PANAMA CANAL

Mr. PEARSON. Mr. President, after carefully examining the strong and persuasive arguments on both sides, after listening to the testimony of some of the expert witnesses before the Senate Foreign Relations Committee and visiting Panama. I have concluded that on balance ratification of the Panama Canal Treaties is in the best interests of the United States.

These treaties have been negotiated to replace the 1903 HayBunau-Varilla Treaty-a source of irritation in the relations between the United States and Panama since the day it was signed. It is important to mention that the 1903 treaty was negotiated and signed for Panama by a French citizen, Philippe Bunau-Varilla. No Panamanian ever saw the treaty before it was signed. Panama had no choice but to ratify the treaty, for failure to do so would have meant a return of the Colombian armed forces. The 1903 treaty created a canal zone which is still seen by most Panamanians as infringing upon their sovereignty. They feel that it would be analogous to another country controlling a stretch of land 10 miles long, running the full length of the Mississippi River. Panamanians have also been concerned that the 1903 treaty deprives them of the full benefit of their major natural resource-their geographic location.

Because the historical background is essential to an understanding of the issue, I am attaching a statement I issued on February 3, 1977.

Mr. President, while I feel sympathy for the sentiments of the Panamanian people, my greatest concern is the long-term security and foreign policy interests of the United States. In 1964, President Johnson announced the intention of the United States to negotiate a new treaty with Panama. Since then, each President, two Democratic and two Republican, has worked toward achieving this goal. Presidents Johnson, Nixon, Ford, and Carter were persuaded that a new treaty relationship with Panama is more likely to serve long-term security and foreign policy interests of the United States. Above all, it would assure what is the essence of our interests-the efficiency, neutrality, accessibility, and security of the Panama Canal.

Americans are faced with a difficult choice. We do not know how well the new treaties will operate. We do not know if they take into account all contingencies. We are forced to make a choice between the uncertainty of the future against the unacceptability of the past.

The new treaties present us with risks, but Americans have always been willing to accept risks, provided they seem reasonable. I believe that these new treaties are as reasonable for our time as those risks that were assumed by Teddy Roosevelt in his time. Another important consideration is how the new treaties would affect our relations with other Latin American countries. The other nations of Latin America have joined with Panama in urging a new treaty with the United States. In their eyes, the canal runs not just through the center of Panama but through the center of the Western Hemisphere. Indeed, the problem affects our relations with the entire Third World, since the nations of the Third World have made common cause on this issue. In March 1973, the United

Nations Security Council would have passed a resolution favoring the Panamanian position on this issue had not the United States used its veto. The other nations of the world view our position on the canal as the last vestige of a colonial past which evokes bitter memories and deep animosities. The new canal treaties provide the United States with a unique position to improve our relations with virtually all of the countries of this hemisphere, and, indeed, the people of the entire developing world.

Mr. President, before arriving at my decision to support these treaties, I listened very carefully to the opponents and to the arguments that they made. I read with great interest the vast volume of mail from my constituents in Kansas. I must admit that I, too, have been deeply troubled by many of the issues raised by opponents of the treaties. Primarily these deal with the sovereignty issue, the economic questions, the possible need for a new sea level canal, the security questions and the role of Omar Torrijos.

Mr. President, many of my constituents have written to me and asked, "We bought it, we paid for it, why give it away?" "If we give away Panama, what is to prevent us from giving away Alaska or Louisiana?"

To answer those questions, one must look at article 3 of the HayBunau-Varilla treaty in which the U.S. was granted all "rights, power, and authority within the zone,' as "if it were sovereign.' The United States never claimed sovereignty over the Canal Zone. In fact, we continue to pay rent for the use of the Zone.

Secretary of War William Howard Taft, the future President and later Chief Justice of the Supreme Court, studied the question of sovereignty further and declared,

The truth is that while we have all the attributes of sovereignty 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.

