Our first witness is Congressman Eldon Rudd. Congressman, we have a copy of your statement and that will be printed in full in the record. We will be very glad to receive your presentation. Please proceed as you see fit. We welcome you to the committee, and I hope we will have a better audience for you before you finish-let me say not a better audience, but a bigger audience. [Representative Rudd's biography follows:] BIOGRAPHY OF HON. ELDON RUDD, MEMBER OF CONGRESS, FOURTH DISTRICT, ARIZONA Eldon Rudd, Republican, of Scottsdale, Ariz., was elected to the 95th Congress on November 2, 1976. An expert on Latin American affairs, he spent some 10 years on diplomatic assignment in Mexico, Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, and Argentina, and also was assigned in Puerto Rico, during his 20-year career as a special agent for the Federal Bureau of Investigation from 1950 to 1970. Congressman Rudd was a member and on the board of directors of the Arizona-Mexico Commission, 1972-1976, the Scottsdale Sister City Commission (Scottsdale, Ariz., and Alamos, Mexico), and is currently a member of the U.S. delegation of the Mexico-United States Interparliamentary Group. STATEMENT OF HON. ELDON RUDD, A U.S. REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARIZONA Mr. RUDD. Mr. Chairman and members of the committee, I genuinely appreciate this opportunity to appear before this august committee to express my deep concerns over the proposed new Panama Canal Treaties. My prepared statement goes into considerable detail about the vital strategic and economic importance of the Canal Zone to the United States and the entire free world. It presents facts regarding misrepresentations, and I request, as you have suggested, that my statement in toto be included in the record, along with a copy of the Torrijos regime's official campaign literature, which I have also submitted. I hope that the literature will be inserted at the end of my official statement and that both will be reproduced as a part of the official hearing record. I will summarize that statement here. This subject may well be the most important policy decision confronting our Nation in 1978. The President has signed the treaties. The White House has underway a full-scale propaganda attack to persuade the Congress and the public to ratify the President's decision. I oppose the ratification of the treaties. Our task here is to determine the truth, based upon fact and wisdom. Proponents' reasons for ratification are: LEGITIMACY OF U.S. PRESENCE IN PANAMA One, the U.S. presence in Panama is illegitimate. The United States must make restitution to Panama for supposed wrongdoing. The importance of this strategic crossing between the two great oceans has been generally known and acknowledged for almost 500 years. It became a base of Spanish conquest and colonization in the New World. In 1821, Panama joined in declaring independence from Spain and unified itself with Colombia. They suffered civil war and revolutions between 1850 and 1902, and Panama made numerous efforts to gain its own independence. The discovery of gold in California led to the building of the Panamanian Railway in 1850 by U.S. interests. From that time forward, the United States tried to negotiate treaties with Colombia for construction of a canal across the isthmus, but Colombia rejected this and agreed with a French company to build the canal. The French failed. In 1902, the Congress authorized purchase of the rights to the isthmian canal for $40 million from the French company. Colombia refused to conclude agreement with the United States, inspiring Panama to achieve its independence. In 1903, the treaty was signed with Panama to build the canal, and that has been the operating document ever since. The treaty says: The Republic of Panama grants the United States in perpetuity the use, occupation and control of the Zone. Article III says: The Republic of Panama grants to the United States all rights and power and authority within the Zone mentioned and described in Article II, which the United States would possess as if it were the sovereign, to the exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority. So, we recognized the integrity of a new government, and furnished it protection from Colombia. We paid that government $10 million for a 10-mile-wide zone. We paid every individual owner and squatter a total of $150 million and acquired land title totally and in fee simple forever. These instruments are duly recorded. We paid the French company $40 million for its rights; we paid the Colombian Government $25 million for whatever claims it might have pressed, and then we spent another $366 million to construct