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Senator SARBANES. I just want to be certain I understand this point. You say that Panamanians will lose their jobs because of the agreement?

Mr. LEGGETT. Some Panamanians will lose their jobs as in commercial activities that are down there. They may have the right to be rehired but they will be rehired perhaps at a considerably different wage program then they are currently under. We have some 3,600 Panamanians today or more who are involved in commercial activities in the Isthmus of Panama.

Senator SARBANES. Do you expect those activities to cease?

Mr. LEGGETT. All those activities summarily ceased on the execution of the exchange of ratification documents and we substitute a whole new set of vendors wherever they might come from with new rates of pay and compensation and things like that. These people might be working for any number of entities.

CHANGE IN COMMERCIAL ACTIVITIES

Senator SARBANES. Will the activities cease? As I understand it, there are some commercial activities which will no longer be carried on by the new Panamanian Canal Commission. Is that correct? Mr. LEGGETT. Yes.

Senator SARBANES. But those activities will continue under different auspices?

Mr. LEGGETT. That is right, under different rates of pay.

Senator SARBANES. The concern is not that they will lose their job but the terms of employment will change.

Mr. LEGGETT. They will lose their jobs for all intents and purposes subject to the right of the possibility of being rehired under a totally different atmosphere.

Senator SARBANES. There is still going to be a job there? There is still an activity to be done and there will be a job there, is that correct? Mr. LEGGETT. There will probably be a job there and undoubtedly they will be looking for people but the dictator might well determine that he would like to get more Castillians in there than he would black Panamanians.

Senator SARBANES. In the next paragraph is the group that you refer to there in Panama, is it your view that they are opposed to these treaties?

ABSENCE OF CIVIL LIBERTIES, HUMAN RIGHTS, TREATY OPPOSITION Mr. LEGGETT. In the next sentence I say

In addition to some of the Canal employees who may not like the treaties there is a group in Panama who consider the absence of civil liberties and human rights to be pre-eminent at this time.

You have heard from some of those. They have been before the committee. They might be referred to as part of the oligarchy but they are probably more than oligarchy. If they have any sense whatsoever they would speak out and express themselves in favor of continuity of relationship with the United States rather than subject themselves to the caprice of the local dictator.

Senator SARBANES. Given their concern about the absence of civil liberties and human rights, is it your view that this group is opposed to the ratification?

Mr. LEGGETT. That is right. I haven't described exactly the group, it would not be fair to them, but there are substantial numbers of people who are concerned that, like Mr. Fraser said, the Republic of Panama is not democratic now. I would like it to be democratic again. What we are doing by this agreement, we are ensconcing my friend, Mr. Torrijos, in power for the rest of his natural life and maybe they will have an overthrow, I don't know. It depends on how many anibassadors' cars they burn. But they have had a tremendous tension there for a change of government and I do think that we have a government there today which frankly is not friendly.

One of the reasons it is not friendly is not because of the fact that the Panamanian people are not friendly. You have a controlled press. So, I have taken for the last 6 years daily abstracts from the Panamanian press. It is murdering us. They only let their people hear and see what they want them to hear. They have built them up to this fever pitch where they are ready to explode. I think that is the kind of thing that we should not necessarily support. It is one thing to reach a confrontation and then compromise and the parties go their separate

ways.

We e are not going our separate ways. We are reaching a compromise and we are going back and living with them. It is going to be bloody to do that.

FORCES STRENGTHENED IN PANAMA IF TREATY REJECTED

Senator SARBANES. If the treaties were rejected what forces in Panama would be strengthened by that action on the part of the United States?

Mr. LEGGETT. If the treaties were rejected the charade I see would be that there probably would be a period where they refused to negotiate as they did when they refused the last treaty in 1967. Then we would inevitably negotiate again. I believe that we have negotiated the old treaties a number of times and we have changed our posture many, many times, both in fact and otherwise. If we turn down the treaties, it well could be that Torrijos might be turned out of office. It might well be that you would get a group temporarily harder to deal with than Torrijos.

