 p.m., at the Presidencia. In answer to a question, he said President Chiari is pleased by the answer he has received from President Kennedy. He declared that Panama most likely will continue the appraisal of its position during the time that the United States takes for the study of its current and future canal needs. Velarde also said that the Panama Government will appoint its negotiators soon and they will work closely with the National Council of Foreign Relations in the presentation of Panama's claims. When a newsman raised the point that the time mentioned in President Kennedy's letter for the U.S. study of its canal needs might be 1 or 2 years, Velarde pointed to the phrase "within a very few months" and added that while every one was entitled to his own interpretation, he thought this means less than 6 months. Chiari's letter revealed that the Panamanian President made his first approach to Kennedy on the subject of new negotiations as far back as July. At that time an emissary of President Chiari met with the personal representative of President Kennedy at a meeting of Central American Foreign Ministers held in Tegucigalpa, Honduras. This was followed by the September letter.

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ISTHMIAN CANAL POLICY QUESTIONS 167 The Panamanian Chief Executive made one major point in his personal letter to Kennedy-"that the 1903 treaty, which has governed basically relations between the two countries since Panama became independent was not negotiated by Panamanian representatives, but was hurriedly signed by a quick confabulation" between the Secretary of State of the United States, John Hay, and Philippe BunauVarilla, a Frenchman temporarily acting as Panama's envoy. Chiari pointed out that this was done at the "peak of the colonialist expansion of strong states." But times have changed, Chiari said, in effect. "After a half century and two world wars," he wrote President Kennedythe panorama is wholly different: Colonies are on their way out, respect for the personality of each state is now an axiom in international law; the principle of nonintervention in the internal affairs of another state has victoriously surged forward, and the structure of the world organization of nations is showing, ever more effectively, the influence of united small nations on international problems and conflicts. And with a pointed reference to the key question between Panaia and the United States-sovereignty over the Canal Zone-the President of Panama added: There's no place in the mentality of man in this second half of the 20th century for the proposition that a state, no matter how strong, can exert suvoreign rights over any part of the territory of another state, no matter how small or weak. But, he went on, there is nothing to prevent two sovereign and independent states from reaching understandings providing acceptable arrangements for the fair interests and rights of each. President Kennedy's letter matched the cordial tone of Pres dent Chiari's approach. "Once again," Kennedy wroteon behalf of the Government of the United States, I reaffirm our willingness to cooperate wholeheartedly with the Government of Panama to insure the full enjoyment of the various benefits which the canal should afford to the two nations that made possible its construction. We also wish to make these benefits available to all nations interested in international trade. He added: My Government recognizes that differences will inevitably arise between even the friendliest nations and believes that these differences must be discussed thoroughly and frankly in order to clarify the interests and attitudes of both parties. It seems clear, therefore, that when two friendly nations are bomud by treaty provisions which are not fully satisfactory to one of the parties. arrangements should be made to permit qualified representatives of both nations to discuss these points of dissatisfaction with a view to their resolution. There has been no official announcement by Panama on wha p i issues it proposes to raise when normal negotiations are wnd-taken. But an official listing of unfulfilled Panamanian demands in previous negotiations carried in the Foreign Office's 1961 report to the National Assembly included these major points: 1. The display of the Panamanian flag in the Canal Zone. 2. Implementation of the principle of equality of wages. of treatment, and of opportunity for employment among Panamanian and North American citizens in the Canal Zone.

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168 ISTHMIIAN CANAL POLICY QUESTIONS :. Increase of the canal annuity to 20 percent of the gross reve11ue with a guaranteed minimum of S5 million. The present annuity is $1.930,000. 4. Cessation of grant in perpetuity. 5. Mixed courts in the Canal Zone. [From the Panama (Republic of Panama) Star & Herald, Nov. 17, 1961] REPUBLIC OF PANAMA ASSEMBLY CALLS FOR BRAND NEw TREATY-DEPUTIEs FAVOR SCRAPPING OF PREVIOUS PACTS-RESOLUTION, APPROVED IN ~M(USLY, ADVOCATEs TREATY REAFFIRMING REPUBLIC OF PANAMA SOVEREIGNTY IN ZONE The Panama \National Assembly went on record yesterday for the trapping of all previous treaties with the United States and for a new treaty reaffirming Panamanian sovereignty in the Canal Zone. The resolution, introduced by nationalist leader, Aquilino Boyd. in behalf of himself and 11 other assembly deputies, was approved unanimously after a brief discussion. In addition to the sovereignty demand, the Assembly listed 13 other points as minimum aspirations of the Panamanian people. These points are almost identical to the list of Panamanian demands not anet by the United States in previous negotiations, issued earlier this month by the Foreign Office. The Assembly acted within 24 hours of the release of the text of the correspondence between Presidents Roberto Chiari and John F. Kennedy on the subject of new treaty negotiations. President Chiari, in a letter dated September 8, told President Kennedy that the two countries should make another attempt at resolving their longstanding differences, starting this time from scratch. President Kennedy, in a letter dated November 2, agreed that such differences must be discussed thoroughly and frankly, and indicated that the United States will be ready to enter into talks in 1962 after a reexamination of its current and future needs with respect to Isthmian Canal facilities. The Assembly said yesterday that Kennedy's letterevidences the good will of his Government to arrive at satisfactory agreements on the questions deriving from the Interoceanic Canal embedded in our territory. The resolution also pointed out: That the 1903, 1936, and 1955 treaties have not succeeded in "cementing the relations between the two countries in a satisfactory manner." That the 1903 treaty is manifestly unfair and that the grant is made to the United States in perpetuity is not in keeping with the principles of international law. That Panama is not deriving fair benefits from the Panama Canal. The resolution provides as follows: Be it re8olved1. That (the assembly) express its most fervent desire that the 1903 Treaty on the Interoceanic Canal and the treaties subsequently entered into in 1936 and 1935 be totally replaced and that a new treaty be drawn up which will reaffirm Panamanian sovereignty in the Canal Zone and satisfy the minimum aspirations of the Panamanian people. 2. That the following are recognized as the minimum aspirations of the Panamanian people:

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ISTHMIIAN CANAL POLICY QUESTIONS 169 (a) Elimination of the in-perpetuity clause and reversion to Panama of the Canal installations on a fixed term. (b) Fair sharing of the Canal revenues (The Foreign Office had listed increasiug the Canal annuity from the present $1,930,000 to 20 percent of the grwss revenue, with a guaranteed minimum of $5 million). (c) Establishment of mixed courts and revision of the present legislation in the Canal Zone. (d) Recognition of Spanish as an official language in the Canal Zone. (e) Cooperation by Canal Zone authorities to enforce Panamanian laws in the Canal Zone. (f) Establishment of Panamanian jurisdiction over the ports of Balboa and Cristobal. (g) Raising of the Panamanian flag on all public buildings and on all ships transiting the Canal. (h) Use of Panamanian postage stamps in the Canal Zone. (i) Elimination of the issuance of exequaturs (written official recognition the Canal Zone to foreign consuls. (j) Effective equality of opportunity and treatment for Panamanian and North American workers in the Canal Zone. (k) Inclusion of a clause on arbitration as the means of resolving controversies. (The Foreign Office has listed acceptance of the mandatory jurisdiction of the World Court over controversies between the two countries.) (1) Cooperation by the U.S. Government for the defense of the Panamaitian civil population against possible nuclear attacks. (m) Regulation of commercial activities in the Canal Zone through a Treaty of Commerce, bearing in mind at all times the objective of ensuring for Panama the full enjoyment of all types of benefits deriving from the operation of the Canal. Cosignators of the resolution with Boyd were Deputies Azael Vargas, Thelma King, Jos6 Agustin Arango. Enrique Jim6nez, Jr., Jacinto Lopez y Le6n, Jorge Fernindez, Sidney Wise Arias, Rafael Grajales, Juan B. Arias. RalI Aran go, Jr., and Demetrio Oecerega. 4 INTERLOCKiNG SUBVERSION IN GOVERNMENT DEPARTMENTS U.S. SENATE, SUBCOMMPFYEE To INVESTIGATE THE ADMINISTRATION OF THE INTERNAL SECURITY ACT AND OTHER INTERNAL SECURITY LAWS, OF THE COMMITTEE ON THE JUDICIARY Wa.hington. D.C. Varch 25. 1.954. The subcommittee met at 10 a.m. pursuant to call, in room 324, Senate Office Building, Senator William E. Jenner (chairman) presiding. Present Senators Jenner. Watkins, Xelker. and Butler. Also present: Charles P. Grimes, chief counsel: J. G. Sourvine. associate counsel; Benjamin Mandel, director of research: Dr. Edna R. Fluegel and Robert C. McManus, professional staff numbers. The CHAIRMAN. The committee will come to order. Let the record show this is a continuation of a hearing with Ambassador Braden that was started December 22, 1953, in New York, and I will ask Mr. Grimes to connect the two and to clarify the record. Mr. GRIMES. Thank you. I think that would make a more orderly record. There will be some repetition, but simply by way of amplification. The CHAIRMAN. Mr. Witness, do you swear the testimony you will give will be the truth, the whole truth, and nothing but the truth, so help you God? Mr. BRADEN. So help me God, I do.

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170 ISTHMIAN CANAL POLICY QUESTIONS TESTIMONY OF SPRUILLE BRADEN, NEW YORK, N.Y. The CHAIRMAN. State your full name. Mr. BRADEN. Spruille Braden, and I live in New York, 320 East 72d Street. The CHAIRMAN. What is your business or profession? Mr. BRADEN. Presently as a consultant to various firms mostly on foreign investments and particularly in Latin America. The CHATRMAN. When were you with the Government of the United States? Mr. BRADEN. I was with the Government of the United States more or less continuously-there were in the first couple of years a few intermissions-from the end of 1933 until June 28, 1947. The CHAIRMAN. In what capacities did you serve? Mr. BRADEN. I began first as a delegate in charge of all the economic and financial discussions at the Seventh International Conference. * * * Mr. BRADEN. Yes. Going back to 1941, when I was in Colombia, I began sounding warnings to the State Department about the menace of communism in this hemisphere and during the war-1943 and 1944-there were repeated dispatches in which I said that this is the gravest peril we face and that after the war it is going to be most serious. The CHAIRMAN. That was in your written reports? Mr. BRADEN. Written reports and telegrams, all kinds of things. Mr. GRIMES. What was the Russian Communist Party line at that time? Mr. BRADEN. More or less simultaneously with that, we had the opening that fall of the first United Nations Assembly meeting in New York. They had a San Francisco meeting and a London meeting, but here the Assembly met in New York for the first time. Mr. GRIMIES. They were about to meet at the time this took place? Mr. BRADEN. This all took place after V-J Day, August 6 or August 7. Mr. GRIMES. The agitation began? Mr. BRADEN. It began promptly and it grew rapidly in volume. Mr. GRiMEs. You knew this through reports that reached you? Mr. BRADEN. I had all kinds of reports and telegrams, everything coming in from Panama. The Army had the same thing. The newspapers carried it. Mr. GnmiEs. But your knowledge is based on the official reports made to you as Assistant Secretary of State in charge of Latin American affairs; is that correct ? Mr. BRADEN. Exactly. Mr. GRIMEs. That is the position you occupied, then? Mr. BRADEN. That is the position. Mr. GRIMEs. Will you state, please, what the Russian Communist Party line was? I think I interrupted you. Mr. BRADEN. I was going to say that for the first time the Russians at. that time at that Assemply in New York, made the attack on us that we had aggressive intentions-that we were aggressive and the

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ISTHMIAN CANAL POLICY QUESTIONS 171 proof of the aggressive intentions we had was our establishing bases all over the world. Mr. Gmms. Did they at that time mention Panama bases ? Mr. BRADEN. Subsequently during the discussions in the Assembly they did, not at the beginning, as I recall. Mr. Gnmxs. So they used the Panama bases as proof of our aggressive intentions? Mr. BRADEN. Well, you say they used it. We gave them the ammunition. Mr. GimEs. Let's get to that later, but that was the party line ? Mr. BRADEN. Sure. Mr. Gaimrs. We were the aggressors. The proof is we have the bases, the military bases, all over the world, including Panama ; is that right? Mr. BRADEN. As I recall, the Russians made the point specifying Panama later. The CHAIRMAN. They were not referring to the Canal Zone, they were referring to the Republic of Panama, 134 bases? Mr. BRADEN. Yes, the 134 bases I am talking about. But the Canal Zone was brought in implicitly. Mr. Gimus. Did you have any experience in connection with the aggitation in Panama and the Communist Party line with Alger Hiss? Mr. BRADEN. Yes. Mr. GrimTs. What was it? Mr. BRADEN. There were two instances. Mr. GnmiEs. What was Hiss doing at that time? Mr. BRADEN. Hiss was in charge of the Office of Special Political Affairs. Mr. GImEs. In the State Department? Mr. BRADEN. In the State Department. That office today is headed by an Assistant Secretary of State. It is the Office for United Nations affairs. He was the head of that office, although he did not have the rank of Assistant Secretary of State. The first thing that happened was that, in the routine performance of his duties, the Governor of the Canal Zone submitted his annual report. Mr. GiumEs. To whom? Mr. BRADEN. On the operations of the Canal Zone. I think that is submitted to the War Department. I am not sure of that. but in any case, it was published, as it usually is. Mr. GRIMES. You say routine operations. Would you describe it, briefly, please? Mr. BRADEN. I can't do a good job of describing it. I don't think I read it. Mr. GRimms. What sort of report was it? Mr. BRADEN. How many boats are going through the canal in different directions, the tonnage, et cetera; what were the operations of the stores in the canal, what was the labor operation, everything. Mr. Gmms. Population, matters of that sort? Mr. BRADEN. I think population was probably in it. I don't recall. Mr. GRIMES. This is a report by our Governor down there on operations in the Canal Zone and a report which he submits annually; is th at correct? 67-843-6--12

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172 ISTHMIAN CANAL POLICY QUESTIONS Mr. BRADEN. Exactly. Mr. GRIMES. He had been submitting it to the American Government; is that right? Mr. BRADEN. Since 1903, I assume. Mr. GRIMES. Go ahead, please. What happened in connection with that report? Mr. BRADEN. My office, represented by Mr. Cochran, Mr. William Cochran, who was in charge of that whole area in the Caribbean, and Mr. Wise, who was on the Panama desk, became involved in an argument with the Office of Political Affairs, because the latter wished to submit this report by the Governor of the Canal Zone to the United Nations. My officers immediately got in touch with the legal adviser's office where Miss Ann O'Neill, a very competent lawyer, and a very sturdy soul, I may say-I have a great admiration for her-supported the thesis of my officers that under no circumstances should this report of the Governor of the Canal Zone be submitted to the United Nations. Finally, Mr. Hiss himself Mr. GNIMEs. What was your reason for that? Mr. BRADEN. I was going to say what Hiss' reason was first, because I think that makes it clearer. Alger Hiss and his office claimed, under article 73(e) of the United Nations Charter, it was our obligation to submit that report. I don't know whether you would like to have article 73 reviewed now, or not. The CHAIRMAN. Let it go into the record and become a part of the record, without reading. (The material referred to was marked "Exhibit No. 357" and is as follows:) EXHIBIT No. 357-CHARTER OF THE UNITED NATIONS-CHAPTER XI, DECLARATION REGARDING NON-SELF-GOVERNING TERRITORIEs Article 73 Members of the United Nations which have or assume responsibilities for the administration of territories whose people have not yet attained a full measure of self-goverment recognize the principle that the interests of the inhabitants of these territories are paramount, and accept as a sacred trust the obligation to promote to the utmost, within the system of international peace and security established by the present Charter, the well-being of the inhabitants of these territories, and, to this end: a. to ensure, with due respect for the culture of the peoples, concerned, their political, economic, social, and educational advancement, their just treatment, and their protection against abuses: b. to develop self-government, to take due account of the political aspirations of the peoples, and to assist them in the progressive development of their free political institutions, according to the particular circumstances of each territory and its peoples and their varying stages of advancement; c. to further international peace and security; d. to promote constructive measures of development, to encourage research, and to cooperate with one another and, when and where appropriate, with specialized international bodies with a view to the practical achievement of the social, economic, and scientific purposes set forth in this article; and e. to transmit regularly to the Secretary General for information purposes, subject to such limitation as security and constitutional considerations may require, statistical and other information of a technical nature relating to economic, social, and educational conditions in the territories for which they are respectively responsible other than those territories to which chapters XII and XIII apply.

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ISTHMIAN CANAL POLICY QUESTIONS 173 Mr. BRADEN. My OffiCers mairitained Itllt was per fect 1y ridiciilo s: that article 73(e) anticipated self-government. That was the phraseology used in it. The Canal Zone, so far as the Rhepublic of Panama is concerned, "s self -governing. We had a special agreement as to the operation of the Canal Zone. There was no rhyme or reason, in my opinion, nor in the opinion of my officers, why that should be presented to the United Nations. Moreover, we knew that if it were presented that it was just going to enrage the Panamanians. It was going to play into the hands of the Russians with their allegations about our bases scattered all over the world, and particularly in Panama. It was going to alienate a lot of the other Latin Americans, vlo would say. "See what the U nited States is doing in the Canal Zone It was a thoroughly bad move to make and particularly with the Assembly starting up in New York. I knew that Mr. Alfaro, the former President of PIanama, and Miniister of Foreign Relations. a leading p)olit ician. already faced this terrific problem about the bases outsi(le of the zone, and would be ierrificallv annoyed by this report be ing presented. Mr. GRIMES. fn addition, would it comliicate our relations insofar as operation is concerned by giving the United Nations a voice? Mir. BRADEN. It would complicate us with the Republic of Panama. It brought the United Nations mto soimet hiinig where they had 11o right to be. Mr. GREMES. It might give them a claim to 1 omue stake in the operation of the Panama Canal ? Mr. BRADEN. Exactly. Mr. GRIMES. Was that part of the argument? Mr. BRADEN. Absolutely. The CuAilRiAN. Senator Watkins. Senator WATKINS. Is it not true we also made reports on Alaska Mr. BRADEN. That was not in my sphere, so I haven't any idea about that. I think we did. I dlont know whether we did on Hawaii. or not, but I think we did, now that you mention it. But I wasni' concerned about that. I had enough troubles of my own with Panama. Senator WATKINS. The reason I call your attention to it was the fact I entered a protest about reporting from Alaska. Mr. BRADEN. I vaguely remember that was true. Senator WELKER. Mr. Chairman, may I have a question? The CHAIRMA N. Senator Welker. Senator WELKER. Mr. Ambassador, you were fortified by your counsel's opinion and the opinion of yourself and others, that you were permitted not to submit this information as requested by Mr. Hiss under the limitation of security; is that correct? That is subsection (e) of article 73. Mr. BRADEN. That I can't give you an opinion on as a lawyer. I know that the procedure was totally out of order. There was no justification for that; aside from all of the issues that counsel has brought up in regard to our relations. Senator WELKER. Not withstanding the fact that you did have the security defense in mind, it was still insisted by Mr. Hiss? Mr. BRADEN. It was still insisted by Mr. Hiss that it had to be submitted to the United Nations.

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174 ISTHMIAN CANAL POLICY QUESTIONS Finally, Mr. Cochran and Mr. Murray Wise, my assistants on this matter, came to me and said, "You have got to enter the fight. We can't get any further on it." At that point we got Mr. Hackworth, the legal adviser to the State Department, in on it. My boys reported to me they were quite concerned. They feared Mr. Hackworth was veering over to the side of Alger Hiss, but I stormed around quite a bit on this problem and finally Mr. Hackworth would not give a decision. At that point it was appealed to the Under Secretary of State. The CHATRMAN. Who was that? Mr. BRADEN. Mr. Acheson. I remember very vividly that I went in to see Mr. Acheson. I think Mr. Hiss had already been there for some time. This was all 7 years ago, so my memory may be a bit off, but I think it is substantially accurate. When I tried to state my case, Mr. Acheson, as a lawyer, agreed with Mr. Hiss, and I didn't even have a chance to state my case. I remember that I came out of that meeting boiling with rage at what happened. Senator WELKER. Mr. Hiss was present there? Mr. BRADEN. Oh, yes. The only thing we got out of Mr. Hiss' office was an expression which today I don't understand very clearly, and he said this-he put in a phrase that this was submitted to the United Nations, this report of the Governor, on a pragmatic basis for this year, for the year 1946. What that means, I don't know, but that was supposed to take care of our objections which needless to say, it did not. As we predicted, the Panamanian Foreign Minister made a speech in the United Nations. I have a copy of this if you wish to have it in the record. The CHAIRMAN. I think it should go into the record and become a part of the record. (The material referred to was marked "Exhibit No. 358" and is as follows:) ExHIBIT No. 358-PANAMA CANAL ZONE Is NOT LEASED TERRITORY (Dr. Ricardo J. Alfaro Explains Payment of $430,000 Annuity by the U.S. Government) (Speech by the president of the Panamanian delegation, Dr. Ricardo J. Alfaro, during the session of the Political Commission of the General Assembly of the United Nations on November 14, 1946, in respect to the international status of the Panama Canal Zone.) The Panamanian Delegation has been informed that by virtue of a resolution a donted on February 9. 1946, by the United Nations Assembly, the United States his presented a report concerning the territories under its administration and has included the Panama Canal Zone among those about which it had to report to the general secretariat. in accordance with article 73(e) of the United Nations charter. AMr. GimEs. Would vou state what his points were? Mr. BR DEN. The substance was that here we were talking about the canal as if we had it under lease, and we did not; that it was a special agreement beginning in 1903 between Panama and the United States:

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ISTHMIAN CANAL POLICY QUESTIONS 175 that Panama had given the I united States certain facilities and we had in turn made certain pavien ts il regard to-I think it was .10 imillioni to Panama, plus an annual rental of $250,000 a year. Subsequently we went off gold, raised it to $430,000 a year. There were the various quid pro quo's back and forth that the submission of this to the Ulnited Nations was an outrage both to Panama and to the agreement. Mr. GRIMES. In other words, it was none of the business of the United Nations that he caine out very much on the side of thie united States on this? Mr. BRADEN. le came out very much on the side of my office, not of the United States, because we had submitted it. Mr. GRIMEs. That depends on what the U.S. interest is. Mr. BRADEN. Of the true interest of the United States, yes. Mr. GRIMES. The report was then submitted to the United Nations ? Mr. BRADEN. Yes. Mr. GIMNEs. Did another incident take place in regard to Panama ? Mr. BRADEN. Yes. Mr. GRIMEs. What was that? Mr. BRADEN. At that time, and you have to get the picture of the United Nations, the Russians making their speeches about our being aggressors, the proof being the bases, the Panama bases, 134 outside of Panama Canal Zone, being brought in as proof positive of our aggressive intentions, and I desperately trying and praying that I would be able to keep the lid on everything until the Assembly was over in New York. And that we could get Mr. Alfaro down to Washington, and quietly and calmly, in luncheons, and in our offices, work out an agreement with him about these 134 bases which the military informed me were vitally necessary for the security of the Panama Canal-therefore, of the United States. You can, therefore, imagine my utter astonishment when one morning I picked up the Washington Post at my apartment and here on the front page was an announcement that we had reported to the United Nations on the Canal Zone as an occupied territory. When I read that, I realized that was really putting the fat in the fire in our relations with Panama in the substantiation of the Russian allegations and in our relations with all of the American Republics; it was Such a nasty situation. Mr. GmMEs. In other words, our State Department had officially reported it to the U.N., that Panama was one of our occupied territories? Mr. BRADEN. Yes. The only thing, my memory is a little hazy on whether that came along at about the same time as the submission of the report by the Governor, or whether it came subsequently, but my best recollection is it came subsequently. Mr. GRIMES. This was a matter under your jurisdiction as Assistant Secretary of State for Latin American Affairs? Mr. BRADEN. Exactly. Mr. GRIMES. You learned about it for the first time in the newspapers?

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I 76 ISTHMIAN CANAL POLICY QUESTIONS Mr. BRADEN. I learned about it for the first time in the newspapers. Mr. GRimEs. What did you do? Mr. BRADEN. I dropped the newspaper, and I tore down to the State Department. I called in the Director of the Office of American Republics Affairs, Mr. Briggs, who presently is our American Ambassador in Korea; and my first special assistant, Mr. Wright; and Mr. Murray Wise was then called in as the officer on the Panamanian desk. I may say I was using some pretty strong language around the place at this outrage. None of them knew any more about it than I. They also had read it in the newspapers. We then tried to run it down, and we found that this report had been submitted and the employment of the words "occupied territory" by the Office of Special Political Affairs, that is to say, Mr. Alger Hiss.

