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

PM–50. Letter from the Secretary of State to the Secretary of the Army (Brucker)¹

Washington, August 12, 1960

Dear Wilber:

Following the discussion on Panama at our meeting of April 6, I wrote to you on April 8² outlining my understanding of the conclusions we reached in the hope that we could get together soon thereafter on the four points we had under review, prior to seeing the President. Unfortunately, due to my very busy schedule in the ensuing weeks, it was impossible to give attention to the matter, and Acting Secretary Dillon wrote you on May 4³ to inform you of the delay which had been encountered.

In the Interim, we have completed the study on the precedence of the Ambassador in making decisions on Canal Zone activities which have implications for our relations with the Republic of Panama. After careful consideration, we believe that the precedence of the Ambassador should relate not only to decisions affecting our relations with Panama, but also to decisions affecting our relations with other countries. I am enclosing a copy of a draft amendment⁴ of Executive Order 9746 of July 1, 1946⁵ as amended, which is in line with the above and which I should like to discuss with you at our next meeting before presenting it for the President’s consideration.

With respect to my suggestion that a representative of this Department be named to the Board of Directors of the Panama Canal Company when a vacancy occurs, I am not quite clear whether you accepted Livie Merchant as an individual or as a position. As I wrote you in my April 8 letter, I think it important that the principle be established that the Department of State will be permanently represented on the Board of Directors at the Under Secretary level. It seems to me that, until a vacancy occurs on the Board, our representative might serve as an observer, thus giving the same foreign policy guidance to the Company that will be available when he becomes a member of the Board.

On the issue of a civilian versus a military Governor of the Canal Zone, you will recall that we were not able to come to a meeting of the minds. Although Major General Carter has recently begun his four year term as Governor, has made an excellent start and has shown without a doubt that he has a profound sense of public relations, I think we should still establish the principle that the Governor be a civilian. I want to make it clear that a man of extremely high caliber would be required in order not to defeat the purpose of appointment.

With reference to the issue of the display of the Panamanian Flag in the Canal Zone, we were agreed on April 6 that no decision be taken at that time. Since that date, however, we have become increasingly concerned over the possibility of a recurrence of the events of last November on the anniversary date this fall. In conversations in June with senior officers of the Department, both the present administration in Panama and President-elect Chiari voiced the fear that disturbances would occur if a favorable decision had not been made by November 3. In our view, Congressional resistance, which still persists, has been the overriding factor in the unwillingness thus far to set a recommendation before the President. We feel, however, that the new Congress will not react as strongly as the present one has when presented with a decision which is the President’s to make, in any event. Therefore, I should like to discuss with you at our next meeting, and prior to our meeting with the President, the possibility of a joint Army-State-Defense recommendation to the President that, as of November 3, 1960, the flags of the United States and Panama be flown on a daily basis in the Canal Zone in a special location, readily visible from the Republic of Panama, in recognition of Panama’s titular sovereignty over the territory of the Canal Zone. Our idea is that the notification to the Government of Panama would be explicit in setting forth our understanding of the significance of this act, that our treaty rights in the Zone would remain unaffected by the joint flag display. We would certainly indicate that in its reply the Government of Panama should acknowledge that the proposed action would only be in recognition of Panamanian titular sovereignty over the Zone.

I hope that we can arrange to meet soon with the President on the matters outlined above and, when an appointment has been made, I will be in touch with you so we can discuss them together a day or so beforehand.

With warmest personal regards.

Most sincerely,

Christian A. Herter

1. Source: Department of State, Central Files, 611.19/8–1260. Confidential. Drafted by Sharp on July 19.
2. See Document PM–39.
3. See Document PM–40.
4. Not found.
5. For the text of Executive Order 9746, which President Truman signed on July 1, 1946, see II Federal Register 7329.