territory or lands belonging to the United States. So, if we had a formal treaty before us and if it should be ratified, it still would be necessary for the Congress to pass an act vesting in the Republic of Panama the title to the particular tracts of land; because 'the Congress' means both bodies. The House of Representatives has a right to a vote as to whether any transfer of real estate or other property shall be made either under treaty or otherwise.

"Another reason why it is not necessary to embody the provisions of the joint resolution in a treaty or treaties is that so far as Panama is concerned, most of the results sought to be attained by means of the joint resolution have already been accomplished. We already have the sites; we already are occupying them; we already are putting installations upon them for the proper defense of the Canal Zone. The instrumentalities involved comprise not only airfields, but detector stations, searchlight stations, and all the other various instrumentalities for the proper protection of the Canal and its approaches." (88 Cong. Rec. at 9257)

Now we are dealing with much more than sewer and waterworks systems or navigation aids or airfields. We are dealing with our entire property interests on the Isthmus. I therefore urge that the only treaty the Senate ought to accept is one which includes congressional authorization for disposal of U.S. canal property as one of its provisions. Absent that provision, the treaties should be remanded to the negotiators.

I sincerely believe that we as Members of Congress are trustees for the powers vested in us by the framers of the Constitution, and as such, have the duty to preserve and protect such powers. With your permission, Mr. Chairman, I would like to submit for the record several documents, including a memorandum of law, which more fully discuss the interpretation of article IV, section 3, clause 2 of the Constitution Also, if the committee wishes to make inquiry into the boundary treaties, the Indian treaties, or other contentions with respect to the property clause, I will be happy to address those matters.

There is another constitutional question here of great importance and thạt involves the constitutional requirement that "no money shall be drawn from the treasury, except in consequence of appropriations" (Article 1, Section 9, Clause 7). In spite of these requirements, the proposed treaty requires the payment of billions of dollars to Panama without specific approval by the House of Representatives.

The provisions of the proposed treaty for payment to Panama "out of canal operating revenues" are appropriations of public funds that under the constitution require prior action by the Congress.

The proposed Panama canal treaty provides that the United States will operate the canal "by means of a United States Government Agency called "The Panama Canal Commission" which shall be constituted by and in conformity with the laws of the United States." The functions to be assigned to the new agency are now performed by the Panama Canal Company and by the Canal Zone Government. The treaty does not purport to further specify the form of the government agency to be established for the indicated purpose and the Congress might well establish the agency either as a government corporation, such as the Panama Canal Company, or as a non-corporate establishment, such as the Canal Zone government. In either case, the canal operating agency would be subject to the laws of the United States applicable to the disbursement of public funds, and payments of expenses by the new agency, including the payments to Panama, would have to be provided by appropriations. Provision for such payments out of canal operating revenues without appropriation by the Congress is clearly in contravention of Article I, Section 9, Clause 7 of the constitution.

In addition to the paramount constitutional questions, I must, as chairman of the House committee which oversees canal operations, voice my concern as to the economic compensation package provided in the Panama Canal Treaty.

The Panama Canal's commercial value rests upon the provision of efficient service at reasonable toll rates. As one financial expert said, the reliability of user charges and open disclosure of financial results are the key to the financial worth of the canal. The increase in tolls of approximately 40 percent or more that will be required immediately under the new treaty, and the inflationary indices that will cause future toll increases, will inevitably result in diversion of traffic from the canal and strike a mortal blow at the concept of operation of the canal on a self-sustaining basis. The required toll increases will simply be beyond

the capacity of the canal to handle. I find it difficult to understand how we can aggressively pursue minimizing tolls at the St. Lawrence Seaway and maximizing them at the Panama Canal.

The U.S. will be forced inevitably to directly subsidize the operation of the canal through appropriations. This result, of course, does not comport with the frequently made assertion that there will be no additional burden on the taxpayer as a result of these treaties. The discontinuance of the payment to the treasury of interest on the investment of the U.S. in the canal, which is implicit in holding a tools increase to 40 percent, will itself diminish the treasury of the United States by a half-billion dollars by the year 2000, and in effect, result in payment to Panama of interest on funds invested by the United States.

In summary, the abrupt changes in canal finances that will result from the proposed treaty will have irreversible consequences that will pose a threat to use of the canal and the economies of the U.S., our allies, and nations in Latin America.

While my testimony to this point has addressed the organic defects of the proposed treaties, it is clear that the underlying premises for these treaties are a major part of the on-going debate. In very brief fashion, I would like to address the three premises upon which approval of the treaties is suggested. All three of the premises have been so overstated or inaccurately drawn that they often bear little resemblance to reality.

