I thank you, Mr. Chairman and members of the committee, for the opportunity to be here. I would be pleased to answer any questions you may have.

[Congressman Rudd's prepared statement follows:]

PREPARED STATEMENT OF HON. ELDON RUDD, FOURTH DISTRICT, ARIZONA, U.S. HOUSE OF REPRESENTATIVES

Mr. Chairman, Members of the Committee, I greatly appreciate this opportunity to appear today during this final session of hearings on the proposed new Panama Canal treaties.

Let me note by way of background that I am very familiar with the countries and people of Latin America, having spent several years on diplomatic assignment in many countries throughout Latin America.

My analysis and views of the proposed treaties are based upon my understanding of the history and aspirations of Latin American peoples, as well as considerable discussion about the treaties with academic and legal scholars, business and government leaders, and people in Arizona and other parts of our country and the world.

Mr. Chairman, I believe that Senate action on these treaties may well be the most important foreign policy decision confronting the United States in 1978.

While the full text of the two treaties and their accompanying implementing agreements are available from a number of sources, regrettably most Americans will not read the full texts. Their opinions will be shaped and their judgments formed by what the opponents and proponents say about the treaties.

The President of the United States has signed the treaties. The White House has for many months been embarked on a full-scale, heavily financed propaganda effort to persuade the public and Members of Congress to ratify the President's questionable decision.

We are being told by the President and his emissaries that the treaties should be ratified for a number of reasons-among them that:

1. The U.S. presence in Panama is illegitimate.

2. Control of the Canal is no longer vital to our national defense.

3. The commercial importance of the Canal to the U.S. and to world trade has diminished.

4. The Canal cannot be defended against enemy attack.

5. Failure to ratify the treaties will provoke the Panamanians to guerrilla warfare and create a second Vietnam.

6. The Latin and South American countries support the new treaties, and will be offended if they are not ratified.

7. Ratification will guarantee uninterrupted operation of the Canal.

8. Ratification will not impair or limit our present ability to defend the Canal. 9. Because it is in the self interests of Panama to keep the Canal open and operating, we should not be concerned over any aspects of the new treaties. Mr. Chairman, if historical fact and current wisdom supports all these contentions or even most of them-then indeed the people and the Congress should look favorably upon ratification of the treaties.

On the other hand, however, if historical fact and wisdom strongly contradict these claims in behalf of the treaties, then Congress and the people should refuse ratification. Our task is to determine the truth.

I would like to look at each one of these claims to see whether they stand up or fall under factual scrutiny.

Question 1. Is the U.S. presence in Panama illegitimate? Does equity require the United States to revise the present treaty and make restitution to the Republic of Panama for past wrongdoing?

Answer. Vasco Nunez de Balboa crossed the Isthmus of Panama to discover the Pacific Ocean in 1513. The strategic importance of this narrow piece of ground was immediately recognized. It became the base for Spanish colonization and conquest of the New World.

Discontent in the Spanish colonies matured more slowly than it did in the English of North America. But there were numerous revolts. In 1821, the residents of the Isthmus of Panama signed a formal agreement declaring independence from Spain, and unification with Colombia.

It was a bad choice. Colombia suffered civil war and revolution. Between 1850 and 1902, the residents of Panama made 53 major efforts to achieve independence.

During this period, the United States, in support of Colombian sovereignty, landed troops on the Isthmus of Panama six times.

The discovery of gold in California heightened American interests in a proposed canal across the isthmus. In 1850, the Panamanian Railway was built by a consortium of U.S. companies and financiers. Anxious to protect the integrity of this commercial artery, the U.S. supported Colombian authority, while at the same time recognizing the legitimate claims of the Panamanians.

Between 1856 and 1870, the United States tried to negotiate a treaty with Colombia for the construction of a canal across the isthmus. Colombia rejected the American proposals and made an agreement with a French company for construction of a canal. The French failed.

In 1902, Congress passed the Spooner Act, providing President Theodore Roosevelt with authority and $40 million to purchase the rights to an isthmian canal that had been obtained by France from Colombia.

After passage of that Act, several months of arduous negotiations between U.S. Secretary of State John Hay and Colombian Charge d'Affaires Tomas Herran resulted in a treaty, which the U.S. Senate duly ratified on March 17, 1903.

