Office of the Historian

611.19/3–2453

Memorandum by the Under Secretary of State (Smith) to the President 1

confidential
[Washington,] March 24, 1953.

Subject:

  • United States Relations with Panama

It has always been politically expedient in Panama to exploit points of friction stemming from the Canal Zone, and a growing nationalism has complicated their settlement. However, the United States has viewed some Panamanian aspirations as not compatible with the efficient operation and security of the Canal. Although sweeping concessions were made to Panama in 1936 and 1942, Panama still aspires to

a)
A higher annuity (originally $250,000, raised to $430,000 in 1936).
b)
Increased limitations on or elimination of Canal Zone commissaries and PX’s, and certain commercial activities in the Canal Zone.
c)
Elimination of “racial discrimination.” in Canal Zone, and fulfillment of United States “commitments” re equal treatment of Panamanian labor.
d)
Exercise of jurisdiction in certain fields in the Canal Zone, despite grant of exclusive jurisdiction to the United States in 1903.
e)
Fulfillment of United States commitments to build bridge or tunnel at Pacific end of Canal and to move railroad station in Panama City.
f)
Preferential position in supplying Canal Zone markets.

Despite the fact that no specific demands have yet been officially transmitted to this Government, President Remon has been publicly demanding “justice, not alms” from the United States and has announced he will visit President Eisenhower soon. We have informed him that such a visit does not appear to be possible at this time and that advance preparation is indispensable. Remon is not well educated and lacks experience in international affairs, but is strongly anti-Communist and is considered pro-United States.

Our Ambassador is informing the Foreign Minister that this Government is willing to discuss mutual problems through normal diplomatic channels, but intimating that to make unspecified demands in public before communicating them to us is scarcely courteous and will prejudice their solution. He will also express our appreciation of Remon’s friendship.

W[alter] B[edell] S[mith]
  1. Initially drafted by Mr. Leddy and Willian B. Sowash of the Office of Middle American Affairs, and later revised by Under Secretary Smith.↩