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

PM–39. Memorandum of Conversation, by Edward T. Long¹

Washington, April 6, 1960

SUBJECT

• Long-Range Program for Panama

PARTICIPANTS

• State:

  • The Secretary
  • Under Secretary for Political Affairs Livingston T. Merchant
  • ARA - Assistant Secretary Rubottom
  • S/P - Assistant Secretary Smith
  • OAP - C. Allan Stewart
  • M - Mr. Long

• Defense:

  • Secretary of the Army Wilber M. Brucker
  • Assistant Secretary of the Army George H. Roderick
  • Deputy Assistant Secretary of Defense (ISA) Robert Knight
  • Colonel-George M. Seignious II - Aide

Nine Point Program

The Secretary opened the meeting by expressing his delight at the nine point program for Panama which the Department of the Army had prepared and which was to be announced by means of a White House press release. He expressed the hope that the Department of Defense would be able to find the money for pay increases for Panamanian employees of the U.S. armed services. Mr. Roderick said that there was now no problem on this issue and that he was hopeful it would be resolved by the end of the week with the press announcement coming out some time before April 15. He said the pay increases would go into effect on May 1. He also proposed a new sentence in the draft press release which would highlight the fact that this program was not an afterthought and reflective of submission to Panamanian pressure but was something which was in train before the November riots and would have been implemented before if the riots had not taken place. The Secretary agreed with this change with the addition of the thought that the delay was also caused by our own legislative procedures.²

Significance of Panama

Turning to the reason for the meeting, the Secretary pointed out that we had been looking at the Panama problem from a long-range viewpoint and that we were considering Panama in the overall mosaic of Western hemisphere problems. Malcontents in the hemisphere today were not rallying around Lenin or Stalin or Khrushchev or Mao but rather had adopted Fidel Castro as their symbol. He observed that it was our wish to avoid particularly the increase of sentiment favorable to Castro in Panama where there was much social pressure on the part of unhappy elements. With this in mind he wanted to propose several changes which he thought would contribute to a more effective U.S. operation in that country.

Panama Canal Company Board

First of all, he stated we would like to have a State Department representative at a senior level on the Panama Canal Company Board of Directors which he understood now had thirteen members. We did not want to displace any current member but thought that, until an opening occurred, the State Department representative could be an observer with a political voice. Secretary Brucker replied that he had no objection to a State Department observer but that his concept of the Company was that the Company was strictly a business operation with a Board consisting of high level businessmen. He alluded to the appointment of Commerce Under Secretary John Allen to the Board which he had approved on the understanding that Mr. Allen, an experienced businessman, would conduct himself as a businessman rather than as an official of the Department of Commerce. Secretary Brucker questioned whether it would be a good thing from the Department of State standpoint to have an official on the Board. The Secretary asserted that our concept differed completely from Secretary Brucker’s. We had no desire to interfere with the business operation of the Board but we thought it important that one voice of the thirteen be a political voice, that there should be a member of the Board alert to political implications of the Board’s actions. The Secretary stated that, if requested to name the State Department Board member, he would nominate Mr. Merchant. Secretary Brucker then stated that if this was what the Secretary wanted it would be acceptable to him. (Note: Secretary Brucker seemed even happier when the Secretary pointed out that Mr. Merchant had considerable business experience before joining the Department of State.)

Panama Canal Company Stock

The Secretary then raised the question of the stock of the Panama Canal Company, the operation of which the President has delegated to the Secretary of the Army. The Secretary thought it would be a good thing, in order to avoid the military implications of ownership, to have this stock transferred to the Secretary of the Treasury. Secretary Brucker stated he was not prepared to discuss this subject and the matter was dropped.

