Memorandum by the Assistant Chief of the Division of Central America and Panama Affairs (Wise)46

The most recent despatch (no. 2882 of November 20)47 from Panama drafted jointly by the Ambassador and Mr. Blocker emphasizes strongly that it would appear definitely impossible to negotiate a new defense sites agreement until some agreement has previously been reached for at least a technical return of the bases we now occupy. The Embassy believes that if we could indicate that the bases would be returned by some definite date we could begin immediately the negotiation of a new accord. President Jiménez appears very disturbed and embarrassed over our failure to agree to a symbolic return and feels that our delay is not consistent with the high principles the United States has always followed in dealing with weaker, but friendly Governments. Continued pressure on the president caused him last week to authorize Dr. Alfaro to present the Panamanian position before the United Nations.48 The Panamanian press has played up to the fullest extent Dr. Alfaro’s statements in New York.

The present conduct of Panamanian authorities with regard to this question undoubtedly is fomented by these factors:

Desire of Jimenez administration to maintain its political prestige before the Opposition and the public.
Pride before neighboring Latin American countries in the fact that the Isthmus of Panama is a laboratory in which the Good Neighbor policy is tested.
Fact that Panamanians consider their territory of “international” value because of the Panama Canal and Panama’s position as a so-called “crossroads” of the world.
Fear that the recent Republican victory in the United States will mean a change in policy toward Latin America.

In view of the foregoing, Panamanians feel called upon to “bristle up” and represent what they feel are the best interests of countries south of the border. If Panama stands on its decision not to discuss or negotiate a new defense sites agreement until a satisfactory arrangement has been reached as regards bases now held we are faced with only two alternatives: [Page 1134]

“Sit tight” and eventually (one year after the signing of the definitive treaty of peace) return the sites with no new agreement. In the meantime relations with Panama would become very strained, the effect of which would be felt in various other sectors of Latin America. This would mean that strong charges of imperialism would be directed at the United States under Republican leadership.
Give the Panamanian administration some face-saving device and obtain a new agreement.

It has been suggested that perhaps the Army adequately could provide for the defense of the Canal with no bases in Panama. If this could be done it undoubtedly would cause the Panamanians to “sit up and take notice” and perhaps even ask for the reestablishment of bases in the national territory (both because of embarrassment and for economic reasons). It would not seem, however, that the Army could get along without using Panamanian territory for even though sites for gun emplacements and air warning stations in Panama might be dispensed with there is always the need for practice and maneuvering areas and, of course, Rio Hato is a very important and, in effect, permanent base.

I understand that with the exception of Rio Hato the bases we now occupy are being held primarily on a “care-taker status”. Could we arrange with the Panamanians

to fly both flags over the remaining sites?
to ask them to station a liaison officer on each site or to name one liaison officer for all sites (avoiding completely the use of any reference to joint control)?
to agree that this status would continue indefinitely during which time a new agreement is to be negotiated?

In conclusion, I am inclined to feel now that with the position taken by the Panamanian administration at home and before the United Nations it will not negotiate a new defense sites agreement, no matter how palatable its terms may be, until we have given the administration some way to save face with the Panamanian public, with the other American Republics, and with the United Nations on the matter of our continued occupation of sites obtained under the 1942 Agreement. No matter how badly we may hate to do this it might be to our best interests to do so.

If the question of an interpretation of the 1942 Agreement is submitted to arbitration very likely we would win the case in point; however, our victory would in no way facilitate the negotiation of a new agreement or continued friendly relations with Panama.

I think the new agreement should be drawn up and taken to Panama personally by someone in the Department. If it is definitely seen that Panama will not negotiate that person should then proceed (naturally in complete conjunction with the Ambassador) to work out with the Panamanians face saving device as regards the remaining sites.

  1. Addressed to the Acting Chief of the Division of Central America and Panama Affairs (Newbegin) and the Director of the Office of American Republic Affairs (Briggs).
  2. Not printed.
  3. For Dr. Alfaro’s presentation of the Panamanian position before the United Nations, November 21, 1946, see United Nations: Official Records of the General Assembly, First Session, Second Part, First Committee, 1946, pp. 132–133.