Memorandum of Conversation, by the Secretary of State55

Participants: Secretary Marshall
Panamanian Foreign Minister Dr. Ricardo J. Alfaro
Mario de Diego
Murray M. Wise

At his request Dr. Alfaro called on me again this morning to discuss matters relating to the negotiation of a new defense sites agreement. The conversation lasted about thirty minutes.

Dr. Alfaro began by saying that during the interview of September 24 I had mentioned the possibility of talking to him again on this subject once I had seen the defense sites documents. At that point I interrupted the Minister and said that I had now been advised fully of the status and details of the negotiation and understood that he was not pleased with the phraseology, nor the proposed term of occupancy for Rio Hato.

Dr. Alfaro said that there were certain matters of phraseology that had not yet been satisfactorily ironed out, but he gave no indication of wanting to discuss details of phraseology with me. He said that he was primarily concerned with the term of occupancy for Rio Hato, and stated that he thought we were asking for Rio Hato for too long a period and that we must appreciate the opposition in Panama to [Page 920] long-term grants to the U.S. Dr. Alfaro said that Articles II and X of the 1936 treaty were ample protection for the defense needs of the U.S. in Panama and that the Panamanian Government would, therefore, find it difficult to justify ceding Rio Hato on a long-term basis. I told Dr. Alfaro that I thought that I had a good understanding now of the Panamanian problem with respect to long-term leases and that I had hoped that I could persuade the people intimately connected with these negotiations that Rio Hato should be requested on a 15-year basis. I added, however, that political leaders in Washington and those in a position to advise on appropriations felt that a longer term was needed for Rio Hato. I said that it was the consensus among our people that we should either obtain Rio Hato for 20 years or proceed with a decision which was fast forming, to withdraw entirely from Panama. I said that in my opinion this would be very regrettable, and that such a decision would be tragic. I said that I had been most hopeful that these negotiations would be worked out in a manner satisfactory to both Governments. I said, however, that if we could not negotiate an agreement which would give us Rio Hato on a basis by which we could prepare and equip it for the use of new planes now under construction, we would (if we obtained Rio Hato on a shorter term) be forced to use smaller planes considered today as inadequate for the proper defense of the Canal. Accordingly, the decision which apparently is being reached with respect to withdrawing from Panama is based on the theory that it would be better to run the risk of being able to defend the Canal from within the Canal Zone itself than to have an unsatisfactory agreement. I repeated that I realized well the embarrassment which might be caused Panama by the negotiation of a long-term agreement for Rio Hato. I stated that I had been encouraged by recent reports from Panama with respect to the negotiations on phraseology, and I told Dr. Alfaro in this connection that I was sure he could understand that any agreement must necessarily provide a very clear basis for our use of sites in Panama during the interim period which would come between the conclusion of the negotiation of the new agreement and the date it actually would come into effect (here I was obviously referring to the Minister’s objection to our language for Article I).

Dr. Alfaro said that he could not understand, if listening posts, radar stations, etc. were so essential to protection as had been explained by General Crittenberger, why we would ask for Rio Hato for a period longer (20 years) than we sought for the listening posts (5 years). He thought this was an inconsistency and that if Rio Hato were to be of any value to us, it would have to be always supported by the listening posts. Therefore, he thought we should ask for Rio Hato on the same basis as we asked for the other sites.

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I told Dr. Alfaro that I could not see his point. I said that a radar station could be set up on short notice, while the extension and equipping of Rio Hato was a much different proposition. I said that upon very short notice we could at the slightest indication of need for listening posts go out and set them up. I referred to my explanation to Dr. Alfaro on September 24 that we could not be too certain at any moment, in view of the situation in the world today, as to just what threats we might have to face, and that since time is such a necessary factor in providing adequate defense, we wanted to take every precaution now and not allow ourselves to get into a position of un-preparedness such as existed prior to the last war. I added that it would be unfortunate to come out with a statement to the effect that we were on the verge of military action, but that I could not consider any procedure of disarmament such as had been followed in 1921. I said with great firmness and conviction that the casualties we had suffered during the past war were tremendous and that we had paid a terrific price for victory, and while I was determined to avoid another international conflict, I had no intention of disarming as we had after the last war. I told Dr. Alfaro that this was a practical element in our considerations and that with respect to the defense of the Panama Canal there was a need for adequate preparation. I said that it would be deplorable to have to withdraw from Panama and that I was really surprised that the military authorities were even considering it, but that apparently the decision was fast being reached that there would be less risk in withdrawing from [to?] the Canal Zone than there would be in agreeing to the use of Rio Hato on a basis which would force us into a defense setup inadequate for our needs.