the canal. We did not foment a revolution. We recognized a new government. We didn't rent or lease the zone. It was granted to us—and the term "grant" is used 14 times in the treaty. The land was pest ridden, mosquito infested, and uninhabitable, and there was no guarantee that we would succeed where the French had failed. We agreed to build the canal at Panama instead of Nicaragua. We spent $2 billion, permitting the Panamanians to enjoy the highest standard of living in Central America and the fourth highest in all of America. Is our presence there legitimate? Indeed it is. IMPORTANCE OF CANAL TO U.S. NATIONAL DEFENSE Two, it is said that control of the canal is no longer vital to the national defense. Is it vital? Indeed it is. In fact, Lt. Gen. Welborn Dolvin, who speaks for the White House, said in Phoenix on December 15 that the Joint Chiefs and the military in general consider the canal to be of strategic importance. Four former Chiefs of Naval Operations are on record that the loss of the canal, which would be a serious setback in war, would contribute to encirclement of the United States by hostile naval forces and threaten our ability to survive. More than 350 prominent admirals and generals agree. The Canal is an essential link between naval forces of the United States both in the Atlantic and the Pacific, and it is only because of the waterway that we can risk having what amounts to a bare-bones one-ocean navy. U.S. Commander in Chief Pacific Fleet has said that in the event of hostilities, the canal would be absolutely essential for the defense of American commitments, and even if he had carte blanche use of every East-West railway boxcar in the United States, without use of the canal, he could not say with any degree of certainty that he could successfully carry out a defensive war. Proponents of the new treaties emphasize that 13 U.S. aircraft carriers are too large to transit the canal. True. But of the 176 combat surface vessels, 41 nuclear-powered ballistic missile submarines, and 75 attack submarines currently on active duty, these carriers are the only vessels that cannot transit the canal. As for supertankers, no U.S. port is capable of handling offloading from these giant oil cargo ships. COMMERCIAL IMPORTANCE OF CANAL Three, proponents content commercial importance of the canal in world trade has diminished. Not true. In fiscal 1975, there were 13,786 transits, or 40 vessels a day; 97 percent of the world's trade vessels make use of the canal; 70 percent of all transiting vessels will depart from or arrive at a U.S. port. DEFENSE OF CANAL AGAINST ENEMY ATTACK Four, proponents contend the canal cannot be defended against enemy attack. General McAuliffe, Commanding General, Southern Command, headquartered in the Canal Zone, has testified his troops are adequate to defend the canal from any threat. He elaborated on this statement to me when I visited him in Panama. The canal is not a delicate, complicated, electronically controlled installation. It isa n engineering marvel in its simplicity. Water fills and empties the locks by gravity. Controls are manual, and alternate power sources are available. The maintenance crews can rapidly replace any damaged lock. POSSIBILITY OF GUERRILLA WARFARE IF WE FAIL TO RATIFY Five, proponents contend if we fail to ratify the new treaties, Panamanians would resort to guerrilla warfare and create a second Vietnam. Of the 1.7 million Panamanians, a great many are violently opposed to the Torrijos military dictatorship. Torrijos' 8,000-man national guard is used to maintain civil order and immigrations and customs duties, and only about 1,600 are trained as a military readiness force. Student revolutionaries are not a military force and could not pose a serious threat to the canal installation because our troops are established at strong defense points. Vietnam was a war on the other side of the world of mobility and position-which is not the case in Panama. Our wise forefathers selected a 5-mile wide protective stretch of land on either side of the actual ditch, and guerrilla encroachment could be easily detected and stopped. Six, it is said we need to ratify so as not to offend Latin American countries, and thus assure their friendship. Not so. Many of these governments are apprehensive, and do not trust Torrijos to maintain stability in the canal. They are suspicious of Torrijos' ties to Castro Cuba and the Marxist world. It is an act of faith for Latin spokesmen to attack the gringos, but uninterrupted operation of the canal and reasonable tolls are vital to the economies of all Latin America. I spent a career in Latin America and know that they want a strong United States, both militarily