to eliminate frictions in our relations. He pointed out that measures have been under study by the U.S. Government with a view to assisting Panama in attaining its objective of expanding the base of its economy. The U.S. Ambassador to Panama, Julian F. Harrington, has been instructed to make a parallel approach to President Ernesto de la Guardia, Jr., of Panama.

UNITED STATES OFFER TO DISCUSS OUTSTANDING PROBLEMS IN PANAMANIAN-UNITED STATES RELATIONS UNDER CONDITIONS FREE FROM CONTINUING THREATS OF VIOLENCE: Summary of Conversations Between the Secretary of State (Herter) and the Panamanian Ambassador at Washington (Arias Espinosa), Issued by the Department of State, November 16, 1959 1

1

The Secretary of State and the Panamanian Ambassador, Ricardo Arias Espinosa, on November 16 discussed the present situation in Panama. In the course of the conversation, held in the Secretary's office, Mr. Herter told the Panamanian diplomat that the Department is receiving disturbing reports from our Embassy there which indicate the threat of further violence such as occurred on November 3 and 4 and that he is becoming increasingly concerned for the safety of American citizens resident in the Republic of Panama. The Secretary requested Ambassador Arias to communicate this concern to his Government while reminding him that the Government of Panama continues to have the fundamental responsibility for maintaining public order in Panama. He added that representatives of the United States continued to be willing, as in the past, to seek mutually satisfactory solutions to outstanding problems but that this can be accomplished only in an atmosphere of calm.

If it would be helpful, the Secretary told Ambassador Arias, the United States would be willing to send a high-ranking official of the Department of State to Panama to discuss the issues about which there has been misunderstanding, granted, of course, that the conversations could be conducted under normal conditions.2

'Department of State press release No. 800 (text as printed in the Department of State Bulletin, Dec. 7, 1959, p. 827).

'On Nov. 18 a Department press officer read the following statement to news correspondents:

"Deputy Under Secretary of State, Mr. Livingston Merchant, will depart from Washington Friday morning [November 20] by a special mission aircraft for Panama. The Department's representative will discuss with the Government of Panama the issues involved in recent misunderstandings between the two Governments in accordance with the Secretary's proposal to the Ambassador of Panama on November 16th. He expects to leave about 8 a.m. will be accompanied by Mr. C. Allan Stewart, Director of the Office of Central American and Panamanian Affairs. They expect to arrive about 3 p. m."

He

Secretary of State for Political Affairs, that "the United States Recognizes the Titular Sovereignty Over the Canal Zone Remains in the Government of Panama," November 24, 1959*

I am leaving Panama after a short visit during which I have been received with the utmost friendliness and courtesy.

Ambassador [Julian F.] Harrington and I have had a series of extremely useful discussions with President de la Guardia, Foreign Minister Miguel Moreno, and their associates. These talks reflected the common desire to see restored to the relations between the two countries the warm and close association which has traditionally existed. The opportunity was provided for a comprehensive review of outstanding problems, and on both sides there was an expression of intent and desire to find acceptable solutions.

I was reassured by the firm expression on the part of the Panamanian Government of its intention to afford to American lives and property in Panama the protection customarily provided by one friendly state to the nationals of another.

There was discussion of certain measures which the United States Government contemplated inaugurating with the restoration of normal conditions. These measures, which had been decided upon more than a month ago, were responsive to certain complaints made in the past by the Panamanian Government and contemplate additional benefits which will redound to Panama's economic well-being.

During the course of our discussions, in response to a question by the President of Panama, I assured him that the policy of the United States Government with respect to the status of the Canal Zoneremains as it had been stated more than 50 years ago to the effect that the United States recognizes that titular sovereignty over the Canal Zone remains in the Government of Panama.2

American Foreign Policy: Current Documents, 1959, p. 390.

'Department of State press release No. 817 (text as printed in the Depart ment of State Bulletin, Dec. 14, 1959, p. 859).

"As stated in art. III of the Nov. 18, 1903, convention between the United States and Panama (Treaty Series 431; 33 Stat. 2234).

Panama to Visual Evidence of Its Titular Sovereignty Over

the Panama Canal Zone: Reply to a Question Asked at a News Conference, December 2, 1959*

This [the question of flying the flag of Panama beside that of the United States in the Canal Zone] is one of the points that's been talked about for many years, since, for 50 years, the United States has recog nized the titular sovereignty of Panama [in the Canal Zone]. There have been numbers of problems over the years that have come about because, first, of what the Panamanians felt were injustices to them in the original treaties, and, secondly, by the interpretations of treaties as revised in later years."

These last problems of the differences were under study for the last few months, and we had already agreed with the Panamanians for methods of taking another look at them and trying to see whether we couldn't meet their requirements in this matter. So, there has been a very conciliatory attitude toward governments, as far as I have known, and the one question of the flag has never been specifically placed before me, no decision has ever been made about it. But I do, in some form or other, believe we should have visual evidence that Panama does have titular sovereignty over the region.

