STATEMENT OF W. J. Amoss, JR., EXECUTIVE VICE PRESIDENT, LYKES BROS. STEAMSHIP Co., INC.

My name is W. J. Amoss, Jr., I am Executive Vice President of Lykes Bros. Steamship Co., Inc. whose headquarters are in New Orleans, La. Lykes owns and operates 41 ships in a worldwide freight service, with sailings from ports in the U.S. Gulf and South Atlantic to ports in the United Kingdom, the European Continent, the Mediterranean, South and East Africa, the Far East, the Caribbean and the West Coast of South America.

Lykes is one of the oldest American Flag operators and has always been in the forefront in providing the shipping public with modern, fast and efficient ships designed to meet the shippers needs. At the present time Lykes has a fleet of 41 vessels consisting of 8 warbuilt C-2's and C-3's, which are in the process of being sold or scrapped, 12 C-3 type break-bulk ships, 21 C-2 type ships 9 of which are being jumboized to include a mid-body section capable of carrying 162 20' or equivalent containers under and on deck, and will shortly have in service three of the Seabee type ships which are the largest and most versatile ships ever built. Each of these ships are capable of replacing five conventional break-bulk ships in cargo carrying capability.

Just recently Lykes purchased from W. R. Grace & Co. its 50% ownership in Gulf & South American Steamship Co., Inc. thereby becoming 100% owners. Gulf & South American operated five C-3 type ships in a freighter service between U.S. Gulf ports and ports on the Caribbean Coast of Colombia, Panama and the West Coast South America countries of Colombia, Ecuador, Peru and Chile. This service is now in the process of being merged into the Lykes organization and the five ships formerly owned by G&SA will be added to the Lykes fleet.

The Panama Canal is of vital importance to Lykes as evidenced by the answers to certain parts of the questionnaire sent out by your office in connection with the hearings held on January 17th and 18th. The information furnished by us in response to this questionnaire showed that during 1970 our ships made 229 transits of the Canal and Gulf & South American ships made 31 transits. The two companies combined paid to the Panama Canal Co. $1,429,631.90 in tolls during this same year.

Lykes supports the position of the American Institute of Merchant Shipping as presented by Mr. James J. Reynolds in his testimony of January 17th. We have nothing further to add to that testimony, however, we would like to bring to your attention a related matter which may be of interest to you as it is to Lykes and that is the operation of the S/S "Cristobal" by the Panama Canal Company.

We understand that the "Cristobal" is now approximately 35 years old and is fast approaching the end of its economic and useful life. Naturally, we are interested in obtaining as much as possible of the available traffic to and from this area, commensurate with our service being attractive to shipper requirements and our rates being at a competitive and compensatory level. This being the case we would like very much having an opportunity to work with both the Panama Canal Company and the Military Sealift Command to offer our services in the two way trade between U.S. Gulf ports and the Canal Zone as a replacement for the "Cristobal". In order that we might be able to provide sufficient and suitable shipping facilities to fill the requirements of the Panama Canal Co. we are hopeful that they would be willing to meet with us to discuss their needs. We appreciate your kindness in allowing us to submit this statement after the completion of your hearing.

STATEMENT OF HONORABLE JOHN H. BUCHANAN, JR., a REPRESENTATIVE IN CONGRESS FROM THE STATE OF ALABAMA

Mr. Chairman and Members of the Panama Canal Subcommittee. In light of the negotiations currently under way over the future status of the Panama Canal and the Panama Canal Zone, I am gratified that this vitally important matter is being taken up by this Subcommittee.

The significance of these hearings and of the current negotiations lies in the great strategic importance of the Panama Canal to the United States and to the defense and security of the entire western hemisphere.

Most of us have never questioned the sovereignty and jurisdiction of the United States over the Panama Canal and the Canal Zone. This authority is firmly grounded in the Hay-Bunau-Varilla Treaty of 1903 and our jurisdiction has

resulted in, among other things, an aggregate net investment in the Canal of over $5 billion. At this time, however, this sovereignty is being seriously threatened and the Congress has a constitutional obligation to protect the vital interests of the United States in this matter.

The threat to U.S. sovereignty over the Canal is a real one and part of its manifestation is now already history. Between 1964 and 1967 a special U.S. team negotiated three abortive treaties with the Republic of Panama. As we are now all aware, these treaties would have resulted in a relinquishing of U.S. sovereignty over the Canal and a serious threat to the ability of our country to effectively control the Canal or provide for its defense.

The provisions of these treaties, furthermore, did not take into account the constitutional authority of the Congress over the disposal of United States property. The provision under Article IV, section 3, clause 2 of the United States Consitution specifically vesting in the Congress the power to dispose of territory or other property of the United States was virtually ignored. One of the treaties would also have removed operation of the Canal from the authority of the Congress-placing it under a nine-member commission, with five representatives from the U.S.

