are constitutional authorities to the effect that once a treaty is amended it cannot then be approved by the other party without entering into a new treaty. If that be the case, if major amendments are made to the treaty, it may well be that that, in itself, will defeat this treaty, because it will require entering into a new treaty.

It will be an interesting constitutional question about which the Chair will be asked. That question may have to be submitted to the Senate for the Senate's view. That would not necessarily be binding if, in fact, that would vitiate the treaty in the absence of another treaty submitted to both countries.

Mr. SCOTT. Will the Senator yield on that point?

Mr. ALLEN. I yield.

Mr. SCOTT. It would appear to me that in the event the Senate does offer amendments and they are adopted by the Senate, and the treaty, as amended, would later be ratified by the Senate, this would influence the executive branch of Government in its efforts to negotiate a new treaty. I feel, quite frankly, Mr. President, that the Senate is somewhat closer to the people of the United States than the executive branch. Certainly, it is closer than the unelected negotiators of this treaty. In fact, no one within our State Department or within our diplomatic corps has had to face the electorate as has each Member of the Senate. I feel someone must speak for the people, and I hope it will be the Senate.

Mr. ALLEN. I thank the distinguished Senator.

There is one other point I would like to make as we suggest guidelines for the consideration of this treaty. I do not foresee here on the floor of the Senate a filibuster against this treaty. I believe there will be a long discussion, a legitimate debate. Though I have not discussed the matter with the leadership, I feel sure that the leadership would not file any cloture petition as long as the debate is legitimate debate. It may last for weeks without being a filibuster. I do not believe a filibuster will ensue, the reason being the difference in what it takes to cut off a filibuster; 60 votes, and 67 votes to approve the treaty, assuming all Senators are present. Far more than that, the reason there will not be a filibuster is if the treaty is defeated by extended debate, the treaty would still remain on the Executive Calendar for the next session of this Congress and for succeeding Congresses, to be brought up by the leadership at any time.

What I am going to be working toward is a vote up or down on the treaty. Once it is defeated by the Senate, it becomes a complete nullity. If other negotiations are held and other treaties are submitted to the Senate, we would have to consider them ab initio. But there will be no filibuster, as such, and no need to invoke cloture.

The PRESIDING OFFICER. The Senator's time has expired.

[From the Congressional Record-Senate, Sept. 16, 1977]

THE PANAMA CANAL TREATY

Mr. ALLEN. Mr. President, on Monday, September 12, 1977, I brought to the attention of the Senate remarks made by chief Panamanian negotiator, Dr. Romulo Escobar Bethancourt, who gave interpretations of the treaty at a news conference in Panama City on October 24. Dr. Bethancourt's comments showed that, at least in the minds of the Panamanians, the United States would not have the right to intervene militarily to guarantee the neutrality of the canal nor would the United States have the right to priority of passage of its vessels of war.

Today, Mr. President, I have received a translation of a speech given by the Panamanian Planning and Economic Policy Minister, Nicolas Ardito Barletta, given on August 19, 1977, before the National Assembly of Panama in Panama City. Minister Barletta's remarks should be of great value to the Senate in assessing the actual economic impact of the proposed canal treaty. Like Dr. Bethancourt, Minister Barletta interprets the treaty to his country in a manner which stands in stark contrast to the cost analysis presented by our own Government. While the treaty provides only for the payment of $20 million per year for police services and for fixed annuity, Minister Barletta states that the cash economic benefits actually amount to the astonishing sum of $2.262 billion in 1977 dollars, for an annual average payment of approximately $100 million. That is for each of the 23 years of the life of the treaty. Mr. President, some rather ingenious devices have been discovered by the executive department for providing this $24 billion to Panama without the necessity of seeking congressional approval through the appropriations process. But, Mr. President, unlike our own Department of the Treasury, Minister Barletta gives a very careful explanation of the devices used and, in my judgment, Senators should therefore find of great interest the entire substance of his speech which I intend to enter into the Record if given unanimous consent to do so. For example, Minister Barletta reckons the average income to Panama from the proposed new Panama Canal Commission to be $80 million per year, not a maximum of $20 million as expressly stated in the proposed treaty. But his explanation is better than any that I could give. Here is what Minister Barletta had to say:

The agreements reached in this aspect are as follows: An average income of $80 million per year, I repeat, average, for the next 23 years; that is, a total of $1.8 billion in the 23 years. The majority of this income is subject to a clause of inflationary correction so that the annuity consistently maintains its purchasing value, based on the year 1977.