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[From the Congressional Record, Sith Cni. 2d se. Juii' 7. P ISTHMIAN CANAL POLICY-AN EVALUATION Mr. FLOOD. Mr. Speaker, over a period of many years, I biave devoted much time and effort to the study of interoceanic canal problems. My inquiries have included the study of many sources, both offi-ial and unofficial. Among the former, are the 1947 report of the Governor of the Panama Canal under Public Law 280, 79th Congress, and the June 1, 1960, report to the House of Representatives by the Boar(dI of Consultants, Isthmian Canal Studies-House Report No. 1960, 86th Congress. The 1947 report, prepared during the hysteria over the advent of the atomic bomb, was directed toward securing authorization of a vast sea-level undertaking at Panama, because of its alleged greater "security" from attack. Subsequent clarifications of the assumptions upon which the "security" hypothesis were based and the advent of the H-bomb have, in the opinion of many competent experts, revealed the underlying fallacies in the "security" thesis for planning navigational projects. The June 1, 1960, report is significant as being the first one of engineering character to challenge the security justification for a new canal of sea level design, the first to relate the large fixed charges involved in the construction of such type to the costs of operations, and the first to express doubt as to the ability to construct such type without serious danger of long interruption to traffic. Neither of these reports present the diplomatic costs that would be involved in the sea level project in the form of a huge indemnity and greatly increased annuity that would most definitely be demanded by Panama for a new treaty to cover the specific conditions for its construction. This aspect, Mr. Speaker, is a paramount consideration that cannot be ignored; and I altogether fail to understand why this most vital feature has been ignored. Of all the papers that I have read, the most comprehensive, logical and historically based, is one on Isthmian Canal policy, prepared on request of the Board of Control of the U.S. Naval Institute and published in the March 1955 issue of its proceedings. With only minor revision, this paper is as applicable today as when it was published. The arguments therein set forth for the major operational improvement and increased capacity of the existing Panama Canal, according to the Terminal Lake-third locks plan, are irrefutable. The time has come when decision should be made without further delay, unless we propose to surrender the canal, which the people of our Nation will never approve. In order that this incisive evaluation of Isthmian Canal policy may be readily available to all agencies of the executive branch, navigation 177

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178 ISTHMIAN CANAL POLICY QUESTIONS and economic interests, at home and abroad, and the Congress, I quote the article with a biographical sketch of its author, and commend it for careful study by every Member of the Congress, and the staffs of congressional committees charged with responsibilities over interoceanic canal questions: ISTHMIAN CANAL POLICY-AN EVALUATION By Capt. Miles P. DuVal, U.S. Navy (Retired)) ISTHMIAN CANAL POLICY ROOTED IN HISTORY The Panama Canal, opened to traffic on August 15, 1914, is an interoceanic public utility for the transit of vessels of commerce and war of all nations on terms of equality as provided by treaty. The history of this undertaking is epic. The idea of its construction traces back more than four centuries. The development of it includes extensive explorations, grave crises, and weighty decisions. Out of these the Isthmian Canal policy of the United States gradually evolved. Yet, despite the vast literature on the canal question, nowhere are the principles of this policy comprehensively stated in one place, and they are not adequately understood. For these reasons a knowledge of key episodes of this important historical subject is essential. The advantageous geographical position of the American Isthmus was recognized by the early Spanish who, within an incredibly short time after their arrival in 1502, explored its regions and reduced their fields of investigation to four main areas: Tehuantepec, Nicaragua, Panama, and Darien-Atrato. Because of the lower continental divides at Panama and Nicaragua and penetration of the jungles there by river valleys, these two avenues quickly became the great rivals for trans-Isthmian commerce. They are still potential rivals. At Panama, mountainous terrain and torrential rivers, notably the Charges, at first represented insuperable barriers to the construction of a canal. At Nicaragua, the existence of a large lake, with the then navigable San Juan River flowing from it into the Atlantic, reduced the magnitude of that undertaking simply to cutting across the narrow strip) separating the lake from the Pacific. These facts undoubtedly supply the basis for the initial predilection of the United States in the 19th century for a Nicaraguan canal. Eventually, the control of the Nicaragua route became a focal point of international conflict, with Great Britain and the United States in a diplomatic deadlock, This difficulty was not removed until 1901, when the Hay-Pauncefote Treaty superseded the earlier ClaytonBiulwer Treaty of 1850, which had deprived the United States of excliusi e contro of any isthnian canal. Graduating from the U.S. Naval Academy In 1918 (class of 1919), Captain Duval has !u;i oxensive naval service including duty from 1941 to 1944 as captain of the port, Balhao. C.Z. in charge of marine operations in the Pacific sector of the Panama Canal. From 1946 to 1949 he was Navy Department liaison officer and coordinator of Isthmian Canal studies, under the Chief of Naval Operations. He is the author of two books on the canal. "And the Mountains Will Move" and "Cadiz to Cathay." published by Stanford University Press and is now completing a third volume in his trilogy.

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ISTHMIAN CANAL POLICY QUESTIONS 179 PATTERN OF ISTHMIAN CANAL ISSUEs EVOLVES Meanwhile, French interests under the dynamic leadership of Ferdinand de Lesseps had decided to construct a canal across the isthmus. An International Congress for Consideration of an Interoceanic Canal met in Paris in 1879. There, this Congress wrestled with the difficult questions of selecting the best site and deciding on the best type. De Lesseps, the hero of Suez, (a simple sea-level canal), lent the full force of his prestige and his genius toward securing approval for a "sea level" undertaking at Panama-a wholly different problem. One engineer, the only one in that Congress who had adequatel-: studied the geography of isthmian regions and grasped their signifcance, when he saw the trend toward decision for the "sea-level" type, rose in strong protest. He understood the topography at Nicaragua and how its elevated lake, 105.5 feet high, would contribute toward the construction and operation of a canal there. He knew the surface features at Panamathe continental divide about 10 miles from the Pacific, the torrential Rio Obispo-Chagres flowing into the Atlantic, and the smaller Rio Grande into the Pacific, both through contiguous valleys suitable for the formation of lakes. Interpreting these elements in the light of maritime as well as engineering needs, he recognized the lake idea as offering the solution of the canal problem. Then, with the vision and simplicity of true genius, he proposed a "practical" plan for the Panama Canal, here summarized: "Build a dam at Gatun and another at Miraflores, or as close to the seas as the configuration of the land permits. Let the waters rise to form two lakes about 80 feet high, join the lakes thus formed with a channel cut through the continental divide, and connect the lakes with the oceans by locks. This is not only the best plan for engineering but also best for navigation." Essentially, that was the plan for the Panama Canal eventually adopted in 190. The man who conceived and presented the plan was Adolphe Godin de Lpinay. The applicability of this plan-the only one which at that time could have had any chance for success-was not understood. De L6pinay's great idea was ignored. His conception of this plan. however, and its dramatic presentation before the Paris Congress of 187) establish him as an architectural and engineering genius-the originator of the plan from which the Panama Canal was eventually built. The French, despite De Lepinay's timely warning, launched upon their ill-fated undertaking. Ten years later, in 1889. their effort collapsed and the isthmus returned to the jungle. Yet, before the failure, the French, to save time and monev, were forced to change their plans from "sea-level" to a modified high-level lake and lock type. Thus, as the 19th century closed, the pattern of interoceanic canal's focal political and engineering issues had evolved: first. a struggle among competing interests in the choice of route: and second. debate as to the type of canal, with final decision for the high-level-lake and lock type at Panama. PANAMA WINS THE BATTLE OF THE ROUTES In 1899, after more than half a century of exploration, including a number of naval expeditions, the United States started serious investigations by means of an Isthmian Canal Commission for explora

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I SO ISTHMIAN CANAL POLICY QUESTIONS t ion, 1899-1902, of which Rear A di. John G. Walker, a distinguished I ne officer of the U.S. Navy, was president. After an extraordinary political struggle, known as the "battle of ihe routes," the Congress authorized the acquisition for the United States of a canal zone in what was then a part of the Republic of Colombia, the purchase of the French holdings, and construction of a canal at Patnama, with provision for the Nicaragua canal as an alternate project, if suitable arrangements could not be made for one at 1anamia. To this end, the Charge d'Affaires of Colombia, Dr. Tomas Herrin, a graduate of Georgetown University and well acquainted with American governmental leaders, succeeded, after many months of arduous labor, in negotiating what was considered a most favorable canal treaty for his country-the Hay-Herrin Treaty of January 22, 1903, which was ratified by the U.S. Senate on March 17, 1903. Unfortunately, this treaty became involved politically in Bogota. The Colombian Senate, called into special session on June 20, 1903, for its ratification, rejected the treaty on August 12, 1903, against urgent pleadings of Dr. Herrin in Washington and U.S. Minister Arthur M. Beaupre in Bogota. Panamanian leaders, fearing that after all Panama still might lose the canal to Nicaragua, set out to prevent that possibility. Under the leadership of Dr. Manuel Amador, the state of Panama seceded from Colombia on November 3, 1903, and declared its independence. This was quickly recognized, first, by the United States, and appropriately, second, by France, the country that started the waterway. Then followed the Hav-Bunau-Varilla Treaty of November 18, 1903, which was ratified first by Panama and then by the United States. In this treaty the Republic of Panama granted to the United States "in perpetuity" the "use, occupation, and control of a zone of land and land under water for the construction, maintenance, operation, sanitation, and protection" of the Panama Canal-and as if the United States were the "sovereign" of that territory. The ratification of this treaty sealed the choice of the Panama route. The technical justification for this fundamental action was supplied by the Tsthmian Canal Commission, 1899-1902, which, under the direction of Rear Adm. John G. Walker, explored all canal routes. He also headed the first Isthmian Canal Commission for construction of the Panama Canal (1904-5) under which the Canal Zone was acquired. the Canal Zone Government organized, and preliminary work started. These achievements place him in history as a principal architeet of Isthmian Canal policy. BATTLE OF THE LEVELS AND THE GREAT DECISION Work under the United States control started haltingly, with inoreasing uncertainty as to the type of canal that should be constructedthe high-level-lake and lock type or a canal at sea level. Each proposal had strong advocates. Fortunately, when the time for decision approached, President Theofore Roosevelt selected the great railroad builder, explorer, and business executive, the late John F. Stevens, as Chief Engineer of the fsiLbniai Canal Commission.

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ISTHMIAN CANAL POLICY QUESTIONS 181 Mr. Stevens' qualifications were unique. He had read everything available on the proposed Panama Canal since the time of Philip I. built railroads in the Rocky Mountains, and supervised open mining operations in Minnesota. Thus, in his experience he had witnessed what occurs when the balances of nature are altered, and understood the hazards involved in excavating a navigation channel throtuih mountains. Arriving on the Isthmus on July 25, 1905, at the height of a crisis. he had matters under control within 24 hours. Experienced as he was in large undertakings, he promply provided housing for employees, organized commissaries, encouraged sanitation, ordered equipment. planned the transportation system, and formed the basic engineering organization for building the Panama Canal. Indeed, so rapid was his progress that he found himself hampered by having to wait for a decision as to the type of canal, then being considered by an international Board of Consulting Engineers. In its report of January 10, 1906, this board split-eight members, including five Europeans, voting for "sea level"; and the five remaining Americans voting for high-level-lake and lock. The naval member on the Isthmian Canal Commission at that time was the Chief of the Bureau of Yards and Docks, who, in a minority report, favored the "sea level" plan as "affording greater immunity from hostile injury." 2 Meanwhile at Panama, Stevens had walked through the entire length of the canal route and studied the topography. Interpreting it in the light of navigational requirements as well as construction, he decided upon the high-level-lake and lock plan, with the Atlantic terminal dam and locks at Gatun. For the Pacific end, he favored placing its locks in one group south of Miraflores at Aguadulce, just as he planned to do at Gatun. Testifying in Washington before congressional committees in January 1906, with a conviction for the high-level plan that no one could shake, he voiced his determined opposition to the "sea-level" idea. But one appearance was not enough. In June, he was again in 'Washington, still leading in this memorable struggle, later described by Col. George W. Goethals as the "battle of the levels." On this occasion, Stevens even more forcefully and fearlessly urged the high-levellake plan as the logical solution. In the end, with the support of President Theodore Roosevelt, Secretarv of War AVilliam H. Taft, and the Isthmian Canal Commission. the recommendations of Chief Engineer Stevens prevailed. Congress, by the act approved June 29, 1906, adopted the high-level-lake and lock plan as proposed by the minority of the International Board of Consulting Engineers. That was the great decision in building the Panama Canal, for the second time completing the pattern of interoceanic canal political and engineering debate. Here it should be noted that when making his recommendation to the Congress for this action, President Roosevelt did so after evaluating all available evidence of relative vulnerability and operations. effectiveness of the two types. Although he understood that the "sealevel" type would be "slightly less exposed to damage in event of war." 3 2 Report of Board of Consulting Engineers for the Panama Canal (washineton. 06)). I P. iv.

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182 ISTHMIAN CANAL POLICY QUESTIONS lie recommended the high-level plan because of its economic and operational superiority. The transit from 1914 through August 31, 1954, in both peace and war, of more than 230,517 vessels of various types has completely established the wisdom of that decision. Moreover, it secured Chief Engineer Stevens, who was primarily responsible for bringing it about, his great fame as the basic architect of the Panama Canal. CIVILIAN CONTROL REPLACED BY MILITARY Though the high-level plan, as approved by the minority of the International Board of Consulting Engineers, provided for placing all Atlantic locks at Gatun, it also specified separation of the Pacific locks into two groups. Chief Engineer Stevens, who had had railroad operating experience, recognized the operational inconvenience of this arrangement and never favored dividing the Pacific locks. Eventually, on August 3, 1906, Stevens tentatively approved a plan developed by William Gerig. The proposal placed all Pacific locks in three lifts south of Miraflores with the terminal dam and locks between two hills, Cerro Aguadulce on the west side of the sea-level section of the canal and Cerro de Puente on the east side-on a natural perimeter that would have supplied the same arrangement as at Gatun. This plan, had it been followed, would have enabled lakelevel navigation from the Atlantic locks to the Pacific, with a summitlevel anchorage at the Pacific end of the canal to match that at the Atlantic end. Regrettably, Stevens was under great pressure to start construction. Advocates of the "sea-level" proposal, stung to the quick by their defeat in Congress, were poised ready to take advantage of a major change in the approved program as evidence of weakness in the highlevel plan. Opponents of any canal at all were also seeking some means to delay the enterprise. These two forces together represented a political and economic strength that could not be disregarded. Stevens' foundation explorations, necessarily made in great haste, proved unsatisfactory, and he did not dare to jeopardize the project by further delay. Twenty days later, on August 23, 1906, still confident that this important question would rise again, he voided his plan marking it, "not to be destroyed but kept in this office," and proceeded with the approved plan for separating the Pacific locks. In 1907, after having brought construction to a point where the success of the project was a certainty, Stevens resigned his positions as Chief Engineer and Chairman of the Isthmian Canal Commission, to which combined offices he had been appointed by President Roosevelt in recognition of his contributions. He was succeeded by Col. George W. Goetbals under whose able direction the work was carried forward. PANAMA CANAL OPENED FOR TRAFFIC Notwithstanding this shift in administrative control of the canal enterprise from civilian to military in 1907, the Stevens proposal to combine the Pacific locks did not die. Col. William L. Sibert seriously stldie(d it and. on January .31, 1908, formally submitted a definite plan

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G eo'o rj O' ok Ne" $s' \I.v G'312 ~ j ~ ~ AttA. 4 -$ ij tt I \1 \4 1 AIU \I <6 K( I R THlE INImo P .\( 1 \ 141 1 t I. I \ \\I \ ---. L(I Nl t I IA

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184 ISTHMIAN CANAL POLICY QUESTIONS that reflected his appreciation of marine needs as the basis for navigational planning.' But, unfortunately, the Sibert proposal likewise was not approved for reasons then deemed adequate. In this connection, it is pertinent to comment that after the resignation of Rear Admiral Walker in 1905 there was no experienced navigator on the Isthmian Canal Commission. Thus, one can only ponder what might have been the result had such a person been readily available for consultation with Stevens and Sibert on marine planning. In the light of later operational and engineering knowledge, developed in 1941-44, when there was such consultation between experienced engineers and marine operating officials, it is indeed regrettable that the Stevens-Sibert proposals were not adopted. Colonel Goethals headed the project to the end, making a number of important but nonbasic changes, which included a widening of Culebra (Gaillard) cut and the locks. He developed the first permanent operating organization under the Panama Canal Act of 1912 and, as the first Governor of the Panama Canal, opened the canal to traffic on August 15, 1944, and overcame the early slide crises. He and his associates won great fame as builders of the Panama Canal. In this connection, it should be explained that the original concept of the functioning of the canal enterprise as a civil agency under the Panama Canal Act was dual: in peace, as an interoceanic public utility under a Governor; in war, under the supreme control of the comimanding general of U.S Army on the isthmus. In either status, the operational mission of the waterway remained as the transit of vessels under the obvious assumption that the Panama Canal, like other transportation facilities in the United States, would serve in war as well as in peace. DEFENSE CONCEPTS BECOME ASCENDANT After the opening of the canal to traffic, the great builders left the isthmus; operation and maintenance became matters of routine, and the project was uncritically accepted. The rapid development of the airplane and other modern weapons following World War I, dramatized by periodic fleet exercises off Panama, made considerations of defense matters of increasing concern; those of marine operations became secondary. In the excitement preceding World War II, the Congress authorized construction of a third set of larger locks, primarily as a defense measure, 5 known as the third locks project, at an authorized cost of $277 million. The proposed layout placed a new set of larger locks (140 feet by 1,200 feet) near each of the existing locks but at some distance away to afford greater protection through dispersal and increased lock capacity for large naval vessels. The new locks were to be joined with the existing channels by means of bypass channels. 6 Significantly, the plan included a number of construction features for future chaniing of the canal to "sea level." Thus, discerning 4 William L. Sibert and John F. Stevens, "The Construction of the Panama Canal" (New York: D. Appleton & Co., 1915), pp. 139-46 contains a summary of the Sibert proposal mid its disposition. Public Law 391. 76th Congress, approved Aug. 11, 1939 (535 Stat. 1409). H. Doe. 210, 76th Cong., 1st sess. (1939).

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ISTHMIAN CANAL POLICY QUESTIONS I S5 students recognized the third locks project as renewing the old "battle of the levels" in a new form-that of "conversion." The third locks project layout at the Atlantic end of the canal, which duplicates an operationally sound arrangement at Gatun, is likewise sound. At the Pacific end, however, the proposed new channel layout contained three sharp bends-29', 47', and 37 -in succession from north to south. The latter, if it had been completed, would have created operational problem s and navigational hazards of the gravest character. Construction started in 1940 and was pushed vigorously until suspended in May 1942, because of shortage of ships and materials more urgently needed elsewhere for war purposes. No excavation waaccomplished at Pedro Miguel; that at Gatun and Miraflores wasubstantially completed. Some $75 million was expended. 7 WAR EXPERIENCE INSPIRES PLAN FOR CANAL IMPROVEMENT The suspension of the third locks project, however. afforded an opportunity, while there was still time left to make such a study, for its reexamination in the light of operational needs demonstrated by marine experience. This was at a period when the Panama Canal was the scene of many military and naval expeditions on their way to and from combat zones in the Pacific. This, it should be also noted, was before the advent of the atomic bomb. These studies conclusively established that the principal marine operational problems of the existing Panama Canal are1. Dangerous traffic bottleneck at Pedro Miguel and lack of a Pacific summit anchorage. 2. Double handling of vessels at separated Pacific locks. 3. Effect of fog in Culebra (Gaillard) cut on capacity and operations. 4. Lockage surges in cut caused by operating Pedro Miguel locks (3-foot maximum amplitude). 5. Limited operating range of Gatun Lake water level (87 feet-82 feet). 6. Navigational hazards in the restricted cut (300-foot minimum bottom width). 7. Inadequate dimensions of present locks for laroezt vessels (110 feet by 1,000 feet ).' From the nature of these inadequacies, it is obvious that locating the Pedro Miguel locks at the south end of Culebra (Gaillard) cut, where it created at tragic bottleneck and other problems. was the fundamental error in operational design of the Panama Canal. Under the basic assumption that the prime function of the Panama Canal is the safe and convenient transport of vessels, it is self-evident that the wide channels of Gatun Lake afford safer and more convenient navigation than can any necessarily restricted channel at sea level. House Committee on Merchant Marine and Fisheries. executive hearings on HI.R. 44 79th Cong. 1st sess., Nov. 15, 1945, p. 4. 8 Hon. Willis W. Bradley, "What of the Panama Canal?" Congressional Reord. vc 1.-4. pt. 10 (Apr. 21. 1948), p. A2449 and "The Whys of tLh Painama Cana:: Conmressiinai! ,Record, vol. 95, pt. 12 (Mar. 4, 1949), p. A1303 contain extended discussios of mori:problems.

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186 ISTHMIAN CANAL POLICY QUESTIONS Moreover, the advantages of unrestricted lake navigation outweigh the minor hazards and time lost by passage through locks. Thus, the best operational solution is not provided by lowering the Gatun Lake water level to sea level, or to some intermediate level, but by raising it to its highest feasible elevation. The obvious economic operational solution thus is a major improvement of the existing canal according to what is known as the Terminal Lake-third locks plan, which includes the following program: 1. Removal of the bottleneck Pedro Miguel locks. 2. Construction of all Pacific locks in continuous steps near Miraflores. 3. and 4. Elevation of the intermediate Miraflores Lake water level (54 feet) to that of Gatun Lake to serve as an anchorage during fog periods and to dampen surges. 5. Raising the summit water level to its optimum height (approximately 92 feet). 6. Widening Culebra (Gaillard) cut. 7. Construction of a set of larger locks. These modifications will remove the traffic choke at Pedro Miguel, correct present operational dissymmetry and simplify canal control, increase channel depths, and improve navigation, mitigate the effect of fog, reduce marine accidents, decrease transit time slightly, conserve water, and increase capacity. Thus, the plan supplies the best operational canal practicable of economic achievement. El 534 m#"s PM e Ezcamto at OW W a01 s 1 Pfnt4 EWtifaot Cgu'aUM 0 3 2 h*9tWP of Exce.vvion on Cenr U Atda.ic Oran. PA ~ _E1 0 LOTo+S 54anE e 10 15 20 25 30 35 40 4S 50 Courtesy Ci:i! Engineering DIAGRAMMATIC SIDE ELEVATION OF THE PANAMA CANAL This drawing shows the canal modified and adapted to the Terminal Lake-Third Locks proposal. The present lake and lock canal is unshaded; the sea-level proposal is shaded. This plan was publicly revealed by its author on May 20 1943, in an address before the Panama section of the American society of Civil Engineers, under the title, "The Marine Operating Problems, Panama Canal, and the Solution." 9 Attended by high Army, Navy, and Canal Zone officials, the presentation aroused the interest of the commandant of the 15th Naval District, Rear Adm. C. E. Van Hook, who was present. He later submitted the plan to the Navy Department. On September 7, 1943, the Secretary of the Navy forwarded it to the President. Subsequently, this proposal was approved in principle by the Governor of Panama Canal for the major modification of the existing canal. 9 A.s.C.E. "Transactions," vol. 114 (1949), p. 558.

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ISTHMIAN CANAL POLICY QUESTIONS 187 According to the report of a 1949 congressional investigation, it can be accomplished at "comparatively low cost." 10 Moreover, no doubt exists as to its soundness because a similar arrangement at Gatun has been tested since 1914 and found eminently satisfactory. *r PRINCIPAL TRAN-ISTHMIAN CANAL (I) Tehuantepec, (5) Nicaragua, (9) Chiriqui, (15), Panama, (16. San Blas, (1~ Sasardi-Morti, (23; Atrato-Cacarica-Tuyra, and (25) Atrato-Truando. ATOMIIC BOMB RESURRECTS SEA-LEVEL PLA N The spectacular advent of the atomic bomb in 1945 injected a new element into the canal picture. Under the force of its impact, canAl officials sought authority to conduct an "overall review" of the entire interoceanic canals in the light of the then newest (levelopinents in the "military and physical sciences." This was before the hydrogen bomb. Accordingly, the Congress in 1945 enacted legislation 12 authorizing the Governor of the Panama Canal to make a conmprehensive investigation of the means for increasing its capacity and security to meet the future needs of interoceanic commerce and national defense. The law also provided for a restudy of the third locks project, a study of canals at other locations, and for consideration of any new means for transporting ships across land. Thus was launched the second major canal crisis in the 20th century. It served to resurrect the corpses of the 1902 "battle of the routes" and the 1906 "battle of the levels" with a rehashing of all the main arguments of the earlier struggles on the basis of the newer term, "security," rather than the older one, "vulnerability." Under a far more extreme interpretation of the "*security" factor of the statute than was intended by the Congress that enacted it, the investigation was directed toward obtaining authorization for a sea10 H. Rept. 1304, 81st Cong., 1st sess (1949), p. 2. 11 Committee on Merchant Marine and Fisheries. op. cit., p. 5. Public Law 280, 79th Cong., approved Dec. 28, 1945 (59 Stat. 063). 67-543-06 ~3

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188 ISTHMIAN CANAL POLICY QUESTIONS level project at Panama, with the "security" and "national defense" factors as paramount, and money costs not a "governing consideration." 13 In line with the 1905-06 precedent, the naval representative on the Board of Consulting Engineers for the greater part of this engineering investigation was the Chief of the Bureau of Yards and Docks. In the ensuing public hysteria centered on the dangers of the atomic bomb and other modern weapons, the long range and fundamental mission of the Panama Canal to provide efficient and economic transit of vessels was generally overlooked. The report of the 1946-47 Isthmian Canal Studies 14 recommended only the sea-level project for major canal construction at Panama, initially estimated to cost $2,483,000,000. With the exception of the two terminals, this project provides for constructing a virtually new Panama Canal of 60 feet minimum depth in navigation lanes and of 600-foot width between sloping sides at a depth of 40 feet on a new alinement somewhat removed from the present channel, which it crosses several times. The project includes a tidal lock (200 feet by 1,500 feet) and a navigable pass at the Pacific end, many miles of dams for flood control reservoirs on both sides of the projected canal, diversion channels and other structural features. This program would rest in abandonment of the greater part of the existing waterway and the investment that it represents. Although the 1947 report contained studies of plans for a Terminal Lake-third lock project, which it did not recommend, it offered a relatively minor program for improvement of the present canal installations "to meet the needs of commerce" as a preferred alternative to the major improvement of the existing waterway as recommended to the President in 1943 by the Secretary of the Navy. Transmitted by the President to the Congress on December 1, 1947, and without presidential approval, comment, or recommendation, the report promptly encountered sharp opposition. The Congress took no action on this report. Instead, in 1949, it authorized an investigation of the organizational and financial aspects of the canal enterprise, 5 for which study Representative Clark W. Thompson, of Texas, a retired Marine Corps Reserve officer, served as chairman. This investigation resulted in the first basic change 16 in the permanent canal operating organization that was established in 1914. The new act requires that transit tolls be established at rates that will place the operation of the canal enterprise on a self-sustaining basis-a new principle in Isthmian Canal policy with far-reaching implications affecting the future economic management of the Panama Canal and interoceanic commerce. This subject is now under further congressional study. 7 n See statement of Board of Consulting Engineers. quoted in Panama American, Aug. 5, 1940. p. 3, cols. 4-6. 14 Summarized with discussions in A.S.C.E. "Transactions," vol. 114 (1949), pp. 607-906. 'r H. Res. 44, 81st Cong. quoted in Congressional Record, vol. 95, pt. 2 (Feb. 28, 1949), p. 1617. 36 H. Doc. 460, 81st Cong., 2d sess. (1950) and Public Law 841, 81st Cong., approved Sept. 26, 1950 (64 Stat. 1038). 17 Hon. John J. Allen, "Panama Canal-Interim Report," Congressional Record, vol. 100, No. 149 (Aug. 4, 1954), p. A5766.