It is said that the Panama Canal is of diminishing and minor importance to the United States both commercially and militarily. This is incorrect. Commercially the Canal is of major and continuing importance to the United States and militarily the Panama Canal and Canal Zone remain major military assets of our country, and in essence, constitute the southern flank of our defenses.

There are many statistics which point to an increasing rather than decreasing role for the Canal in our commerce and security. I have appended some of those statistics to this statement and ask permission that they be inserted for the record.

It has also been said that should the treaties fail to gain approval there will be violence and sabotage of the Canal. Selling these or any treaties that must endure for generations on the basis of response to a threat of violence does great injury to the conduct of our foreign relations. This issue is not a proper one for consideration.

Threats always cut two ways. If we are going to respond to threats, could that provoke disgruntled canal employees or fanatic superpatriots to proclaim they will sabotage the Panama Canal if the United States can no longer own and control it? The general United States policy to resist threats from terroritsts has worked well. We must apply it in this debate on the treaties. To support or oppose a treaty because one side or another is more prone to violence is most unwise. The Panama Canal is only one of many major facilities that are vulnerable. The U.S. Capitol was vulnerable to the Weathermen several years ago.

Finally, it is said that the Panama Canal treaties are the top issue on the Latin American agenda, and that the U.S. would face hostility from Latin America if the treaties are rejected.

This overstatement is contradicted by the experience of many of our officials in Latin America. None of us can believe that the countries on the west coast of South America or the countries in Central America will be happy about the tolls increase that is implicit in the treaty. In fact, at the gathering of the organization of American States in Grenada this year, the organization voted 19 to 0 (the United States abstained, Panama did not vote) for a resolution stating that canal tolls should reflect only the actual operating costs of the waterway. The success that Panama has had in garnering support in Latin America should be juxtaposed against the fact that Panama has consistently failed to obtain the degree of Latin American support she has sought for her position in reference to the Panama Canal. With respect to the treaties themselves, in September, despite some pressure salesmanship from the U.S., the Latin countries refused to endorse the agreements and signed only a watered-down resolution.

In conclusion, the proposed treaties should be accepted or rejected on the basis of whether they serve the best interests of the United States, not on the basis of who is supporting or opposing them, not on the basis of party, or region. A properly-conceived treaty arrangement may serve U.S. and Panamanian interests, but I do not believe the treaties should be accepted in their present form. Above all, I think we should be realistic enough to recognize that because of the

manner in which these treaties were negotiated an atmosphere has been created in which violence or stoppage of the Canal will probably occur regardless of approval or disapproval of the treaties.

Thank you.

DISPOSITION OF U.S. PROPERTY IN THE PANAMA CANAL ZONE

(By Bernard Tannenbaum, Special Counsel and Consultant, House Committee on Merchant Marine & Fisheries)

It is virtually undisputed, and even the State Department acknowledges, that the United States is the owner of territories and property in the Panama Canal Zone.

Some confusion over this issue has arisen because of the dispute surrounding the use of the word "sovereign" in the 1903 Treaty as it relates to the U.S. presence in the Panama Canal Zone. However, the question of U.S. sovereignty in the Zone is not material to the role of the House of Representatives in connection with the new Panama Canal Treaty.

Nevertheless, the U.S. Supreme Court in Wilson v. Shaw, 204 U.S. 24, 33 (1907) stated, with regard to the Canal Zone property:

"It is hypercritical to contend that the title to the United States is imperfect, and that the terriory described does not belong to this nation.

In United States v. Husband R. (Roach), 453 F. 2d 1054 (1971), cert. den. 406 U.S. 935 (1972), the Court stated that:

"The Canal Zone is an unincorporated territory of the United States." The Treaty making power is nonetheless limited in that it:

"*** cannot change the Constitution or be held valid if it be in violation of that instrument.” The Cherokee Tobacco, 11 Wall. (78 U.S. 616, 620 (1871).” In Geofroy v. Riggs, 133 U.S. 258, 267 (1890), the rule was stated as follows: "The treaty power, as expressed in the Constitution is in terms unlimited except by those restraints which are found in that instrument against the action of the government or of its departments . . . It would not be contended that it extends so far as to authorize what the Constitution forbids, or a change in the character of the government or in that of one of the States or a cession of any portion of the territory of the latter without its consent." and the Supreme Court in Reid v. Covert, 354 U.S. 1, held that civilian dependents of members of the Armed Forces overseas could not constitutionally be tried by a court-martial in times of peace for capital offenses committed abroad nothwithstanding the fact that such jurisdiction was authorized by treaty. The Court stated:

***** no agreement with a foreign nation can confer power on the Congress, or on any other branch of Government, which is free from the restraints of the Constitution.

