The Secretary of State to the Ambassador in Panama (Hines)
555. Urdesp. 2617 of Oct 12.36 We are favorably impressed neither by tone of Pan memo of Oct 8, by Pan note accompanying your desp 2635 Oct 1537 nor by Alfaro’s threat publicly to accuse U.S. of bad faith unless we accept his “interpretation” termination clause 42 agreement. If he insists on pushing matters along that line we may ultimately have no choice but to declare we stand on what 42 agreement clearly and incontrovertibly says, and occupy until 1 year after signature last definitive peace treaty remaining sites now occupied. We are however desirous of getting on with new agreement rather than engaging acrimonious debate. We are accordingly prepared consider possibility suggested urtel 673 Oct 2137 of issuing joint statement which would set stage for successful negotiations provided question of interpretation is not aired therein and further provided no time limit for such negotiations is included.[Page 1126]
Foregoing is for confidential information yourself and Blocker.
Following statement would be acceptable to us:
“Govts of Panama and US on Sept 12, 1946 reiterated in joint statement recognition of traditional friendship uniting them, and declared their determination to fulfill their joint responsibilities in all matters pertaining to Panama Canal, defense of which plays vital role in security of both countries and of hemisphere.
In this spirit two Govts have now consulted on most effective means protecting Canal in the future. Discussions of technical military nature have been held between His Excellency President of Panama and his advisers, and Commanding General of Caribbean Defense Command. The two Govts are in agreement that revised agreement for defense, based on 1936 General Treaty, should be concluded.
Since termination hostilities last year US has evacuated approximately three quarters defense sites occupied under 1942 agreement. In light of their mutual interest in broad aspects of security and their conviction that such security can best be achieved by closest possible continued collaboration, the two Govts have also agreed that further use by US of remaining sites is desirable, pending conclusion new agreement. They have reached this accord without reference to their respective interpretations of 1942 agreement.”
Pls discuss proposed joint statement immediately with appropriate Pan officials and advise Dept reaction.