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ISTHMIAN CANAL POLICY QUESTIONS 189 CLARIFICATIONS RESTORE OPERATIONS AS BASIS FR PLANNING Meanwhile in the Congress, the "security" and "national defense" premises, on which the recommendation for the sea-level project was primarily based, were vigorously challenged. As to the atomic bomb, Representative Willis W. Bradley, a retired naval officer, summarized his views: "As far as I can acertain, the greatest authorities on modern weapons of war who have given this subject serious attention hold uniformly that any canal would be critically vulnerable to the atomic bomb, regardless of type; that a sea-level canal would be in the same security class as a lake canal; that a sea-level canal could be closed for prolonged periods of time beyond any hope of speedy restoration; and that a sea-level canal cannot be considered secure in an atomic war. These same authorities also agree that the atomic bomb is irrelevant as a controlling factor in the planning of operational improvements for the Panama Canal." Representative, now Senator, Thomias Martin of Iowa. a retired Army officer, developed the national defense clarification, repeatedly stressing that protection of any type of camal, wherever loatedl, is -an overall governmental responsibility, and that its defense, like that of the seaports, airports, railroadi, higlhways. an poduetiye cent ers of the United States depends upon the combined indlistial, mi]itav naval, and air power of this -Nation as obtained in bot world war, and not upon passive defense measures, uch as may be embodied in inherent characteristics of canal design." Here it should be stated that leading atwi w: artare authorities. who studied the problem of C>rinal Zone defenle in Il 17. considered that arguments as to relative vulnerability of types of -o1 ru.tion are entirely without point and that the sea-level project would, in effect, constitute a "maginot line." This view has been greatly strengthened by the later development of the hydrogen bomb, which is measured in megatons of TNT equivalent as compared to kiloton for the atomic bomb. In the course of extensive discussions of the sea-level project recommendation, 2 0 congressional and administrative leaders often 4ressed the point that this project, if justified primarily for "national defense,'' would divert both funds and resources from projects and programs in the United States that are far more essential to national security. The combined effects of the defense clarifications have been toward eliminating the concept of inherent resistance to attack as the governing consideration in planning at Panama. Thus, it appears that the only justifiable security design feature is adequate protection against sabotage, which is chiefly an administrative function. Eventually, a group of engineers and others associated in building the Panama Canal submitted their views in a memorandum to the Congress. This memorial challenged the official cost estimates in the 1917 report, charging that the sea-level project would cost several times Is Bradlev, "What of the Panama Canal?" op. cit., p. A2451. 3 Hon. Thomas E. Martin, "An Interoceanic Canals Commission, the Beet Solulion rf Panama Canal Problem," Congressional Record, vol. 97. pt. 14 (July 1S, 1951). ). A44i. 2 Ion. Clark w. Thompson. "Isthmian Canal Policy of the United States--Pilio:raphical List," Congressional Record. vol. 95, pt. 16 (Aug. 25, 1949>, p. A5580 and suPequent statements of distinguished Members of Congress.

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190 ISTHMIAN CANAL POLICY QUESTIONS its initial estimate-$2,483 million-and that the third locks project adapted to the principles of the terminal lake proposal (widening Culebra Cut excepted) can be accomplished at relatively low cost as compared to that of the sea-level project-estimated as under $600 million. The statement also criticized the 1953 program for repair and alteration of present lock structures as makeshifts in character and without sufficient merit, pointing out that it will delay the fundamental and long-overdue solution of the problems involved. It stated that the Governor's recommendation of none but the sea-level project for major increase of canal facilities served to exclude what may be the best solution when evaluated from all angles. Included in an address to the House by Representative Eugene J. Keogh of New York 2 this memorandum was promptly recognized by the engineering profession. 2 Strong appeals for the creation of a wholly American, independent, broadly based, predominantly civilian, strictly nonpartisan and objective Interoceanic Canals Commission, composed of able men who may not be dominated or unduly influenced by Federal executive agencies, have been made by responsible Congressional leaders as the best means for developing a wisely-reasoned Isthmian Canal policy. 2 3 The consequences of prolonged arguments, in and out of the Congress, have been toward restoration of economic thinking and an increased appreciation of fundamental planning concepts so well expressed during the 1905-06 "battle of the levels" by General Henry L. Abbott, the great student of the Chagres, member of the Comit6 Technique of the French Panama Canal Company and the international Board of Consulting Engineers, and an advocate of the highlevel type. His words were: "The true criterion is ease and safety of transit, and * this test leaves no doubt as to which type of canal should be preferred at Panama." 24 This standard, both obvious and simple, is as true today as it was when written in 1905. Moreover, it is applicable in evaluating not only canal proposals at Panama but also those at other locations. DIPLOMATIC IMPLICATIONS The. juridical basis for the Canal Zone rests with the Hay-BunauVarilla Treaty, which authorized a zone 10 miles wide extending 5 miles on each side of the center line of the canal. After extended diplomatic discussions, the boundaries of the Canal Zone were later fixed in the Price-Lefevre Boundary Convention of September 2, 1914. An examination of the general plan of the proposed sea-level project discloses a number of features not covered by current international agreements. Among these are: a new main channel alignment substantially removed from the existing channel from which Canal Zone 2 "Panama Canal Construction Engineers Favor Interoceanic Canals Commission," Congresslonal Record, vol. 100, No. 79 (Apr. 29, 1954), p. 5491. O"Panama Canal Problem," Civil Engineering, vol. 24 (July 1954), p. 460. H.R. 8457 and H.R. 8458, 82d Congress, H.R. 1048, 83d Congress, and S. 766 and H.R. 3335, 84th Congress. 24 Henry L. Abbott, "Problems of the Panama Canal." (New York: Macmillan Co., 1905), p. 224.

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ISTHMIAN CANAL POLICY QUESTIONS 191 boundaries are measured; flooding of additional territory in the Republic of Panama in the Chagres River Valley downstream from Madden Dam (Alhajuela); diverting the Chagres River from its present path west of Limon Bay to a new path east of the bay that crosses a Panamanian highway; and draining the central portion of Gatun Lake. The last feature would disrupt present navigation channels to Panamanian settlements on the lake and uncover large and forbidding swamp areas with resulting health and sanitation consequences. These aspects of the "sea-level" undertaking would idoubtedly bring a demand from the Republic of Panama for a new treaty covering the specific conditions for its construction. What concessions such a treaty would cost cannot be predicted. But, based upon previous experience in such diplomatic negotiations, these costs would be far greater than earlier ones, inevitably adding to the total estimate and increasing tolls. Furthermore, such negotiations would be fraught with considerable uncertainty in the relations of the United States with Panama and other nations of Latin America, not to mention threats to the security of the enterprise through the process of its internationalization, for which there have been persistent demands. In contrast, the Terminal Lake-Third Locks plan, being merely an "enlargement of the existing facilities" 25 that does not call for additional "land or waters" or authority, will not require a new canal treaty. This, it must be obvious, is a truly paramount consideration. The construction of a canal at another location would introduce an entirely new diplomatic situation, which would be just as complicated as that at Panama. The salient elements of this situation, however, are: that the 1947 report does not present these significant diplomatic involvements; that the need for negotiating a new treaty with Panama to cover the sea-level project was not submitted to the Congress; and that the Congress has not authorized such negotiation as was done in the Spooner Act of 1902 for the original construction of the Panama Canal. ISTHMTAN CANAL POLICY MUST BE REDETERMINED The evolution of Isthmian Canal policy has been slow. Its principal objectives have long been the best type of canal at the best site for the transit of vessels of commerce and war of all nations on terms of equality as provided by treaty, and at low cost of construction, maintenance, operat on, sanitation, and protection. Often beset by bewildering confusions of ideas, the progress of fundamental concepts has, at time deviated from their lo i Ical courses. Yet events have thus far conspired to avert irretrievable error. Now, with the main arguments clarified, the interoceanic canal problem in its national relationships is coming to be better understood and attention is focusing on the true objectives of securinQ requisite capacity and operational efficiency. Nevertheless, the evolving situation is of such ()rave concern that it must be protected by ceaseless viglance and fully matured objective judgment. 2 Hull-Alfaro Treaty of Mar. 2, 1936, art. II.

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192 ISTHMIAN CANAL POLICY QUESTIONS The Panama Canal is now entering its fifth decade of operations. Its navigational inadequacies have been established. The canal as completed contains fundamental errors in operational design centered on the location of the Pedro Miguel locks. These can be corrected only by the major reconstruction of the Pacific end of the canal as contemplated in the Terminal Lake-third locks proposal. Commercial traffic through the canal has reached the highest volume in history. The Navy has vessels that cannot transit. Issues raised by questions of "security" and "national defense" have been formally submitted but never accepted. The principle of economic operation of the canal has been embodied in law. 2 6 Yet, in a physical sense, the shipway is still essentially what it was in 1914. Thus, the time has come to provide, without further delay, the additional interoceanic transit capacity and operational improvements to meet present and future needs. The solution of this problem is not the simple proposition that it may appear. Instead, it is a highly complicated one of the greatest national importance, rising above purely personal and group considerations. It involves questions of fundamental operational and engineering planning, the decisions on which will affect the welfare of the United States and other maritime nations through the indefinite future. These facts call for a further reassessment of the entire interoceanic canals problem 27 based on realities, with a comprehensive restatement of Isthnian Canal policy as derived from a reasoned line of action. This is the task that sooner or later the Congress and the Nation must meet. Public Law 841, 81st Cong., approved Sept. 26, 1950 (64 Stat. 1038). 2 Thompson, "Interoceanic Canals Problem," Congressional Record, vol. 98, pt. 8 (Jan. 15. 1952), P. A-163.

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[From the Congressional Record, 87th Cong., 2d sess., June 13, 1962] PRESIDENT TAFT: STATEMENT ON CANAL ZONE SOVEREIGNTY AND JURISDICTION Mr. FLOOD. Mr. Speaker, even since the ill-advised action of the President of the United States on September 17, 1960, in directing the formal display of the Panama flag over the Canal Zone territory, the question of sovereignty over the zone has become a topic of increasing discussion in the Spanish-language press of the isthmus, with resulting confusion and uncertainty. Among the remarks of American statesmen most often quoted out of context on the matter of sovereignty over the Canal Zone are those of President William Howard Taft, who, first as Secretary of War and later as President, was associated in responsible capacity with the construction of the Panama Canal a longer time than any other high official. On November 16, 1910, while attending a banquet given by the President of Panama, in the capital city of that Republic, President Taft made this significant statement: We are here to construct, maintain, operate, and defend a world canal, which runs through the heart of your country, and you have given us the necessary sovereignty and jurisdiction over the part of your country occupied by that canal to enable us to do this effectively. (Source: Canal Record, vol. IV [Nov. 23, 1910], p. 100.) Such comments by President Taft were no mere offhand remarks, but a deliberately phrased declaration by the President of the United States. It was a clear-cut and accepted statement of the policy under which the Canal Zone was acquired and the Panama Canal constructed and has since been maintained and operated in a land of endemic revolution and political instability. It would indeed be tragic for any weakening in this policy to be made at this time of international crisis which may continue for many years to come. Any subtraction from the time-tested policy of exclusive sovereignty of the Canal Zone by the United States is well calculated to cause disaster to the entire world, for the Panama Canal as a major transportation artery, has long been the key target in the long-range program for Bolshevist conquest of the Caribbean. Furthermore, the surrender of the Panama Canal to any other country or to any international body might, well result in the most serious consequences to the free world as well as open a diplomatic Pandora's box. This is no time to temporize on a subject of such transcendent significance. In order that the full text of President Taft's significant statement may be available to all agencies of our Governmenit, both legislative 193

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194 ISTHMIAN CANAL POLICY QUESTIONS and executive, which may be concerned with this matter, and the Nation at large, 1 quote it as part of my remarks: [From the Canal Record, Nov. 23, 1910] PRESIDENT TAFT'S VISIT President Arosemena and my friends of Panama, I am always glad to accept your hospitality. As once I have done in the case of Mexico, so now in the case of Panama, I have ventured to violate the customary limitation upon the movements of the President of the United States by leaving the soil where it exercises sovereignty to come beneath the flag and the protection of a friendly neighbor. The birth of the Republic of Panama and the peculiar interest that the United States has had since that birth in Panama's welfare and prosperity found a common cause in the construction of the Panama Canal. The treaty between the two countries makes the United States the guarantor of the integrity of the Panama Republic, and, therefore, in a sense the guardian of the liberties of her people secured by its constitution. Our responsibility, therefore, for your Government requires us closely to observe the course of conduct by those selected as the officials of your Government after they are selected, and to insist that they shall be selected according to law. All this, I say, makes us especially interested in what is done in your Government, but this relation neither calls for nor permits annexation. We are here to construct, maintain, operate, and defend a world canal, which runs through the heart of your country, and you have given us the necessary sovereignty and jurisdiction over the part of your country occupied by that canal to enable us to do this effectively. We do not wish any further responsibility in respect to your Government than is necessary in the carrying out of our purpose to construct and maintain this canal. We have no desire to add to the territory under our jurisdiction except as the operation of the canal may require it. We have guaranteed your integrity as a republic, and for us to annex the territory would be to violate that guarantee, and nothing would justify it on our part so long as Panama performed her part under the treaty. I wish to make this statement as emphatic as possible, because irresponsible persons, without the slightest foundation of fact, have started the rumor that my visit to the isthmus was for the purpose of preaching annexation, when nothing could be further from the truth. Panama cannot be too prosperous, cannot be to healthy, cannot be too strong a government for the United States. And I know I speak the unanimous voice of the people of the United States when I say that they would be most reluctant to have to take over the responsibilities of government in this neighborhood, beyond that of the C anal Zone, and that they would feel utterly dishonored in so doing unless there was some conduct on the part of the Panamanian people which left them no other possible course. I am glad to say that there is not the slightest indication or probability that the Panamanian people will ever pursue a policy which will require such a change in the present most satisfactory relations between the two Republics.

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[From the Congressional Record, 88th Cong., 1st sess., Feb. 18, 1063] PANAMA CANAL PROCRASTINATION PERILOUS Mr. FLOOD. Mr. Speaker, it has been aptly stated that the history of the Panama Canal is one of continuing crises. Those of key character concern the best site and the best type, known as the battle of routes and battle of the levels. Moreover, this pattern of struggle reappears periodically, and since 1947 the question of the proper modernization of the Panama Canal has been beset with repetitions of these old controversies in slightly modified forms. Over a period of years, a number of Members of the Congress, several in the House but only one in the Senate, who have made serious studies of the canal question and recognized its magnitude, have introduced bills to create the Interoceanic Canals Commission. In so doing, it was their purpose to provide an effective agency to develop a timely, definite, and wisely reasoned Isthmian Canal policy, which the Congress and the Nation can accept and which time and usage will justify. Unfortunately, this task has been complicated immeasurably by the ratification in 1955 of a secretly contrived canal treaty between the United States and Panama and by the nationalization in 1956 of the Suez Canal by Egypt. Despite the inherent differences between the juridical foundations of the two interoceanic canals, this action by Egypt served to evoke a chain of aggressive nationalistic and Communistic revolutionary inspired agitations in Panama, some of them marked by mob violence led by well-trained leaders. The long-range objectives of this revolutionary movement is the wresting of the sovereign control of the Panama Canal from the United States and the extortion of greater benefits from the toll revenues. The only basis for such aims is that inherent in Panama's geographical location, which is adjacent to the Canal Zone territory. The difficulties of securing increased transit capacity have now become severely aggravated by the necessity for safeguarding the sovereignty and jurisdiction of the United States over the Panama Canal and the Canal Zone. As a start in this direction, I made a series of major addresses in the House beginninnin in 1957 and continuing up to the present Congress. These included, in comprehensive detail, the diplomatic and legislative history of the acquisition by the United States in 1904 of our territorial possession known as the Panama Canal Zone. Though these efforts were generally ignored in the mass news media of the United States or, when presented, had their meaning distorted, they were prominently featured in the press of Panama, especially in the Spanish-language papers, which I follow closely. Through the latter, they have produced echoes from various countries of Latin America. The failure on the part of elements in our Department of State to stop the depredations of isthmian agitators by means of forthright 195

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196 ISTHMIAN CANAL POLICY QUESTIONS declarations of U.S. policy, in the course of time, has led to a chain of diplomatic victories by Panama, making the United States a laughing stock in the Western Hemisphere. So confident did anti-U.S. extremists become that the Panamanian National Assembly even attempted to encircle the Canal Zone by enacting legislation extending the 3-mile limit to 12 miles, with Panama controlling the water at each end of the zone's 3-mile limit, which could have made that waterway another Berlin. This attempt our Government very promptly and properly refused to recognize, but friction resulted. The radical leadership in the Panama National Assembly, which includes some Marxist-Leninists, obviously understood the significance of my researches in the exposure of their schemes and did not stop with the attempted encirclement of the Canal Zone. It followed up by giving me the unique distinction of being formally declared as public enemy No. 1 of Panama. The situation on the isthmus was worsened on September 17, 1960, when the President of the United States, in a mistaken gesture of friendship, by an Executive order soon after the adjournment of the Congress, directed the formal display of the Panamanian flag outside the flag of the United States at one place in the Canal Zone as evidence of a so-called titular sovereignty of Panama over the zone. This unfortunate precedent of striking the American flag in the Canal Zone, as predicted by me on the floor of the House, merely served to open the door, for in Panama and elsewhere, the action was interpreted as a belated U.S. recognition of Panamanian sovereignty. In this connection, Mr. Speaker, I would invite attention to the fact that on February 2, 1960, after full debate, the House of Representatives approved House Concurrent Resolution 459, 86th Congress, against such display by the overwhelming vote of 381 to 12, which was transmitted to the Senate but, for reasons not published, was never acted upon by that body. In addition, the Congress passed the Gross amendment to the Department of Commerce Appropriations Act prohibiting the expenditure of funds embraced in the act for such purpose. No wonder isthmian extremists became emboldened and arrogant. Under these circumstances, the necessity for an effective counterpoise to Panama became clearly evident. This compensating force developed in the form of growing demands for a second canal at Nicaragua, the ancient rival of the Panamanian site, and elsewhere. In an address to the House on June 30, 1960, I undertook to give a comprehensive description of the Nicaraguan project, which was largely based on a 1931 report-House Document No. 139, 72d Congress-and to advocate its consideration. The second canal idea, thus stimulated, served as an antidote for Castroism in Panama and to still some of the violent anti-American agitations among its radical elements. ThDis address, moreover, supplies significant background information on the interoceanic canal picture, in which the Nicaraguan idea has a history of over four centuries. Now, Mr. Speaker, for more than 30 years our country has witnessed a frustrating succession of administratively dominated, ex parte investi rations and reports concerning increased interoceanic canal transit facilities, often directed by those who, directly or indirectly, would

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ISTHMIAN CANAL POLICY QUESTIONS 1 97 benefit from teir Owi rTcommendati(nv The pmp il'er'tH of shl prO'edure was th1e I 11-fatIed 1989 pr(ject for :a hi >et largr locks at Panama. Thin con'Itrivct ion effort, ]umihed 1nder congr>s sional authorization on andmin istrative recommenla)ion-, was V1spended in 1942 after an expendtiire of some 75 million of t ( payers' money, mainly on lock site excavations at Gatun :iid 11 Miraflores. It is fortunate that no excavation was started at Pedro Migiuel. Had such an engineering fiasco been brollit a!)olit I)\ civLIIn en1gineers they would have been crucified. After suspension o constiuction on thi project, a nunb WIr of independent engineers and others studied Its planning, and learned t hat no adequate investigation of it had been made prior to submi ion to the Congress. Such failure is difficult to comprehend. At this point, Mr. SpeakVer, may I suggeKt that Members of the Congress, when visiting the Canal Zone, inquire onto significant phases of the third locks project history and inspect tlie channel lavou as then planned by personal obervat ions around the Miralore.s Lake area, as other Members of the C(onriess and myself have (one. But, unless the project is studied iln advance of such inspect ion and uinderstood, there will be no point in making a field exploration of it. It is interesting to note also that an undisclosed objective of the third locks program was conversion of the Panama Canal to sea level according to a plan which had likewise not been ai equatelv studied, and that completion of the third locks project would not only have resulted in creation of a navigational monstrosity at the Pacific end of the canal, but as well would have committed our country to a serpentine sea-level undertakingy that would have been a navigo'at ional nightmare. Moreover, all of this resulted from a formal inquiry by routine administrators pursuant to Public Resolution No. 85, 74th Congress, approved May 1, 1936, and without adequate hearings or debate by the CongressHouse Document No. 210, '6th Congress, and Public Law 91, 76th Congress. The great questions in the canal problem are: First. Safegua rding the untrammneled sovereignty and jurisdiction of the United States over the Panama Canal and the Canal Zone territory, without which the canal cannot be operated. Second. The major operational improvement and increase of capacity of the Panama Canal by the elimination of the bottleneck locks at Pedro Miguel, the consolidation of all Pacific locks in new three-lift structures near Aguadulce to correspond witli the lock arrangemnent at Gatun, and raising the Miraflores Lake level to that of Gatun Lake to form a summit anchorage at the Pacific end of the canal to match that at the Atlantic end. This program would also include one set of larger parallel locks for larger vessels and raise the summit lake level from its present height of 85 to 92 feet. Third. The question of a second canal, at Panama, Nicaragua, Colonibia, or elsewhere, in an area that extelnds from Tehuantepec to the region of the Atrato, of whatever type that supplies the best conditions for transit at least cost. In these connections, Mr. Speaker, I would invite attention to the fact that in 1944, when the initial recommendation for the elimination of the Pedro Miguel locks was submitted to the Secretary of War, the

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198 ISTHMIAN CANAL POLICY QUESTIONS then Governor of the Canal Zone warned that advocates of a so-called sea-level canal at Panama would oppose "unjustifiably" any major change in the existing waterway on the ground that such improvement would delay its conversion to one at sea level-Congressional Record, June 21, 1956, statement of Senator Thomas E. Martin. This, Mr. Speaker, is no real reason at all. Nevertheless, the then Governor's warning has been more than justified by sea-level advocates who have not only opposed any major improvement of the existing canal, but also have prevented an adequate study of it and have failed to present any information concerning the inevitable indemnity and increased annuities involved, or even to mention the subject. Furthermore, it is indeed remarkable that these insistent advocates, some of whom have been in positions of authority, have unfailingly endeavored to conceal important facts and consequences to arise, and have striven to commit our Government to an unnecessary venture that would overnight plunge us into a measureless sea of extravagance and diplomatic turmoil. All of this could be, and would be, obviated by the major improvement of the existing canal by means of a third locks project, modified to include the reconstruction of the Pacific end of the canal. Moreover, such major improvement would not require a new treaty with Panama, or a new indemnity, which is a matter of paramount importance and has been, and still is, consistently ignored by sea-level advocates. More than two decades have passed since suspension of the third locks project. Traffic has continued to grow, making action more urgent. Certainly, the time for permitting further procrastination on the part of administrative officials in coming to a wise decision is now over. In determining our country's attitude on this vital question, all the pertinent facts must be considered and met-not concealed as has been done on more than one occasion. To decide upon matters of such magitude in a purely routine, administrative manner is absolutely shocking and has been repeatedly shown to have been counter to the best interests of the United States and the world at large. Transcendent among the many considerations that enter into the Panama Canal picture is that of the Pandora's box of diplomatic difficulty that would be involved in the adoption of the so-called sea-level project for that waterway. This plan would open up the entire treaty situation and make the United States a target for political blackmail in the way of vast indemnity and annuity costs as well as risk of the final liquidation of our sovereign rights, power, and authority over the canal enterprise. No wonder Panamanian politicians and others who would benefit have overtly and covertly sought its adoption. Mr. Speaker, I consider it a dastardly outrage that attempts should be made to settle these grave questions as casual routine matters, withholding significant facts from the people of our Nation, and bypassing the Congress and the President. Every consideration demands action by the Congress. To this end, I have introduced H.R. 3858 to create a competent, objective, and independent Interoceanic Canals Commission charged with broad authorities for making the necessary studies and reports touching on this matter of increased interoceanic transit facilities, as follows:

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ISTHMIAN CANAL POLICY QUESTIONS 199 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Interoceanic Canals Commission Act of 1961". SEC. 2. (a) A commission is hereby created, to be known as the "Interoceanic Canals Commission" (hereinafter referred to as the "Commission"), and to be composed of eleven members to be appointed by the President, by and with the advice and consent of the Senate, as follows: One member shall be a commissioned officer of the line (active or retired) of the United States Army; one member shall be a commissioned officer of the line (active or retired) of the United States Navy; one member shall be a commissioned officer of the line (active or retired) of the United States Air Force; and eight members from civil life, four of whom shall be persons learned and skilled in the science of engineering. The President shall designate one of the members from civil life as Chairman, and shall fill all vacancies on the Commission in the same manner as are made the original appointments. The Commission shall cea-e to exist upon the completion of its work hereunder. (b) The Chairman of the Commission shall receive compensation at the rate of $25,000 per annum, and the other members shall receive compensation at the rate of $22,500 per annum, each; but the members appointed from the Army, Navy, and Air Force shall receive only such compensation, in addition to their pay and allowances, as will make their total compensation from the United States $22,500 each. SEC. 3. The Commission is authorized and directed to make and conduct a comprehensive investigation and study of all problems involved or arising in connection with plans or proposals for(a) an increase in the capacity and operational efficiency of the present Panama Canal through the adaptation of the Third Locks Project (53 Stat. 1409) to provide a summit-level terminal lake anchorage in the Pacific end of the canal to correspond with that in the Atlantic end, or by other modification or design of the existing facilities; (b) the construction of a new Panama Canal of sea-level design, or any modification thereof ; (c) the construction and ownership. by the United States, of another canal or canals connecting the Atlantic and Pacific Oeeans ; (d) the operation, maintenance, and protection of the Panama Canal, and of any other canal or canals which may be recommended by the Commission; (e) treaty and territorial rights which may be deemed essential hereunder; and (f) estimates of the respective costs of the undertakings herein enumerated. SEC. 4. For the purpose of conducting all inquiries and investigations deemed necessary by the Commission in carrying out the provisions of this Act, the Commission is authorized to utilize any official reports. documents. data. and papers in the possession of the United States Government and its officials: and the Commission is given power to designate aud authorize any member. or other officer, of the Commission, to administer oaths and affirmations. subpena witnesses, take evidence, procure information and data. and require the production of any books, papers, or other documents and records which the Commission may deem relevant or material for the purposes herein named. Such attendance of witnesses, and the production of documentary evidence. may be required from any place in the United States, or any-territory, or any other area under the control or jurisdiction of the United States, including the Canal Zone. SEC. 5. The Commission shall submit to the President and the Congress, not later than two years after the date of the enactment hereof, a final report containing the results and conclusions of its investigations and studies hereunder, with recommendations; and may, in its discretion, submit interim reports to the President and the Congress concerning the progress of its work. Such final report shall contain(a) the recommendations of the Commission with respect to the Panama Canal, and to any new interoceanic canal or canals which the Commission may consider feasible or desirable for the United States to construct, own, maintain, and operate; (b) the estimates of the Commission as regards the approximate cost of carrying out its recommendations; and like estimates of cost as to the respec

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200 ISTHMIAN CANAL POLICY QUESTIONS tive proposals and plans considered by the Commission and embraced in its final reports; and (c) such information as the Commission may have been able to obtain with respect to the necessity for the acquisition, by the United States, of new, or additional, rights, privileges, and concessions, by means of treaties or agreements with foreign nations, before there may be made the execution of any plans or projects recommended by the Commission. SEC. 6. The Commission shall appoint a secretary, who shall receive compensation fixed in accordance with the Classification Act of 1949, as amended, and shall serve at the pleasure of the Commission. SEC. 7. The Commission is hereby authorized to appoint and fix the compensation of such engineers, surveyors, experts or advisers deemed by the Commission necessary hereunder, as limited by the provisions in title 5, United States Code, section 55a (1946 edition) ; and may make such expendituresincluding those for actual travel and subsistence of members of the Commission and its employees-not exceeding $13 for subsistence expense for any one person for any calendar (lay; for rent of quarters at the seat of Government, or elsewhere; for personal services at the seat of government, or elsewhere; and for printing and binding necessary for the efficient and adequate functions of the Commission hereunder. All expenses of the Commission shall be allowed and paid upon the presentation of itemized vouchers therefor approved by the Chairman of the Commission, or such other official of the Commission as the Commission may designate. SEc. 8. There are hereby authorized to be appropriated such sums as may be necessary to carry out the provisions and purposes of this Act.

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[From the Congressional Record, 88th Cong., 1st sess., Apr. 9. 19633] CONGRESS MUST SAVE THE PANAMA CANAL Mr. FLOOD. Mr. Speaker, over the past few years I have addressed this body at great length to present to the Congress and the Nation a, clear picture of the situation in the Caribbean with special reference to the key target of the world revolutionary movement in that areathe Panama Canal. All significant aspects have been explored, a plan of action to meet the crisis offered, and a series of predictions made of what would happen in the event of the failure of our Government, the Congress and the Executive, to take the necessary steps in the way of f orthright declarations of our national policy. So far, our country has not taken the measures required. Instead, it has floundered from crisis to crisis making concession after concession and, by this inaction or implied acquiesence, has invited larger and larger demands. The most serious fears that inspired my repeated warnings have come to pass virtually as predicted with no end yet in sight, and I hardly know what to say. The situation which a few years ago was simple and easy to remedy has now become so grave that I feel impelled to speak out again on this crucial matter so that the people of the United States and their Congress will know what is happening in their backyard with respect to the sovereign powers, rights, and authority of the United States over the Canal Zone and Panama Canal. To this task, I now address myself. WARNINGS THAT WERE IGNORED What were some of the incidents that were forecast and timely warnings given? The list of them, in the light of what has subsequently transpired, is an impressive array. They were: In 1958, the attempt of Panamanian students to hoist the Panama flag at the Canal Zone Administration Building, which most people then laughed off as a playful students' prank; and On November 3, 1959, during the annual commemoration of the independence of Panama from 'olombia, the attempted inva'4on of the Canal Zone by a Panamanian mob, which overpowered the civil police of the Canal Zone and required the use of the U.S. Army to protect the zone. On September 17, 1960, soon after the adjournment of the Congress, the ill-advised action of the President of the United States, contrary to will of the Congress as expressed in legislative enactments loncerning the canal, in directing the formal display of the Panama fVag over the Canal Zone territory as evidence of Panama's so-called "Wit l r sovereignty." The eniuing misinterpretation by Panamanian and intern:tional propagandists of this action as recognition of Panamanian fundamenrai sovereigrnty over the zone. 201

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202 ISTHMIAN CANAL POLICY QUESTIONS And on October 29, 1962, on orders of the executive department of our Government, the formal raising of the Panamanian flag at the Canal Zone Administration Building, on a separate flagmast alongside the U.S. flag as part of a program for similar displays at other points in the zone as increased recognition of Panama's claim of titular sovereignty over the Canal Zone and Panama Canal. Mr. Gnoss. Mr. Speaker, will the gentleman yield? Mr. FLOOD. I yield to the gentleman from Iowa; yes. I am very glad to yield to my friend, the gentleman from Iowa [Mr. Gross] because I recall that when I was a member of the Appropriations ubcommittee which at that time considered the request for the Department of Commerce, during the period of years I was discussing this, there was an amendment introduced by the gentleman from Iowa to the appropriation bill for the Department of Commerce and passed unanimously by the House, to prevent the use of any funds in that bill for the erection of any flagpole or any other contrivance for the flying of a flag in an attempt to defeat that program. I am happy to yield to the gentleman from Iowa. Mr. GRoss. And, it was by an Executive order of then President Eisenhower that the will of Congress was subordinated-I believe that is the proper word-at least the flag of Panama was raised along with the U.S. flag in the Canal Zone? Mr. FLOOD. That is correct; and it was done by subterfuge because the gentleman's amendment to the appropriation bill and as it applied to the Department of Commerce became law. It was clear and it expressed again the second intent of this Congress that that not take place, and that any money in the bill could not be used to build a flagpole or to fly the flag because under the provisions of that appropriation for the Department of Commerce and related agencies the Panama Canal and the Panama Canal Government was in that bill. Hence that money could not be used. So, the subterfuge was perpetrated upon the American people and upon this Congress, and I do not think he should have directed the Army from those funds to do so because of the gentleman's amendment to that bill. Mr. GRoss. That is exactly right, and I want to commend the gentleman for the unceasing fight be has made to preserve our right to be in the Canal Zone and to administer the Territory there as it ought to be administered in the interest of the United States. Mr. FLoOD. With the help of such Members as the gentleman from Iowa, we will continue to do this. The last action, Mr. Speaker, was taken by your Government despite the fact that on October 12, only 17 days previously, the ceremonies for the dedication of the Thatcher Ferry Bridge at Balboa, attended by Under Secretary of State George W. Ball, former Governor Maurice IH. Thatcher, and other notables, was marred by Panamanian demonstrators, who used communistic revolutionary tactics and claimed Panamanian sovereignty over the bridge. To many Members of the Congress and our people, the series of predictions by me seemed extraordinary. They are, I can assure, not the result of any so-called inside information or of the powers of a clairvoyant, but only the considered conclusions from the study of trend-forming developments and their projection into the future.

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ISTHMIAN CANAL POLICY QUESTIONS 203 Nor is the fact that all of them materialized, essentially as foretold, any source of gratification to me. Rather, it is a cause for deep concern for the failure of the responsible agencies of our Government, the Congress, and the Executive, to take timely preventive measures instead of waiting until little hills become volcanoes and erupt in our faces. Later in this address, I shall indulge in other predictions, affecting both the United States and Panama. In so doing, however, I wish to stress again that what I shall say is not as an enemy of Panama or its people, but as a friend of both, vith their best interests ever before me. I shall speak realistically, for the problems involved are too grave to gloss over or ignore. PANAMANIAN ASPIRATIONS AIDED BY DEPARTMENT OF STATE What are the aspirations of Panama with respect to the Canal Zone and Panama Canel? Panamanian leaders and agitators have never disdained to publish their objectives. But no better summary of them has ever been made than that by Gilberto Arias, recently Secretary of Finance in the Cabinet of President Chiari, as quoted on March 19, 1963, in the isthmnian newspaper, Critica. His words were: In the future, with God's help, we will achieve our objective: that the Panama Canal be the property of Panamanians. under full and absolute jurisdiction of the Republic of Panama, maintained by Panamanians, operated by Panamanians, sanitated by Panamanians, and protected by Panamanians. This concise statement, Mr. Speaker, must be accepted at its face value. Moreover, it is the end toward which every move in the reiations between Panama and the United States has been made ever since the Suez Canal crisis of 1956 in a program of piecemeal liquidation, aided and abetted by certain elements in our Department of State. How responsible officials of our Government. can knowingly collaborate with Panamanian radicals to surrender more of oir authority to a country, which since 1955, when sanitation in the terminal cities of Colon and Panama was returned to it, has not even succeeded in collecting its garbage, is incompresensible. Let us not be so naive as to think that those primarily responsible for this erosive process do not know what they are doing. They know precisely and seem to be bent on following the same path at Panama as they did in Cuba. which was featured by covert collaborationEarl E. T. Smith, "The Fourth Floor." New York. Random house, 1962. The only difference is that in Cuba it was the friendly antiCommunist Cuban Government being undermined whereas in Panama it is the sovereignty of the United States over the Canal Zone Territory being assaulted. Here again, Mr. Speaker, I woud emphasize that the Republic of Panama grew out of the movement for the Panama Canal and not the reverse. The only advantage that Panama can claim as regards the canal is its geographical location, which advantage it never ceases to expoit in advancing its demands for increased benefits and sovereignty over the Canal Zone. To make sure that there is no uncertainty as to what purpose the Panamanian Government is using all its energies to acquire. I shall quote its openly declared objectives, as stated in a report on September 67-S43-6614

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204 ISTHMIAN CANAL POLICY QUESTIONS 20, 1960, to President Chiari by his Committee on International Politics. These demands included: First. Raising the Panamanian flag in the Canal Zone. Second. Equal salary treatment and job opportunities for Panamanians and North Americans. Third. Raising the annuity to 20 percent of the gross income, with a guaranteed minimum of $5 million. Fourth. Setting the length of time for the annuity and cessation of the perpetuity clause. Fifth. Mixed courts in the Canal Zone. Sixth. Complete supplying by Panama to the zone market, including ships, and stopping of production activities in the zone. Seventh. Recognition in the Canal Zone of exequaturs granted by Panama to foreign consuls. E*ghth. Use of Panamanian postage in the zone. Ninth. Liquidation of the Panama Railroad. Tenth. Establishment of Spanish as the official language of the Canal Zone along with English. Eleventh. Panamanian jurisdiction in the zone over passengers and cargo coming into Panama and over ships flying the flag of Panama. Twelth. Granting to Panama of dock and port facilities, and at U.S. expense. Thirteenth. Organization of Panama's civil defense at U.S. expense. Fourteenth. Corridors, under Panamanian jurisdiction across the Canal Zone. Fifteenth. Opportunities for Panamanian products in U.S. markets. Sixteenth. Acceptance of compulsory jurisdiction of the World Court over controversies between Panana and the United States. And, Mr. Speaker, I will give you one guess and only one as to what would happen in the decision of the World Court on the controversy between the great Republic of Panama and the United States of America. Such demands, Mr. Speaker, are matters that would inevitably affect all interoceanic commerce that uses the Panama Canal and has to pay tolls. They more than justify the concise statement of former Finance Secretary Arias, previously quoted, and present grave questions to which the merchant marine of all nations simply cannot afford to be indifferent. Moreover, it is significant that the flag of Panama's new Independent Revolutionary Party carries 10 stars, the 10th star representing the Canal Zone. No wonder that patriotic Americans in the Canal Zone and the United States have become alarmed for the security of this vital transportation artery and view with amazement what is now taking place. BYPASSING OF CONGRESS BY INTErYNATIONAL SOCIALISTS As to the flag question previously mentioned, it will be recalled that the distinguished House Committee on Foreign Affairs, in early 1960, in anticipation of difficulties with respect to the flag question, conducted hearings on United States-Panama relations, when high executive officials and myself iestified-hearings, January 12, 15, 19, 22, and February 2, 1.)0; also House Report No. 2218, 86th Congress.

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ISTHMIAN CANAL POLICY QUESTIONS 205 The unanimous recommnendation of the full contiit 1ev was for a concurrent resolution expressing the sense of the Congress t hat, any variation in the f ra(lit ionaI it erlret 11011 of t he t reatiles of 1903, 1:3G, and 1955 between the United 5:ates and Paviania xxi \i6 reference to matters of territorial sovereigity shall be made only pursUtiat to treaty-House Concurrent Resolution 459, 86t h Congress. After an animated debate on February 2, 1"GI fhe llouse adopted this resolution by the overwhelming vote of 381 to 12, which should have prevailed over the pre(ilections of executive officials. Transmit ted to the Senate, i Iis reso] ii o1 Wzs 1'efrred t o I lie omittee on Foreign Relations, wler-e, because of opposition front the Department of State, it was not reported to the Senate and died in the committee. Notwithstanhding the 4'i. lure of the Senate to (lct. the ma1,ign itu1+de of the House vote is sionificat, clearly reflecting the concern of our people for the security of the Canal Zone territory. It also (lemonstrates to the international infiltrators in the Department of State and their collaborators that these influences can never succeed in perpetrating their schemes with respect to the Panama Canal through normal procedures. They realize that they must bypass the Congress by means of a new canal treaty. This, they no doubt feel, can be pushed through, as was the 1955 treaty, without adequate debate, to continue the process or erosions that started with the 1936-39 treaty. What a contrast has been the action of the Department of State in respect to West Berlin. For that city, Khrushchev has spoken publicly about replacing the flags of the United States, Britain, and France, with that of the United Nations but the Departmiient of State correctly opposes striking the American flag there. Why did it urge striking it in the Canal Zone? U.S. VITAL INTERESTS DISREGARDED Though the writings on the diplomatic history of U.S. Caribbean and Isthrmian Canal policies are voluninous, the truly vital interests of our country at Panama are seldom stated. Those who v]eOw the subject realistically emphasize the following major points: First. Control of the maritime approaches to the Panama Canal, both Atlantic and Pacific. Second. Maintenance of untrammeled sovereignty over the Canal Zone. Third. Meeting our treaty obligations to maintain free and open transit for vessels of commerce and war of all nations on term of equality with tolls that are just and equitable. Fourth. Civil protection of the Canal Zone from disorders and pestilence, originating in the terminal cities of Colon and Panama. Fifth. Safeguarding the summit-level water supply as required for lockages and maintaining channel depths. Sixth. Military and naval defense of the Panama Canal from aggression. The foregoing points, Mr. Speaker, are not wanderings of someone-s imagination, but conclusions developed from the study of history. Most of the present difficulties at Panama have steiimed from either ignorance of these fundamentals or a heedless disregard of them.

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206 ISTHMIAN CANAL POLICY QUESTIONS coupled with connivance on the part of international Socialist elements in our Government and those cooperating with them for the complete liquidation of U.S. control of the Panama Canal-a major object of Soviet policy. The question arises who are these elements and why are they not eradicated? Supplying the answers are tasks that the Congress should undertake. In this general connection, Mr. Speaker, it was Alger Hiss, when holding an important position in the Department of State in 1946, who, under article 73 of the U.N. Charter filed an administrative report with the United Nations listing the Canal Zone as an "occupied area." By thus minimizing U.S. sovereignty and supporting the Communist revolutionary conspiracy, this was a monstrous aggression upon our valid and unblemished title to that part of our territorial domain (Flood, "Monroe Doctrine or Khrushchev Doctrine," Congressional Record, Apr. 12, 1962). These facts in our history suggest the question as to whether there are yet Alger Hisses in the Department of State. If there are, let us clean them out. In any event, the Congress and the Nation should know that since 1923 our Government has made no forthright public statement of policy with respect to the Panama Canal. The urgency for such a statement is more acute today than ever in our history. LIQUIDATION OF PANAMA RAILROAD NARROWLY AVERTED Among the most audacious attempts at liquidation in the Canal Zone was the example of the Panama Railroad as was evidently contemplated under the 1955 treaty. This effort, officially made on June 17, 1955, before the Committee on Merchant Marine and Fisheries by the then Governor of the Canal Zone, an active military officer, inspired that committee and other Members of the Congress to take the necessary measures to prevent it. Notwithstanding the committee's objective, the first step in the railroad's liquidation was actually taken by awarding to Panama, without any compensating concession, over $25 million worth of valuable property of the Panama Railroad, including its terminal freight yards and passenger stations in the cities of Colon and Panama. It was evidently in the minds of the schemers that, after surrendering the terminal facilities, the removal of the main line tracks would follow in due course and thus permit the construction of a truck highway on the roadbed, the effort for which was being sponsored by certain Panamanian interests and advanced by the then Governor of the Canal Zone. This was discussed and prevented by me as the result of hearings before my subcommittee of the Appropriations Committee for the Department of Commerce and related agencies, which included the Panama Canal government, and by the merest accident of a question I asked the then former Governor of the Canal Zone on the matter of trucks and the highway. While the treaty power of our Government, consisting of the Executive and the Senate, was engaged in giving away the railroad terminals, the House, by conducting an independent investigation headed by an able railroad executive in the United States, a retired vice presi

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ISTHMIAN CANAL POLICY QUESTIONS 207 dent of the Pennsylvania Railroad, prevented taking up the main line tracks and the complete liquidation of the railroad itself. Now, Mr. Speaker, we have a situation difficult for even the most credulous to comprehend-a railroad without its needed terminal facilities and without any substitution therefor. No wonder, Mr. Speaker, our diplomacy was fast becoming a laughing stock in the Western Hemisphere. No wonder our citizens kept demanding the elimination from the Department of State of the elements responsible for such diplomatic stupidity or downright disloyalty to the paramount interest of our country. Mr. Speaker, it was the indicated congressional inquiry that saved the Panama Railroad. It was also this inquiry that caused some Members of the Congress present, including myself, to question the correctness of the "traditional" practice of appointing as governors of this great civil agency, known as the Panama Canal enterprise, only active officers trained for a military career. Moreover, the evidence indicates that had there been a capable business administrator heading this civil agency, the move to liquidate the railroad would never have been attempted. (See Committee on Merchant Marine and Fisheries, hearings on proposed abandonment of Panama Railroad, June 17, Dec. 7 and 8,1955, pp. 33-36.) k PENALTIES FOR SURRENDERING AUThORITY The undertaking by the United States following the 1901 HayPauncefote Treaty with Great Britain to construct and operate a transIsthmian canal was the culmination of an evolutionary process, involving most major historical occurrences in the Americas during the 18th and 19th centuries. Such an edifice cannot be demolished and swept into the ashcan of history with impunity. Provisions in the 1903 treaty gave the United States the necessary authority to enforce sanitary ordinances and to maintain public order in the cities of Colon and Panama. Unfortunately, the right to intervene in the terminal cities, in event of domestic violence was abrocrated at the specific insistence of Panama in the 19)6 treaty and the authority of the United States to enforce sanitation was surrendered to Panama in 1955. What have been the results? The most violent border incidents in isthnian history, which as previously shown, were accompanied by attempted mob invasions of the Canal Zone: and a deplorable breakdown in sanitation procedures, as evidenced by the failure of Panania to collect garbage, which is frequently piled high in the streets, calisiiW Panamanian citizens to make vigorous protests to their (Toerlin10t. Again, Mr. Speaker, I would stress that these are fact s and not mere carping criticisms. These facts are rooted in conditions that are inherent and serve to emphasize that where there is responsibility there must be adequate authority, such as provided by the 1901 treaty, or there will be chaos. Nor should it ever be overlooked that our country, notwithstanding its concessions to Panama. is still respom7ible. This responsibility must be faced: it cannot be evaded, for our obli-ations are to the entire world. We now have a total investment in the canal enterprise of more than $,L500 million, the funds for which have been supplied by the American taxpayer. Panama, in its radical demands

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208 ISTHMIAN CANAL POLICY QUESTIONS does not offer a penny for reimbursement for these vast expenditures, but claims the right to take over the canal-lock, stock, and barrelfree fron any obli ration whatsoever. How can any Panamanian with a sense of justice favor such a demand and how can the free world approve it? Of course, the Communist powers would approve, because without delay they would fill the vacuum thus created and take over the canal itself. Nor should our Government be deluded with the idea that its actions at Panama are not being observed by interested nations. In Great Britain, one of the signatories to the 1901 Hay-Pauncefote Treaty, it is well understood, as shown by a recent story in the Times of London, which emphasized that aid to Panama is "no substitute for a firm policy and this apparently the United States lacks in its dealing with Panama." Quoted from Miami (Fla.) Herald, March 14, 1963. CANAL ZONE CITIZENS APPEAL TO THE COURTS By the fall of 1962, the process of erosion of our rights, power, and authority, symbolized by the formal display of the Panama flag in the Canal Zone wherever the U.S. flag is flown by civilian authorities as increased evidence of Panamanian sovereignty, had gone so far that our citizens there decided to act, for they understand the significance of such display far better than temporary custodians of the governorship. In a desperate effort to protect our Nation's interests, they organized at their own expense to bring court action to test the legality of the formal display of the Panama flag over the Canal Zone Territory of the United States. One of them, Gerald A. Doyle, Jr., Chief Architect of the Panama Canal, brought suit in the U.S. District Court of the Canal Zone against Gov. Robert J. Flemming, Jr., of the zone and Secretary of the Army, Cyrus R. Vance, in an effort to end this symbol of surrender by the United States to the mob-ruled Panama Government. PANAMANIAN REACTION TO FLAG SUIT Mr. Speaker, I would invite the attention of the Congress to another angle of the sovereignty question that is most significant and illuminating. Reacting to the suit in the Canal Zone court, a Panamanian citizen, on January 9, 1963, filed a suit in the Supreme Court of Panama that aims to establish that the ratification of the 1903 treaty by executive decree of the Panamanian revolutionary junta, was illegal and hence null and void. If sustained by the Panama Supreme Court, it would logically follow by the same token that the 1903 revolution, by which Panama gained its independence from Colombia, was likewise null and void, that Panama is still a department of the Republic of Colombia, and that Colombia and not Panama, is the sovereign of the isthmus. Such eventuations, Mr. Speaker, would not be improbable, because the original guarantee by the United States of Panamanian independence that was provided in article I of the 1903 treaty, at the specific request of Panama, was abrogated in the 1936 treaty for the reason that Panama felt that it no longer needed such guarantee.

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ISTHMIAN CANAL POLICY QUESTIONS 209 This leaves the way open for Colombia to regain its territorv lowt throughout the political events of 1903 out of which came t he Repuilioi of Panama and the Panama Canal. Realistically, and I speak without intended offense, how long could Panama continue as a free and independent nation after liquidation of U.S. control and operation of the Panama Canal? CANAL USERS HAVE MOST AT STAKE The Panama Canal enterprise, under treaty and law, operates on a self-sustaining basis, with tolls prescribed at rates calculated to cover costs. In this connection, Mr. Speaker. I would invite attention to the fact that the users of the canal, which have to bear increases in costs of operation through increased tolls have the most to lose by what could happen at Panama. Unless the users of the canal are to suter unpredictable consequences, the crisis on the isthmus must be m11t. and met forthrightly and adequately, and without further tempoIzation or delay; else the entire course of history will be clan2'ed. and changed disastrously. The situation in the Canal Zone is just that grave and notliing lers and our policies of diplomatic placation and lack of judgment and vision have largely contributed to the crisis wLiclih l thn arisen. All claims by Panama of any type of sovereignty on the Canal Zone, except that of reversionary character, mst be repudiated. In so doing, our Government must make clear that the sovereign rights. power, and authority of the United States are not nej*otial)1e and that there will be no treaty with Panama liquidating or e haugin(t the basic sovereignty provisions. In this general connection, I would invite attention that on March 20, 1963, at San Jose, Costa Rlica, the President of Panama and the United States spent 41 minutes in conference. As far Ps Is known, no report of this meeting was published in the United States, but the press of Panama in describing its results quoted President Ch ian as having expressed his satisfaction. This, anI other information. inicates that President Chiari, now being opposed by six of Panama's political parties, is pressing desperately to secure more benefits tfromf the United States so that his parties will not be defeated In tlhe coming Panamanian election and that he will be able to dictate > owui successor. GOVERNOR OF CANAL ZONE ATTACKS JURIDICAL FOUNDATION OF PANAMA CANAL In December of 1962, Mr. Speaker. I visited the Canal Zne. Making it a point to seek enlightenment from all possible sim-e-ofiicial and unofficial, civilian an(l military, high and low-I gmmd 'eneral alarm on the part of our citizens at the conduct of the Gove!eor of the Canal Zone. This alarm, Mr. Speaker, was not surpriung but the natural result of what has been transiring. I sChre the deep concern of our residents in the Canal Zone for the same historic reasons.