Fortunately, the 1967 treaties never came to fruition. Word of their contents brought loud cries of protest from the American people and equal indignation on the part of many Members of the Congress. A most significant Congressional expression came from this Subcommittee in a December, 1970, "Report on Problems Concerning the Panama Canal." In this Report, the Subcommittee on the Panama Canal expressed strong opposition to ceding U.S. sovereignty and jurisdiction over the Canal Zone.

The ninety-first Congress also saw the introduction of some 105 resolutions declaring it to be the policy of the House of Representatives and the desire of the American people that the United States maintain its sovereignty and jurisdiction over the Panama Canal Zone. In September of this year, furthermore, hearings on these resolutions were held by the Subcommittee on Inter-American Affairs of the House Foreign Affairs Committee.

Because of my own deep concern about this matter, I have cosponsored such a resolution in the last two Congresses and submitted testimony during the above Subcommittee hearings.

Mr. Chairman, I indicated in the aforementioned testimony and feel compelled to restate at this time my awareness that the matter of continued U.S. sovereignty over the Panama Canal is only one of the issues of interest to the people of Panama and being discussed in the current negotiations. I can understand the desire of the people of Panama to work out better arrangements in such areas as economic compensation, increased employment of Panamanians in the Canal Zone, and increased use of Panamanian products and services in the Canal operation. It would certainly be in the best interest of both nations, furthermore, to reach a satisfactory accord on such issues.

Thus, while it is my firm belief that the United States cannot and should not surrender on the question of sovereignty, negotiations might well be in order on these other issues, and agreement on these other issues should be greatly facilitated if the question of relinquishing U.S. sovereignty can be excluded once and for all as a point of negotiation.

Unfortunately, I have seen no indications that U.S. sovereignty and jurisdiction in the Panama Canal Zone is no longer at issue in the negotiations. Events since 1967, furthermore, suggest that there is every reason to expect Panama's demands for U.S. concessions to be even greater.

In this regard it is important to remember that Panama, too, declared the 1967 treaties to be unacceptable. In a 1970 explanation of its dissatisfaction with the treaties, the Government of Panama rejected U.S. control of the Canal, the right of the U.S. to maintain military forces there, and the management of the Canal for the benefit of shipping.

Panama has repeatedly expressed its determination to terminate current U.S. rights under the 1903 treaty, end U.S. sovereignty in the Canal Zone, and extend its own jurisdiction into the Canal Zone. Toward this end, the current military junta government in Panama, under dictator Brig. Gen. Omar Torijos, has been conducting a massive hate-filled propaganda campaign against the United States. I note that many recent examples of the strongly-worded anti-U.S. articles which regularly appear in the controlled Panamanian press have been inserted in the Congressional Record by my colleague from Pennsylvania, Mr. Flood. It is my hope that the Subcommittee will direct its attention to these in its consideration of this important issue.

Reference to the current propaganda campaign was also made in an article entitled "Puzzle in Panama-Torijos Brings Calm, Prosperity to Nation at Expense of Freedom" (Wall Street Journal, June 17, 1971). Staff reporter James C. Tanner writes, "But now Gen Torijos is setting out on a bold new course to build popular support and possibly to put new pressure on the U.S. as the treaty negotiations approach.' "***"Some Americans here fear that major demonstrations against the U.S. will follow, perhaps leading to mob violence and riots similar to those that began in 1967. Gen Torijos agrees that there may be violence. But he says this will occur only if the U.S. again balks on the hot issues of jurisdiction over the 10-mile-wide Canal Zone and Panama's share of the waterway's growing revenues.'

This, then, is the unfortunate_atmosphere in which the current negotiations between the United States and Panama are taking place. In realization of this and with the history of the 1967 treaties as a lesson, the House of Representatives cannot afford to remain silent. To do so could constitute an abrogation of our our constitutional authority over the disposition of U.S. property and, far worse, a failure to fulfill our solemn obligation to see that the vital interests of the United States and its citizens are protected.

I am gratified that the Panama Canal Subcommittee took an important step toward the fulfillment of this responsibility with the issuance of its December, 1970, report. With negotiations on the Canal again in progress, similar action by the Subcommittee at this time would be of even greater importance and I respectfully urge that such action be taken.

Thank you.

STATEMENT OF HONORABLE J. Herbert Burke, a RepresENTATIVE IN Congress FROM THE STATE OF FLORIDA

Mr. Chairman: The House Foreign Affairs Committee of which I am a member, held hearings on the Panama Canal just a couple months ago and I presented testimony at that time in opposition to the proposed treaty. In 1967 and 1968, I joined with many of our colleagues in urging a halt to treaty proposals being touted at that time. Then, as now, I indicated my opposition and co-sponsored legislation designed to maintain U.S. sovereignty over the Panama Canal and Canal Zone.

