This treaty gives dictator Omar Torrijos control over the canal: He can close at any time, and under the treaty we cannot negotiate with any other country to build a canal anywhere else until the year 2000-without his permission. Thus, the United States will be dependent on dictator Torrijos or whatever or whoever replaces him.

TREATY COST TO UNITED STATES

The cost of this treaty should also be of great concern. Section 4 of article XIII provides that from the date of the inauguration of the new agreement. Panama will henceforth receive 30 cents for every ton of cargo passing through the canal. But beyond this, we find that this amount "will be adjusted to reflect changes in the U.S. wholesale price index for total manufactured goods" every 2 years. Thus, the 30 cents. per ton figure only remains in effect for 5 years and thereafter every 2 years it will rise by the amount of change in the American wholesale price index. This agreement will be reflected in large toll increases.

If these tolls had been in effect in 1976 on the 117 million tons of cargo that passed through the canal, the Panamanian dictatorship would have extracted a total of $35 million. This amount could easily be projected to $46 million by 1980. A 60,000-ton American oil tanker passing from Alaska to the American Gulf Coast would thus pay Panama $18,000. By 1985, the expected cargo of 184 million tons would give Panama $55.5 million.

The proposed treaty in effect gives Panama an OPEC (oil producing exporting country) style transportated cartel for the next 22 years. Beyond the termination date even more exorbitant charges can be expected. Some Panamanians have already spoken of raising tolls by 400 percent. Even former Ambassador Linowitz has acknowledged that the treaty will entail an immediate rise in tolls of 25 to 30 percent-the largest increase in the history of the canal.

Can we expect Panama, even if its outlook were not Marxist, to smoothly operate the canal? There are 202 men qualified to pilot ships through the canal. Only two of these are Panamanians. Only ships captains can qualify for this position and they must have 20 years active experience to qualify. Panama does not produce ships captains and it only recently opened its first navigational school, yet Panamanians must replace those Americans who resign rather than work for the dictatorship.

TORRIJOS POLITICAL IDEOLOGY

A lot has been said about Omar Torrijos. He is unquestionably a dictator and a fervent admirer of Fidel Castro. However, our Department of State says that if you do not conclude a treaty with him, the leaders who may replace him are even worse. Mr. Chairman, I submit that neither Torrijos or those "worse" should have control of our shipping lifeline.

Cuban Communists wield enormous influence in Panama. Torrijos at one point hailed Castro as "an example and a light." The Communists have consistently demanded that the United States give up the canal. Then Assistant Secretary of Defense Califano, referring to the 1964 riots said that "known and identifiable Communists, members of

the Communist l'arty of Panama and people who belong to the vanguard of National Action, which is *** the Castro Communist Party in Panama," participated in these riots in which 23 Panamanians and 4 United States soldiers were killed. Reports of Cuban cadres in Panama, training selected persons in guerrilla warfare and sabotage, are too frequent to be ignored.

There is also the question of Torrijos himself. Brig. Gen. Omar Torrijos Herrera has ruled Panama since 1968 when he led Panama's National Guard in an armed uprising which overthrew the elected government. After taking power, Torrijos dissolved all political parties and exiled 20 members of the Communist Party, including Ruben Dario Sousa and the rest of the party's top leadership. The Communist Party of Panama is officially called Partido del Pueblo and is directed by Moscow. After exiling the top leadership, Torrijos made an agreement with the remaining Communist Party functionaries that as long as they supported his policies, they could continue to function. The agreement was made with Moscow's approval, and in 1973, the exiled leaders were readmitted to Panama.

Communist Secretary-General Dario Sousa wrote in the official international Communist journal, World Marxist Review, for March 1973, that Panama is, "another weak link in the chain of imperialist oppression, one of the fronts in the great struggle for liberation." Dario Sousa expressed support for the activities of the Torrijos govenment in pressing for the takeover of the Panama Canal.

Torrijos maintains a personal dictatorship and has suppressed the free press. He has appointed members of his family to positions of power, including his three brothers and eight sisters. One brother Moises Torrijos, also known as "Monchi," has a currently pending indictment in the United States for trafficking in narcotics. Nevertheless, Omar Torrijos appointed "Monchi" as the Panamanian Ambassador to Spain.

While Torrijos himself is not an ideological Communist, despite press stories to that effect, he is extremely pro-Communist and relies upon his close associate, Romulo Escobar Bethancourt, to serve as his liaison with both domestic Communists and foreign Communist governments.

Torrijos is a heavy drinker who becomes uncontrollable an incoherent while drunk. He is hardly a stable type of person and should never control a vital world seaway like the Panama Canal.