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210 ISTHMIAN CANAL POLICY QUESTIONS There was more than a scintilla of Clive of India. I could see the East india Co. all over the place, with thousands of Americans being considered and rapidly considering themselves as colonials from the home office. This apprehension is not good for the canal, not good for Panama, and not good for the United States. At a press conference held at the Tivoli hotel, I learned about an address given on December 10, 1962, shortly before my arrival, by the Governor before the Panama section of the American Society of Civil Engineers, which includes Panamanian engineers among its membership. Imagine my surprise on reading this address, which began with an apology for what has made our country great and an expression of his low regard for engineers. Not only was this address the most disconcerting ever publicly uttered by a Governor, but he seems to have reveled in its flavor. Though it has many points that could be challenged, it is important to note that his address first, reflected the philosophy of international Socialist elements in, and on the fringes of our public affairs; second, advocated what amounts to a permanent state of social revolution, which advocacy is not a valid function of a Governor of the Canal Zone; third, belittled the constitutional foundations of our country and urged unconditional exercise by Federal agencies of power without regard to constitutional limitations; fourth, condemned the past in oir history without discriminating between that which is great and that which is ephemeral; fifth, failed to present the Constitution in its true light as the great contractual document under which the Thirteen Original States created three separate and independent agencies of government with limited powers; and sixth, concluded with an illiberal assault upon those who differ with his views as having small minds bent on preserving the status quo, and thus, in effect, as being domestic enemies as dangerous to the United States as foreign enemies. Mr. Speaker, I wish to emphasize that this address by the Governor of the Canal Zone, who was at that time, and still is, a member of task forces engaged in important diplomatic discussions with Panamanian oflidials. was interpreted by many who heard it as first, a deliberate administrative attack against the present diplomatic and juridical foundation of the Panama Canal enterprise; and second, as an attempted public intimidation of those standing up for the sovereign rights. power, and authority of the United States over it. Thus, this shocking address served to invite further aggressions against the sovereicntv of the United States over the Canal Zone territory. CIVILIAN GOVERNOR NEEDED It will be recalled that President Chiari of Panama visited WYashi iton .JIne 12-1, 1942, to present points of dissatisfaction over the basie 190 Panama Canal Treatv, and then agreed to appoint represont ativ I) discuss them. The Governor of the Canal Zone and the I.>. Ambassador to Panama were designated to form the previously mnt ioined itas.k force to represent the United States in the ensuing Con sult at ionls.

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ISTHMIAN CANAL POLICY QUESTIONS 211 In the months following, there were niany rumors of extverene demands by Panama, often denied at the time (and later l)roved t rue by events. On January 10, 1968, the Departnment of Stiate, iin a jolit communique, announced agreement by the United States-Planam a representatives on the following: First. That the flag of Panama would be flown with the U.S. flag on land wherever it is displayed by civil authorities. Second. That foreign consuls may function in the Canal Zone on the bases of exequaturs issued by the Government of Panama. Third. That Panamanians will have equal opportunities with the U.S. citizens at all levels, with social security benefits from the United States. Fourth. That the U.S. representatives proposed the use of Panamanian postage stamps in the Canal Zone. Fifth. That the representatives of the two countries discussed the need of pier facilities for Panama. The latest news from the zone is that Panama has demanded jurisdiction of a corridor across the zone from Arraijan to Panama City, including the Thatcher Highway and the Thatcher Ferry Bridge, both entirely within the zone. Though this report may 1'e denied, I can assert on the floor of the House that there have been discussions of this demand and that a survey has even been made. What is the meaning of this secrecy? This vulnerable structure across the Pacific entrance to the canal would be an obvious point for attack in event of hostilities as a means of blocking the channel. Even to consider the idea of its transfer to Panama is shocking. In addition, I can state without fear of successful contradiction that the Committee on Merchant Marine and Fisheries is now engaged in an effort to prevent the leasing of certain piers, repair yards, and the small drydock at Balboa to the Republic of Panama-H.P. 999, 88th Congress. What further evidence is required to show the sustained program of cannibalization of the Panama Canal that has been, and still is going on in the Canal Zone? Why is it, Mr. Speaker. that these facts, which are well known on the isthmus, are denied to the people of the United States? The surrenders, already made and contemplated, all without the authority of the Congress are not meaningless gestures of diplomatic pacification, but acts of aggression by public officials of our Government against the treaty-based sovereign rights, power, and authority of the United States. As such. they are fully in line with the longrange Soviet program for conquest of the Caribbean. At this point, Mr. Speaker. I wish to associate myself with those in the Congress who wish the President, in line with the phjilosophy]v of the 1950 recommendations of the Bureau of the Budget to apl)oint an experienced and capable business administrator to head the Pana1a Canal-I-House Document 460,81st Congress. Such business type organization was originally desired by President Ioodrow Wilson. who was prevented from bringing it about by the opening of World War 1. In any event, Mr. Speaker, the original reasons for dlezignatinz only active officers of the Army as governors of this civilian agency no

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212 ISTHMIAN CANAL POLICY QUESTIONS longer apply and the need in completing the reorganization for the Panama Canal enterprise started in 1950, with transfer of its supervision from the Secretary of the Army to the Secretary of Commerce. Before concluding this matter, Mr. Speaker, I wish to express my admiration for the way our patriotic citizens on the isthmus have risen to the defense of our legal position in the zone. Thank God for Theodore Roosevelt who made the Panama Canal possible. Thank God for Gerald A. Doyle, Jr., and his fearless leadership. Thank God for the Canal Zone civil employees who are supporting him. And thank God for the Constitution of the United States, under which the founders of our Nation made it possible for American citizens to defend, by lawful means, our country's just interests wherever they may be. CONGRESS MUST SAVE THE PANAMA CANAL The court fight now being waged by frustrated and beleaguered American citizens in the Canal Zone has heroic aspects, suggestive of the plight of those barricaded in the legation compound of Peiping, China, during the Boxer Insurrection in 1900, while awaiting rescue by expeditionary forces. The rescue in the Canal Zone must be effected by the Congress as the ultimate authority under the Constitution of the sovereign people of our country, while there is still time. As a start in this direction, my distinguished colleague from Missouri [Mr. Cannon], on March 4, 1963, introduced House Concurrent Resolution 105, which aims to clarify and make definite the fundamental policy of the exclusive sovereign control by the United States over the Panama Canal enterprise and to lead to the repudiation of all actions by the executive counter to that policy, including the ill-advised measure of hoisting the Panama flag over the Canal Zone as an evidence of Panamanian sovereignty. Mr. Speaker, the situation that I have developed at such length today is not the result of illusory impulses, but of considered conclusions derived from years of study and observation, which I am ready to uphold on every appropriate occasion. Furthermore, the issues are basic and must be met on their merits and not used to obscure weak, mistaken actions on the part of elements in our Government. Over a period of years, I have received many letters from our citizens from various parts of our Nation. Though the views held by them are seldom seen in the mass news media, I know that they understand what is taking place at Panama and realize the significance of the control of the Panama Canal for the future of the United States and the entire world. Although I could quote hundreds of letters from individuals and organizations in these regards, I shall not do so. But I do wish to state that among the strongest supporters for maintaining the untrammeled sovereignty of the United States in the Canal Zone are members of our great labor and patriotic organizations, such as the AFL-CIO and the American Legion. They view the Panama Canal as the highest achievement of American statesmanship, genius, and labor. They realize the mounting danger and are determined that control of the canal will not be wrested from our country.

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ISTIH-IIAN CANAL POLICY QUESTIONS 213 Mr. Speaker, some of these organizations have taken t'ir p)0it 1 011 as regards continued L.S. sovereignty over t he ('anal Zone by means of letters and resolutions, which are quote(i in the documentation for my remarks. Because of the importance of their stands in (ii cvolving lineup in the United States on the Panama Canal sovereignty issue, I can think of no better way to support their stands than to make known to the Congress and the Nation the views of such eminent legal authority as former Secretary of State Charles Evans Hughes when faced with a similar crisis at Panama. On December 15, 1923, Secretary Hughes, in response to demands by Panama for increased sovereignty and increased sovereignty attributes over the Canal Zone, spoke with a refreshing degree of candor. His words, which should ring throughout the world, were: Our country would never recede from the position which it had taken * in 1904. This Government could not, and would not, enter into any discussion affecting its full right to deal with the Canal Zone and to the entire exclusion of any sovereign rights of authority on the part of Panama (Foreign Relations, 1923, vol. III, p. 684). It was an absolute futility for the Panamanian Government to expect any American administration, any President or any Secretary of State, ever to surrender any part of these rights which the United States had acquired under the treaty of 1903. Mr. Speaker, I would state that from time to time, since the birth of freedom, parliamentary bodies have preserved the just rights of a nation against the misguided exercise of executive power. In the present juncture, it seems that the legislative branch of our Government must similarly act to uphold and maintain the uialienable rights of our Nation in regards to the great Isthmian waterway. The text of House Concurrent Resolution 105 and other documentation follow: Mr. Speaker, I ask unanimous consent to revise and extend my remarks, to include a resolution and certain other material in connection with these remarks. The SPEAKER pro tempore. Is there objection to the request of the gentleman from Pennsylvania ? There was no objection. (The matter referred to follows:) HouSE CONCURRENT RESOLUTION 105 Whereas the United States, under the Hay-Bunau-Varilla Treaty of 1903 with Panama, acquired complete and exclusive sovereignty over the Canal Zone in perpetuity for construction of the Panama Canal and its perpetual maintenance, operation, sanitation, and protection; and Whereas all jurisdiction of the Republic of Panama over the Canal Zone ceased on exchange or ratifications of the 1903 treaty on February 26, 1904; and Whereas since that time the United States has continuously exercised exclusive sovereignty and control over the Canal Zone and the Panama Canal; and Whereas where responsibility is imposed there must be given for its effectuation adequate authority; and with respect to the Panama Canal the treaty of 1903 so provided; and Whereas the United States has fully and effectively discharged all its treaty obligations with respect to the Panama Canal and the only legitimate interest that Panama can have in the sovereignty of the Canal Zone is one of reversionary character that can never become operative unless the United States should abandon the canal enterprise; and Whereas the policy of the United States since President Hayes' message to the Congress on March 8, 1880, has been for an interoceanic canal "under American control," that is to say, under the control of the United States; and

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214 ISTHMIAN CANAL POLICY QUESTIONS Whereas the grant by Panama to the United States of exclusive sovereignty over the Canal Zone for the aforesaid purposes was an absolute, indispensable condition precedent to the great task undertaken by the United States in the construction and perpetual maintenance, operation, sanitation, and protection of the Panama Canal, for the benefit of the entire world; and for which rights the United States has paid the Republic of Panama the full indemnity and annuities agreed upon by the two nations; and Whereas, on February 2, 190, the House of Representatives in the Eightysixth Congress, by an overwhelming vote, approved House Concurrent Resolution 459, favorably reported by the Committee on Foreign Affairs, as follows: "Resolved by the House of Representatives (the Senate concurring), That it is the sense of the Congress that any variation in the traditional interpretation of the treaties of 1903, 1936, and 1955 between the United States and the Republic of Panama, with special reference to matters concerning territorial sovereignty shall be made only pursuant to treaty." Whereas, because of continuing claims of sovereignty over the Canal Zone by Panama which, if granted, would liquidate United States control of the Panama Canal and Canal Zone, a further declaration by the Eighty-eighth Congress is deemed necessary and timely: Now, therefore, be it Resolved by the House of Representatives (the Senate concurring), That (1) the United States, under treaty provisions, constitutionally acquired and holds, in perpetuity exclusive sovereignty and control over the Canal Zone for the construction of the Panama Canal and its perpetual maintenance, operation, sanitation. and protection; and (2) That there can be no just claim by the Republic of Panama for the exercise of any sovereignty of whatever character over the Canal Zone so long as the United States discharges its duties and obligations with respect to the canal; and (3) That the formal display of any official flag over the Canal Zone other than that of the United States is violative of law, treaty, international usage, and the historic canal policy of the United States as fully upheld by its highest courts and administrative officials; and will lead to confusion and chaos in the administration of the Panama Canal enterprise. (4) That the provisions of H. Con. Res. 459, Eighty-sixth Congress, are reiterated and reemphasized. [From the Republic of Panama Sunday American, Mar. 17, 1963] FLEMING WOULD SLAY "SACRED COWs"-HAs STRONG FEELINGS ABouT DOYLE Canal Zone Gov. Robert J. Fleming, Jr., was quoted yesterday by the Scripps Howard wire service as saying "I'm in favor of slaughtering some sacred cows." The statement was quoted in dispatch from Jim Lucas, one of a group of 21 U.S. newsmen visiting the isthmus on a tour of U.S. Army installations, who also heard Fleming denounce those Americans in Panama and in the United States who believe "any accommodation to give Panamanians a better share (of Panama Canal benefits) is a sellout of vital American interests." Fleming was also quoted in the dispatch as saying that he has "very strong feelings" about the suit filed against him by Panama Canal Chief Architect Gerald A. Doyle, and as declaring that in the militarv "you could bust a man like that." Lucas' dispatch reads as follows: "The Governor of the Panama Canal Zone today denounced those in Panama and the United States," he said, believe "any accommodation to give the Panamanians a better share is a sellout of vital American interests." "I'm in favor of slaughtering some sacred cows," Maj. Gen. Robert J. Fleming, Jr., President of the Canal Company as well as Governor, said in an angry statemient to 21 visiting American newsmen.

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ISTHMIAN CANAL POLICY QUESTIONS 215 Among them: 1. The "shibboleth" that any agreement between the United States and the Republic of Panama to settle differences is a form of appeasemeut 2. A discriminatory wage scale which has given 16 percent of the canal employees, 98 percent of them Americans, the bulk of the payroll. 3. "Blind adherence to a treaty signed 60 years ago" and "strictly legalistic interpretation" of its provisions. Fleming said he had "always believed these things and it is high time somebody said them." "Here is where we, the United States, became a world power," he said. "The Panama Canal is a technical achievement of which every Amerin u (,ain be proud. But socially, there is sand in our gears. We have lagged behind the rest of the United States, and we've got to catch up." Fleming said any progress in betterment of relations between Aiericans and Panainaans "has been and will be resisted by small groups having a vested interest in the status quo." le said these people gain an audience they do not deserve. He said they undo the good done by thousands of others, and thus serve our enemies. He said there are some Members of Congress who "obviously" share their sentiments and work with them. He refused to name any particular Congressman, but Representatjve Clarence Cannon, Democrat, of Missouri, is author of a resolution which would require Fleming to haul down the Panamanian flig now flying over portions of the zone. Fleming said he has "very strong feelings" about a suit filed against him in Federal court here by his Chief Architect, Gerald Doyle of Cleveland, Ohio. Doyle seeks a writ of mandamus to force the Governor to haul down the Panamanian flag, forbid the use of Panamanian stamps in the Canal Zone (something Fleming said he "hopes" to do soon) and block an agreement now being negoriated whereby Panama's Foreign Ministry would accredit foreign consulates in the zone subject to our veto. Fleming conceded Doyle was the kind of Anierican he had in mind. In the military, he said, "you could bust a man like that" but he is powerless to do alything about zone employees who have special status. In a separate interview, Doyle said a "Gerald Doyle Defense Committee" in the zone has raised $S,000 to finance his litigation to the Supreme Court, if necessary. He said, however, he merely seeks to prevent Flenind's doing those thin without congressional approval which he said is required "if our Constitution means anything." Fleming and Doyle want to "block (U.S. Ambassador) Joe Farlhnd and I froiii carrying out any agreements by the executive branch to improve relations with Panama." He said it is important that public opinion in the United States be marshalled in favor of "treating Panamanians like people." Small groups of oldtime canal employees, he said, are insulatedd from the facts of life which are familiar to other Americans through daily exposure." "We are not going to solve our problems by listening to these people, he said. CONGRESS OF THE U1NTTED STrES,. HOUSE OF RE:PRESENTATIVES, Tlashinton, D.C. 0c ober 2'A,196?. Hon. DEAN RUSX, Secretary of State,Departnent of State, Washington, D.C. DEAR MR. SECRETAR*Y: A news ispatch from BiJboa, C.Z. in tie New York Tims of October 7, 19C2, states that tartfin with t 1 lo dication of the Thatcher Ferry Briige across the Pananu Cmn1 on October 1, the hgs of omh 1Panamni (Ind the Luited States will fly

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216 ISTHMIAN CANAL POLICY QUESTIONS side by side over -the bridge and at several other spots in the Canal Zone. Information is respectfully requested of the authority for this action. Sincerely yours, DANIEL J. FLOOD, Member of Congress. DEPARTMENT OF STATE, Washington, D.C., November 8, 1962. DEAR CONGRESSMAN FLOOD: Thank you for your letter of October 26, 1962, addressed to Secretary of State Rusk concerning the display of the flags of Panama and the United States on the Thatcher Ferry Bridge in the Canal Zone. As you know, on September 14, 1960, President Eisenhower directed that the flag of the Republic of Panama be displayed, along with the flag of the United States, at a particular location in the Canal Zone. This decision was made voluntarily and unilaterally by the United States as a gesture of goodwill toward Panama. The concept of "titular sovereignty," expressed by Secretary of War Taft in 1906, was affirmed in 1960 by President Eisenhower. Since the 1960 action the Panamanian authorities have expressed a desire to have their flag fly in a similar manner at other sites in the Canal Zone. In June of this year the subject of flags was discussed by President Kennedy and President Chiari during their talks in Washington, D.C. As stated in the joint communique of June 13, the two Presidents agreed that their representatives would arrange for the flying of Panamanian flags in an appropriate way in the Canal Zone. It is on the basis of President Kennedy's publicly announced decision that arrangements were made to fly additional Panamanian flags alongside the U.S. flag at certain sites on land in the Canal Zone. I hope the above information will be useful to you. If I may be of any further assistance, please do not hesitate to call on me. Sincerely yours, FREDERICK G. DuTrON, Assistant Secretary. CONGRESS OF THE UNITED STATES, HOUSE OF REPRESENTATIVES, Washington, D.C., January 7,1963. I-Ton. DEAN RUSK, Secretary of State, Department of State, Wa1shington, D.C. DEAR MR. SECRETARY: The Department of State, in its letter of November 8, 1962, advised me that the concept of Panamanian "titular sov reignty" over the Canal Zone, as expressed in 1906 by Secretary of War Taft and as affirmed in 1960 by President Eisenhower, is the basis for President Kennedy's June 13, 1962, agreement to fly addit ional Panamanian flags in the Canal Zone alongside those of the United States. This statement., unless amplified by historical facts, is not, only incomplete but also misleading as to the real intent of Secretary Taft concerning sovereignty over the Canal Zone.

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ISTHMIAN CANAL POLICY QUESTIONS 217 To supply the essential additional facts, attention is respectfully invited to the following: October 24, 1904: In a comprehensive reply to a note of the Panamanian Government, Secretary of State Hay mentioned the "titular sovereignty of the Canal Zone" but asserted that such sovereignty ismediatized by its own acts, solemnly declared and publicly proclaimed by treaty stipulations, induced by a desire to make possible the completion of a great work which will confer inestimable benefit on the people of the isthmus and the nations of the world (Foreign Relations, 1904, pp. 613-630). January 12, 1905: When discussing the question of jurisdiction over the Canal Zone in a report to President Theodore Roosevelt, Secretary of War Taft explained thatwhile we have all the attributes of sovereignty necessary in the construction, maintenance, and protection of the canal, the very form in which these attributes are conferred in the treaty seems to preserve the titular sovereignty over the Canal Zone in the Republic of Panama, and * we have [had] conceded to us complete judicial and police power over the zone and the two ports at the ends of the canal (hearings before Senate Committee on Interoceanic Canals, 1(907, vol. III, p. 2399). April 18, 1906: When testifying before the Senate Comittee on Interoceanic Canals, Secretary Taft commented that article III of the 1903 Canal Treaty ispeculiar in not conferring sovereignty directly upoL1 the United States th pwers which it would have if it were sovereign. This gives rise to the ol ivus iupation that a mere titular sovereignty is reserved in the 'anamanian Government (ibid., p. 2527). February 9, 1909: In an address at New Orleans, President-elect Taft stated that, under the 1903 treatywe are entitled to exercise all the sovereignty and all the rights of sovereignty that we would exercise if we were sovereign, and Panama is exelided from exercising any rights to the contrary of those conceded to us. Now that may be a ticklish argument, but I do not care whether it is or not. We are there. We have the right to govern that strip. and we are going to govern it. And without the right to govern that strip, without the power to police it. and without the power to make the laws in that strip bend, all of them, to the construction of the canal, we would not have been within 2 or 3 years, hardly, of where we are in the construction. November 16, 1910: When attending a banquet given by the President of Panama in the capital of that country, President Taft made this significant statement: We are here to construct, maintain, operate, and defend a world canal, which runs through the heart of your country, and you have given us the necessary sovereignty and jurisdiction over the part of your country occupied by that canal to enable us to do this effectively (Canal Record, vol. IV, [Nov. 23, 1910], p. 100). December 5, 1912: President Taft in an Executive order, pursuant to the Panama Canal Act of 1912 and in conformity with the 1903 treaty, decreed that: All land and land underwater within the limits of the Canal Zone are necessary for the construction, maintenance, operation, protection, and sanitation of the Panama Canal. October 15, 1923: When the Minister of Panama brought up the subject of sovereignty over the Canal Zone with Secretary of State Charles Evans Hughes, the latter stated: The grant to the United States of all the rights, power, and authority which it would possess if it were sovereign of the territory described, and to the entire

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218 ISTHMIAN CANAL POLICY QUESTIONS exclusion of the exercise by Panama of any such sovereignty, is conclusive upon the question you raise. The position of the Government upon this point was clearly and definitely set forth in the note of Mr. Hay * of October 24, 1904 (Foreign Relations, 1923, vol. II). December 15, 1923: In a conversation with the Minister of Panama, Secretary Hughes reiterated this stand, declaring with refreshing candor that the U.S. Governmentwould never recede from the position which it had taken in the note of Secretary Hay of 1904. This Government could not and would not enter into any discussion affecting its full right to deal with the Canal Zone under article III of the treaty of 1903 as if it were sovereign of the Canal Zone and to the entire exclusion of any sovereign rights or authority on the part of Panama (ibid., p. 684). Moreover, Secretary Hughes added: It was an absolute futility for the Panamanian Government to expect any American administration, no matter what it was, any President or any Secretary of State, ever to surrender any part of these rights which the United States had acquired under the treaty of 1903. In addition to the foregoing, the fact that U.S. sovereignty over the Canal Zone was meant to be absolute was also stressed in 1913 by Bunau-Varilla, who, as Minister of Panama in 1903-04, had been the principal draftsman of the 1903 treaty. He stated: After mature thought, I recognized that if I enumerated the various attributes of sovereignty granted, I ran the risk of seeing in the (U.S.) Senate, some other attributes asked for. To cut short any possible debate, I decided to grant a concession of sovereignty en bloc (Bunau-Varilla, as quoted by Earl Harding, "The Untold Story of Panama," New York: The Bookmaker, 1959, p. 39). Accordingly, the formula adopted by the duly accredited representatives of the United States and Panama was that of exclusive sovereignty as conferred in article III. The validity of this formula has been confirmed in a series of U.S. court decisions. It would thus appear that, if the term "titular sovereignty," has any meaning at all, it is in the nature of a reversionary interest in the sole event the United States should fail to meet its treaty obligations to maintain and operate the Panama Canal. It can mean nothing more than this for the United States cannot operate and defend the canal enterprise with less than exclusive sovereignty. There must be authority where there is responsibility. In these connections, I would also invite attention to the following: Hearings before the House Subcommittee on Inter-American Affairs on U.S. relations with Panama, January 12, 15, 19, 22, and February 2, 1960. Debate on Panama-United States relations, Congressional Record, February 2, 1960, pages 1643-1652. House Concurrent Resolution 459, 86th Congress. (See H. Rept. 2218, 86th Cong., Aug. 31, 1960.) This resolution (H. Con. Res. 459, 86th Cong.), which aimed at preventing the formal display of the Panama flag in the Canal Zone except as may be authorized by treaty, was adopted on February 2, 1960, by the House, with an overwhelming vote of 381 to 12. The measure was transmitted to the Senate where it was referred to the Committee on Foreign Relations but, for reasons never publicly stated, was not acted upon by the Senate.