Article IV, Section 3, Clause 2 of the U.S. Constitution vests the power to dispose of territory and other property of the U.S. in the Congress, which includes the House of Representatives. Today, this power is in danger of being usurped. Ambassadors John Mundt and Robert Anderson are in the process of negotiating a new treaty with Panama that will determine the future of the Canal. If the negotiations are successful and the resultant treaty is ratified by the Senate, the U.S. taxpayer could wind up loosing his shirt.

The Canal Zone and the Panama Canal are territory and property of the United States paid for by our taxpayers. The construction of the canal and subsequent maintenance, operation, sanitation and protection from 1904 to June 20, 1968 represented a net total investment of more than $5 billion. A project for modernizing the existing Panama Canal by the construction of a third set of larger locks is being proposed, as is a sea level design for the same purpose, with an estimated cost to the taxpayer in the neighborhood of $2.88 billion.

Under the terms of the 1903 treaty the U.S. was granted in perpetuity the "use, occupation and control" of the Canal Zone territory for the "construction, maintenance, operation, sanitation and protection" of the Panama Canal with full "sovereign rights, power and authority" within the Zone to the "entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority." The U.S. also obtained title by purchase of all privately owned land and property in the territory from individual property owners in the most costly territorial acquisition in U.S. history.

The original treaty has been modified twice.

First, by the Hull-Alfaro Treaty of 1936-1939. In this treaty the U.S. made significant concessions to Panama, including the construction of a Trans-Isthmian highway, over which Panama was given jurisdiction, extending through the Canal Zone to Colon, renunciation of the right of eminent domain in the Republic of Panama for Canal purposes, and surrender of U.S. authority to maintain public order in the cities of Panama and Colon and adjacent areas.

Second, by the Chapin-Fabrega Treaty of 1953-1955. In this treaty the U.S. gave further concessions to Panama, including provisions for the construction by the U.S. of a free bridge across the Canal at Balboa; relinquishment of the

right to enforce health and sanitation ordinances in the cities of Panama and Colon, and the cession to Panama without any compensation whatever of the terminal yards and passenger stations of the Panama Railroad.

The 1903 treaty gave Panama only a reversionary interest in the Canal. As in the case of the execution of a reversionary deed of property in Anglo-Saxon countries, the Canal would revert back to Panama if the U.S. abandoned it. The U.S. was never given direct sovereignty, but, rather, it was given the powers which it would have if it were sovereign, while reserving the titular sovereignty to Panama.

Operation of the Canal requires order. Because the United States has been able to insure order in the Canal Zone the Canal has served for 57 years and provided immense economic benefits to the U.S., Panama and the entire world. Over 15,000 ships use the canal each year or more than 42 ships each day.

I have introduced legislation, H. Res. 550, which would state the sense of the House of Representatives that the Government of the United States should maintain and protect its sovereign rights and jurisdiction over the Canal Zone and the Panama Canal. Further, that the U.S. Government should in no way forfeit, cede, negotiate, or transfer any of these sovereign rights, jurisdiction, territory or property to any other sovereign nation or to any international organization, which rights, sovereignty and jurisdiction are indispensably necessary for the protection and security of the entire Western Hemisphere including the Canal and Panama.

I feel this legislation is necessary because over 70% of the_Panama Canal traffic either originates or terminates in United States ports. The Canal is of vital strategic importance and imperative to the hemispheric defense and to the security of the United States as well as to Panama.

During the preceding administration the U.S. conducted negotiations with the Republic of Panama which resulted in proposed treaties under the terms of which the U.S. would relinquish its control over the Canal Zone and Panama Canal with the gift of both to Panama. The present revolutionary government of Panama seeks to renew negotiations looking towards a similar treaty. The December 1, 1970 report by the Atlantic-Pacific Interoceanic Canal Study Commission revives the entire canal situation, including surrender of the Canal Zone to Panama and operation of the Panal Canal by an international organization not subject to U.S. jurisdiction. The recommendations of this Commission would place the U.S. in a position of heavy responsibility without requisite authority and invite a takeover by Soviet power of the isthmus as occurred in Cuba, other Latin American countries, and at the Suez Canal.

While relations between the U.S. and Panama are necessarily close and generally friendly, there remains a good deal of conflict and controversy over the canal. President Johnson agreed to negotiate a new treaty with Panama in the belief that, if left unresolved, these problems might permanently embitter relations between our two countries. However, the draft agreements submitted for ratification were unsatisfactory to both sides.