The Hay-Herran Treaty would have given the United States the right to build and operate a canal through a 10-kilometer-wide strip of land across the isthmus, for an initial payment of $10 million and an annuity of $250,000.

But after the treaty had been signed by the two ministers, and ratified by the U.S. Senate, Colombia saw an opportunity to increase its U.S. payment to $50 million. The French company's rights to construct the canal were due to expire in a few months. And so the Colombian Senate refused to ratify the Hay-Herran Treaty in an attempt to also obtain the $40 million authorized by the Spooner Act for the purchase of those canal construction rights.

Colombia's gamble, motivated in part by greed, that rejection of the HayHerran Treaty would result in a more lucrative deal within several months did not work. The disappointed Panamanians revolted against Colombia, the United States recognized Panama's independence and negotiated a treaty with the new nation.

This treaty, signed and ratified by both countries on November 18, 1903, has been the operating document ever since.

The treaty says, and I quote

The Republic of Panama grants the United States in perpetuity the use, occupation and control of the Canal Zone. (Emphasis added.) Article III of the treaty states that

The Republic of Panama grants to the United States all the rights and power and authority within the zone mentioned and described in Article II, which the United States would possess and exercise if it were the sovereign, to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority. (Emphasis added.)

Did the United States take advantage of the new, fledgling Panamanian government?

We recognized the integrity of the new government and thereby protected the new republic from its old master, Colombia, or any other aggressor.

We paid the government $10 million for a strip of land about 10 miles wide and 50 miles long. We paid every individual landowner or squatter on this parcel of land a total of $150 million-and by this payment acquired title in fee simple-total ownership of all land within the Canal Zone. These deed instruments were all recorded and are a part of the official US. Court record.

In addition, we paid the defunct French company $40 million for whatever rights they had to the ditch. We also paid the government of Colombia $25 million for whatever claims they still might have pressed, in return for which Colombia ratified the Thomson-Urrutia Treaty officially recognizing the legitimacy of Panama's independence and U.S. sovereignty over the Canal Zone.

On top of all that, the United States spent $366 million to construct the Panama Canal.

Is our presence in Panama legitimate? Indeed it is. We did not foment a revolution. We recognized a new government.

Under the terms of the 1903 treaty, Panama granted the Canal Zone to the United States. They did not rent it to us or lease it to us. The term "grant" is used 14 times in that treaty.

What we got for our money was the right to build the Canal, to own and occupy a strip of land about 10 miles wide and 50 miles long.

The land at that time was pest-ridden, mosquito-infested, and uninhabitable— and there was no guarantee that we could succeed where the French had failed. We agreed to build the Canal at Panama instead of Nicaragua. We cleaned up Panama, and made a total investment of about $2 billion.

As a result, the people of Panama today enjoy the highest standard of living in Central America, and the fourth highest in all of the Americas.

Question 2. Is control of the Panama Canal vital to our national defense? Answer. Indeed it is. In fact, Lieutenant General Welborn Dolvin, one of the President's spokesmen who appeared in Phoenix on December 15th urging ratification of the new treaties, declared that the Joint Chiefs of Staff and the military in general consider the Canal to be of strategic military importance.

Four former Chiefs of Naval Operations-Admirals Thomas Moorer, Arleigh Burke, Robert Carney, and George Anderson-are all on record with the statement that

The loss of the Canal, which would be a serious set-back in war, would contribute to encirclement of the United States by hostile naval forces and threaten our ability to survive.

General V. H. Kulac, United States Marine Corps retired, has said

The Panama Canal is an essential link between the naval forces of the United States, both in the Atlantic and the Pacific. It is only because of the waterway that we are able to risk having what amounts to a bare-bones, oneocean Navy.

The U.S. Commander-in-Chief Pacific Fleet recently stated that in the event of hostilities, the Panama Canal would be absolutely essential for the defense of American commitments.

He stated that if he were granted carte blanche use of every boxcar on every east-west railway line in the United States, without the use of the Canal he could not say with any degree of certainty that he could successfully carry out a defensive war.

Proponents of ratification have attempted to emphasize the fact that 13 of our aircraft carriers are too large to transit the Canal. This is true. But of the 176 combat surface ships, 41 nuclear-powered ballistic-missile submarines, and 75 attack submarines currently on active duty, these aircraft carriers are the only vessels which cannot transit the Canal.