"There is nothing in the language of Article VI, the Supremacy clause, which intimates that treaties and laws enacted pursuant to them do not have to comply with the provisions of the Constitution (p. 16) ...

"It would be manifestly contrary to the objections of those who created the Constitution, as well as those who were responsible for the Bill of Rights-let alone alien to our entire constitutional history and tradition-to construe Article VI as permitting the United States to exercise power under an international agreement without observing constitutional prohibitions.

"The prohibitions of the Constitution were designed to apply to all branches of the National Government and they cannot be nullified by the Executive or by the Executive and the Senate combined." (p. 17).

Article IV, Section 3, Clause 2 of the Constitution contains clear restraints on the Treaty making power and the Supreme Court has consistently ruled that the power under Article IV, Section, 3, Clause 2 is exclusive.

Sere v. Pitot 6 Cr. (10 U.S.) 332 (1810); American Insruance v. Canter 1 Pet. (26 U.S.) 511 (1828); United States v. Gratiot 14 Pet. (39 U.S.) 526 (1840); Cross v. Harrison 16 Har. (57 U.S.) 164 (1953); Gibson v. Chateau 13 Wall. 92. 99 (1872); Irvine v. Marshall 20 Howe 558 (1858); Emblen v. Lincoln Land Co. 184 U.S. 660 (1902); Sierra Club v. Hickel 433 F. 2d 24, 28 (9 Cir. 1970) aff'd 405 U.S. 727 (1972); United States v. Fitzgerald 40 U.S. 785 (1841); Alabama v. Teras 347 U.S. 272 (1954).

In Tugade v. Hoy, 265 F. 2d 63 (9 Cir. 1959) the Court held that any authority of the President to dispose of property (e.g. The Philippines) must be derived from an Act of Congress.

The State Department does acknowledge that the Constitution does contain some clear limitations on the Treaty power. Herbert J. Hansell, Legal Advisor, Department of State, in a statement before the House Committee on Merchant Marine and Fisheries on August 17, 1977 admitted that:

"The Constitution, of course, contains some provisions which limit the treaty power with respect to specific subjects. Principal instances are Art. 1, § 7, Cl. 1 and Art. 1. § 9, cl. 7. The former clause provides that 'all bills for raising revenue shall originate in the House of Representatives.' The second clause cited ordains that no money shall be drawn from the Treasury but in consequence of appropriations made by law.' Hence it is recognized that treaties may neither impose taxes nor directly appropriate funds." (p. 4).

In hearings before the Subcommittee on Panama Canal in 1971 (92nd Congress) Ralph E. Erickson, Deputy Assistant Attorney General, stated:

"Indeed, with respect to treaty provisions requiring the appropriation of funds, it has been acknowledged that such treaty provisions require implementing legislation." (p. 96).

As to whether Article IV, Section 3, Clause 2 "is an exclusive grant of legislative power to the Congress or whether Congress and the President and Senate, through the treaty power, share that authority", Mr. Erickson acknowledged: "The answer to the question is not simple and altogether free of doubt." The State Department, however, was in less doubt at hearings before the Committee on Foreign Affairs, House of Representatives (78th Congress 1943) where Philip W. Bonsal, Chief, Division of the American Republics, Department of State, affirmed the Department's position that resolutions dealing with certain property transfers to Panama “. . . come clearly within the constitutional powers of Congress." (p. 8).

Attorney General Harlan Stone, in an opinion rendered in 1924, to the Secretary of the Navy, stated:

"The Constitution (art. 4, sec. 3, cl. 2) gives to Congress the power to dispose of... property belonging to the United States and Mr. Justice Thompson, sitting in Circuit in U.S. v. Nicoll 27 Fed. Case 15879 (pp. 149-150) said: 'No public property can, therefore, be disposed of without the authority of law either by an express act of Congress for that purpose, or by giving the authority to some department of the Government, or subordinate agent. See also Wisconsin R. Co. v. Price County (133 U.S. 496, 507).'

"It follows then that property once acquired by the Government may not be sold, or title otherwise disposed of, except under the authority of the Congress, and in the manner provided by law, and this prohibition extends to any attempt to alienate a part of the property or in general, in any manner to limit or restrict the full and exclusive ownership of the United States therein"... (34 Op. Att. Gen. 320, 322).

Furthermore, the Comptroller General of the United States in letters addressed to John M. Murphy, Chairman, Committee on Merchant Marine and Fisheries, stated:

"We fully realize that in accordance with Art. IV, § 3, cl. 2 of the Constitution, United States' real or personal property interests in the Canal Zone can ultimately be divested only through an Act of Congress. (May 2, 1977), and

"... the United States interests in the Panama Canal Zone can ultimately be divested only through an Act of Congress." (June 14, 1977).