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ISTHMIAN CANAL POLICY QUESTIONS 219 In addition to adopting the flag resolution, the House of Representative, on February 9, approved the Gross amendment to the 1961 Department of Commerce Appropriation bill, which provision prohibited use of funds thus appropriated for display of the Panama flag in the Canal Zone. This measure became law. These actions in the legislative branch in 1960, House Concurrent Resolution 459 and the Gross amendment, made clear the position of the Congress that acceding to demands for display of the Panama flag in the zone would constitute a "major departure from established policy and 'should not be accomplished through Executive fiat.' President Eisenhower's voluntary and unilateral action on September 17, 1960, directing the display of the Panama flag over the Canal Zone territory, went beyond the authority conferred on the executive branch by the Congress. This striking of the U.S. flag in the zone led me to issue a special press release on September 21, 1960 (Congressional Record, Jan. 4, 1961, p. 86). All of the sources and citations mentioned in the foregoing must be well known in the Department of State. If the actual records of the issue were not presented to successive Chief Executives by the responsible officials of the Department, they were gravely derelict in the performance of their duties to protect the interests of our country. It is upon the Congress that the Constitution conferred the power to declare war, the supreme act in defense of the national interest; and if the Congress has this power, it has the last word of authority in denning what the national interest is, was, or will be. No one of the creatures set up by the Congress, and by it with the means to operate; namely, the executive departments or agencies, may go beyond, above, below, or behind the precise definition of the national interest whenever the Congress chooses to define it with precision. And rarely, Mr. Secretary, has the Congress defined the national interest with more force and with greater precision than in regard to the untrammeled exercise by the United States of its sovereign rights in the Canal Zone. No refinement by Executive rhetoric can change the explicit definition of the national interest exercised by the Congress in this regard. Moreover, the Canal Zone is not an "occupied area" subject to Executive disposal, but a portion of the territorial domain of the United States acquired in 1904 pursuant to law and treaty. (See "Panama Canal Zone: Constitutional Domain of the United States," World Affairs, fall, 1958.) As such, it is virtually a part of the "coastline of the United States." I assert that the Department of State's interpretation of the statement of Secretary Taft in 1906 so as to justify the action of the Executive in 1962 to authorize the flying of additional Panamanian flags in the Canal Zone is wholly mistaken. In any event, the ordering of such display was an arbitrary assumption of authority, subject to judicial review as to its validity. The flag of a nation, when permanently flown, has only one meaning and that is sovereignty; and this is the way in which the display of the Panamanian flag over the Canal Zone is interpreted at Panama 67-S4--66--15

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220 ISTHMIAN CANAL POLICY QUESTIONS and elsewhere by Marxist-socialistic elements hostile to the United States. Nor should it ever be overlooked that Soviet strategy for conquest of the sea aims at gaining control of key water routes: namely, the Skagerrack, Straits of Gibraltar, Dardanelles, Suez Canal, Straits of Malacca, and the Panama Canal. Thus, the Cuban crisis has been only an incidental element in the program to take over the entire Caribbean, in which movement the Panama Canal has long been, and still is, the key target. Sincerely yours, DANIEL J. FLOOD. Member of Congress. DEPARTMENT OF STATE. Washington, D.C. February 5, 1963. DANIEL J. FLOOD, House of Representatives. DEAR CONGRESSMAN FLoOD: Thank you for your letter of January #, 1963 concerning the historical background of sovereignty over thl Canal Zone and your views on the flying of the Panamanian flag alongside the United States flag at certain sites in the Canal Zone. The references cited by you have in the past served as bases and guides for decisions and they will be kept available for continued use. The Department of State in carrying out its responsibilities will continue to be governed by duly constituted authority and the expressed policy designed to safeguard U.S. national interests; these conditions were set forth in two of my previous letters both dated November -, 1962, in response to your inquiries of October 9 and 26, 1962. Your continued interest in United States-Panamanian relations and operation of the Panama Canal is greatly appreciated. If I may be of additional assistance in this matter, please do not hesitate to call on me. Sincerely yours, FREDERICK G. DUvrroN, Assistant Secrefary/ (For the Secretary of State). JOINT COMMUNIQUE AND AIDE MEMOIRE RESULTING FROM DIsCusSIONs IN PANAMA BETWEEN UNITED STATES AND PANAMANIAN REPRESENTATIVES President John F. Kennedy and President Roberto F. Chiari of the Republic of Panama agreed, during President Chiari's visit to Washington on June 12-13, to appoint high-level representatives to diseu.ss points of dissatisfaction with provisions of the United StatesPanamni Treaty governing the Panama Canal. The results of the discussions in Panama, which are continuing, are summarized in the following joint communique and aide memoire: JOINT COMMUNIQUE The representatives of the Governments of the Republic of Panama and of the United States of America, appointed to discuss points of dissatisfaction in United States-Panamanian relations with regard to the Canal Zone have periodi

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ISTHMIAN CANAL POLICY QUESTIONS 221 cally met during the last 5 months. Various aspects of pending questions have been discussed up to the present, with the following results: First. It has been agreed that the flag of the Replulblic of Panam a will he flown together with the fhag of the United States of Americ:i on lu ml in the (Cnmo Zone where the flag of the United States of America is flown by civilian authorities. Private organizations and persons in the Zone ore free to display flags at will over their places of residence or business. Other aspects of the lag (uestion will be discussed later. Second. Foreign consuls, on the basis of exequaturs issued by the Government of Panama and, in accordance with procedures and understandings which have been agreed upon by the Government of Panama and the Government of the United States, may function in the Canal Zone. Subject to these procedures and understandings the U.S. Government will cease issuing documents of exequatur. Third. The representatives of both Governments have discussed labor problems relating to Panamanian citizens who work in the Canal Zone. Special attention has been devoted to the subject of wage scales, equal opportunities for Panamanian and U.S. citizens at all levels, and social security benefits. All these problems continue to be under discussion. Fourth. The representatives of Panama submitted for discussion the question of using Panamanian postage stamps in the Canal Zone postal system. The U.S. Government has proposed the use of Panamanian stamps in the zone in accordance with technical arrangements now under consideration and in conformance with international postal standards. Fifth. In accordance with instructions, the representatives h avZ discussed Panama's need for pier facilities and have visited the present pier facilities in Cristobal. This subject continues to be under discussion. The representatives of the Governments of the United States of Ameriva and of the Republic of Panama will continue their present discussions aimed at finding solutions to other problems which remain unresolved. The discussions are continuing in the spirit of the joint comimunicue issued by the President of Panama and the President of the United States of America at the end of the visit which the President of Panama made to Washington in June of last year. From time to time additional joint commnuniquies outliniing tile progre,-s of the discussions will be issued. AIDE MEMOIRE JANUARY S, 196)3. With reference to the conversations between His Excellency the Minister of Foreign Affairs and the American Ambassador concerning the meeting on September 11, 1962, of the United States and Panamanian representatives to discuss improvement of United States-Panamanian relations with regard to the Canal Zone, His Excellency will recall that the following decision was reached. It was agreed that the practice heretofore followed on the part of the United States with respect to the issuance of exequaturs for use in the Canal Zone would be changed as follows: The U.S. Government would not be agreeable to the exercise of consular funetions by a consular officer from a government not recognized by the United States. Also, the Government of the United States will notify the Government of Panama and will prohibit a consular officer from acting in the Canal Zone if, for example, in the opinion of the U.S. Government, a situation arises in the future in which a consular officer accredited by Panama is a security risk, or his functioning would interfere with the operation, maintenance, or defense of the canal. Hereafter, when the Government of Panama has on request issued an exequatur to a consular officer to function in Panama. and has notified the Department of State to that effect, the Departmentof State, providin,it has no objection in accordance with the preceding paragraph, will inform the Government of Panama by note that said consular officer may function in the Canal Zone, and the Government of Panama will so inform said consular officer; in the event the Department of State objects in accordance with the preceding paragraph, information to that effect will be supplied the Government of Panama and the consular officer may not undertake to perform consular functions in the Canal Zone.

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222 ISTHMIAN CANAL POLICY QUESTIONS RESOLUTION 230 OF THE 44TH ANNUAL CONVENTION OF THE AMERICAN LEGION, LAS VEGAS, NEv., OCTOBER 9-11, 1962 Resolution opposing surrender of U.S. jurisdiction over the Canal Zone and the Panama Canal Whereas more than 50 years' experience in the construction, maintenance, operation, sanitation, and protection of the Panama Canal, in a region of political instability, has completely established the wisdom of the 1903 treaty provisions for its exclusive control by the United States in perpetuity as indispensable for safeguarding the vital interests of our country and all free nations; and Whereas a series of surrenders to successive demands by the Republic of Panama, through treaties and executive agreements, and finally, by Executive order on September 17, 1960, to authorize display of the Panamanian flag over the zone (issued contrary to the overwhelming vote of the House of Representatives) has seriously weakened our legal position on the isthmus; and Whereas, notwithstanding solemn treaty obligations to maintain and operate the Panama Canal, the President has acceded to recent Panamanian demands for general treaty revisions that aim not only further to weaken the rights, power, and authority of the United States on the isthmus, but also to set a time for turning over control of the Panama Canal and the Canal Zone to Panama: Now, therefore, be it Resolved, by the 44th Annual National Convention of the American Legion, assembled in Las Vegas, Nev., October 9-11, 1962, That the American Legion reaffirms the position expressed in resolution 251, adopted by the American Legion at its 43d national convention, in Denver, Colo., September 11-14, 1961, which is: 1. That the United States should not, in any way, surrender to any other government or authority its jurisdiction over, and control of, the Canal Zone, and its ownership, control, management, maintenance, operation, and protection of the Panama Canal in accordance with existing treaty provisions. 2. That it is to the best interests-not only of the United States, but as well of all nations and peoples-that all powers, duties, authority, and obligations of the United States in the premises be continued in accordance with existing treaty provisions. 3. That there can be no just claim by the Republic of Panama for the exercise of any immediate control of whatever character over the Panama Canal Zone so long as the United States discharges the duties and obligations with respect to the canal. 4. That formal display of any official flag over the Canal Zone other than that of the United States, is violative of law, treaty, international usage, and the historic canal policy of the United States; and be it further Resolved, That the American Legion is deeply concerned over the published aspirations of the Republic of Panama to negotiate with the United States of America for certain concessions, which, if granted, would be contrary to the established policy of the American Legion; and be it further Resolved, That the American Legion urges the loyal news mediums of the Nation to publicize the grave perils involved so at to alert and

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ISTHMIAN CANAL POLICY QUESTIONS 223 inform our people, with demands for prompt and forthright declarations and actions by the legislative and executive departments of the Government. RESOLUTION 22 OF THE AMERICAN COALITION OF PATRIOTIC SOCIETIES, 34TH ANNUAL CONVENTiON. WASHINGTON, D.C. CARIBBEAN CRISIS FOCUSES ON PANAMA CANAL Whereas the outbreak of the Cuban crisis in early October 109, foblowed by the raising on October ) of the Painanian flag at iie Canal Zone administration building under the authority of the Prekcident. emphasized the Marxist-Socialist plan for conquest of the strat egle Caribbean area in which the Panama (anal is the key obieci ive: m(] Whereas over a period of years the conduct of our Panama policies by the Department of State, made with the approval of President, has been featured by a series of harmful and timid surrenders to Panamanian radical demands which have seriously undermined our juridical position on the isthmus; and Whereas more than half a century's experience in connection wit h the acquisition of the Canal Zone, the construction of the Panama Canal, and its subsequent maintenance, operation. sanitation an( potection in a region of endemic revolution has completely established the wisdom of the 1903 treaty provisions for its exclusive sovereign control by the United States in perpetuity, as indispensable for the vital interests of our country and other free nations: and Whereas, regardless of the pathetic twists and turns of the contrulling international-Socialist element in the Department of State wNih respect to our Caribbean and isthmian policies, the United States cannot foreswear its inherent right of self-defense; Resolved, That the American Coalition of Patriotic Societies: 1. Urges the following plan of action for our Government: (a) Clarify and openly restate the Monroe Doctrine as applying to intervention through infiltration and subversion in any part of the Americas. (b) Clarify and openly restate our historic, indispensable., and time-tested policies for U.S. control in perpetuity over the Canal Zone and the Panama Canal. (c) Announce to the world the determinationn of the Imit e 1 States to liberate the people of Cuba from alien masters and the restoration of constitutional government. (d) Reactivate a special service naval s(juadron in e C 'aribbean to serve as a symbol of liberty and as an assurance for security. 2. Condemns the tragi failures on the part of Cngies. the Department of State. and the IPres ident to safegtard I.S. vial interests in the Caribbean; 3. Considers that the responsililty for such lereli :t io re-t5 primarily with the jirisd icrt hinal coiiunittees of the Colrss, tie Department of State. and the Presiden: and 4. Urges the loyal iiews medial -f our country io inform olr people about tie dancers in the Caribbean. withI demands for

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224 ISTHMIAN CANAL POLICY QUESTIONS prompt and forthright actions and declarations by the legislative and executive branches of our Government. CONTROL OF PANAMA CANAL R.oltion Adopted by the 09th Co-nfinental Congress, Natiowal Socicty. Daught< s of the American Revolution, April 18-22, 1960 Whereas the United States in 1903 acquired full sovereignty by grant in perpetuity of the Canal Zone from Panama; and Whereas the Thomson-Urrutia Treaty between the United States and Colombia aimed, through a generous compensation to Colombia, to restore the friendship between that country and the United States which had been threatened by the loss of territory and revenue occasioned by the secession of Panama from Colombia, and defined the rights of the United States and Colombia respecting the Panama Canal; afnd Whereas forcing the abandonment of the Panama Canal, and accomplishing its internationalization is a Communist tactical objective; and Whereas retention of sovereignty and control of the Panama Canal Zone is a vital necessity to the defense of the United States; Resolied, That the National Society, Daughters of the American Revolution, urge that the United States refuse to permit the flag of Panama to be flown in the Panama Canal Zone; and Resolved, That the National Society, Daughters of the American Revolution, urge the President and the Senate of the United States to refuse to enter into any treaty or make any executive agreement with Panama whereby this country would lose its sovereignty and control over the Canal Zone, and the Panama Canal. CANAL ZONE CENTRAL LABOR UNION, AND METAL TRADES COUNCIL, AFL-CIO, Balboa H eights, Canal Zone, March 31,1963. Hon. DANIEL J. FLooD, Hous" of Represcntatives, TV ah ingt on. D.C. DEAR Sm: We know that upon your shoulders will fall the major burden of marslialing the arguments for the passao-e of House ConcurLent Resolution 105 and the companion Resolution 113 which was introduced by yourself. We believe that these resolutions are a reaffirmation of the basic principleS upon which any civilized form of government may exist or continue to exist. No government, even ours, can hope to maintain its prestige for any length of time when it does not operate within tle framework of constitutional law. In other parts of the, world, as well as here locally, commitments have been made by various individuals dictated by expediency, which have resulted in long-term detriment to the inherent rights of all of our citizens. Unfortunately, when Congress perceived the need for

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ISTHMIAN CANAL POLICY QUESTIONS 225 remedial action, these commitments have become irrevocable actiontying the hands of Congress. We pray that you will have the inspiration that may show all your colleagues that it is not only the few citizens of the zone that are affected, but that every one of their constituents in one way or another, is, and will be, adversely a ected. It is very possible that these re solutions may be the one single piece of legislation that does the most to establish in the Americas a respect for government under constitutional law. The forces that are working in this hemisphere against democracy want government by fiat. Sincerely, J. H1. ELLIOTT, descent. \TETAL TRADES DEPARTMENT, Hon. CLARENCE CANNON, U.S. Ho te of Representatves., T ashington, D.C. DEAR MR. CANNON: We have read with interest House Concr rent Resolution 105, which you introduced on March 4, 1963, dealing with the Panama Canal. I am writing you to let you know that the Metal Trades Department, AFL-CIO, is very much interested in the continued welfare and well-being of the many U.S. citizens employed in the Canal Zone, the vast majority of which are members of our affiliated international unions of this department. The deep interest of the metal trades department in matters concerning the welfare of the citizens of the United States employed as civilians in the Canal Zone, was evidenced by the unanimous action taken at our last convention in December 1961. The convention adopted three resolutions dealing with the Canal Zone merit system, the promotion of a sound apprenticeship program in the zone, and the unanimous expression that any person appointed to position as Governor of the zone, stockholder, or, member of the Board of the Panama Canal Company should be required by oath to express their intent in the continuing of the Panama Canal as a U.S. enterprisO. We indeed desire to commend you for the introduction of T ouse Concurrent Resolution 105, which obviously reflects the considered view of tioughtful and well-informed Members of the Congress with reard to the Panama. Canal. The recent Cuban situation and the Suez Canal crisis in 15 hIve hoth served to focus world attention on the Panama Canal. We are inleed greatly concerned wth the continue erosion of T S. a rity TOe~ 1 c,,(on7etinuedj ofU.atvrv over the CQ-.rW Zone. AAe recognize that th Rep'bli of PIana is subject to economic ills due largely to its overdepencdence on the Pnama Canal and its failure to develop its own ag'ricltrai POtniU> 1 We trust the t with the dminiStration-proposed r n techniC 1( tOd en Omi 0 a *i wil come a decreasjn M need f'r Panaa to rely on tho Pmnima Cane as a solution to its econmW The portion .f the metal ti rqdes deoIrtment is to endor ane1 1) ~ Gil the 0-9 !z e"iv f~ic l
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226 ISTHMIAN CANAL POLICY QUESTIONS The principal purposes of the Panama Canal since its first transit almost 50 years ago has not changed. The dual purpose of its construction was to serve without profit world commerce, and as a measure of national defense. It was with wise understanding and responsible statesmanship that the House Committee on Panama Canal reported: "The canal should not be permitted to become a pawn in our normal diplomatic relations with Panama." The Panama Canal still has great strategic importance to the security of both the United States and the free world. The phenomenal (recordbreaking) demand for Panama Canal services established in 1962, reveals to all its economic importance. Until, and unless another canal is built, the Canal Zone and the Panama Canal must in the interest of the entire free world continue to remain under exclusive U.S. authority and control. lWe strongly support the provisions and urge the adoption of House Concurrent Resolution 105. We are taking the liberty of sendipg a copy of this communication to Congressmen Daniel J. Flood and Frank T. Bow, who introduced similar resolutions, House Concurrent Resolutions 113 and 120, on March 12 and 28, 1963. A copy of this letter is also being sent to Thomas E. Morgan, chairman, Foreign Affairs Committee of the House, and to all members of that committee. Sincerely yours, B. A. GRTTA, President. [From the Panama (Republic of Panama) American, Mar. 23, 1963] THE TREATIES--WERE THEY ALL "TAKE". SIR: This is the fifth article we have written to your column dealing with the subject of present and past treaties between the United States and Panama as regards the Canal Zone and the Panama Canal. Our past papers have dealt with the subject of sovereignty and international law as both apply to the "big ditch," the Panama Canal. It has been loudly, eagerly, and zealously argued that the treaties of 1903, 1936, and 1955 were completely one sided in favor of the United States with the Republic of Panama getting the very short end of the stick. It has been forthrightly urged that it was all take and no give on the part of the U.S. Government as regards the Panama Canal. We found the book, "The Untold Story of Panama," by Earl Harding, extremely interesting on this subject and at the same time quite revealing and quite shocking. This 171-page book was published by Athene Press, Inc., of New York City in 1959. Harding is a famed journalist and was formerly the assistant to the president and public relations counsel of Remington Rand, Inc. As early as 1913 Harding advocated that to properly protect the Panama Canal the Canal Zone should take in much more territory than the treaty of 1903 gave to the United States. On page 103 of his book Tiar ding states: I suggested that acquisition of territory for future defense could not be r(garded as aggression-unless delayed until a new generation of P.namanians came to believe their sovereignty an inalienable right.

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ISTHMIAN CANAL POLICY QUESTIONS 227 They believe it now. For Panama history books have not told Panamanian youth that only a handful of conspirators knew that a revolution was planned. Radical ideologies infiltrated all around the Canal Zone and exaggerated ideas of supernationalisi took bold of a generation of Panamanians schooled to believe in the fiction that their -founding fathers" actually won their independence. So uninformed and misinformed Panamanians and North Americans took for granted the righteousness of Franklin Delano loosevelt's ahrogration of practically everything in the 1903 treaty to wiich the Panamanian poliLicians objected and the new treaty of 1936 was signed in Washington on March 2. What did the treaty of 1936-39 give to the Republic of Panama Hardinz states ,uire bluntly the following: 1. The priceless treaty rights of the United States to buihl defense bases outside the 10-mile-wide Canal Zone. "That giveaway cost American taxpayers much more than the million dollars in rental paid to the Panama Government during World War II for permission to plant guns, build roads, landing fields, bomber bases, and nearly 400 buildings on Panama's pasture lands and in her swamps and jungles adjacent to the Canal Zone. It took endless negotiation to obtain permission-where the Inited States formerly had the right under the 1903 treaty-to use Panamanian territory for defense purposes. 2. All U.S. authority outside the Canal Zone was abrogated "thus abandoning its (United States) rights to defense bases outside the Canal Zone." The U.S. Government's right of eminent domain in acquiring property within the cities of Panama and Colon which miight be needed for canal operation was renounced. 3. Also eliminated (by the 1936 treaty) was the right of the United States to maintain public order in Panama if the Panamanian Government could not do so. The annuity of $250.000 paid by the United States for use of the canal strip was increased to S430,000--'on account of the Roosevelt devaluation of the dollar." 4. The treaty of 1936 restricted residence in the Canal Zone to American civilian and military personnel. established corridors within the zone for Panamanian convenience and prohibited new private enterprises in the Canal Zone. The treaty of ?':G was the lezal basis that brouit about the United States, in January 1948, abandoning the 13 defense site withi the Republic of Panana and retreated within its Canal Zone. "It was then understood thit future defense would be entirely from within tlhe zone limits." The little-menio:ined treaty of 1955 zave to Panama the folVinL: 1. Increased the U.S. annuty' to Parama from 13,0 B o 2. Gae P7,nama, without required c ompensatin (dollars, w:Iterfront and other pronerties. including Panama Railroads yards nd cterminlar; M the cities o Col6 (1 ania, o on "est41 MimaJ firi: mnarke lx al~e," as statedi b our Gernmetl f4j These ifts included the Iotel Washingion in Coln (l.45O.Kh0) and maany~ciher parcels.

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228 ISTHMIAN CANAL POLICY QUESTIONS 3. Agreed to ask Congress to appropriate and authorize building a bridge across the Panama Canal to replace the Thatcher Ferry, estimated to cost (at that time) up to $27 million. This bridge is now constructed. 4. Concessions to Panama designed to restrict American (United States) and extend Panamanian rights in respect to commissary privileges, trade advantages, wage classification, taxation, and so forth. "Panama's principal token return for all the treaty consessions was 'the right to use, for a period of 15 years without cost' as a military training and maneuver base the old Rio Hato Base west of the Canal Zone. Extension after 15 years is subject to 'agreement between the two Governments. The treaty of 1955 was ratified by the U.S. Senate on July 29. J!'1-, by a vote of 72 "for" and 14 "against." Senator Russell, of Georgia, repeatedly questioned the wisdom of ratification and stated in his argument against ratification: I reiterate that the Department of Defense never thinks of challenging the Department of State or interfering in any way in any international negotiations. That has been true of all negotiations we have had in the past 2 years. If I had the privilege of appointing someone in the Department of Defense I would have cautioned him, when he came to consider a treaty having to do with the Panama Canal, to get some agreement that would not bleed us white, if we had to get some land outside the zone, in the event of another war while we were committing ourselves to these increased payments, we should have some room to stand and fight, in the event of another war, rather than having to pay a large rental for additional ground. Have the series of treaties between the United States and the Republic of Panama since the treaty of 1903 been "all take" on the part of the United States and "no give ?" In all intellectual honesty and sincerity, we think not. CENTRAL COMMPTEE. CANAL ZoNEx DEMOCRATIC PARTY.

