162. Memorandum From the Officer in Charge of Central American and Panama Affairs (Sowash) to the Acting Assistant Secretary of State for Inter-American Affairs (Rubottom)1
SUBJECT
- Nicaraguan Canal Survey
From the immediate viewpoint of its intended purpose vis-à-vis Panama and from the long range viewpoint of possible serious interest in actual construction of the Nicaraguan Canal, the proposal to proceed with an immediate survey of the proposed route across Nicaragua is both timely and desirable. Panama’s obvious design to reap advantages from the present Suez controversy appears to be momentarily stymied by an apparent uncertainty in what direction to proceed at this time. She has clearly indicated her solidarity with the Egyptian position in various ways, most recently by inviting the Government of Egypt to send a special mission to the Panamanian inauguration on October 1. In his inaugural address President de la Guardia [Page 314] stated that the treaties with the United States do not adequately meet Panama’s “national aspirations” and that he was confident that the problems in Panama’s relations with the United States will ultimately be resolved in favor of Panama’s interests. There is obviously a continuing need for some gesture to impress upon Panama the possibility of our proceeding with a canal in Nicaragua which, insofar as Panama is concerned, would be in competition with the Panama Canal. A quiet survey by a small team of the Nicaraguan route, news of which would inevitably leak from Nicaragua, would seem an effective way of bringing Panama to some realization of the possible consequences of her present conduct. The same thought also has occurred to a number of Congressmen and Mr. Bonner’s2 Committee on Merchant Marine and Fisheries reportedly is ready to announce a new interest on the part of Congress in a Nicaraguan canal. Several Panamanian press articles have taken the position that talk about a Nicaraguan canal is mere bluff on our part and an actual survey might give them some second thoughts.
The assassination of President Somoza3 makes the present a somewhat less propitious time in which to approach the Nicaraguan Government on this subject than that which existed a fortnight ago. Presumably President Luis Somoza would welcome our initiative in this matter as much as his father. In many quarters in Nicaragua the proposed survey would be most welcome as a harbinger of considerable future benefits to Nicaragua. In ultra-nationalistic and leftist quarters, it will be a tocsin of alarm for those who profess to see in the canal United States encroachment and domination. In short, it will be a pretty hot chestnut to hand the new Nicaraguan administration. For this reason I would suggest, if the Defense Department concurs in the survey proposal, that Ambassador Whelan be instructed to sound out President Luis Somoza in advance of our actual request for permission in order to establish what the probable climate receptivity would be. A public turndown by Nicaragua on whatever grounds would be extremely counter-productive.
At your meeting with Mr. Gray on October 3 I suggest that you continue to support a proposal for a survey of the Nicaraguan route by a small team of two or three engineers. So far as its effect upon Panama is concerned, the results should be greater if we go about this business very quietly and without publicity and allow Panama to learn of it first from its own intelligence sources in Nicaragua. Then, in reply to inquiries on their part we should simply confirm the presence of the survey team without further comment leaving Panama to draw its own conclusions. Ambassador Harrington has [Page 315] suggested that Governor Potter of the Canal Zone, who participated in the survey made in 1929 and 1930 of the Nicaraguan route and who was in 1931 and 1932 the first chief of the Nicaraguan Hydrographic Office, be a member of the new survey party. His participation would not go unnoticed by the Panamanians.
I understand that there is interest in the highest quarters in this Government in the possibility of actually constructing a Nicaraguan canal. This would be an extremely weighty matter to be considered by the several United States agencies involved. It should not be confused with the present proposal.