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DISASTROUS CONSEQUENCES

The psychological and political consequences of the abandonment of sovereignty by the United States in the Zone-in the face of repeated threats by a minor dictator openly backed by Castro and Russian communism-to our naval base at Guantanamo Bay, Cuba, to other U.S. base rights overseas and to our strategic position in the Caribbean could be disastrous. The questions that would inevitably be asked are:

Is the United States a paper tiger?

Where, after Vietnam and Angola and now, Panama, would we draw the line, if not at our own back door?

It is certainly true that rioting mobs tomorrow, as in the past, are an ever present possibility in Panama; Latin volatility and Communist provocateurs, aided by trained Cuban infiltrators, insure that. Sabotage and terrorism, if supported by Cuba and/or Russia, could become serious; some bombing incidents involving the automobiles of Zone residents who oppose the transfer of sovereignty have already occurred. But serious sabotage of the Canal itself, even if it could be accomplished, would be an irrational act. For Panama, it would kill the goose that laid the golden egg.

A large-scale guerrilla war, another Vietnam, is highly unlikely. We want no more Vietnams, but surely Panama does not want a Central American Vietnam either, and the great majority of Panamanians are not the dedicated and disciplined fanatics that we faced in the jungles of Southeast Asia.

In any case, if we are to avoid confrontation all over the world by concession and retreat, if we refuse to defend highly important or vital interests merely to avoid the blackmail threat of violence we are finished before the crisis erupts.

RISK IS NECESSARY

As to Latin-America, we must risk its rath. But it will be far from unanimous—no matter what some Latin American spokesman say, pro forma, for public consumption. Fundamentally the nations of Latin-America and the Southern Hemisphere have always respected strength. Many of them are highly dependent on the waterway, and some of them, quite satisfied with the low rates and efficiency of American operation of the Canal, mistrust the probable instability and uncertainty of Panamanian rule.

There is, too, very considerable uneasiness about Communist influence in Panama and the close ties Torrijos has established with Castro. The memories of Angola and the fears of Russian imperialism within the Western Hemisphere are vivid.

During last Fall's political campaign, both President Ford and Jimmy Carter avoided the real issue in the Panama negotiations which is the question of U.S. sovereignty and the security of our "soft underbelly." Neither of them referred to the major problem of the Canal issue the strategic importance of the Caribbean, and both of them said they would maintain "control" of the Canal.

The exact words of now President Carter, which are today most germane, were: "I would never give up complete control or practical control of the Panama Canal Zone. But I would continue to negotiate with the Panamanians."

In other words have your cake and eat it, too. Give up sovereignty, perhaps, but maintain security and control. It's a nice trick, if you can do it.

We lost our great airfield in Libya and our entire military investment there after a change of regime. We were denied overflight or refueling bases during the last Mid-East war, even by our allies. After the Cyprus crisis both Turkey and Greece either limited U.S. operations at our bases in those countries or closed them down. Sovereignty means control. Control without sovereignty is double-speak.

[From the Congressional Record-Senate, Apr. 4, 1977]

PANAMA CANAL: BRITISH PRESS ALERT TO DISREGARD OF THE 1901 HAY-PAUNCEFOTE TREATY

Mr. HELMS. Mr. President, during the last decade, various Members of the Congress have repeatedly stressed that one of the principal treaties governing the operation of the Panama Canal is the 1901 Hay-Pauncefote Treaty with Great Britain, which applied the rules for the Suez Canal to the Panama Canal.

The projected surrender of U.S. sovereignty over the Canal Zone is an obvious disregard of this treaty, the principles of which have been accepted by canal users and strictly observed by the United States. So far as can be ascertained, no effort has been made to secure the approval of the British Government, which is one of the largest users of the Panama Canal with a total of 1,148 transits out of 13,786 oceangoing transits during fiscal year 1975. In fact, relatively recent efforts by serious students of the canal problem to obtain information from State Department sources revealed that its responsible officials knew nothing about the Hay-Pauncefote Treaty until alerted to its existence by being questioned.

In the United Kingdom the situation is different, for an important London newspaper is alert to the canal subject now being debated in the United States. It has stressed that

American plans to transfer sovereignty of the Panama Canal to Panama will have to be approved by the British Government.