The United States did not purchase the Canal Zone as it did Alaska and Louisiana. The Hay-Bunau-Varilla treaty provided for a payment of $10 million to Panama for treaty rights, not territory. In the Louisiana Purchase of 1803, France ceded to the United States, "forever and in full sovereignty the territory with all its rights and appurtenances." When the United States purchased Alaska, it received all rights, franchises and privileges previously belonging to Russia. In both cases, the United States received all public lands and all the inhabitants became U.S. citizens. In neither case did the United States have to pay a continuing annuity or rent or assume other obligations after taking over the territory. In addition, it should be mentioned that children born in Alaska or Louisiana are automatically U.S. citizens, while children born in the Canal Zone do not automatically become American citizens. Mr. President, let me turn to some of the economic considerations involved. The Panama Canal Treaty changes the basic economic assumptions under which the canal has historically been operated. For the first time in history the new treaty gives long overdue recognition to the fact that the canal is Panama's primary economic resource. While Panama has benefited from the presence of the canal through salaries paid Panamanian nationals, direct purchases by the Canal Company and establishment of private,

commercial, and service industries related to the canal, the direct payment to Panama for use of the canal was held to a minimum, presently only $2.3 million annually.

The important point to consider is that the treaty does not allocate one dime from the American Treasury to go to Panama. The entire payments to Panama specified in the treaty are all to come from canal revenues. The United States has been operating the canal "at cost." We have deliberately kept the canal's toll rates low. In effect, the United States has been subsidizing the shippers of the over 70 nations which use the canal. The canal could easily absorb the toll increases that might be needed under the new treaty. These increases would provide sufficient revenue to pay Panama the annuities pledged in article XIII.

Toll increases would have less than a 2-percent effect on the total shipping costs of items that transit the canal. The total effect on the cost to the American consumer would be even smaller. Thus, I agree with the Foreign Relations Committee which concluded that the economic effect of the new treaty on the total U.S. economy would be minimal.

Mr. President, I have received a number of letters questioning the additional economic package to Panama. This additional assistance program is not part of the Panama Canal treaties. It will be considered by separate congressional procedures. The program is based upon the desire for greater cooperation between the United States and Panama, in light of the new partnership arrangements which will result from the treaty. It must also be pointed out that this assistance program consists of loans, not grants. The bulk of the program is supported by money lent by the Export-Import Bank for American exports to Panama. In addition, this section will help U.S. manufacturers, and it will not cost the American taxpayer any money.

Mr. President, I am concerned about the future capacity of the Panama Canal and the possible necessity to enlarge it or to build a new canal. The canal is truly the "moonshot of the early 20th century." As David McCollough wrote in his excellent book, "The Path Between the Seas,"

The creation of a water passage across Panama was one of the supreme human achievements of all time, the culmination of a heroic dream of 400 years and of more than 20 years of phenomenal effort and sacrifice Primarily the canal is

an expression of that old and noble desire to bridge the divide, to bring people together. It is a work of civilization.

The canal is a masterpiece of design and construction. The locks have performed well from the time they were opened. Ships now transit the canal at a rate of over one per hour, every hour of the day during the year.

Ships of a size that were never dreamed of when the canal was built are now capable of transiting the canal. However, we are now building larger and larger ships, and it may become necessary to build a new canal in the future.

Section 2 of article XII of the Canal Treaty prevents the United States from building a new sea level canal in any other place other than Panama. On the other hand, it prevents Panama from negotiating with any other power to build a canal through its territory.

Mr. President, this section has received much criticism, but it was added at the insistence of the United States. President Johnson appointed the Atlantic-Pacific Interoceanic Canal Study Commission, headed by former Secretary of the Navy, Robert Anderson. In 1970, the Commission filed its voluminous report, concluding that the best route for a sea level canal would be in Panama. We did not wish Panama to negotiate with other powers to build such a canal. Thus, our negotiators insisted that the treaty include the provision giving us the first option on a sea level canal in Panama. Now, if the treaty is approved, Panama cannot allow another country to build such a waterway unless the United States grants permission. In return for this concession, we agreed not to build a canal in any other country other than Panama, which we had no intention of doing in any case.

Mr. President, I also am concerned about the defense of the canal. The defense of the Panama Canal consists of two components: internal security and external defense. Both are presently the responsibility of the U.S. Government. Internal security is primarily concerned with countering sabotage and terrorist activities. Under the new treaty the internal defense of the Panama Canal will be greatly enhanced by our cooperating with the Government of Panama.

