Foreign Relations of the United States, 1952–1954, The American Republics, Volume IV

611.1913/2–2754:Telegram

The Ambassador in Panama (Chapin)¹ to the Department of State

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Panama City, February 27, 1954—2 p.m.

223. Foreign Minister Guizado told me last night, that Remon telegraphed President Eisenhower yesterday, asking that he instruct Mr. Dulles to intervene personally in Panama–United States negotiations.² I expressed some surprise at this end-run. Guizado explained Remon wished to leave no stone unturned to solve impasse and that this procedure implied no lack of confidence in Embassy.

Guizado went on to say that Panamanian Government regarded United States offer of 1 million a year for 10 years, as completely unacceptable and even insulting.³ Panama of course, could not accept a penny of such a hand out, particularly in view Remon’s oft repeated declaration that Panama wanted justice, not alms.

During our two-hour conversation, Guizado, of course, ran gamut of Panama’s well known complaints, emphasizing demand that Panama be given percentage (20 percent was figure mentioned) of canal company’s “gross profits”.

In conclusion, Guizado stated categorically that unless Washington talks took quick turn for better, Remon had decided to withdraw Panamanian negotiators with fanfare.

While statements, such as those made by Guizado last night, contain some elements of bargaining and bluff, I am forced to conclusion that Remon and Guizado are serious in their threat to break-off, dramatically, negotiations unless Panama obtains something considerably more substantial. It cannot be over emphasized that these substantial gains to which Panama aspires are not only material, but psychological in character. Remon is so deeply committed politically to Panamanian public that I fear that failure in Washington would be only first step towards what might develop into a violent nationalism, i.e., anti-Americanism by his administration or its successor, if he forced to resign.

Strongly urge immediate re-examination our position regarding payments supplementary to annuity with emphasis on possibility of percentage “share” of gross tolls without guaranteed minimum.

Department will no doubt bear in mind desirability forestalling break during Caracas Conference.

Chapin

1. Selden Chapin replaced Mr. Wiley as U.S. Ambassador to Panama on Jan. 22, 1954.
2. President Remón telegraphed that he was availing himself of President Eisenhower’s suggestion, made during Remón’s visit to the United States in September 1953, that he bring to Eisenhower’s personal attention any difficulties arising in connection with the negotiations. In view of the U.S. negotiating team’s rejection of several Panamanian proposals, he specifically requested that Eisenhower permit Secretary Dulles to grant an interview to Panamanian representatives while in Caracas, so that they might be able to explain in person the Panamanian Government position. (611.1913/2–2754).
3. The U.S. Delegation to the U.S.-Panamanian talks made this offer on Feb. 23, 1954, in lieu of an increase in the annuity (Department telegram 167 to Panama City, dated Feb. 23, 1954, 819.00 TA/2–2354).