Mr. President, the failure of the State Department to take up this matter with the British Government as a party to the HayPauncefote Treaty is indeed difficult to comprehend. The Panama Canal and its protective frame of the Canal Zone is not a shopping center convenient for use as a diplomatic plaything but one of the greatest works of man that serves the shipping of the entire world. The surrender of its sovereign control by the United States would probably be followed by worldwide consequences of malign character, especially for Latin American nations dependent upon it.

Mr. President, in order that the Congress, especially the Senate, may be fully informed, I ask unanimous consent that the article from the Daily Telegraph and the text of the 1901 Hay-Pauncefote Treaty be printed in the Record.

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

[From the London Daily Telegraph, Mar. 3, 1977]

BRITAIN ONCE RULED SEA AND SO MUST APPROVE PANAMA TRANSFER

(By Desmond Wettern)

American plans to transfer sovereignty of the Panama Canal to Panama, which the Carter Administration intends to effect soon to rid America of the last vestiges of "colonialism," will have to be approved by the British Government.

This results from Britannia having once ruled the waves-or at least having had the world's largest merchant navy. The matter was decided in 1901.

The Hay-Pauncefote Treaty of that year requires that Britain be consulted before there is a change in the control of the Canal.

The treaty was signed on Nov. 18, 1901, by the British Ambassador in Washington, Lord Pauncefote, and the American Secretary of State, John Hay.

It superseded the earlier Clayton-Bulwer Treaty of 1850 and provided for unhindered passage of the Panama Canal, when it was completed by the shipping of all nations.

OBJECTION UNLIKELY

It also gave the United States Government the “exclusive right for the regulation and management of the canal" and stipulated that "no change of territorial sovereignty or of the international relation of the country or countries traversed by the before-mentioned canal shall affect the general principle of neutralisation or the obligation of the High Contracting Parties (Britain and America) under the present Treaty.

Although this would seem to preclude any loop-hole for the Americans to transfer the Canal's sovereignty to another power, the Foreign and Commonwealth Office is reserving its position.

From a legal point of view the British Government is unlikely to object to any transfer of sovereignty though, at least concerning the treaty provisions, Whitehall's acquiesence would seem to be based on turning a blind eye rather than a close interpretation of the Treaty's five articles.

Britain's involvement in the Treaty derives from the days when it was Government policy to ensure free navigation around the world for the benefit of the British Merchant Navy, then easily the world's largest.

The Americans alone are entitled to "maintain such military police along the canal as may be necessary to protect it against lawlessness and disorder."

British shipping is now a close second to that of America in the use of the Canal. In 1973-74, the last year for which figures are available, 1,258 British merchant ships went through the Canal carrying 13,800,000 long tons of cargo compared to 1,322 American ships carrying 10,500,000 long tons.

The biggest users were Liberia, with 1,798 transits, and Japan with 1,348. Russian use amounted to only 242 transits involving 1,500,000 long tons of cargo.

BANKING INTERESTS

The use of the Panama Canal by British warships is now small. In 1976 a task group of some nine ships used it returning from a nine-month series of exercises and visits east of Suez, but since then no British warship has navigated the canal either way, I understand.

Apart from political considerations the Carter Administration is also believed to be under pressure from American banking interests to hand the canal over to Panama.

ACCESS TO PROFITS

American and international banks, including the London branch of Chase Manhattan, are believed to have lent the Left-wing regime of President Torrijos of Panama large sums and are anxious to obtain interest on their loans. It is felt that interest payment will be possible only if Panama has access to profits from canal dues.

British banks believed to have provided loans include the Orion Bank, William Brandts' and Son and Lloyds, and Bolsa International.

[Appendix C]

TREATY BETWEEN THE UNITED STATES AND GREAT BRITAIN TO FACILITATE THE CONSTRUCTION OF A SHIP CANAL

(Hay-Pauncefote Treaty)1

[Signed at Washington, November 18, 1901; ratification advised by the United States Senate, December 16, 1901; ratified by the President, December 26, 1901; ratified by Great Britain, January 20, 1902; ratifications exchanged at Washington, February 21, 1902; proclaimed at Washington, February 22, 1902.]

L. Convention of April 19, 1850.

II. Construction of canal.

[Articles]

Manuscript, United States Department of State, Archives, Treaty Series, No. 401. Also S. Doc. No. 474 (63d Cong., 2d Sess.), pp. 292-94; W. M. Malloy, op. cit., I, 782–84 (US).