Mr. Chairman, recent history has shown the results of allowing irresponsible demogogs to control vital international waterways.

We should not forget the history of the Suez Canal following its nationalization. The Suez Canal has been closed twice since Egypt took it over, once for 8 years. Contemplate the increased costs to the American consumer if this should take place in Panama.

LINOWITZ CONFLICT-OF-INTEREST CHARGE

Who besides the Communists would benefit by our giving up the canal? Only the banks who have loaned Torrijos money to the point where 40 percent of the Panamanian national budget is absorbed by debt service. I submit that there was a serious conflict of interest for

Mr. Sol Linowitz who served as conegotiator while retaining connections with the bank that had made large loans to Torrijos. What was the role of these New York banks in these negotiations?

What have they been promised? Are the American taxpayers going to be asked to pay increased prices for their goods because we are giving Torrijos carte blanche to raise tolls in order to pay off his debts? The Senate has been disinclined to investigate these questions. I think it should, investigate these areas lest these questions forever cloud the Treaty.

ALLEGED THREAT OF VIOLENCE ARGUMENT

Lastly, I want to discuss the alleged threat of violence used as an argument for surrender of the canal by administration spokesmen. It is clear that there will be violence whether or not the treaty is approved.

Chief Panamanian negotiator Escobar incited violence against the United States during an August 12, 1977, address to the Federation of Panamanian Students, an organization with a long history of extreme anti-American violence. Escobar said:

There are still theories that we can get much, much more, through confrontation. I believe this is true. * **We are not asking for confrontation, but neither will we give permission to anybody for a confrontation. Whoever wants to start a confrontation can do so himself.

In the past, when we set bombs against our oligarchy, when we challenged the regimes established in our country, we never asked anyone for permission. You have never asked anyone for permission.

When one wants confrontation, one puts his knapsack on his back, his bomb at the waist and goes to stage the confrontation. This is not written in any book. If one triumphs, one wins, and if one does not triumph, he dies.

After Escobar's speech, the radical students were harangued by their Secretary General Robert Gomez. He said that:

While the treaties resolve part of the problem . . . much remains to be done to totally eliminate the last symbol of the overwhelming presence of U.S. imperialism. The banners of the FEP will not be lowered in the struggle, because this struggle will be continuous and prolonged until the last invading soldier leaves.

Contrary to what many think, the new agreement will not, and cannot, signal the end of the process or of the struggle for national liberation ... hail the unity of the patriotic forces and support for the liberating process. The struggle against imperialism and its internal allies will be continuous and prolonged. Liberation or death! The FEP is on the move! No one and nothing can stop it! Romulo Escobar Bethancourt is the closest associate of dictator Torrijos. He was appointed by Torrijos as chief negotiator of the treaties now before this committee of the Senate. Escobar is the main foreign policy adviser to dictator Torrijos and is his personal emissary to Communist Cuba. Escobar says he was a close personal friend of Ernesto "Che" Guevara, the Communist revolutionary who helped Castro take power and who later organized Marxist terrorist groups throughout Latin America and in Africa.

Escobar was a leader of the Communist Party unit at the University of Panama and an organizer for the party. In 1949, he violated Communist Party discipline by accepting a scholarship to leave the country and attend school in Brazil. Despite his expulsion he remained a Marxist-Leninist and in recent years has served as Torrijos liaison

with both the Panamanian Communists and with foreign Communist governments.

If the United States cannot defend the canal against Communist guerrilla attacks and sabotage, how can we expect to defend it in wartime? The position of the United States is that it will never submit to terrorist demands. Even when the lives of American displomats are at stake, the United States does not pay ransom. Why then should this country submit to the extortionist threats of terrorism from such tinhorn bandits as Torrijos and Escobar. To yield to their extortion demands for control of our canal will only encourage other terrorists or tyrants throughout the world to view the United States as an easy target.

It is the duty of the President of the United States to protect the lives and property of Americans, terrorist threats nowithstanding. If the President were to neglect to exercise this duty he would be derelict in his duty as Commander in Chief.

I urge this committee to reject these treaties, which are against the interest of the people of the United States and would only benefit our Communist enemy and those bankers that put profit above patriotism. This concludes my formal statement.

Senator SARBANES. Congressman McDonald, I want to thank you for being patient through a long afternoon to await your turn as a witness and the opportunity to present your statement. The committee appreciates having the benefit of your views on this very important matter. I have no questions. The committee will now stand in recess until 9:30 on Monday morning when it will resume further consideration of the treaties.

Mr. McDONALD. Thank you, Mr. Chairman.

[Whereupon, at 4:45 p.m. the committee adjourned subject to the call of the Chair.]