and economically, to provide leadership in the Western Hemisphere and insure relative tranquillity. Consider the psychological well-being of the American people. Since the failure of the Bay of Pigs in Cuba, the United States has suffered a series of severe defeats. We are in retreat around the world. It is politic for the Latins to condemn the Yankees, but weakness, conciliation, and appeasement will not earn the love nor respect of our Latin neighbors or the world. GUARANTEED UNINTERRUPTED OPERATION AND DEFENSE OF CANAL Proponents say ratification will guarantee uninterrupted operation of the canal and will not impair or limit our ability to defend the canal. It is now our uncontested and unilateral right to defend the canal. We don't need a new treaty to do this. The claim is based upon Torrijos' threat that Panamanian guerrillas will stop the operation of the canal if we don't surrender to him. Defense and control without sovereignty is meaningless, since without sovereignty we have no rights in the zone. Opening language of the new proposed treaty says: "Acknowledging the Republic of Panama's sovereignty over its territory." This repudiates 75 years of legal understanding, and amounts to a confession of wrongful taking by our country. That is the whole treaty. The rest is window dressing. We now have sovereignty, as courts have held. What benefits would accrue to our country and to our people by turning this $10 billion asset over to a military dictatorship? While we were negotating with Torrijos, his government concluded new commercial relations with the Soviets. These commercial agreements are exactly the same as the Soviets' opening gambits to obtain a foothold in Cuba in the 1960's. Construction of the canal in Panama made Panama a viable nation. It is important to note the first American of authority to suggest the 21-955 O-78-27 giveaway was convicted perjurer Alger Hiss, formerly of the U.S. State Department, who in 1946 advised the United Nations that Panama was U.S. occupied territory. MORAL COMMITMENT Proponents say we are morally bound to give the canal to Panama. In truth, our moral commitment is greater to keep it, to protect it for ourselves and for world commerce. We citizens first learned of the Government's giveaway during the 1976 Presidential campaign, when candidate Carter said, "I would never give up complete or practical control of the Panama Canal Zone." But, one of his first acts as President was to send Ellsworth Bunker and Sol Linowitz to negotiate a new treaty. Linowitz was a temporary appointment, according to knowledgeable journalists. Mr. Chairman, I have about 1 minute left. May I continue? Mr. RUDD. According to knowledgeable journalists his name was not submitted to the Senate because he would not have been confirmed. Although candidate Carter, now President Carter, promised to deal openly and fairly with the people, he kept the new treaties secret, under wraps, until he signed them. He didn't seek opinions of Congress or the American people. The treaties will require Panama be paid $60 million to $80 million annually for the next 22 years. The administration has additionally promised to loan Torrijos some $345 million from the Export-Import Bank, AID, and in military credit-all guaranteed by the U.S. taxpayer. Why should the people of the United States, who now own the canal, give this asset to Torrijos and pay him to take it? A recent magazine article provides the answer under the title, "The Treaty That Wall Street Wrote," saying that New York banking institutions want the new treaties adopted in order to get loans of $2.9 billion back from Torrijos. The heavily indebted Torrijos government pays 40 percent of its annual budget to debt service alone. Torrijos rewrote the banking laws in 1970 to permit Panama to become a haven for foreign banks. There are now banks in Panama with assets of $8.6 billion doing tax-free business throughout the world. In 1972, Torrijos expropriated the power and light company in Panama owned by the U.S. Boise Cascade Co. with troops of his national guard. One month later, Torrijos nationalized the bus service by hijacking its buses. Our State Department forced the American company to sell to the Panamanians. These treaties were written in secret, do not serve the citizens of our country, and transfer a vital asset to a dictator who does not have the strength to defend the canal. The United States is the only country on Earth that can do so. If the treaties are ratified, we will have earned the disdain and lost the respect of every country in the world. We cannot gamble with our sovereign zone, so vital to the world's future. The treaties are folly and should be rejected. |