III. Rules of neutralization.
IV. Change of sovereignty.

V. Ratification.]

The United States of America and His Majesty Edward the Seventh, of the United Kingdom of Great Britain and Ireland, and of the British Dominions beyond the Seas, King and Emperor of India, being desirous to facilitate the construction of a ship canal to connect the Atlantic and Pacific Oceans, by whatever route may be considered expedient, and to that end to remove any objection which may arise out of the Convention of the 19th April, 1850, commonly called the Clayton-Bulwer Treaty, to the construction of such canal under the auspices of the Government of the United States, without impairing the "general principle" of neutralization established in Article VIII of that Convention, have for that purpose appointed as their Plenipotentiaries:

The President of the United States, John Hay, Secretary of State of the United States of America;

And His Majesty Edward the Seventh, of the United Kingdom of Great Britain and Ireland, and of the British Dominions beyond the Seas, King, and Emperor of India, the Right Honourable Lord Pauncefote, G.C.B., G.C.M.G., His Majesty's Ambassador Extraordinary and Plenipotentiary to the United States;

Who, having communicated to each other their full powers which were found to be in due and proper form, have agreed upon the following Articles:

ARTICLE I

The High Contracting Parties agree that the present Treaty shall supersede the aforementioned Convention of the 19th April, 1850.

ARTICLE II

It is agreed that the canal may be constructed under the auspices of the Government of the United States, either directly at its own cost, or by gift or loan of money to individuals or Corporations, or through subscription to or purchase of stock or shares, and that, subject to the provisions of the present Treaty, the said Government shall have and enjoy all the rights incident to such construction, as well as the exclusive right of providing for the regulation and management of the canal.

ARTICLE III

The United States adopts, as the basis of the neutralization of such ship canal, the following Rules, substantially as embodied in the Convention of Constantinople, signed the 28th of October, 1888, for the free navigation of the Suez Canal, that is to say:

1. The canal shall be free and open to the vessels of commerce and of war of all nations observing these Rules, on terms of entire equality, so that there shall be no discrimination against any such nation, or its citizens or subjects, in respect of the conditions or charges of traffic, or otherwise. Such conditions and charges of traffic shall be just and equitable.

2. The canal shall never be blockaded, nor shall any right of war be exercised nor any act of hostility be committed within it. The United States, however, shall be at liberty to maintain such military police along the canal as may be necessary to protect it against lawlessness and disorder.

3. Vessels of war of a belligerent shall not revictual nor take any stores in the canal except so far as may be strictly necessary; and the transit of such vessels through the canal shall be effected with the least possible delay in accordance with the Regulations in force, and with only such intermission as may result from the necessities of the service.

Prizes shall be in all respects subject to the same Rules as vessels of war of the belligerents.

4. No belligerent shall embark or disembark troops, munitions of war, or warlike materials in the canal, except in case of accidental hindrance of the transit, and in such case the transit shall be resumed with all possible dispatch.

5. The provisions of this Article shall apply to waters adjacent to the canal, within 3 marine miles of either end. Vessels of war of a belligerent shall not remain in such waters longer than twenty-four hours at any one time, except in case of distress, and in such case shall depart as soon as possible; but a vessel of war of one belligerent shall not depart within twenty-four hours from the departure of a vessel of war of the other belligerent.

6. The plant, establishments, buildings, and all works necessary to the construction, maintenance, and operation of the canal shall be deemed to be part thereof, for the purposes of this Treaty, and in time of war, as in time of peace, shall enjoy

complete immunity from attack or injury by belligerents, and from acts calculated to impair their usefulness as part of the canal.

ARTICLE IV

It is agreed that no change of territorial sovereignty or of the international relations of the country or countries traversed by the before-mentioned canal shall affect the general principle of neutralization or the obligation of the High Contracting Parties under the present Treaty.

ARTICLE V

The present Treaty shall be ratified by the President of the United States, by and with the advice and consent of the Senate thereof, and by His Britannic Majesty; and the ratifications shall be exchanged at Washington or at London at the earliest possible time within six months from the date hereof.

In faith whereof the respective Plenipotentiaries have signed this Treaty and thereunto affixed their seals.

Done in duplicate at Washington, the 18th day of November, in the year of Our Lord one thousand nine hundred and one.

JOHN HAY.
PAUNCEFOTE.

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