I believe it is true that the overwhelming majority of high-ranking professional military men and women in the United States strongly believe that U.S. control of the Panama Canal is vital to our national defense.

More than 350 prominent generals and admirals have so stated by declaring their opposition to the proposed new treaties, in response to a survey by the Reserve Officers Association.

They include Admiral John S. McCain, former Commander-in-Chief of U.S. Pacific Forces; General Lyman Lemnitzer, former Supreme Allied Commander, NATO; General Charles L. Bolte, former Army Vice Chief of Staff; General Lewis W. Walt, former Commandant of the United States Marine Corps; Major General Ernest (Mike) Massad, former Deputy Assistant Secretary of Defense; and Brigadier General John S. Eisenhower, son of the late former President Dwight D. Eisenhower.

Question 3. Has the commercial importance of the Canal to the U.S. and to world trade diminished?

Answer. Indeed it has not. In fiscal year 1975 there were 13,786 transits-an average of 40 vessels a day. Thirteen major trade routes funnel through the Caribbean Sea, Gulf of Mexico, Panama Canal region. Ninety-seven percent of the world's trade vessels use the Panama Canal, and 70 percent of all commerce using the Canal is bound to or from a U.S. port.

Question 4. Can the Canal be defended against enemy attack?

Answer. Lieutenant General Dennis P. McAuliffe, Commander-in-Chief of the U.S. Southern Command headquartered in the Canal Zone, has testified that his troops are adequate to defend the Canal from any threat. He elaborated upon this statement when I visited with him personally in Panama early last year. Because the Zone itself stretches five miles on either side of the actual ditch, guerrilla encroachments into the Canal Zone could be easily detected and stopped. Our troops are established at defensive strong points. This was the purpose in the plans of our forefathers.

The Canal is not a delicate, complicated installation. It is an engineering marvel in its simplicity. The locks are simple mechanisms, controls are manual. There are

alternate power sources available. The maintenance crews on station could rapidly replace any damaged gate or lock.

An atomic bomb could destroy the Canal, but experts have testified that saboteurs would have great difficulty disabling any of the operating machinery. The so-called "suitcase bomb" theory is hardly imaginable, and I only view it as a scare tactic by those whose other arguments in favor of U.S. abandonment of the Canal are equally weak.

Question 5. Will failure to ratify the treaties provoke the Panamanians to guerrilla warfare and create a second Vietnam?

Answer. That is highly unlikely, and this argument is typical of the "scare talk" that is being used to intimidate the American public which opposes U.S. abandonment of the Canal into accepting the proposed new treaties.

There are about 1,700,000 citizens of Panama. Many of these are violently opposed to the Torrijos military dictatorship. Panama's 8,000-man National Guard is essential to the maintenance of civil order to perform customs and immigration duties. Only about 1,600 are trained as a military readiness force. Student revolutionaries in Panama have caused riots in the past, and have done damage, but they are not a military force. Should they seriously attack the Canal installation, our troops would be established at defensive strong points, easily able to counter any threat to the Canal.

Vietnam was a war of mobility and position. Such is not the case in Panama. The substantial advantage would be with the U.S. defenders.

Question 6. Do all Latin and South American countries support the new treaties? Will they be offended if the treaties are not ratified?

Answer. It is highly unlikely that many of them support the treaties. It is even more unlikely that any of them would be offended if the Congress refused to ratify them.

In fact, a number of Latin American governments are most apprehensive about the proposed new treaties. They do not believe that the Torrijos government can maintain a stable position in the Canal Zone. They are suspicious of the close ties between Torrijos and Castro Cuba, and recent agreements with the Soviet Union that have established a stronger Soviet political and economic presence in Panama.

It is an act of faith for Latin American spokesmen to attack the Gringos, to shout "Yankee go home," but uninterrupted operation of the Canal and reasonable tolls are vital to the economies of all South America.

The American presence guarantees not only the availability of transit. It also insures relative tranquility in the Caribbean-Gulf of Mexico sea space. Addressing this question, the highly respected military writer Hanson W. Baldwin has stated

Even more compelling than the military and economic importance of the Canal are the political and psychological considerations. Since the failure at the Bay of Pigs, the U.S. foreign policy has suffered a series of severe defeats. We have been in retreat in many places around the world. An accepted part of the Latin mystique is to condemn the damned Yankees, but weakness, conciliation and appeasement do not earn love and respect.