Governor of the Canal Zone

The Secretary said that we had given careful thought to the problem of the Governor of the Canal Zone and it was our firm opinion he should be a civilian. Secretary Brucker observed that there was nothing in the statutes which would prohibit this but stated the Governor of the Canal Zone, who was also the President of the Panama Canal Company, had traditionally been a Corps of Engineers officer. He thought this precedent was a good one, that it should be continued and that it was very proper. The Secretary said he knew that the leading candidate for nomination as the new Governor next month was an engineering officer of great stature and that he would have no quarrel with his designation. However, the problem was one of principle and he thought that, in principle, the Governor should definitely be a civilian. Secretary Brucker said that it was such an important thing to have a Corps of Engineers officer heading up the Zone and Company, that the Corps of Engineers’ tradition was a great one in Panama. He said that certainly we would not want to have a run-of-the-mill politician as Governor and that we would not want to have two civilians, the Ambassador and the Governor, involved in Panama and Canal Zone problems. It was most important to have a professional engineer giving professional advice on the Canal Zone. The Secretary responded that he did not quarrel, of course, with the efficient operation of the Canal itself but that he might argue on the issue of a military officer as Governor and involved in relations with the Government of Panama. He said that, while he took absolutely no exception to the prospective nomination from the Corps of Engineers for the new Governor, he thought we would have to reserve our positions on this issue. He said that, assuming a civilian candidate and a military candidate were of equal stature, we would prefer the civilian. It was a question of judgment.

Secretary Brucker responded that the nominee for Governor would have to be confirmed by Congress where of course the Corps of Engineers was very powerful.

The Secretary then said “we agree to disagree”, that he thought it important that we settle this matter in principle for the future.

Mr. Merchant said the problem essentially was that the U.S. exercises sovereignty over a narrow strip of land bisecting the Republic of Panama. In these modern times it was essential from the standpoint of our political relations with Panama to avoid the image of military occupation, which the concept of a military man as Governor of the Zone represented psychologically. He said that certainly the Corps of Engineers would continue in its respected technical capacity. The Secretary agreed that the problem was essentially a psychological one. Secretary Brucker replied that he just did not agree with the Department of State’s position on this and he strongly recommended reconsideration of it. He stated that, in his opinion, the Latin Americans had a tremendous respect for U.S. Army officers and that this was an important aspect.

Primacy of the Ambassador

The Secretary said another problem which he would like to address himself to was that of the difficult position inherent in the presence of three top-level American officials in the area, the Ambassador, the Governor and the General commanding the Unified Command. He said he felt it important to affirm the primacy of the U.S. Ambassador in Canal Zone matters relating to the government and the people of Panama. Secretary Brucker observed that the military had no disposition to look at things in Panama other than eye to eye with the Ambassador. The closer the relations the better, and this has been the traditional situation there. The Secretary said this must be the understanding between the two Departments and Secretary Brucker replied that “we will work with you on this”.

New Canal

The Secretary then turned to the problem of the new Canal and said it was the Department’s feeling that a governmental decision on this should be made as soon as possible. He said he understood that the Panama Canal Company had just completed a study recommending the construction of a sea level canal. Mr. Roderick interjected that the Merchant Marine and Fisheries Committee of the House was publishing a report on this subject done by a group of highly respected engineers and that the recommendation of this report would be the construction of a third set of locks to the present canal. He understood that the report recommended this because of the diplomatic problem of negotiating a different route for a possible sea level canal. He said he had heard that the Cabinet was to consider the Panama Canal Company report on April 29 and that perhaps this consideration should be undertaken beforehand, i.e., before the Merchant Marine and Fisheries report was made public.

Gorgas Hospital Project

Secretary Brucker asked how the Gorgas Hospital project was progressing. The Secretary said he understood ICA was actively and favorably studying it. He hoped that the necessary funds could be found.

Flag

The Secretary then mentioned the flag problem and observed that the Department felt, that given the present attitude of Congress, nothing formal could be done in this regard at this time. He hoped, however, that the Governor would continue, on suitable occasions, his ceremonial crossed flag project which was so successful last month. Secretary Brucker agreed.

1. Source: Department of State, Central Files, 719.00/41–660. Confidential. Special Assistant to the Under Secretary of State for Political Affairs.
2. For the text of the White House press release of April 18 announcing the nine point program for Panama, see the Department of State Bulletin, May 16, 1960, p. 798.