The external defense of the canal will remain the primary responsibility of the United States during the balance of this century. Under the new Panama Canal Treaty, the Panamanian Guardia Nacional and appropriate U.S. commanders will develop plans in concert to provide for mutual defense. As past and present members of the Joint Chiefs of Staff have repeatedly pointed out, the capacity to defend the Panama Canal would be improved through cooperation with the Government of Panama. After the year 2000, the Neutrality Treaty provides for a canal open to ships of all nations in times of peace or war. However, it specifically provides that the United States and Panamanian Naval ships shall transit expeditiously and without impediments or preconditions.

Our ability to defend the canal, and our rights to do so, were further strengthened by the "Statement of Understanding" by President Carter and Omar Torrijos, which are now amendments to the treaty.

Although we can never be sure that no one will ever attack the canal, we can be sure that the United States will always be prepared to defend it.

Mr. President, I must admit that the aspect of these treaties which troubles me most is that we had to deal with the government of Omar Torrijos. I am troubled that Torrijos is a dictator. I am troubled that Panama's "human rights policies" leave a lot to be desired.

The treaties do not accomplish the impossible. They will not restructure the Government of Panama in our own image; they will not guarantee respect for human rights; they will not prevent drug smuggling through Panama into the United States; they will not insure that every Panamanian Government official will agree with the ideological line of the United States. But, while I wish the United States did not have to deal with Torrijos, we cannot pick and choose the heads of governments of other countries. We deal

with the leaders of many countries, even when we disagree with them. We should also not forget that the United States has been committed to a new Panama Canal Treaty since 1964, 4 years before Torrijos came to power.

Although we may not approve of the Torrijos regime, it is important to note that the recent plebiscite in Panama approved the treaties by a majority of over 2 to 1. Whatever the Panamanian people may think of Torrijos, they are strong in their opposition to the continuation of the Hay-Bunau-Varilla Treaty. As William Jordan, our Ambassador to Panama, testified before the Foreign Relations Committee,

This is an issue-probably the only issue-which brings Panamanians together in a kind of national unanimity that is rare in history. * Talk with Panamanians. You will find that whether they are rich or poor, city or campesinos, university graduates or day laborers, they are as one in their dream of a Panama that is united and sovereign, a country that is no longer divided in half by a foreign enclave.

In sum, Mr. President, I support the new treaties because they are in the best interests of the United States. They will make the canal easier to operate and easier to defend. They will assure for the United States continued access to the canal, for both military and commercial purposes. They will advance our position throughout Latin America, and, in many important respects, throughout the world. It is a signal to the world community that few actions can be taken independent of the welfare of others.

Finally, they will fulfill the expectations of every American that this country will continue to act as a world leader, proud of its heritage and willing to accept the challenges of the future. As Theodore Roosevelt stated,

The important thing is the next step. It often happens that the good conditions of the past can be regained not by going back, but by going forward. We cannot recreate what is dead; we cannot stop the march of events; but we can direct this march, and out of the conditions develop something better than the past knew. Mr. President, I ask unanimous consent that the statement be printed in the Record.

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

HISTORICAL BACKGROUND ON THE PANAMA CANAL

To understand the present situation, it is necessary to review the events that led up to the Hay-Bunau-Varilla Treaty of 1903 and see how it came about, for it is still at the heart of the argument. Americans had been interested in a Panama Canal as early as 1826, when Secretary of State Henry Clay came out in favor of building such canal. In 1850, the United States and Britain agreed to the Clayton-Bulwer Treaty stating that both nations would cooperate in the construction of an isthmian canal; they also bound themselves never to fortify or exercise exclusive control over such a waterway.

From 1881 through 1889, the French attempted to build a canal through Panama. The French ran into insuperable medical, engineering and financial problems. More than 20,000 workers died, mostly from yellow fever. In one stretch of the Canal, the walls kept caving in as fast as they were dug. Besides the tremendous actual cost of the construction, the company building the canal was rocked by charges of highlevel corruption.

The United States emerged from the Spanish-American War a Caribbean as well as a Pacific power. This changed status brought about a remarkable resurgence of interest in an isthmian canal. Although the United States had built a railroad across the isthmus, such a water passage now seemed imperatively necessary if the American people were to take full advantage of their new trade opportunities in the