Senator SARBANES. Temporarily what?

Mr. LEGGETT. For a temporary period of time you might get a group that is harder to deal with than Torrijos. I do think that when you set up a system that requires double guards at every military gate. which this agreement does, and requires inventory of all the material and requires licensing to do virtually everything and has advisory commissions which are on the spot which are going to be dominated very much by the group that is very, very much concerned, while the people we put on there will be the commanders of the Coast Guard and miscellaneous kinds of people like we currently have on the Panama Canal Board of Directors, then we do not have control. The Americans are not interested really in what goes on down there and

as a result were they to join with any kind of Panama group the Panama group would just overpower them by the press, by support, by leaking suggestions out.

As a result of all this, my frank view, and it is the view of other people who are very knowledgeable about Panama, is that if you want to give it away, bite the bullet and give it away. Give it to them lock, stock, and barrel. Don't get into this lockstep kind of masochistic effort where we have to give it to them, interrelate with them on a daily basis, emasculate our management, emasculate our work force, emasculate our training programs, and pay them very large amounts of money in addition.

We will be giving them large amounts of money which they will undoubtedly put into arms. The area is not armed today.

PRESENT CAPACITY FOR PANAMANIAN MILITARY ACTION AGAINST CANAL

The capacity for Torrijos to effect a large military action against the canal today is nonexistent. If you get one or two to try to blow up the Gatun locks-which in fact they blew up the Ambassador's car yesterday-they may blow up the Gatun locks 5 weeks after we ratify the treaty. Today we can do something about it. Five weeks after we ratify we will not be able to do a damn thing about it because they will have control, lock, stock, and barrel. That is not in our interest. We are putting ourselves in a prejudiced position because of an altruistic endeavor to be in more harmony with dictators in South America and I just don't think that is in our interest.

Senator SARBANES. Thank you very much, Mr. Leggett. We appreciate your appearance.

Mr. LEGGETT. Thank you.

Senator SARBANES. Congressman McDonald.

STATEMENT OF HON. LARRY MCDONALD, A REPRESENTATIVE FROM GEORGIA

Mr. McDONALD. Mr. Chairman, I think you have a revised statement from the one that was initially presented to the committee. With your permission I will go through that statement at this time. Senator SARBANES. You can submit it for the record and summarize it or proceed to follow it, whatever your choice.

Mr. McDONALD. Thank you, Mr. Chairman.

Mr. Chairman, I appreciate the opportunity to testify again against the giveaway of the U.S. canal in Panama. I say that because, after reading the proposed treaty that is before this body, there are no possible benefits for the United States. The United States is simply leaving and paying the Panamanian dictator Omar Torrijos to take the canal off our hands. It is a bad treaty and should be rejected forthwith.

U.S. SOVEREIGNTY RIGHTS

The presentation of this treaty to the U.S. Senate is the culmination of a long process that started in 1946 when Alger Hiss, then head of the Office of Political Affairs at the State Department, sent to the

United Nations a list of so-called U.S.-occupied territories which included the Panama Canal Zone. The concept was presented to the world by Hiss that this country is renting that land in Panama and someday, inevitably, America would have to give it back.

From the beginning, this was the wrong premise. Those payments to the Panamanians are an annuity, not a rental fee. The U.S. sovereignty has been affirmed in repeated court decisions. All the relevant court cases are cited in the hearings held by the House Committee on Merchant Marine and Fisheries Subcommittee on the Panama Canal, entitled "Panama Canal Finances," April 6, 7, and 9, 1976. The canal is not leased territory for which we pay Panama a rental fee, but a "grant in perpetuity" for which we pay an annuity. The only real right Panama has to this land and property is a reversionary interest should the United States ever cease to exercise its treaty rights in the areas designated, nothing more.

Therefore, contrary to the ponderous announcements by the Department of State, this is U.S. land and property, thus requiring under article IV, section 3, clause 2, of the U.S. Constitution that the House of Representatives concur in any transfer of land or property. In this connection, I should mention that I am a party to two lawsuits on this matter now before the U.S. Supreme Court, and it is my fervent hope that the Justices rule in favor of the U.S. Constitution for a change and permit the Representatives of the people to participate in this decision. The people of Panama live under a dictatorship. Their voices cannot be heard on this issue. The voice of the American people should be heard.