It is quite easy to see that this amount would escalate tremendously in 23 years, if we continue the inflationary spiral of some 6 or 7 percent, on the average, per annum—

The income for the first year is estimated to be $65 million. By the end of the treaty, the amount will reach approximately $100 million in real values of 1977, that is, corrected against any inflation that may occur during that period. The mean of this gradually increasing sum gives us the average amount of $80 million. This income is itemized as follows: $0.30 for each ton of cargo that transits the canal. According to traffic projections through the canal, this means an average income of

$55 million per year which in the first year will amount to about $42 million, to reach $70 million by the end of the century.

Of course, that would be added to the oil that we receive from Alaska, and it is anticipated that there will be a tremendous volume of oil going through the Panama Canal in years to come

The second item of this round sum is $20 million per year, of which $10 million is guaranteed each year, the rest depending upon the level of income of the Panama Canal Company in that year. If in one year the second half of the $20 million cannot be covered, the deficit caused would be covered in the subsequent years to maintain the $20 million per year payment.

This is in addition to the average of $80 million, which would make it up to $100 million in 1977 dollars

And a third item of approximately $5 million per year of income will come from several businesses and operations being transferred to the national government, such as ports, railroads, sale of fuel, repair of ships, and so forth. Therefore, the total sum of $80 million is composed of these three items that I just discussed.

But, Mr. President, in glowing terms and with obvious pride in accomplishment, Minister Barletta points out other plums he succeeded in shaking loose in the negotiations. And the Panamanian negotiators surely did skin our negotiators. They just outtraded us. We are supposed to be the Yankee traders, but they surely outtraded our negotiators; and every step of the way, of course, the negotiations were carried on in secrecy as far as the general public here in the United States is concerned; and then we are confronted, here in the Senate, with a fait accompli, with the treaty already signed, with great fanfare, by the President.

But here is what Minister Barletta says they shook from the plum tree of the American taxpayers:

Another aspect gleaned from the canal operation is the transference to Panamaas Edwin Fabrega will explain shortly-of buildings and infrastructure for a current value of $82 million. Aside from this aspect, which is what Panama would derive from the operation of the canal and from the transfer of physical assets which currently exist in the Canal Zone, there is a parallel and corollary package of economic cooperation. This package reaches an amount of $345 million, above all, within the next 5 years, and is itemized as follows: loans from the Export-Import Bank up to the amount of $200 million in the next 5 years; loans for the construction of housing guaranteed by AID up to $75 million in the next 5 years; loans guaranteed by a U.S. agency called OPIT for $20 million for Cofina, our development bank, and other loans and equipment, principally military equipment, for the amount of $50 million in the next 10 years.

Furthermore, Minister Barletta places a 1977 value on facilities which will be donated to Panama in 1999. His figure is $3 billion, and I have little doubt that it is correct, as to the value of the facilities which will come to Panama in 1999. Or, possibly, it will be a much higher figure. Minister Barletta continues:

Aside from the foregoing, it must be emphasized that all the rest of the existing structures in the Canal Zone, that is, the canal itself and the rest of the civilian and military installations, will be returned to Panama, free of charge, on 31 December 1999.

"Returned to Panama"; this is Barletta's language, it is not the language of the Senator from Alabama, because I do not feel it is a return to Panama. It is a gift to Panama, because obviously they had nothing to do with constructing these facilities, or with constructing the Panama Canal:

And these structures have an approximate value of $3 billion currently. Aside from that, we must also point out that Panama will receive from the company that

operates the canal the amount of $10 million per year, also with inflationary correction, to cover the costs of the public services which Panama will administer in the exercise of its jurisdiction in the zone area, for these services which are generated by reason of the existence and operation of the Panama Canal. Therefore, lending these services will cost nothing to the national treasury.

We are going to pay for the police operations there in the Canal Zone.

Minister Barletta does not place a dollar figure on the immensely valuable real property which would be transferred to Panama immediately upon implementation, but surely those real property values must be well into the billions. He does, however, discuss the significance of the cash contributions in terms of the annual budget of the Government of Panama. His remarks in that respect are particularly illuminating in showing the tremendous benefits being transferred to this small country of only 1.7 million citizens. Perhaps the Governors of some of our smaller States would particularly appreciate Minister Barletta's thoughts on this subject: In brief, what is the significance of these figures? We can say that in the next few years, the next 3 or 4 years, the amount of the annuity alone, without taking into consideration the economic cooperation, is 19 percent of the national government's budget; that is, it is a considerable increase, one-fifth.

That is just the amount of the annuity alone.

It is 25 percent of the operational expenses of the current budget and is 15 percent of the program of investments of the public sector. As the national government's intention for the time being is to devote the majority of these resources to solving the problems of our nation, the problems of our people through its investment program, we have to take into consideration that this amount-the annuity only, which in the first few years will be approximately $65 million per yearmeans at least 15 percent more for the program of investments being carried out by the country. This amount can become a figure of more impact through financing which can be negotiated on the basis of this income.