The first of these agreements (1) abrogated the Treaty of 1903, (2) recognized Panamanian sovereignty over the Canal Zone, (3) made Panama an active partner in the management and defense of the Canal, (4) increased toll royalties to Panama, and (5) eventually ceded possession of the Canal to Panama in 1999, if no new canal were constructed at U.S. expense, or soon after opening a sea level canal, but not later than 2009, if a new canal were built.

The second of these agreements was for a canal of "sea level" design and would have given the U.S. an option for 20 years, after ratification, to start construction, 15 more years for construction, and a majority membership in the canal authority for 60 years after opening or until 2067, whichever is earlier.

The third of these agreements was for defense and provided for the continued use of military bases by U.S. Forces in Panama for five years beyond the termination date of the proposed treaty for the operation of the existing canal.

The Panama Canal is of immense interest to the United States; essential for interoceanic commerce and Hemispheric security. The recent efforts to wrest its control from the U.S. trace back to the 1917 Communist Revolution. These efforts conform to the long-range Soviet policy of gaining domination over key water routes. This pattern is seen in the takeover of Cuba, which flanks the Atlantic approach to the Panama Canal and in the case of the Suez Canal. Thus the real issue at Panama, dramatized by the Communist takeover of strategically located Cuba and Chile, is not U.S. control versus Panamanian, but U.S. control versus Soviet control. This is the issue that should be debated in the Congress, especially in the Senate. Panama is a small, weak, unstable country occupying a

strategic geographical position that is the objective of predatory power, requiring the presence of the U.S. on the Isthmus in the interest of Hemispheric security and international peace.

Recognizing the Caribbean Sea as the Mediterranean Sea of the Americas, communist strategists selected the region for transformation to a communist controlled area: Theorizing that if Cuba, Guatemala, and Panama could be taken, the area would fall, thereby separating the two Americas.

We have the example of the Suez to show us what happens when a major western power abdicates its authority. In July 1954, Great Britain arrived at an agreement with Egypt for a phased out withdrawal of British forces from the Suez Canal Zone over a period of 20 months. This evacuation had quick consequences. On July 26, 1956, the Egyptian Government promptly nationalized the Suez Canal, creating a world crisis. In 1958 Panamanian demagogs thereupon started thinking along similar lines and sent emissaries to Egypt to find out how to do likewise at Panama. Today, because of the Israeli-Arab War no one has used the Suez Canal since 1967.

I would like to emphasize the striking parallels between what occurred at the Suez Canal and what is being attempted at Panama. These common factors include such things as establishment of governments friendly to the Soviet Union, the receipt of economic and military aid from Communist countries the use of worldwide hostile propaganda against Western powers, the use of terror, and the creation of local crises when these powers are heavily involved in distant areas, such as Vietnam or Korea.

To cede outright control to Panama under such conditions is tantamount to conceding U.S. power to foreign imimical interests. In my judgment, catering to such public opinion, which in many cases is artifically stimulated against us, is not a sound basis for foreign policy decisions. I am opposed, and will remain opposed, to any treaty embodying the loss of American sovereignty over the Panama Canal. I feel that the only way the Panama Canal will remain operational is under U.S. majority control.

STATEMENT OF RepresentatIVE EARLE CABELL, A REPRESENTATIVE IN Congress FROM THE STATE OF TEXAS

Mr. Chairman: I have re-introduced a Resolution to the 92nd Congress setting forth our policy involving the Panama Canal. This is the same Resolution that was introduced during the 91st Congress by myself and over 100 other members of the House.

The Resolution is as follows: Resolved by the House of Representatives, That it is the sense of the House of Representatives that the Government of the United States should maintain and protect its sovereign rights and jurisdiction over said Canal Zone and Panama Canal and that the United States Government should in no way forfeit, cede, negotiate, or transfer any of these sovereign rights, jurisdiction, territory or property to any other sovereign nation or to any international organization, which rights, sovereignty and jurisdiction are indispensably necessary for the protection and security of the entire Western Hemisphere including the Canal and Panama.

Unfortunately, however, no action was taken during the last session.

The necessity for the immediate re-introduction of this Resolution became critical by the filing of the final report of the Atlantic-Pacific Interoceanic Canal Study Commission established under the terms of Public Law 88-609, authorizing the study of the feasibility of constructing a new trans-Isthmian Canal of level design.

The prime recommendation of this report is for the construction of such type canal entirely in Panamanian Territory about 10 miles west of the existing canal, regardless of the costs or consequences. This recommendation hinges upon surrender by the United States of its sovereign rights, power and authority over the Canal Zone, would open up a Pandora's box of problems, and be against the best interests of the United States.

The implementation of this report would seriously impair the National Defense Posture of the United States and could well lead to complete loss, not only of control of these canals, but the loss of our accessibility to their use.

This is entirely probable when one recalls the action taken by Egypt in the seizure and closing of the Suez Canal.