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[From the Congressional Record, 88th Cong., 1st Sess., May 8. 19t:1] PANAMA CANAL QUESTIONS: IMMEDIATE ACTION REQUIRED Mr. FLOOD. Mr. Speaker, since the nationalization in 1956 by Egypt of the Suez Canal and the precedentmaking recognition and support by our Government of that action, the Panama Canal has been the victim of a series of diplomatic aggressions on the part of the Republic of Panama against the sovereignty and juirisdiction of the United States over the Canal Zone. Immeasurably comlphcated by the ratification in 1955 of the secretly contrived Elsenhower-Remon Treaty, our Government, both the Congress and the exec-tive, has failed to meet these assaults with forthright, declaration of policy. Instead, through mistaken acts of generosity and timid attempts at placation, it has aggravated the situation in the Canal Zone, with conditions there verging on chaos. Underlying the present sovereignty agitation, and related to it in many ways, is the transcendent question of increased transit capacity., a subject that has been under congressional consideration since the advent in 1945 of the atomic bomb. In that year, the Congress, on recommendations of administrative authorities, enacted Pt blie Lav 280, 79th Congress, authorizing the Governor of the Panama Canalnow Canal Zone-to study the means for increasing the capacity and security of the Panama Canal to meet the future needs of hteroceanic commerce and national defense, including consideration of canals at other locations, and a restudy of the third locks project. authorized by act approved August 11, 1939. This construction project, hurriedly started in 1940 without adequate study, was suspended in May 1942 by the Secretary of WarStimson-after an expenditure of some $75 million of the taxpayers' money, mainly on lock-site excavations for parallel sets of larger locks at Gatun and Miraflores. most of which can be used in the fut ure. Fortunately, the suspension of that project occurred before excavation was started at Pedro Miguel. The wording of the 1945 statute,which was drafted in the Panama Canal organization that would later supervise its execution. is modt significant in that this law was the first basic canal statute to inelmde the terms, "Security" and "national defense," along with the usual terms, "capacity" and "interoceanic commerce" for sneh il Under a far more extreme interpretation of this iICIenilnly worded enactment, those who directed the inquiry emii 1P1asized the "security" and "national defense" factors as paramount a1d 0om1)r1l1ing, and even as a "mandate" froi the Conzre:s for a rcwV '< tend:lt ion of a new canal of sea-level desiffn at Panama. Later
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230 ISTHMIAN CANAL POLICY QUESTIONS The report, of the Governor, heedless of the diplomatic consequences and costs involved, recommended only a sea-level project at Panama for a major increase of transit capacity, on the basis of its alleged greater "security" primarily against atomic attack and the needs for "national defense," This action served to obscure the plan for the major improvement of the existing canal which, when evaluated from all significant angles, may be the best solution. Forwarded to Congress by the President on December 1, 1947, and significantly without approval, comment or recommendation, the Congress took no action and the report was not published as is usual in such cases. In the ensuing discussion of the 1947 sea-level recommendation in the Congress, distinguished Members described its significant features and exposed the fallacies upon which it was founded. Notable among those discussions were statements by such leaders as Chairman Fred Bradley and Schuler Otis Bland of the Committee on Merchant Marine and Fisheries and Representatives Thomas E. Martin and Willis W. Bradley. all of whom strongly opposed the sea-level proposal. The special attention of the Congress is invited to two addresses by -Representative Willis W. Bradley, which admirably clarified the issues and made strong appeals for an independent inquiry: "What of the Panama Canal ?" Congressional Record, April 21, 1948, page A2449; and "The Why's of the Panama Canal," Congressional Record, March 4. 1949. page A1303. With minor revision, the arguments presented in these two addresses apply with equal force today. Unfortunately, nothing specific was done in this regard until 1957, when the Committee on Merchant Marine and Fisheries, pursuant to House Resolution 149, 85th Congress. appointed a part-time board of consultants to investigate the short-range plans for improving the Panama Canal. This board made no new field engineering studies and based its report on data and studies made by others for the Panama Canal Company, or by the staff of the Company. Its report, House Report No. 1960, 86th Congress, signed on June 1, 1960, recommended no action toward a major increase of canal capacity, but that the entire situation be reviewed in 1970, or at an appropriately earlier date if traffic estimates are exceeded. The time. Mr. Speaker, has now come for our Government to undertake the important task of deciding upon the matter of increased transit capacity for the Panama Canal. For this purpose. there are a number of bills now before the Conrress, which I wish to discuss briefly. One group. illnstrated bv H.R. 863. introdneed by mv colleague from Ohio [Mr. Bowl, and H.R. 3858, by myself, would create the Tnteroceanic Canals Commission. This independent body would be directed 1-o 4udy. first the question of increasing the capacity and operational efficienev of the present eanal through adaptation of the si1'4pended third lock project to provide a summit level terminal lake anchorage in the Pacific end of the canal to correspond with that in i e A tlantic end: second. the construction of a new canal of sea level lein nt Panama, and third, the question of a second canal. Con;idr"atfon of the treaty and territorial rights involved, which so far have bleen i1inorod, would be one of the main features of this inquiry.

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ISTHMIAN CANAL POLICY QUESTIONS 2i I An entirely different approach, however. is represented by ll. SO. introduced by my colleague from North Carolina [Mr. BIonner]. This bill would authorize the Panama Canal Comnpany to study the means for increasing the security and capacity of the Panama Canal or construction of a new canal to meet the future needs of interoceanic commerce and national defense. The key terms of this bill are identical with those of Public Law 280. 79th Congress. and equally ambiguous. Nor do they provide for consideration of the treaty orterritorial questions involved. Moreover, it would keep the inquiry under the control of the same advocates who have long had the predetermined objective of a sea level canal at Panama for reasons other than navigation. These advocates, Mr. Speaker. have unjustifiably opposed any major improvement of the existing waterway on the ground that such improvement would delay conversionn to sea level. This is n reason at all, but a challenge to which the Conure'z should be alert. Every factor in the situation demands that the question of the futIre increase of transit capacity should not be undlertaken _y administrative agencies but by an independent body under congressional authorization, which should be composed only of those of tiei highest qualifications. In anticipation of the pre ent situation. I reqtieted Mr. Edward Sydney Randolph. of Baton RLouue. La. a former member of the I 57 board of consultants, to review tiIe 1960 report of that body which he has done in a letter to me dated April Z. D;). The fact 'that he was not a member of this board during its conii-derat ion of the long-range program left him free to connent upon t report obiectivivy His long service in the Canal Zone i re-ponsible enIneerir capacity, familiarity with the problems involved, independence and vision, enabled him' to prepare specific comments of rare merit that reflect a lifetime of observation and study. Not only 'that, his knowledge has enabled him to pre-ent a most con s tructive engneermg pro gram that should be considered only by an independent comission. with power as set forth in Sil. S6: and H.l. :8S3. Every consideration in the overall subject demands that our Government energetically strive to create the Interoceanic Canals Conmnission at the earliest date. for too much time ha; already passed. In these general connections, we must not overlook the facts that the well-known and tested Terminal Lake-thi rd locks solution for the Panama Canal would not require the negotiation of a new treaty with Panama, but that the seal level proposal would so require. The first s covered by existing treaties but the latter is not so covered. These eatures in themselves ouaht to be suifficient to determine the matter: )ut, in any event, the proposed commission would consider this im>ortant treaty question. An indispensable prerequisite before undertaking any plan for the increase of capacity of the Panama Canal or for a second canal at an)ther site is the clarification and reaflirmation of U.S. sovereignty over he Canal Zone, which is constantly being contested by Panama. 3uch results are contemplated in House Con current Resolution 15 nroduced by the gentleman from Missouri FMr. (xxN ]. and H1ouIe oncurrent Resolution 113. i vrod ieed by myself.

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232 ISTHMIAN CANAL POLICY QUESTIONS Mr. Speaker, delay and confusion have, for too long, plagued the situation on the isthmus as regards the sovereignty of the United States over the Canal Zone and also the determination of an adequate plan for increased transit capacity and operational improvement of the Panama Canal. The time has come for action, for which the 1960 report of the Board of Consultants was a constructive first step. In order to make Mr. Randolph's statesmanlike engineering analysis of this 1960 report easily available not only to the Congress and the Executive, but as well to all interests concerned with interoceanic commerce and have to bear the costs of tolls as well as to the nations at large, I quote it as a part of my remarks: BATON ROUGE, LA., April 5, 1963. To: The Honorable Daniel J. Flood, House of Representatives, Old House Office Building, Washington, D.C. From: Edward Sydney Randolph, registered professional engineer, Life Fellow, American Society of Civil Engineers. 'Subject: Panama Isthmian Canal-Bill to create an Interoceanic Canals Commission. Reference: Letter of Congressman Flood to E. S. Randolph dated October 4, 1962, and later matter. DEAR MR. FLOOD: This is in response to your request for comments on the above subjects. A list of references is at the end of this letter. For brevity references will be to year and page number. Most references are to the 1960 consulting board report. Although I served on the Board while it produced the short-range program, July 15, 1958, published as a committee print, I did not contribute to the long-range program, nor did I know what the contents were, until after its publication. The short-range program has long ago been implemented. To reduce confusing details, this letter will deal chiefly with the locked-in parts of the Panama Canal from Gatun locks at the north to Miraflores locks at the south end. The 1960 board report states at page 8, "The sea level sections may take traffic in both directions simultaneously." The sea level section from Gatun to sea is nominally 6.43, and at Pacific end, from Miraflores locks to sea is nominally 7.41 nautical miles. (Pilot's Handbook, revised 1956, p. 17.14.) If in the remote future, there will be a need for some improvements to the sea level sections of the lock-canal, it might be economical to perform these operations when needed and not associate them with any program for new locks. The sea level sections do not seem to be limiting factors to the capacity of the canal. The several very distinguished members of the board which produced the long-range program, signed June 1, 1960, were engaged for almost 3 years on the shortand long-range programs. Significant is the statement (1960, p. 1) : "No new field engineering was done for the purpose of this report. It is based on data and studies made by others for the Panama Canal, or by the company's staff." Under the circumstances, I do not know how they could have produced a better report at that time. I do not question their findings. At the time of signing, the board possessed far more late information than I. In this letter, I hope to show reasons why the inquiry should be energetically

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ISTHMIAN CANAL POLICY QUESTIONS 233 continued at an early date. Any discussions in this letter are to point up the need for inquiries, not with the intention of deciding any other issues. The board was provided with several plans and estimates for locktype and sea level canals at the Canal Zone. The board made some comments on them but did not recommend any for construction. Several names have been used to differentiate the several lock-canal plans, but obviously any third lane of new locks will, in fact, be a third set of locks. There are wide differences in estimated costs, times required for construction, dimensions of lock chambers, and conveniences of operation in the lock plans offered to the board and shown in the 1960 board report. There might be more and different plans for locks developed, perhaps leading to something superior, if further investigations were vigorously and objectively pushed, by a representative group of able men, empowered to act. The proposed bill H.R. 3858, to create an Interoceanic Canals Commission, now before Congress, would be the best agency for securing the best plan for the future Panama Canal-or a canal in any other place. The 1939 report (H. Doc. 210, 76th) led to the authorization by Congress of a third set of locks. Construction was started July 1, 1940, but was suspended by the Secretary of War in May 1942, due to shortage of ships and materials more urgently needed in wartime. (Encyclopaedia Britannica, 1961, p. 173.) Construction was not resumed. Other plans were put forward-for a sea level canal, and a third lock canal which would elevate the Miraflores Lake to summit level (the Terminal Lake Canal). These two were widely publicized and discusssed. (See 1949 Transactions of the Am. Soc. C.E., vol. 114, pp. 558-906.) Accordingly, it appears that the lock canal plan is still the one approved and favored by Congress. But events since the board report dated June 1960 would justify a new look at all lock canal plans heretofore published and others to be devised. In the 1960 report, I found no recommendations for the resumption of the lock construction program. However, at page 7, recommendation 7, stated: "The entire situation should be reviewed in 1970, or if the present traflic estimates are appreciably exceeded. at an appropriately earlier date." At the time of signing the report, it was doubtless quite clear that a new examination of the matter should be based solely on traffic density. But the situation will be different after year 1967, when it is expected that the enlargements recommended in the 1960 report will be accomplished. Also, the investigations recommended by the board are yielding data, which should be evaluated by the proposed commission. In the 1960 report, at page 38, is shown "Plan 1: Interim Improvements to Present Canal (cost $61 million)." The interim program is all that was recommended for construction. Other recommendations included various investigations, one concerning the construction of a sea-level canal and another concerning water supply for lockages. What will happen after the year 1967? Should the United States be ready with the best plan for construction of new locks, in case of need? Even those lock plans revised in 1958 (1960, p. 319, App. 3) are not on a comparable basis. How can the best plan be found ? It is probably true that a third flight of new locks can be constructed in

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234 ISTHMIAN CANAL POLICY QUESTIONS much less time than any sea-level canal, and for a fraction of the first cost. After the year 1967, there will be an ample waterway from lock to lock. So deep that the full increase in depth will not be required for a long time. The original locks will have some perfections added but will limit the size of the maximum ship to 102 feet wide, 800 feet long ad 38 feet fresh water draft (1960, p. 38). When only one lock lane is available the maximum traffic will be 38 lockages in 24 hours (p. 19). It was estimated that the outage time of one chamber could be reduced to 72 or 96 hours, for repairs (p. 19). That is 3 or 4 days. If during one of those 3-day periods transits happened to be at a peak rate there could be a piling-up of ships. The maximum peak day rate in 1959 was 39.2 transits (1960, table at p. 24). Estimated peak day traffic for 1976 was 47.1, and for year 2000 was 61.9. While these possibilities of delays to ships during several days do not seem alarming now, the situation needs consideration together with the overall planning of the future canal. At page 19, is the statement If these outage times can be selected for minimum traffic interference, the maximum capacity could be achieved. (1960, p. 17) : Basically, the absolute measure of the canal capacity is the maximum number of lockages that can be processed in 24 hours. And at page 21: It is generally predicted that the capacity of a single lock lane would be insufficient at times to meet the needs of expected traffic beyond the year 1960. It is time for a hard new look at the several problems as they will be influenced by the passage of time, interim improvements, the yield from the investigations recommended in the 1960 report, and by other scientific advances. Congress must decide all major questions based on sufficient information. A commission can present data, to Congress, based on the Commission's massive investigations. Engineers, and other experts, employed by the Commission, can provide answers to lesser questions and information for consideration by the Commission. In the press there have been statements to the effect that some improvements in capacity of the American Isthmian Canal will be required by year 1980. If true, the lead time is running out. Such statements are subject to question by a representative body such as a commission. For each proposed plan in the 1960 report is shown a construction schedule. The minimum is 81/2 years for lock construetion including 2 for engineering and administration (1960, p. 373). At pages 382 and 386 are shown construction schedules for Plan IIIConsolidated Third Locks (Terminal Lake) and Plan IV-Zone Sea Level Canal, both 12 years for completion after authorization. These schedules are for necessary work after authorization (1960, p. 324). To be added to the above time periods are the time for congressional action and before that time for commission actions. There is so vast a field for investigation that several years might be required by a commission alone. Crash programs are costly and likely to be far from the best. The only possible means for the full accomplishment of all the interlock

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ISTHMIAN CANAL POLICY QUESTIONS 235 ing inquiries concerning an enlarged waterway would be by nieais of the proposed commission. Each basic fact relating to the problem has a number of variations and different advocates. The interin improvements recommended by the 1N) board hi tided the deepening of the summit level by 5 feet, from nominal f res'A water depth of 45 feet to 50 feet, or 11 percent, and for the wideni i from 300 to 500 feet minimum, or 67 percent, and this is expected tr be accomplished by year 1967. In the meantime all connmercial tonnage applying for passage is accommodated by the original chanK while in the process of widening and deepening. The installation of lights and signals along the canal, already implemented, will enable vessels to pass in both directions simultaneously during night or day ;190. p.302): Lighting both Gaillard Cut and the locks would * increase the capacity * by permitting 2-way traffic in Gaillard Cut during darkness, thus making 24-hour operations possible. It is implied that the widened and deepened canal will (except for the locks) have ability to handle the traffic, in tons, until the Var 2001 (1960, p. 3, conclusion 8): Comparison of capacity and demand also shows that even the preslCanal. after completion of the short-range program and plan I, will have fully adequate capacity to meet the demands of traffic beyond the year 2000 * *c* when repairs or overhauls are being made to the locks. And at page 26: The life of the dredged channel can be perpetuated by periodic dred From the above, it might be construed that there need be no more massive deepening or widening programs for the waterway as far as man can foresee. (Even the 37-foot salt water draft of t arrier U.S.S. Constellation would be comfortably accommodated.) The added depth, particularly in the restricted Gaillard Cut, will permit some extra drawdown of Gatun Lake level in dry seasons. which will periit some added electric power generation at the Gatun Station. At first this will permit a certain amount of fuel s:oving. But as ships increase in size it is probable that the minimum Like level will again be increased. The water level must provide sMiwjien depth above the lock sills at Gatun and Pedro Miguel to floa ships conveniently. At page 25 of 1960 report is stated: (d) Water supply: The usable water supply in Gatun Lake is increaKunIder this plan * by deepening the channel 3 feet more than required for ship maneuverability. With this increase the water supply is considered adequaV-l for the operation of the canal as reconstructed under this plan. The authors of the report seem to have taken a lonz lock eato the time when the third flight of locks is a reality. Then : feet added depth will be very welcome for larger ships. The minimum depth of 47 feet (occurring only at ends of !on drv seasons) should suffice for many years, if new and deeper k.1 are provided. If deeper water will ever be a necessity, at that date consideration might be given to adoption to a higher minimum level which would lend itself to a gradual increase in depth: or to lowering the bottom of the canal, which would need to be done in a arger ste to 1e

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236 ISTHMIAN CANAL POLICY QUESTIONS econoiically performed. It must, at some time, be decided which expedlent will be adopted, how much increase in depth at one time, and when tihe deepening will be imperative, if ever. A full inquiry by the commission might show that the channel, harbor, and aids to navigation will not require large improvements above those accomplished and now in progress within the predictable future. Also that the dates of the needs for larger locks, deeper channels, and added water supply may be based on different factors. In the cost estimates, provided for consideration by the consulting board. starting at page 389 of 1960 report, for additional locks, are shown items which might not be appropriate after the current program of widening, deepening, lighting, etc., of the channels is completed. Assume the waterway will then be adequate until some time like year 2000 (too far ahead for any accurate forecast). In that case a third lane of new and larger locks will accommodate practically all traffic, even very large ships. Under the above assumption, there would fall from the cost estimates those items already accomplished, in whole or in part, such as channel deepening and widening, lighting, signals, harbor improvements and ship salvage facilities; none of which would need attention merely because there were larger locks and probably would need only maintenance for a very long time. If these items are deducted from the cost estimates, as shown on table 1 (following), the costs (1939) would be reduced toFor plan II, third locks, reduced amount-----------------------$468, 000, 000 For plan III, Terminal Lake-third locks-----------------------875, 000, 000 The published estimates, in 1960 report are not in so much detail that I can determine exactly how much of each item should be excluded as unnecessary to the functioning of any of the locks. TABLE I [Part or a1l of the following items in estimated costs might be found unnecessary or inappropriate for any new cost estimates for a new flight of locks in the Panama Canal] Plan HI, Plan rI consolidated 3d locks 3d locks (Terminal Lake), 3 lifts Page references, 1960 Board report.---------------------------------389,390 393-395 Items 3 and 4: Channel excavation---------------------------------$197, 770,000 $204,010,000 Item 5: Harbor improvements---------------------------------------3,300,000 12,950,000 Item 6a: Exoavation, unclassified ------------------------------------17,180,930 Item 6b: Excavation, unclassifiedItem 6c: Excavation, unclassified ,-------------------------------------i,321,250Item 12: Aids to navigation ----------------------------------------11 500,000. Item 11: Aids 1:. naviaion ----------------------------------------------------11, 498, 000 Item ii: Ship sav. ge ficiities----------------------------------------------------8,240,000 Tota--------------------------------------------------245,072,180 236,698,000 Enineerin7 design and supervision, exploratory work, and inspection of materials at percent) ------------------------------------------19,606,000 18,936,000 Total assumed deductible) ----------------------------------264,678,000 255,634,000 Original tctal kstimatd cost ---------------------------------------733,080,000 1,130,310,000 Balance, orin total less deductibles ---------------------------468,402,000 874,676,000 NOTE.-It i PoSSible that for plan M an additional item of $23,000,000 would be deductible, it being"Excavation unclassified'' at Gatun.

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ISTHMIAN CANAL POLICY QUESTIONS 237 I have not seen costs, oil a comparable basis, for tle plan III, the Terminal Lake plan, and plan II, the third locks plan. Those presented in 1960 are based on plans so different in size and other respects that a cost comparison cannot be found. In plan I1, the consiriction of the two upper chambers, in Miraflores Lake, to make t he Miraflores locks a continuous three-lift affair to summit level, would be terribly difficult, long drawn out. would make navigation during construction very inconvenient. The cost for the two parallel chambers, about 178 million (1960, p. 394) would go far toward building another tIhree-lift lock at Miraflores, if of reasonable size. The construction time would be shortened from 12 to 8%A years (p. 381) and would not interfere with traffic during construction. Each of these items would materially reduce the cost of the project. The chamber size of 200 by 1,500 feet for plan III, new locks, is a carryover from 1947 studies. The horizontal area is 78 percent greater than for locks 140 by 1,200 feet. The U.S.S. Constellation is 252 feet wide. Any lock large enough to accommodate such craft as the Constellation would have no commercial value. However, the enlarged waterway (except locks) would carry the Constellation. If it were found necessary to accommodate such vessels, a special lock at each end of the canal might be built and operated for the account of the Navy Department. Due to probable infrequent use, there might be possible some economics of construction. Obviously, if such a lock system were ever to be built, the cost and inconvenience would be much less if the locks were built in only two, rather than three locations. Water control: Most essential for floating and locking vessels. Thi 5 tremendously involved subject is too time consuming for direct consideration by Congress. Better that engineers work up the data. then a commission draw conclusion for submission to Congress. It is axiomatic that the Gatun Lake was developed as an integral part of the waterway. The lake is wholly within the Canal Zone but most of the watershed is in the Republic of Panama. Thus the Republic of Panama is free to build reservoirs on the upper watershed for their own purposes, such as municipal uses and possibly for power. However, any spillage from such reservoirs would almost inevitably flow into the Gatun Lake. This use of water by the Panama Republic will become the subject of news items, I feel sure. Water supply appears to be adequate for lock operation and for municipal J uses (1960, p. 24). And on page 723 In the present canal, therefore, the available water supply will be ample for anticipated traffic beyond the year 2000. Probaby, by the year 2000, considerable pumping into Gatun Lake will be required, of sea water (or brackish water) from one of the sea-level approaches to the locks. The cost was estimated at $250 per lockage, year 1931 (report, 1931, p. 31). Now the costs will be more. The procedure for operating pumps is subject to variations in order to meet varying needs. To limit the cost in plant and in power demand (in kilowatts), a program wherein the pumps would be operated for a longer period than for the period of actual need of extra water for depth and for lockages might be worked out if scientific forecasting is somewhat improved by the end of this century.

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238 ISTHMIAN CANAL POLICY QUESTIONS i ay case, if too much water were plmped, it could be later used part of the power consumed in the pumping. The subjec isver copliate. t is one, for c-on--ideration of a comnmissiOn V t he ad vice of engineers. Pumping water into reservoirs is not new. At the newly finished Robert Moses Niagara Power Plant (National Geographic, April 1963, p. 581) : At night when power demand is low, Niagara-powered electric pumps store water in reservoirs. During the day's peak demand, the stored water flows ():it through the same IuUu~P, which become turbogenerators producing more felectriicty. For a long time t he Gatun Lake has been mildly saline, at the upper ends of the terminal locks, due to the mixing action caused by the filling jets in the lock floors. The heavier saline water lies at the bottom of the lake or cut. With heavy purping the salinity mi git become object jonable when water is nit ended for municipal uses. By he t.ime pumping in large amounts becomes necessary, great advances in Ihe desalt ing of water will have been made. In Barron's magazine, April 1, 19f;, at page 3, is stated: "A plastic-like membrane filters dissolved salt out of water." Electric power: Traditionally water has been drawn from Gatun Lake to generate at Gatun Station. As lockages increase, water for power must decrease (1960, p. 24). "There is not enough water for hydroelectric units to generate all the power required for the Canal Zone in the dry season and in some subnorial rainy seasons." And at page 22, is stated: Tj'hElre Is irisuffliierit diesel power generating equipment on the isthmus to ba wdie all pf0wer req ui remernts. In 1 4ie 1960 report, page 25, at bottom, reference is made to "* * deepening the channel 3 feet more thai r('(uired for improvement of i) mianen verabi I ity." It is im plied that t he lake level can be lowered by all or part. of this 3 feet, anti so provide added water during dry 'eaWoIS. That is, only 2 feet of the 5-foot keepingg in plan 1, was for mane verability. 'In early years this would permit saving in fuel for power generation. ThI proposed lowering of lake bottom to elevation 30, for plan III (1960, p. 29) would permit more drawdown, but would deprive the old0( locks at (iatun of much useful depth. The cost of deepening to elevation 30 would be t remendous. I cannot make ai exact determination of it from the est iimiates in the report. FINANCIAL MATTrirS The financial policy of the Panama (anial has not been quite like tOat of a commercial enterprise. One test might he: Could a new flight of locks be financed by a bond issue sold to the public? T1e answer is obvious, beca use experience shows that tihe original investImii woU 1(1 not be recov(I-(d. F ro report ,1960, page 2: Cn IE~Niiiroveiients ar( ioude for security reasons alone, the carrying charges of 1 !11 pit X t ii res, InclUdiig ipropri1 e amor Wz1tion, s we11 as cost of olDer:t isii of t ie cit ia Milould he l)(,rne by canal tol,.