They are going to use this income as a vehicle to get still more money by putting this in as equity.

We can also say-as another manner of illustrating what these figures mean, because they are so large that one often does not see them in real terms-that this means considerably speeding up the program of investments which we are developing.

There he refers to public works and investments in Panama. All of us here are aware that during the past year we have had to reduce investment in order to face the serious economic crisis which the country and the world have been experiencing.

So, Mr. President, the Panamanians plan not only to take the loans and cash we are offering; they also apparently intend to use our money as leverage for additional loans. Panama is already bankrupt, but the spendthrift Panamanian Government no doubt has already pledged our country's largesse as collateral in a mad search for even more borrowed funds.

Later on, Mr. President, I am going to talk about the loans by the big banks in this country to Panama and the fact that this treaty income that Panama will receive from the U.S. taxpayers and the users of the canal will be used to pay on these existing debts.

Mr. President, sooner or later the Congress must draw the line. and stop robbing American taxpayers to extend funds to bankrupt, Third World countries so that international banks can collect prin

cipal and interest on shaky loans. In my judgment, the international banks should be required to write off their bad debts, at least some portion of the loans they made in error, and the international banks should be put on notice that the American taxpayer will not always guarantee a profit in any loan transaction with unstable governments. Perhaps, the Panama Canal treaty will be a good starting place.

Mr. President, I ask unanimous consent that Minister Bartletta's speech be printed in the Record.

There being no objection, the speech was ordered to be printed in the Record, as follows:

EXCERPT FROM SPEECH BY MINISTER NICOLAS ARDITO BARLETTA

Gentlemen representatives, colleagues, ladies and gentlemen: It is my duty to inform you about the economic aspects of these negotiations, aspects which are fully as important as the others because at this stage we are all convinced of the necessity that a strong national economy must be the basis for obtaining and fully implementing our freedom of action. They are important also because the real valorization of our geographical position as a natural resource was at stake as well as Panama's obtaining of revenue equal to the value of that geographical position. This means, as a result, the real possibility of accelerating Panama's general development and providing an answer to the important needs of our people in this process. In other words, it would be one thing to have dignity and sovereignty with hunger and quite another to have and to consolidate the dignity and the sovereignty with the integral development of our people. And this has been our aim through the economic aspect of these negotiations in attempting to consolidate the value of our geographical position and the resources and revenue which respect to it so as to use it in our development.

The agreements reached in this aspect are as follows: An average income of $80 million per year, I repeat, average, for the next 23 years; that is, a total of $1.8 billion in the 23 years. The majority of this income is subject to a clause of inflationary correction so that the annuity consistently maintains its purchasing value, based on the year 1977. The income for the first year is estimated to be $65 million. By the end of the treaty, the amount will reach approximately $100 million in real values of 1977, that is, corrected against any inflation that may occur during that period. The mean of this gradually increasing sum gives us the average amount of $80 million. This income is itemized as follows: $0.30 for each ton of cargo that transits the canal. According to traffic projections through the canal, this means an average income of $55 million per year which in the first year will amount to about $42 million, to reach $70 million by the end of the century.

The second item of this round sum is $20 million per year, of which $10 million is guaranteed each year, the rest depending upon the level of income of the Panama Canal Company in that year. If in one year the second half of the $20 million cannot be covered, the deficit caused would be covered in the subsequent years to maintain the $20 million per year payment. And a third item of approximately $5 million per year of income will come from several businesses and operations being transferred to the national government, such as ports, railroads, sale of fuel, repair of ships, and so forth. Therefore, the total sum of $80 million is composed of these three items that I just discussed.

Another aspect gleaned from the canal operation is the transference to Panamaas Edwin Fabrega will explain shortly-of buildings and infrastructure for a current value of $82 million. Aside from this aspect, which is what Panama would derive from the operation of the canal and from the transfer of physical assets which currently exist in the Canal Zone, there is a parallel and corollary package of economic cooperation. This package reaches an amount of $345 million, above all, within the next years, and is itemized as follows: loans from the Export-Import Bank up to the amount of $200 million in the next 5 years; loans for the construction of housing guaranteed by AID up to $75 million in the next 5 years; loans guaranteed by a U.S. agency called OPIT for $20 million for Cofina, our development bank, and other loans and equipment, principally military equipment, for the amount of $50 million in the next 10 years.

In short, all these elements of economic benefits which I have mentioned in structures, payments and loans for development will in 23 years amount to the sum of $2.262 billion. This is compared to what Panama would receive under the current