American Foreign Policy: Current Documents, 1959, p. 390-391.

The reply printed here is taken from p. 794 of Public Papers of the Presidents of the United States: Dwight D. Eisenhower, 1959.

'As stated in art. III of the Nov. 18, 1903, convention between the United States and Panama (Treaty Series 431; 33 Stat. 2234).

'See the agreements of Mar. 2, 1936 (Treaty Series 945; 53 Stat. 1807) and Jan. 25, 1955 (TIAS 3297; 6 UST 2273).

retary of State Herter to Questions Asked at a News Conference, December 10, 1959*

With respect to the Panamanian situation," we are having conversations now with the Panamanian Government covering four main subjects, three of which were matters of complaint on the part of the Panamanian Government, two of these arising out of treaty interpretation.

The first has to do with the question of equal wages for equal work, in which the Panamanians felt that through various devices we had reserved for the American employees the majority of the higher paid jobs and had not given the Panamanians sufficient opportunity to share in those higher paid jobs. We have studied that situation over a period of time very carefully, and we are making certain adjustments that I think will be very helpful. In addition to removing some of the security provisions which assured to American citizens a great many of the jobs, we have talked of apprentice training courses there for Panamanians, which would allow Panamanians to increase their skills and qualify for many of the higher paid jobs.

The second has to do with the question of the purchases by the zonal authorities of certain products. Under the treaty it says "wherever feasible" those products should be purchased in Panama or the United States. We have, in the past, sometimes gone afield particularly on meats and have purchased for the Canal Zone outside the United States and Panama. I think that that situation is being remedied so that there will be no question; if anything, we are leaning over backward on the interpretation of the treaty there, so that we can remove that cause of complaint.

The third has to do with the selling of luxury goods in the PX stores. And there we are reexamining the whole list of things that PX's sell so as to avoid as far as possible direct competition with Panamanian merchants.

The fourth subject is one that we raised ourselves. We are projecting a very large housing development for Panamanian employees who work in the zone, but the housing development would be outside or on the outskirts of the city of Panamá itself. We haven't, as yet, concluded the financing arrangements for this, but it ought to be a very large, low-cost, individual-house development, whereby Panamanians over a period of years could become the owners of their own homes in this new development.

Those discussions, I think, are going reasonably satisfactorily. The flag issue, of course, is still an issue. There we are considering with considerable sympathy the question of whether or how to raise the flag in the Canal Zone. It is still a matter of discussion and study here in the Department and in the Department of the Army, where, of course, the authority for the Canal Zone rests.

*American Foreign Policy: Current Documents, 1959, pp. 391-393.

B See ante, docs. 104-109.

'Reference to par. 8 of the first portion of the Memorandum of Understandings Reached between the Governments of the United States and Panama, Jan. 2 1955, appended to the Treaty of Mutual Understanding and Cooperation of that date (TIAS 3297; 6 UST 2273).

ble Evidence of Its Titular Sovereignty in the Panama Canal Zone: Reply to a Question Asked at a News Conference, February 3, 1960*

I think that not all of the difficulties that have come about [in Panamanian-United States relations] have been entirely because of their [the Panamanians'] demands. It is perfectly true there was a treaty nade many, many years ago more than 50, now. And the conditions of that treaty were changed from time to time as the whole condition of affairs in the world so demanded,3 just exactly like our Constitution has been amended 22 times.

I think that at times, because we did buy the territory—and everyone knows that the primary source of revenues for the Panamanian nation is the wealth that is brought there through the canal operations-that we suddenly decide that we must be a little bit too stern in our treatment of them. They are people that are sensitive. I don't know exactly, now, what you can do, because we have people that have suddenly gotten themselves into a state that believes that even if you ever had, for example, a flag flown as a courtesy to the nation in which titular sovereignty still resides, that this would be a very, very great abdication of American rights and responsibility. I think that this is getting a little bit beyond the rule of reason, because the treaty says that the United States may act, and in all respects can act, as if it were completely sovereign. Such language means that there is a titu lar sovereignty in the other nation, in my opinion.

American Foreign Policy: Current Documents, 1960, pp. 273–274.

The reply printed here is taken from p. 150 of Public Papers of the Presidents of the United States: Dwight D. Eisenhower, 1960-61.

The convention signed Nov. 18, 1903, by representatives of the United States and Panama (Treaty Series 431; 33 Stat. 2234).

'See the agreements of Mar. 2, 1936 (Treaty Series 945; 53 Stat. 1807) and Jan, 25, 1955 (TIAS 3297; 6 UST 2273).

White House (Augusta, Ga.) press release dated Apr. 19, 1960 (text as printed in the Department of State Bulletin, May 16, 1960, pp. 798–799).