It maintains a police force, courts, and jails to enforce United States laws, not only upon Americans, but upon Panamanian citizens as well.

And, the Panamanians point out, the treaty says the United States can do all these things forever.

Panamanian frustration over this situation has increased steadily over the years.

In January 1964, demonstrations and riots took place which cost the lives of 21 Panamanians and 3 Americans.

Diplomatic relations were broken.

As part of the settlement we reached with Panama then, President Johnson, after consultation with Presidents Truman and Eisenhower, committed the United States to negotiate a new

treaty.

In our negotiations we are attempting to lay the foundations for a new - a more modern relationship which will enlist Panamanian cooperation and better protect our interests.

Unless we succeed, I believe that Panama's consent to our presence will continue to decline — and at an ever more rapid rate. Some form of conflict in Panama would seem virtually certain and it would be the kind of conflict which would be costly for all concerned.

N

ow some have held that the mere mention by United States officials of the possibility of violence over the

Canal will help to assure that such violence occurs.

I am aware of that concern, but I believe the situation demands candor.

It would be irresponsible to fail to point out to the American people the possible, indeed the likely, consequences of inaction.

It is my firm belief that failure to conclude a reasonable treaty can only work to damage the interests we seek to protect. As we contemplate this situation we should understand that the Canal's physical characteristics make it vulnerable. The Canal is a narrow channel fifty miles long.

It operates by the gravity flow of water and depends for its efficient operation on an integrated system of locks, dams and other vital facilities.

At best, it is susceptible to interruption.

And interruptions would mean not only reduced service to

world shipping but lower revenues.

But the most enduring costs of confrontation over the Canal would not be commercial.

Our Latin American neighbors see in our handling of the Panama negotiations a test of our political intentions in the hemisphere.

Moreover, the importance of the Canal, and our contribution to it, are recognized throughout the world.

It is a measure of our standing and the respect in which we are held that people everywhere-including, I am sure, yourselves— expect the United States to be able to work out an arrangement with Panama that will guarantee the continued operation of the Canal in the service of the world community.

Were we to fail - particularly in light of the opportunity created by the negotiations - we would in a sense be betraying America's wider, long-term interests.

The plain fact of the matter is that geography, history and the economic and political imperatives of our time compel the United States and Panama to a joint venture in the Panama Canal. We must learn to comport ourselves as partners and

friends,

Preserving what is essential to each;

- Protecting and making more efficient an important international line of communication;

- And, I suggest, creating an example for the world of a small nation and a large one working peacefully and profitably together.

́n sum, we are negotiating because we see a new treaty arrangement as the most practical means of protecting our interests.

I

If we try to maintain the status quo we will face mounting hostility in both Panama and Latin America, - and possible loss of the very interest we want to preserve.

But a new arrangement based on partnership promises a greater assurance of safeguarding that interest a Canal that is open, safe, efficient, and neutral.

The real choice before us is not between the existing treaty and a new one but rather between a new treaty and what will happen if we should fail to achieve a new treaty.

Panama.

These, then, are some of the political realities we face in

MYTH AND REALITY:

THE VIEW FROM THE UNITED STATES

We must face political realities here at home as well.

We know that a treaty must receive the advice and consent of two-thirds of the Senate of the United States.

And we expect that both Houses of Congress will be asked to approve implementing legislation.

There is opposition in Congress to a new treaty; it reflects to a considerable degree the sentiments of many citizens.

Our job is to make sure that the public and Congress have the facts they need if they are going to make wise decisions about the Canal.

Unfortunately, the basis for our presence in the Zone is widely misunderstood.

Indeed, a number of myths have been built up over the years - about Panama's intentions and capabilities, about the need for perpetuity, and most important - about ownership and sovereignty.

We need to replace these myths with an accurate understanding of the facts.

F

irst, there is the matter of Panama's intentions and capabilities — and the suggestion that a new treaty will somehow lead to the Canal's closure and loss.

The fact is that Panama's interest in keeping the Canal open is far greater than ours.

Panama derives more income from the Canal than from any other single revenue-producing source.

Even so, some argue, Canal operations would suffer because Panamanians lack the technical aptitude and the inclination to manage the operation of the Canal.

The fact is that Panamanians already comprise over threefourths of the employees of the Canal enterprise.

No one who has been to Panama and seen its increasingly diversified economy can persuasively argue that the Panamanians would not be able to keep the Canal operating effectively and efficiently.

These considerations indicate that Panama's participation in the Canal can provide it with a greater incentive to help keep the Canal open and operating efficiently.

In fact, the most likely avenue to the Canal's closure and loss would be to maintain the status quo.

Second, there is the notion that the Canal cannot be adequately secured unless the United States' rights there are guaranteed in perpetuity — as stipulated in the 1903 treaty.

I can say this: to adhere to the concept of perpetuity in today's world is not only unrealistic but dangerous.

Our reliance on the exercise of rights in perpetuity has become a source of persistent tension in Panama.

And clearly, an international relationship of this nature negotiated more than seventy years ago cannot be expected to last forever without adjustment.

Indeed, a relationship of this kind which does not provide for the possibility of periodic mutual revision and adjustment is bound to jeopardize the very interest that perpetuity was designed to protect.

Third, and finally, there are two misconceptions that are often discussed together: ownership and sovereignty.

Some Americans assert that we own the Canal; that we bought and paid for it, just like Alaska or Louisiana.

next?

If we give it away, they say, won't Alaska or Louisiana be

Others assert that we have sovereignty over the Canal Zone. They say that sovereignty is essential to our needs - that loss of United States sovereignty would impair our control of the Canal and our ability to defend it.

I recognize that these thoughts have a basic appeal to a people justly proud of one of our country's great accomplishments. The construction of the Canal was an American achieve

ment where others had failed.

It was every bit as great an achievement for its era as sending Americans to the moon is for ours.

It is an historic success that will always be held to America's credit.

ereignty.

But let us look at the truth about ownership and sov

The United States does not own the Panama Canal Zone. Contrary to the belief of many Americans, the United States did not purchase the Canal Zone for $10 million in 1903.

WRONG

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Rather, the money we gave Panama then was in return for the rights which Panama granted us by the treaty.

We bought Louisiana; we bought Alaska. In Panama we⚫ bought not territory, but rights.

Sovereignty is perhaps the major issue raised by opponents of a new treaty.

Panama.

It is clear that under law we do not have sovereignty in

The Treaty of 1903 did not confer sovereignty, but speaks of rights the United States would exercise"as if it were sovereign.” From as early as 1905, United States officials have acknowledged repeatedly that Panama retains at least titular sovereignty over the Zone.

The 1936 Treaty with Panama actually refers to the Zone as "Territory of the Republic of Panama under the jurisdiction of the United States."

Thus, our presence in the Zone is based on treaty rights, not on sovereignty.

It is time to stop debating these historical and legal questions.

It is time to look to the future, and to find the best means for assuring that our country's real interests in the Canal will be protected.

What are our real interests?

- We want a Canal that is open to all the world's shipping a Canal that remains neutral and unaffected by international disputes.

We want a Canal that operates efficiently, profitably, and at rates fair to the world's shippers.

We want a Canal that is as secure as possible from sabotage or military threat.

And we want full and fair treatment for our citizens

who have so ably served in the Canal Zone.

The negotiations we are now conducting with Panama for

a new treaty will ensure that all these interests of our country are protected.

tions.

Let me now talk a bit about where we are in the negotia

During the past two years, the negotiations have proceeded step by step through three stages.