Foreign Relations of the United States, 1958–1960, Volume V, Microfiche Supplement, American Republics

PM–19. Memorandum of Telephone Conversation, by the Secretary of State’s Special Assistant (Krebs)¹

Washington, September 23, 1959

MEMORANDUM OF TELEPHONE CONVERSATION WITH THE PRESIDENT

The President telephoned to say that as soon as Khrushchev leaves² he wants to set up a meeting with the Secretary on two subjects: (a) Mexico (in preparation to President Lopez Mateos visit;³ and (b) Panama.

The President said that when the problem of Panama had come up a few months ago he had told the Department of Defense he did not agree with the way they were operating in that area. Since then, the President had talked to Milton Eisenhower, who had expressed his alarm over what he believed to be a worsening of the situation. This morning, the President said, Milton Eisenhower had a two-hour meeting with Secretary of the Army Brucker, who had agreed that some action should be taken on the Panamanian situation.

The President went on to say that, after he and the Secretary have had their discussion, he would want to set up a meeting of himself, the Secretary, Secretary Brucker, Export-Import Bank President Sam Waugh, and the Chairman of the Development Loan Fund Corporation.⁴ At this further meeting the President hoped they could come up with a coordinated plan of action.

The President commented that he is concerned that we continue to rely on a strict interpretation of the Treaty of 1903.⁵ He said there have been many changes since that time and that we must bear in mind that we have a large stake in the Panama Canal and that, in protecting it, we are up against a people who are uneducated, ill-informed, and easy prey to Communist propaganda. The President mentioned particularly his understanding that Panama still owes the United States Treasury a tremendous amount and that the Panamanian Government has barely been able to keep up the interest payments.

The Secretary commented that he had understood that Panama had been doing quite well on repayments but that, in any event, he would look into the situation thoroughly and carefully and would be ready to talk with the President in greater detail at the President’s convenience.

1. Source: Department of State, Secretary’s Memoranda of Conversation, Lot 64 D 199. This conversation occurred at 6:10 p.m.
2. Nikita Khrushchev, the Premier of the Soviet Union, made a state visit to the United States from September 15 until September 27, 1959. Documentation on Khrushchev’s visit is printed in the compilation on the Soviet Union.
3. Mexican President Adolfo López Mateos made a state visit to the United States from October 9 until October 12, 1959. Documentation on López Mateos’ visit is printed in the compilation on United States relations with Mexico, Document 336.
4. Vance Brand.
5. For the text of the Panama Canal Treaty of 1903, see 33 State 2234.