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

PM–38. Memorandum from the Assistant Secretary of State for Inter- American Affairs (Rubottom) to the Secretary of State¹

Washington, April 5, 1960

SUBJECT

• Press Release on Program for Improvement of Relations with Panama

Secretary of the Army Brucker has presented to the Department for concurrence a press release (Tab A)² outlining a nine-point program for improvement of relations with Panama (the original release had ten points but relocation of the Panama Railroad terminal, presently in Panama City, has been held up at the request of the Panamanian Government as a result of opposition from Harmodio Arias, who interposed objection to any arrangement which might assist the railroad when a Foreign Office Note was presented to the Foreign Relations Council for approval (Tab B).³

Secretary Brucker is scheduled to meet early this week with his personnel to ascertain whether all plans for implementation of the program have been completed. Assistant Secretary of the Army Roderick informed Mr. Stewart on April 4 that he still has not heard from the Department of Defense as to its capacity to award the ten per cent increase to non-United States rate employees of the military establishments in the Zone and the Canal Zone Government. Mr. Roderick expressed the view, concurred in by ARA, that the Panama Canal Company wage increase, already authorized by the Board of Directors, should not be granted unilaterally. He thought it would be preferable to hold up the press announcement, if necessary, until Defense and the Canal Zone Government could secure funds to enable them to grant the increase. ARA concurs, believing a much greater impact would be achieved by an all-inclusive wage increase for non-United States rate workers. Mr. Roderick said he was expecting momentarily to hear from Defense whether it had arranged for the necessary funds.

When all arrangements have been made to implement the nine points the press release will be sent to the President for his approval. It will be suggested that the announcement be made by the White House.

Recommendations.

1. That you approve the press release.

2. That you concur with the Department of the Army view that the announcement be withheld until all employing agencies in the Zone arrange to grant the ten per cent wage increases simultaneously, assuming this will be possible in the near future.⁴

1. Source: Department of State, ARA/OAP Files, Lot 63 D 127, “Panama April 1960.” Official Use Only. Drafted by Stewart on April 4. The source text is an uninitialled carbon copy.
2. Not printed.
3. Not attached to the source text. Tab B, which is not printed, was Airgram G-197 from Panama City, April 1; 919.712/4–160.
4. On April 5, Secretary of State Herter approved the press release, and concurred with the view of the Department of the Army that the President withhold the announcement of this program until all employing agencies in the Canal Zone arranged to grant the 10% wage increase simultaneously.