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

611.19/9–1753

The Ambassador in Panama (Wiley) to the Secretary of State

confidential
official–informal

Panama City, September 17, 1953.

Dear Mr. Secretary: Thank you very much for your letter of September 11th.¹

I was delighted to learn that we shall yield none of our basic jurisdictional rights in the Canal Zone. My policy recommendations to the Department have been from the very outset entirely opposed to encroachment of any kind on our treaty rights and privileges in the Canal Zone. Moreover, I have been against increasing the annuity. To do so on the basis of the depreciated purchasing power of the dollar would create a bad precedent in general and inevitably open the door to continuing future demands for additional increases.

I have just seen in a Departmental memorandum to Mr. Cabot of September 8, 1953,² that in a meeting in your office on September 4 you expressed concern lest the United States position on revising or renegotiating the 1903 and 1936 treaties had not been made sufficiently clear to me and the Panamanian Government. A letter of mine to Mr. Sowash of April 10 sets forth in detail the very forthright statements I made to Remón and his wife³ regarding the United States position on revising the agreements or yielding our basic treaty rights in the Canal Zone. Certainly, neither the Department nor I have ever erred on this point in Panamá and I have left nothing unsaid or undone to make matters entirely clear to President Remón, Foreign Minister Guizado and other heads of the government, as well as Dr. Harmodio Arias. Actually, when Mr. Cabot was in Panamá we succeeded, when we met with Remón and Guizado, in introducing into the official Panamanian press release given out on April 18, 1953, the phraseology limiting the negotiations to a review of the “interpretation and application of existing treaties and agreements,” thus clealy excluding revision or renegotiation of these treaties and agreements. At the same time I have not failed to keep the Department fully informed regarding the attitude of President and Mrs. Remón. Both are undoubtedly suffering from an acute Patrick Henry-Joan of Arc complex with regard to the 1903 treaty, which they have described to me as being “entirely unacceptable.” They both revile the memory of Bunau-Varilla, and Mrs. Remón in particular is convinced it was a calamity for Panamá that the Canal was not constructed in Nicaragua. All this should be taken into account. It is deep-seated and dangerous.

In the past, Remón has been invariably pro-American. He took over the government when it was in a state approaching chaos and has been eminently successful in stamping out corruption, in consolidating the domestic political situation and in giving the country a strong, democratic form of government. It is most unfortunate that he and his influential wife should now have deviated to a nationalistic tangent that may easily and seriously upset the otherwise favorable developments in the Republic.

I am convinced that it would be well to consider adopting—from both the immediate and long range point of view—a positive policy of economic collaboration with Panamá in order to develop the country’s latent natural resources, chiefly agricultural. Such a policy might offset to some degree a negative attitude on our part required by many of most of the Panamanian demands. Moreover, if promptly formulated it might constitute a gesture and prevent Remón from returning to Panamá with loss of face. Most important, it would relieve the Republic of its unwholesome economic dependence on the Canal Zone. Actually, a positive, well designed program for the economic rehabilitation of the Republic would be bread upon the waters. Wealth would be created; we would benefit!

Unfortunately, in Panamá the negotiations will have as Begleitungsmusik lots of negative nationalism. Much of it will be genuine. Some of it will be tactical—on the part of the opposition—and then, of course, the subversive element will be astutely active to exacerbate. I hope that we can talk over the problem of Panamá when I reach Washington with the Remóns.

Yours very sincerely,

John C. Wiley

1. Secretary Dulles on Sept. 11, 1953 responded to a previous letter from Ambassador Wiley in which Wiley discussed an offer of limited collaboration in the treaty talks from Dr. Harmodio Arias, adviser to the Panamanian negotiating team (611.19/8–1853).
2. Supra.
3. Summarized in telegram 528 from Panama City, dated Apr. 10, 1953, p. 1409.