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ISTIIAN CANAL POLICY QUESTIONS Any new cost analyses might very well linclde :nlertiel:: ion 1':1 vor1d bv the 19C board. There is talk of construe ting aer canai. awaI ronI te pe nL one. Sliould we so mult iplv our financiall losses A now caimi, o. some o:ner locat1011, wold, besides cane coi>ruetion Oszt' involve le duCliOUt 0 t flm:nM piant ii eni., 0w o!o iI Canal Zone, and at modern prices. Some items are AcconiiolAtions to lorei'n count rkes, I1d renl, 1.onz ai. 1ua rror v acilities ( wl ulng drvdocks and repair sh pu-, d:1 s and reserve rs, w at evwor, power syStel. 1ue stores, Individal p 11nt fOr operations, storehouss, dwellings, connnri :y build ings, roads arid street s, >ari itat ion am hos pitals, telephone systIm. poe1ibl a ra y h1 al InStallation Sst em or nat101al fense. t' seeils over')i m 111i1 tI o :tih at I bV'10r *reaty, 01* one as good as we stil hve the Republic Of P'uulia, could bk neg-otiated. All of the plan it es, MOW in Oera ion on the i > na Canal wo d sel've aS wvell wi-li a I i di ill>. ,ii Of Ocks as 111ev do at preseil. Am needed additions volId serve to increase t he volume oi business and should reduce the overhead ind other opeiniting costs, per vessel in transit. It would be illlpossible, of coli'use. to make :1II od hai cost est II:a e of the ancillary items above IIt ed. I would inot be su rprise'l I it exceeded half a billion dollars. A businessman's viewpoint migt n n0h1t indicate th1:at IIhe I plai roquir-ni'r the smallest outlay of money, over the years. would be most likely to succeed. Other lock plans suggested for study: It would be interest Ing aid possibly very valuable to have at least two lock ca a1 pians investiga ted biv a commission. One to be a vniriation of the plan 11, third locks canal which xould bypass Pedro M iguel locks on he wvest side, and have a duplicate of the Gatlin new locks at the Miraflores site. and a channel on west side of \1 iratlores Lake. The other would be a variation of plan 111, consolidated thiird locks canal ( in the 1960 report), better known as tlie Terin ial Lake pl an. which would naturally follow lie complete iou of the pn 11 variation having the ypas cliainnel read, the second M irailores fhi zit of locLk would be simple to accomplish, relatively inexpensive. Then with two new locks at Miratlores. le completion of the Termin:il Lake 'wx onId be the tinal step. Both plans coul iake e of !he enilared w111erwy betveon Vcivs as well as the soa-ievel sec1 ionv., without clbiinge. lIih woiild be deSI&2ed to tle SIvllo diillneilslo. llaain l'hIKs, probably 1 y 0 I ',iOo foot, in plall 11( I! b)olit '0 feei d.e0 or :ii iore ( lrO! i2 te :e M lekted Ih the conlnlission. I NvouI wo Ml include. i 1 co 'll 't 101 1O t, onktll, neIw locikx. approkcie. ad sueli esseit iil I11pl0rielll< IV Iy omnil t inr tho niew Pedro \ iglel weAt lock thwr ivOl h aul c ci)sls o 4A.'00 foe" of lock :inid :ippri) cI wval.ls, Qi Vina feet (f iock. () i)r, I wO cis-cO -ats, ind a pir of :Ies. Ilo ie o m oai f Ilie e~cav~led lx~> Inijtici \ wol2t he :lboul _7 foot '1i11! a L i ofI phui 1I. Tho-o Nil 1)t'o
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240 ISTHMIAN CANAL POLICY QUESTIONS location at the Pacific end of the canal. There would be savings in operating and maintenance costs. There need be no change in the Gatun locks as now planned, unlees the dimensions are changed. Both, of course, being at the same dimensions, as adopted for the Pacific end. In the first plan (bypass Pedro Miguel locks), the cost of the bypass channel would be involved. The channel would pass along the west side of Miraflores Lake. The present canal channel and the new would require separation by a substantial dike, which would later be removed when the Terminal Lake permanent structures were completed. The difference in water levels would be nominally from 54 to 85 feet. But the summit level could possibly rise, during a great flood to 92 feet. About 38 feet would be the difference in water levels to be provided for. In the first plan, the completed arrangement on the Pacific end would match that at the Atlantic end of the canal. One flight of locks at each end, from summit level to the sea in three steps. It appears that the variation of plan II, above described would be less costly to construct than plan II with locks at three locations. The greater saving resulting from the suggested plan above would be realized when a second lock were placed at Miraflores beside the first new lock-then both would be served by the same bypass channel. (If a special lock for aircraft carriers were added, the saving would again be realized.) For the Terminal Lake plan, here suggested, the elimination of the two upper chambers at the old Miraflores Locks would make available a saving in cost of about $178 million (1960, p. 394). That would go far toward the construction of a second lock for the new twin locks at the west Miraflores site, required for the Terminal Lake plan. Shortening the construction period would make a material saving in first cost. Avoiding any interference with traffic during construction would make a large saving. The old locks need not be altered at all until it was time to abandon them and complete the closure of the terminal lake at Miraflores. After construction of a pair of twin locks at Miraflores west site, the final step in the completion of the Terminal Lake plan would include the enclosing of the Miraflores Lake to permit its surface elevation to be at summit level, the relocation of facilities involved, and the removal of part or all of the old Pedro Miguel locks. It might be prudent to try for the single lock at Miraflores with the Pedro Miguel bypass channel first because of the relatively small outlay in money. Later, at the appropriate date, developed the second lock at Miraflores. (If this date is not too remote, it might be possible to get along with only one new lock at Gatun while using the old Gatun locks. This expedient would greatly reduce the second outlay of money, and permit some of the money to be used to elevate the Miraflores Lake.) My personal feeling is that the step-at-the-time construction procram would be easier to finance. Any of the items of construction is large enough to avoid the objection to small contracts. The following steps can be financed singly, or in combination:

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ISTHMIAN CANAL POLICY QUESTIONS 241 1. Build a flight of new locks at Gatun am n ,)7 Mi raflores, with bypass channel west of Pedro Miguel locks and it, eside of Miraflores Lake. 2. Build second west Miraflores lock, use s(11e 1 yp10 amiel. 3. Raise Miraflores Lake. 4. Add second lock at Gatun, east. Sincerely yours, EL. S. Th\N P1. REFERENCES 1. The 1931 report, House Document No. 139, 72d Congress, 1s ses U. Army Interoc anic Canal Board. 2. The 1939 report, House Document No. 210, 70th Congress, 1st ss b the Governor of the Panama Canal, "Report on the Pailm Canal fo t Fuiure Needs of Interoceanic Shipping." 3. The 1947 report, "Report of the Governr of the Pa nia Camg iunhr Public Law 280, 79th Congress, 1st session, Isthmian Canal Stad i, It. 4. The 1958 report, "Improvements to the Panama ('anPa hori uii Pr gram," July 15, 1958, by board of consult ants, Istbhmian ai Sd iS. m a1i tee report, Committee on Merchant Marine and Fisheries. 5. The 1960 report, House Report No. 190, 86th Congress, 2d s'ito a b d of consultants, Isthmian Canal Stude1 "Report on a Lri-nge Pr< vram ti Isthmian Canal Transits," signed Juae 1, 1960. 6. The 1949 volume of transactions of the American Society of Civil Yngiier volume 114, pages 558 to 906. Contains a paper by Capt. :Miles P. 16:Vi, "The Marine Operating Problems of the Panf ma Canal and their So1Et:u." scribes at length the terminal lake plan and has been N idely read ly ene neers. Also are many papers relating to the sea-level subjet. 'i2bi jc th only reference containing discussions from both siles. Encyclopaedia Britannica, 1961 edition, pages 172 to 174. 8. U.S. Naval Institute proceedings, March 1963, at page 1-2, sliowover;, dimensions and draft of the aircraft carrier (onwtelu1ai(,n 1,047 feet ling 252 feet wide by 37-foot draft). Completed December 1961. 9. "Panama Canal Company, Pilots Handbook," revised 1956.

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[Fr m the Congressional Record, 88th Cong., 1st sess., June 27, 1963] CRISIS IN CANAL ZONE: PANAMANIAN "ULTIMATUM" Mr. FLOOD. Mr. Speaker, in an address to this body on April 9, 1963. 1 dealt at length with the grave crisis that has been generated concerning U.S. sovereignty over our territorial possession designated as the Panama Canal Zone. Explaining that since the birth of freedom parliamentary bodies have preserved the just rights of nations against the misuse of Executive power, I stressed that the Congress in meeting its responsibilities as a separate and independent agency of our Government, must save the Panama Canal. To this end, I urge prompt action on House Concurrent Resolution 105, which was introduced by the distinguished chairman of the Committee on Appropriations (Mr. Cannon) and is now under consideration in the Committee on Foreign Affairs. This resolution, which expresses the sense of the Congress, would clarify and make definite the policy of our Government concerning the question of U.S. sovereignty over the Canal Zone and Panama Canal and thus end the uncertainty that has been created. In Panama, the significance of the indicated address was recognized in banner headlines in Isthmian newspapers. In the United States, so far as I have been able to ascertain, it was ignored by all major newspapers, thereby leaving our people in virtual ignorance of crucial facts affecting their vital interests on the isthmus and giving the influences bent on destroying U.S. sovereignty over the Canal Zone an unguarded and exclusive field in which to advance their program of iuridicial erosion. Such failure, Mr. Speaker, on the part of the major press of our country and the Department of State, is deplorable. PANAMA THREATENS "RADICAL ACTION' Those who have followed the Isthmian situation closely will recall that, following the visit of President Chiari of Panama to the White House in June 1962, a joint United States-Panama Commission was designated to review points of dissatisfaction in the relations between Panamai and the United States. This commission is composed of four persons. Foreign Minister Galileo Solis and Dr. Octavio Fabrega, representing Panama: and Gov. Robert J. Fleming, Jr., of the Canal Zone: and our Ambassador to Panama, Joseph S. Farland, representing tbe United States. The wvor of this body was discussed by President Chiari with the Presidnt 'v the United States in March 1963 at the San Jose, csta Pia m i. It was also discussed by Panamanian Planning Director David rmidio durinii early April of this year in Managua, Nieararna, with Director Teodoro Moscoso of the U.S. Alliance for Proart. During the latter conference, there was raised for the first ti mz a threat of 'radical action" by Panama in what was described z-4

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ISTHMIAN CANAL POLICY QUESTIONS 243 as a "tense" meeting. What this "radical action" was to consi of is not known, but the discussion revealed thiat President (Chiari 1 ilrs* ing strenuously for some form of dramatic and incoeiate (ows1i1 by the United States to Panama as regards the Panama Canal. Why The answer is obvious. le wishes to danigle a newly wrins 1((,dby the United States before the Panamanian electorate wltwli will enable him to elect the candidate of his choice as 1ij prehi etial successor. Such a surrender bv our Government would unldc :edlv have this effect. Hence the desperate drive for it. SOLIS-RUSK NfEETING, APRIL 23, 19613 The next move in the unfolding situation did not take ioi< : develop-a working luncheon on April 23. 196,) in Washingto: lIVe by Secretary of State Rusk. Though attended by Foreigni Minister Solis, Panama's Ambassador Guillermo Arango, U.S. Ambaosador Farland, and State Department officials, the people of the United States and their Congress were again kept in the dark as to what took place. Before leaving Washington, Minister Solis left a memorandum outlining the pending Panamanian demands for Secretary Rusk, which was personally delivered to the Secretary on April 27 Ambasdor Arango. He did not enlighten our people as to its contents, nor ha the Secretary of State issued any release with respect to the luncheon, the memorandum, or the "ultimatum. Such denial of information, Mr. Speaker, calls for positive and protective action by the cognizant committees of the Conf:y-s in defense of the Constitution and the proper discharge of congressional duty. Whether the Department of State so believes or not, the Congress of the United States, as previously stated, is an equal ?artner in our Government. Moreover, it is charged with ultimate :&ponsibility in national and international policy. WASHINGTON SECRECY EXPOSED AT PANAMA In contrast with the silence of the press in our country aboia the Rusk-Solis meeting on April 2:3 and the "ultimatum." the pre~ of Panama gave these matters extensive coverage, publishing news stories with flaming front-page headlines that originated in WaI na on a well as in Panama. The news stories published in Isthmian papers show that the -,ending demands being pressed by the Chiari administration iniude: First. Display of the Panamanian flag on all U.S. military and naval stations in the Canal Zone, and at the same leve< with the flag of the United States: also on all vesss n trai,-t of the Panama Canal. Second. Jurisdiction over a corridor across tie Paciti end of the Canal Zone from Arraijan on the west bank of the 1 an a to Panama City, consisting of the Thatcher H10hway, t w Thatcher Ferry Bridge, and Fourth of July Avenuu.1: and another corridor across the Atlantic end, the lo 'ation vet to be determineI. Both corridors would be carved out of the Canal Zone territory at the vital entrances of the canal and placed iundr fore:'n ntrol-a condition impracticable in ipeae and i azr lUs in 7:.

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244 ISTHMIAN CANAL POLICY QUESTIONS Third. Use of Panama postage stamps in the "U.S.-occupied Panama Canal Zone." Fourth. Turning over certain pier and dock installations at C( ion and Balboa to Panama. Fifth. Elimination of commercial and industrial activities in the Canal Zone. Sixth. Recognition of Spanish, along with English, as an offi-ial language of the zone. seventh Opening up the Canal Zone to Panamanian farming and cattle projects. Eighth. Provision of free water to Panama. Ninth. Equal employment opportunities for Panamanians in the Canal Zone, with social security and other benefits, including provision for a binational commission on labor. More important, however, was the threat of "radical action" by Panama unless its demands are met by the deadline of mid-July or the present joint diplomatic commission, previously mentioned, is transformed into a body for the negotiation of a new canal treaty. What this "radical action" would be was not stated. Mr. Speaker, as far as I can learn, the only information that the people of the United States have had about the doings of this secret meeting in the Department of State on April 23 and the Panamanian ultimatum" were newspaper dispatches from Panama, of which two examples will be found in the present documentation. When the few crumbs of news given in them to the people of our country are compared with what was disclosed in Panama, it is easy to see how our interests at Panama are eroded. Certainly the situation on the isthmus is one that requires immediate and effective action by the Congress. In these connections, Mr. Speaker, I would emphasize again that the Canal Zone is not an "occupied area" in the sense used in the Isthmian propaganda, but a territorial possession of the United States acquired constitutionally pursuant to law and treaty. It is urgent that the status of the United States in the Canal Zone accorded by treaty and maintained by our country throughout its canal history be clarified and made definite by the Congress, as provided in House Concurrent Plesolution 105. In the past, our Government has been forthright in the assetion of this indispensable authority granted by solemn treaty agreement, but in recent years, it has been evasive, cowardly, and, in practiai Ptfect, subversive. CONGRESS MUST SAVE THE PANAMA CANAL As to e Piinamanian 'ultimatum," such a threat by a small country that
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ISTHMIAN CANAL POLICY QUESTIONS 245 randa thIerefore hlave ha.ad te 1iidoit ed effect ofl ntin'f1 L t li a1ong* all nations, (eSpIecIZiilv iII Latiln Amneriva, of i 1ie U i11led states -s ani autocratic 'ankee iperialism oblivious o tle rights of PIIanma. Tilis, to the soiiti of 11s mt I-AmeriCan I)SVelological warl'are in behalf of oultrag(emos PaiImlainiai claims 1soflst antiv beiig waji anid iI l101Vise opposed by r G government. T'ls i ti 0,T ,nv ( I Western Ifemirs!iier 1 C solidairtv. biit as well of a1 1m11ess1l Ation of the Alliaute for Pro're)h. As I have so oten aid. Mr. Speaker. 1ie only way to meei the m njistified demands is Iv forir atrlivht an td publi Ny anoieed decl;arttions by our (iovernmeint. the Congress, an(d Executive, thlt te olemn treaty obligations our conmiry assmned with respect to he Palaia Canal will be fully met. The Canal Zone is not analoQ'ous to a U.N. trust territory, bt 15 exactly what the 1903 treaty provides-territ orv over which tle United States has full and exclusive soverenoiity for the const-ruet ionl. maintenance, operation, sanItation, and prot ectlion of the Palna nit Canal. Except for such ()rant of sovereigry as an indnceieient, on r country would never have undertaken the g-reat and expenlsiye task of building the Panama Canal at the cost of our taxiayers and its subsequent main ance, operation, and protect iol. The current generation of Panamanians may be bli nded by I heir nationalistic zeal and denwgogic leadership, but they must (onie to realize that should the United States ever leave the Canal Zone, (olonbia, led by its radicals, will inevitably, if Soviet power permhs reassert and reestablish its former sovereignty over the entire istliniu.s including the Canal Zone. Also, I may add, if Cuba can be taken over by the Soviets with the aid or acquiescence of policy elements in our Department of State and major news media, then U.S. control of the Panama Canal can likewise be liquidated. The process of erosion of our rights, power, and authority must cease and the trend reversed, or we shall be compelled to leave the isthmus. In such an event. Mr. Speaker. the Republic of Panama will become only a footnote in the "ashcan of history." Thus, ruthless agitators in Panama and their collaborators in the United States are plain into the. hands of the long-range Soviet strategists for the conollest of the Caribbean in which the Panama Canal is the key target. The racial and impossible demands now being pressed by he Panamanian Government and their secret consideration by our hiIest officials are undoubtediv pleasMi to Deputy Thelmi King C(ommuniist member of the Pamuanian National Asembly, anid clohe friend of Fidel Castro, whom she frequently visits illCuba. To what extent is she responsible for what is now transpiring and why did she recently vispt the United Sates? To the people of all the Latin American nations we would womDmend these considerations The Panama Canal is a !:m1 ct e factor with respect to the ii:dJependence of all yowir mat ionl. Sioul 4 the United Starel eease to ma-iritaiii. operate, and roert te Iianii Canal. the Monroe Doctrime would indeed be a d d dom((W t. a Nas recently and so brazenly proclaimed by Soviet dip4m:t American soil. If the Monroe Doctrine is dead, then gens of revobitionary communism will inevitably infilt race the grovernmentin s and

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246 ISTHMIAN CANAL POLICY QUESTIONS institutions of your countries and take over, however much you struggle to remain free. Finally, Mr. Speaker, there is only one way out of the dangerous situation now forming around the isthmus: the Congress must act to save the Panama Canal by forthright declarations of our historic and time-tested Isthmian Canal policy of exclusive sovereign control of the Canal Zone with prompt adoption of House Concurrent Resolution 105. The documentation on which my remarks are primarily based, quoted at the end of my remarks, is commended for study by all Members of the Congress and of the loyal press, as an illustration of news suppression long current in our country about the explosive Panama Canal situation. This can be overcome only by an aroused American people who are being denied information of vital importance about the Panama Canal. The documentation follows: [From the Panama Star and Herald, Apr. 23, 1963] REPUBLIC OF PANAMA AFTER HIGH-LEVEL SHOWDOWN WITH UNITED STATES-SOLIS AND RUSK MEETING TODAY IN WASHINGTON-RADICAL ACTION REPORTED UNDER CONSIDERATION BY CHIART; WORK OF JOINT COM1MIsSION SCORED Panama Foreign Minister Galileo Solis and U.S. Secretary of State Dean Rusk will meet in a private luncheon in Washington today amid indications that this country is seeking a showdown at the highest level over its claims for revision of the treaties between the two countries. Solis left early Monday morning for Washington. It is understood he will review with the Secretary of State the problems of a political nature between the two countries. He will be followed to Washington later this week by Engineer David Samudio, planning director in President Chiari's office, who will meet with officials of the economic section of the Department of State. Samudio will review financial questions stemming from the operation of the Panama Canal in Panamanian territory. The announcement of the forthcoming Washington meetings are in the midst of a statement by Dr. Octavio Fabrega that he wants to withdraw from the present Joint Panama-United States Commission because of disco'itent over the function of the Commission. Fabrega and Foreign Minister Solis represent Panama in the Commission appointed last June by Presidents Chiari and Kennedy to review points of dissatisfaction in the relations between the two countries. The U.S. representatives are U.S. Ambassador Joseph S. Farland and Canal Zone Gov. Robert J. Fleming, Jr. Both of them are in Washington now. Fabrega said he understands that President Cliari is planning to take radical action in the situation in a short time. He did not elaborate. Since, the March meeting of the Pre4'dents of the United States, Panama, and Central America, in San Jose. Costa Rica, Panamanian officials have been voicing displeasure over the slowness of the discussions of the Joint Commission.

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ISTHMIAN CANAL POLICY QUESTIONS 247 The question was raised by President Chiari in his private meetilvr with President Kennedy in the Costa Rican capital. The issue was pressed by Planning Director Saiudio at a meetin2a early this month in Managua, Nicaraguna. wth U.S. AVliance for Progress Director Teodoro L oscoso. Reports from the Nicaraguan capital at that time described the Samudio-Moscoso discussion as "tense." It is understood that at the Managua meeting the possibility of radical action by Panama was raised for the first time. Now comes Dr. Fabrega's statement, carried in yesterday's edition of El Panama America, as follows: I have expressed to President Chiari my desire to withdraw from the Joint Commission which is reviewing relations between Panama and the United States., to which I was appointed by the President last June. .My determination to resign is due to my discontent with the functioning of that Commission. I am satisfied neither with the results of the Connision nor with the conditions under which it has been operating. The fullness of the understanding between the Presidents of Panama and the United States notwithstanding, the Joint Commission has not been functioning as a high-level commission, which was the name applied to it by President Kelnedy when he appointed his representatives. I have not found in the Commission a propitious climate for the consideration of fundamental reforms in the relations arising from the treaties between Panama and the United States. I have found only a disposion to consider questions which are merely accessory, and even with respect to the latter, the procedure is so slow and complex that it does not lead to expect concrete solutions in a foreseeable future. For some time I have been expressing to President Chiari my discontent over this situation, telling him that my discontent has been increasing to the point that I consider that I must withdraw from the commission. President Chiari has asked me to delay this decision for some time and this is the reason why I have not submitted formally my resignation. I understand that President Chiari, deeply concerned over the existing situation, is thinking of radical action on it in a short time. The principal agreement announced by the Commission include the joint display of the Panamanian and United States flags in the Canal Zone, the recognition in the Canal Zone of exequaturs issued by Panama to foreign consuls, and the use of Panamanian postage stamps in the zone. [From the Panama Star and Herald, Apr. 24, 19631 REPUBLIC OF PANAMA CLAIMs WASHINGTON DELAYING TALKS-DR. SOLIS FILES COMPLAINTS AT MEET WITH RUSK-CHARGES UNITED STATES-PANAMA Co0MrIssroN NOT DOING ITS JOB AND AGAIN REITERATEs REPUBLIC OF PANAMA's GRIEVANCES (By Ben F. Meyer) WASHINGTON, April 23.-Dr. Galileo Solis, Foreign Minister of Panama, reportedly complained to U.S. officials today that the United States-Panama Commission. named a year ago to work out problems between the two nations, is not doing its job. In any case, he is understood to have said, the Government of Panama feels the Commission is not working fast enough, and that the delay is at the Washington end.

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248 ISTHMIAN CANAL POLICY QUESTIONS Dr. Solis, Panama's Ambassador Augusto Guillermo Arango, Joseph Farland, U.S. Ambassador to Panama, and a group of State Department officials were guests at luncheon today given by Secretary of State Dean Rusk. It was a working session, reporters were told, at which the whole range of United States-Panama problems was reviewed. A Panamanian source said he was told the tone of the diseussions was most friendly and cordial. Before the luncheon, U.S. officials claimed not to know why the Panamanian Foreign Minister had come to Washington. The presence here of Ambassador Farland and of Gen. Robert Fleming, Governor of the Panama Canal Zone, they said, was for other business. The two are to testify tomorrow to a congressional committee. Fleming attended a quarterly meeting of the Panama Canal Company, a U.S. Government corporation operating the canal and the Canal Zone, this week. Dr. Solis could not be reached for comment and an Embassy spokesman said he had not authorized any statement. Pieced together from what informed sources did and did not say, it appears Dr. Solis came to Washington to ask for speedier action by the U.S. Government on various matters under study by the twonation Commission, composed of Ambassador Farland and Governor Fleming, for the United States, and Solis and Octavio Fabrega, for Panama. Panama has suggested among other measures that the Panamanian postage stamps, rather than those of the United States should be used by the U.S.-occupied Panama Canal Zone; that promises of better opportunities for Panamanian workers in the zone are not being kept fully; that there should be opportunity for private enterprise businesses in the Canal Zone, rather than U.S. Government commissaries; that the United States should get out of the merchandise business in the Zone altogether. Dr. Solis plans to return to Panama tomorrow evening, the Embassy said. [From the Panama American, Apr. 25, 1963] UNITED STATES, REPUBLIC OF PANAMA AGREE To DISsOLvE JOINT COMMISSION BY JUNE 1 (Foreign Minister Galileo Solis, who returned here from Washington early today, met privately for 2 hours today with President Chiari. It is understood that Solis reported to the President on the talks held in Washington with U.S. Secretary of State Dean Rusk and other State Department officials. Immediately after coming out of the meeting with the President, Solis announced he would hold a press conference at 4 p.m. today.) WASHINGTON, April 25.-The United States and Panama have agreed in principle to disolve a Joint Commission seeking solutions to longstanding disputes over the Panama Canal. The four-member Commission is to conclude arrangements on matters under its consideration and then dissolve itself. The group is expected to finish its work about June 1.

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ISTHMIAN CANAL POLICY QUESTIONS 2-4 This agreement to dissolve the Commission was re,,Cid I I-in al here between Panamanian Foreign Minister Galileo Sol i and high State Department officials, including Secretary of State Dean sk. The Commission was created by President Kennedy and lPnanianian President Roberto Chiari (Iuring Chiari's visit here An June 1962. On the coimmission were Solis, Oetavio Fabrefa, S. Ambassador to Panama Joseph Farland, and Panama Canai Gov. Bobert Fleming, Jr. Solis and Farland met here yesterday before the P.mnian Foreign Minister's departure for Panama. U.S. officials stressed that there is no dispute invMKed in -he decision to disband the commission. It has been suggested that L' aibrega decision to resign speed a decision to dissolve the group. These officials said that the commission would be able to -onclude new agreements on outstanding problems and that it has carried out a considerable amount of work. Chiari and Kennedy had intended to have the comimssion arrange for the flying of Panamanian flags on the zone, which was done. and to solve other practical problems brought out by Chiari. Among the issues before the group were equal employment: opportunities in the Canal Zone, wage matters, social security coverage. and other labor questions. Also discussed at the time was Chiari's suggestion that Panania should have access to pier facilities and increased participation by Panamanian private enterprise in the market offered by tle Canal Zone. [From the Panama Star and Herald, Apr. 26, 1963 REPUBLIC OF PANAMA SETS JULY DEADLINE FOR CANAL ZoCNE AcCORDS-CIHIARi READY To DISSOLvE CO-r1nSsIoN Panama has decided to dissolve the joint comnmission reviewing points of dissatisfaction in its relations with the United State, y midJuly unless1. Pending questions have been settled by then, or 2. The commission becomes a negotiating body for a ne w treaty. This is what Foreign Minister Galileo Solis in effect said he told U.S. Secretary of State Dean Rusk at their meeting Tuesdav in Washington. The mid-July deadline will mark the completion of 1 year of discussio