I have spent a career in Latin America. Every Latin American country and citizen wants a strong United States, both militarily and economically, to lead and protect this hemisphere.

Question 7. Will ratification of the proposed new treaties guarantee uninterrupted operation of the Canal?

Question 8. Will ratification not impair or limit our present ability to defend the Canal?

Answer. It is at this moment our uncontested, unilateral right to defend and operate the Canal. We do not need a new treaty to do that. This claim that we need a new treaty rests upon the implicit threat that Dictator Torrijos or Panamanian guerrillas will interrupt the operation of the Canal if we do not surrender the Canal to Panama.

But defense and control of the Canal without sovereignty is doublespeak. Without sovereignty, we would have no rights in the Canal Zone, except any specifically granted by these new treaties. The Torrijos regime or a successor government could repudiate any U.S. role to guarantee uninterrupted operation and use of the Canal, and to defend it, and then any attempts that we might make along these lines would be as an invader of foreign territory.

Let me call your attention to the opening language of the proposed new Panama Canal Treaty. After two paragraphs of recital, it says

Acknowledging the Republic of Panama's sovereignty over its territory. This clause repudiates 75 years of legal understanding, and all the court decisions during that period. It abrogates all prior pacts and agreements-all U.S. rights and territories are immediately ceded to Panama. It amounts to a confession of wrongful taking on the part of American governments from the time of Theodore Roosevelt.

This is the whole treaty. All the rest is window-dressing.

It is this stark and forbiding reality of ceding U.S. sovereignty over the Canal Zone to Panama that explains the ambiguous language of any other key treaty provisions, which have been the subject of so much sharp questioning and

concern.

First, once U.S. sovereignty is abandoned, the United States would no longer retain a "permanent" right to use military force to defend the Canal in an emergency. American military defense of the Canal could only come at the invitation and sufferance of the Panamanian government.

Second, while the treaty gives lip-service to "expeditious transit" for U.S. military vessels in time of emergency, they would not have any priority over other ships unless such priority was specifically granted by Panama any time it was needed.

Under terms of the current treaty, there is no question that the United States has and retains rights both to permanently defend the Canal and for priority passage for our vessels.

But despite Administration claims to the contrary, the new proposed treaty language on these points is subject to Panama's interpretation and whim, with no chance of redress for the United States short of military force if Panama refuses to allow U.S. defense or priority use of the Canal once the new treaties are ratified and U.S. sovereignty is given to Panama.

On the subject of the Canal's neutrality and defense, Article IV of the proposed neutrality treaty simply states that

The United States of America and the Republic of Panama agree to maintain the regime of neutrality established in this Treaty, which shall be maintained in order that the Canal shall remain permanently neutral, notwithstanding the termination of any other treaties entered into by the two Contracting Parties.

Article V states

After the termination of the Panama Canal Treaty, only the Republic of Panama shall operate the Canal and maintain military forces, defense sites and military installations within its national territory.

On the subject of priority passage of U.S. military vessels through the Canal, Article VI of the proposed neutrality treaty states only that—

U.S. vessels of war and auxiliary vessels will be entitled to transit the
Canal expeditiously.

It is the position of the Administration and proponents of the new treaties that this language will allow the United States to intervene to protect the neutrality of the Canal, if it is ever subject to threatened obstruction, attack, or closure by a hostile force. But Panamanian officials have already sharply disagreed with this interpretation-and did so even before the proposed new treaties were signed by President Carter and Dictator Torrijos.

Panamanian chief negotiator Romulo Escobar Bethancourt has flatly repudiated the insistence of Secretary of State Cyrus Vance and U.S. negotiator Sol Linowitz that we would have the right unilaterally to intervene militarily to ensure that the Canal remains open and is not closed off to any country, if these new treaties are ratified.

Escobar stated to the press on August 22nd last year, and I quote—

The neutrality pact does not provide that the United States will say when neutrality is violated.

Escobar has likewise repudiated Administration claims concerning interpretation of the proposed neutrality treaty's provision for so-called "expeditious passage" of U.S. military vessels. Escobar stated that "expeditious passage" would not necessarily mean "privileged passage" or "priority passage." Escobar stated

As a matter of fact, the concept of privileged passage was rejected. Emphasizing Panama's position that U.S. military ships would not be allowed to go to the head of the line to go through the Canal first, under any circumstances, Escobar also stated—

We cannot go that far.