At this point Dr. Alfaro said that if Rio Hato were not obtained on a long-term basis we could always fall back on the 1936 treaty, which provided for consultation on defense needs in cases of “an international conflagration” or “a threat of aggression”. I questioned Dr. Alfaro’s reference to “aggression” and endeavored to have him see what a broad interpretation might be given to that word and how it would be difficult today to determine when there was or was not a threat of “aggression”.

Dr. Alfaro had no answer except to say that President Truman had just publicly stated that “peace is near” and that he wondered how I could reconcile my desire for such defense measures in Panama as I was discussing, with the President’s statement. I told Dr. Alfaro that I had not been aware of the President’s statement and that I was sure that whatever the President said could in no way be interpreted as a willingness to let down our guard. I told Dr. Alfaro that I thought his point was not well taken and that he could certainly find a better [Page 922] argument than President Truman’s statement as support for the Panamanian position as regards Rio Hato.

Dr. Alfaro said that there was another point he would like to mention. He said that while he had always felt that the defense sites negotiations were pursuant to treaty commitments, there was a strong feeling that Panama was not receiving economic benefits from the U.S. equal to Panama’s moral sacrifice in making sites available to the U.S. He said that it would be a very easy matter for the U.S. to build roads in Panama and to pay for certain other public works which for the Republic of Panama would be most costly, and asked if in connection with the negotiation of the defense sites agreement the U.S. would not be willing to announce a policy of economic cooperation with Panama with respect to certain needed public works. Dr. Alfaro referred to the economic assistance we were extending to Greece. I said I didn’t think the Panamanian situation was in any way comparable to the case of Greece. I added that I had not given the question of economic benefits to Panama any consideration in connection with the present negotiations.

Mr. Wise stated that, of course, the fact should not be overlooked that Panama’s so-called “moral sacrifices” made by the granting of defense bases was certainly in great part compensated for by rental payments. Wise added that it had consistently been the position of the U.S. Government that its request for defense sites was pursuant to treaty commitments and, accordingly, the defense sites matter should not be related to negotiations on pending economic matters. Wise said that it was felt most important that neither Panama nor the U.S. in these negotiations give any cause for criticism to the effect that defense sites were being obtained through processes of economic bargaining. Wise remarked, however, that at one time the Department had shown a disposition, once negotiations on the defense sites agreement had been concluded, to enter into the discussion of economic matters. He said that in fact the Department had previously been willing even to withhold the announcement of the conclusion of a defense sites agreement if Panama so desired, until pending economic problems had been discussed or at least until such time as a public announcement could be made that the U.S. would agree to negotiate immediately various pending economic problems. Wise said he could not state that this was still the position of the Department without further consultation. This matter was not pursued further.

I told Dr. Alfaro that I was sorry that I would have to leave for other business but that if he wished, I would be pleased to receive him again.

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Following the conversation with the Secretary, Dr. Alfaro continued the discussion with Wise on the question of Rio Hato. He said that he could not see how Panama could agree to accept from the U.S. a special arrangement for rentals to cover Rio Hato and San José Island, when other private land owners in Panama would receive $50.00. He said this was a most important item and that while no protest had ever been received over the 1942 arrangement for the U.S. to pay a lump sum of $10,000 yearly for the use of Rio Hato, he was sure that if Panama accepted less for Rio Hato than was allowed private owners in other parts of the Republic of Panama there would definitely be a protest this time. He recalled that a claim had already been received from the Hurtematte family because the Army had used all of San José Island rather than the site originally agreed to. Dr. Alfaro said that the Army had occupied the whole island continuously, on the basis that the use of the major part of the island was for maneuvers. He said he had never seen the Army contract for the use of Rio Hato, since it was made behind the Government’s back, and that he would like to know its terms. He said that until he knew them he could find no basis for accepting less than $50.00 per hectare for Rio Hato. Wise told him that his considerations with respect to the above would be made known to the State Department.

Mario de Diego referred to the some 750 hectares which would comprise the land needed for all bases other than Rio Hato. He said that he thought since the total area was so small the U.S. should pay $50.00 per hectare per year for all 13 bases, even though some of them might be on public land. He said he had been discussing this matter with Mr. Hall in Panama.

In conclusion Dr. Alfaro told Wise that personally he believed that Panama should not and could not enter into an agreement which would cede Rio Hato to the U.S. for 20 years. He said he could not and would not recommend this at all. He said he would communicate a summary of his interview with the Secretary immediately to President Jimenez, whom he said would have to make the final decision with respect to our request.

  1. The Secretary was in New York in connection with the General Assembly of the United Nations.