Judge Story in his famed "Commentaries on the Constitution", volume II, section 28, p. 200 (1873 ed.) expressed the rule, thusly:

"The power of Congress over the public territory is clearly exclusive and universal and their legislation is subject to no control but is absolutely unlimited unless so far as it is affected by stipulations and cessions or by the Ordinance of 1787 under which any part of it has been settled."

It would also appear that the Treaty execution without congressional approval runs counter to the language contained in Art. IV, sec. 3, cl. 2, namely, "Nothing in this Constitution shall be so construed as to Prejudice any Claims of the United States." Clearly, the United States has "claims" in the Panama Canal Zone and the Treaty clause should not and must not be construed to prejudice such claims.

Cases involving conveyances by Indians are frequently cited (See Hansell statement, supra) to sustain the power to dispose of property belonging to the United States by Treaty. However, these cases can be distinguished.

For example, Holden v. Joy 17 Wall. (84 U.S.) 211, 242, 243 (1872) is often cited because of the statement:

"*** it is insisted that the President and the Senate, in concluding such a treaty, could not lawfully convenant that a patent should be issued to convey lands which belonged to the United States without the consent of Congress, which cannot be admitted. On the contrary, there are many authorities where it is held that a treaty may convey to a grantee a good title to such lands without an act of Congress conferring it, and that Congress has no constitutional power to settle or interfere with rights under treaties, except in cases purely political."

The fact is, however, that the above language is dicta and the Court goes on to state:

***** but it is not necessary to decide the question in this case, as the Treaty in question has been fully carried into effect, and its provisions have been repeatedly recognized by Congress as valid."

Similarly, a careful reading of the other cases cited by Mr. Hansell (e.g. Jones v. Meehan, 175 U.S. 1 (1899) and U.S. v. 43 Gallons of Whiskey, 93 U.S. 188 (1876) will reveal that these cases do not stand for the propositions cited. In any event, Indian treaties are fundamentally different from the Panama situation because:

(a) They constitute a recognition of pre-existing Indian rights and not a disposal of property.

(b) The U.S. has never released its residual rights or sovereignty and reserved its rights of Eminent Domain. Cherokee v. Kansas 175 U.S. 641 at 654 (1890). (c) The status of the American Indian interest in land in the United States is unique and the transfer of that interest by treaty is not at all analogous to the transfer of property in the Canal Zone to a foreign sovereign nation. Johnson v. McIntosh, 8 Wheaton (21 U.S.) 543 (1823).

(d) Even if it could be maintained that the treaties between the United States and the Indian tribes involved a disposal of property, the practice of concluding such agreements by treaty has been non-existent for more than a century. Indian Appropriations Act of 1872, 16 Stat. 544, 566, c. 120, 41st Congress, 3rd Sess. March 3, 1871.

To further circumvent the power of the House of Representatives, the Executive Branch cites instances in which treaties involved land exchanges for the proposition that disposal of land can be accomplished by treaty alone. "Precedents supporting the power to dispose of property by treaty alone can be found in the boundary treaties with neighboring powers, especially in the treaties between the United States and Great Britain of 1842 and 1846 for the location of our northeast and northwest borders, and in the treaty with Spain of 1819 which effectuated the cession of Florida and determined the boundary west of the Mississippi, ceding lands claimed by the United States on the Spanish side of the boundary.

"I would like to call your attention to the treaty with Mexico of 1933 and the treaty with Mexico of 1970. Both of these treaties provided for the rectification of the river channel and the cession of lands which would have been left on the other side of the channel." (Hansell, supra)

These precedents are readily distinguishable in that the ownership of the land in the aforedescribed properties was in dispute which is not the case in the Canal Zone. The 1842 and 1846 treaties with Great Britain were boundary dispute cases involving the transfer of territory where the exact geographical limit was disputed. The Mexico Treaties resulted from a physical natural change in the course of the Rio Grande.

Crandall in his treatise, Treaties, Their Making and Enforcement (Washington, 2nd edition, 1916 at p. 226) wrote that "A treaty for the determination of a disputed line operates not as a treaty of cession, but of recognition."

It is also interesting to note that the Mexican Treaty provided for "necessary legislation" (Article I, par. D) and that in fact by the American-Mexican Boundary Treaty Act of 1972 (P.L. 92-549) the Congress affirmed and authorized the conditional transfer.

If past practice is to be looked to, as it must, what clearer precedent could there exist than the past practice concerning the disposal of Panama Canal properties?

The House of Representatives has tenaciously asserted its authority over all dispositions of property in the Canal Zone and the Senate in 1942 clearly recognized the role of the House (See 88 Cong. Rec. 9267).