CANAL'S STRATEGIC IMPORTANCE

Now, I would like to go to the question of the canal's strategic importance. The President and the Department of State are attempting to mislead the American people on this issue. The facts are that this country now has a one-ocean Navy with two-ocean responsibilities. The Carter administration has turned its sole attention to Europe, dangerously neglecting the rest of the world.

If another war were to break out in Asia, this country would vitally need control of the canal in Panama. The United States cannot depend on the whims of a hostile leftist dictatorship when its Navy needs to move through the canal.

I would remind the committee that 94 percent of the world's merchant ships can transit the canal and so can all our warships, except the supercarriers. Let us also remember that the Canal Zone is the southern and western anchor of our position in the Caribbean, a Caribbean with Soviet nuclear submarines now prowling about. Together with Guantanamo Bay in Cuba, Roosevelt Roads in Puerto Rico, and the Florida Keys area, the United States can prevent the Caribbean from being turned into a Soviet lake. Abolish our Panamanian bases and the task becomes difficult.

Thirteen major trade routes funnel through the Caribbean Sea-Gulf of Mexico-Panama Canal region. It carries all of our commerce from the prosperous Sun Belt, and increasingly, it carries Alaskan oil to the east coast.

Even our right to expeditious use the canal in wartime has been challenged under the treaty by the chief Panamanian negotiator,

Romulo Escobar Bethancourt. He told newsmen in Panama on August 24:

The United States wanted privileged passage through the canal as a means to seek support from the Pentagon in the negotiations with Panama. This is the truth * * *. And when they saw that there was no way we would allow privileged passage, then they told us: We have to seek a formula so that the Pentagon will see that we are somehow taking them into consideration.

This is how the expeditious passage came about. Now, I do not believe that when they explain the "expeditious passage" term they are entitled to go through first.

They have to sell their merchandise. It is the same merchandise but with different wrappings because they do not think as we do. They have to sell this treaty to their country, and for this reason you see that both of us give different information on the same provision.

U.S. RIGHT TO DEFEND CANAL AFTER 2000

Administration spokesmen say that this country has a right to defend the canal after the year 2000. However, nowhere in the so-called neutrality protocol is this stated. President Carter has been misleading to the American people, because he has not mentioned that in the present state of international law, the word "neutrality" can be given almost any meaning.

Escobar knows that the treaty does not give this country the right to intervene. Escobar told the National Assembly of Panama on August 19, that the Americans

* * * proposed that Panama and the United States declare that the Canal was neutral and that the United States would guarantee that neutrality.

Panama was opposed to this concept, explaining that we did not want that with the excuse of neutrality, the United States would maintain a guarantee over the State of Panama. This was another cause of discussion that kept the negotiations detailed until the United States gave up on the idea of its having a guarantee of neutrality over the canal.

Escobar's statements clearly represent the view of the Panamanian dictatorship. This was confirmed by the State Department document released by Senator Dole yesterday.

Our right to defend the canal is nonexistent after 2000. The Senate will be derelict in its duty if it ignores this fact.

While examining provisions for the defense of the canal after the year 2000, the distinguished Senators should not overlook the fact that most aspects of the treaty come into force much sooner than the year 2000. Only 6 months after ratification, the treaty will enter into force and Panama will assume technical sovereignty. At that time, Panama then grants to the United States only certain specified rights until the year 1999. Most of the treaty provisions go into full force in 30 months.

HUMAN RIGHTS IN PANAMA

In that connection, it should be noted that after 30 months of the treaty being in effect, the Americans in the Panama Canal Zone have essentially no more rights than Panamanians, in other words none since Panama's respect for human rights is rated on a level with the Soviet Union and Cuba. In fact, Panama has the lowest rating according to Freedom House of any non-Communist nation in the Western Hemisphere.

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