Foreign Relations of the United States, 1961–1963, Volume XII, American Republics

394. Telegram From the Department of State to the Embassy in Panama¹

Washington, August 31, 1961, 10:18 p.m.

175. Deptel 157,² Embtel 198.³

1. Assure Chiari we are sympathetic to his concern for social progress as evidenced his conversation with you reported Embtel 164.⁴ We understand his belief, as also expressed in the past by Ambassador Arango, that increased annuity from Canal might provide source funds such purpose.

2. Discourage Chiari from sending letter requesting treaty negotiations. Inform him US Government is currently making study leading toward decision on sea-level canal and considers any treaty talks dependent on outcome this study; that we are attempting hasten decision. We do not believe mutual interests of either Government would be served by premature forcing of treaty issue leading to needless exacerbations.

3. In the meantime we would meet with an economic mission from GOP in late September to review social and economic investment plan and study best employment of all available resources for betterment Panamanian people. We believe such a review could result in material benefit to Panama in meeting social progress requirements in immediate future.

4. We understand Chiari plans personal vacation in Miami late September and return Panama for session Assembly opening October 1. You may indicate that should Chiari wish to visit Washington during his stay, President Kennedy would entertain him at informal luncheon. Because of heavy schedule of visits during September it will not be possible for several days to set date convenient to White House. Protocol difficulties inherent in even informal visit of this nature will be greatly diminished if President Chiari agrees to this rather than heading economic mission.

FYI only. We are exploring possibility of a unilateral increase in annuity to be deposited to fund for economic and social development along lines recommendation in your May 12 letter to the Secretary.⁵ We will advise you further when necessary consultations in Washington have been completed. In meanwhile do not allow Panamanians become aware our efforts in this regard. End FYI.

Since the approach outlined above is designed to meet President Chiari’s, rather than the Foreign Minister’s, motivations for reopening negotiations, we prefer you talk first with Chiari. However we leave to your discretion how best to discourage transmittal of the draft letter (Embtel 194)⁶ within limits of above guidance. Please report soonest.⁷

Rusk

1. Source: Department of State, Central Files, 611.19/8-2461. Confidential; Niact. Drafted by Katherine W. Bracken, Director of the Office of Central American and Panamanian Affairs; cleared in draft with U/PR, L, H, B, G; and approved by Woodward.
2. Telegram 157 to Panama City, August 23, instructed Ambassador Farland to discourage President Chiari from sending a letter to Kennedy requesting treaty negotiations, since a study was underway concerning the possibility of a sea-level canal, and the U.S. Government considered the study’s completion a prerequisite to any decision to discuss new negotiations. (Ibid., 611.19/8-2061)
3. Telegram 198 from Panama City, August 24, urged reconsideration of the decisions reflected in telegram 157, which it argued would lead to a deterioration of U.S.-Panamanian relations. (Ibid., 611.19/8-2461)
4. Telegram 164 from Panama City, August 14, reported a conversation between Ambassador Farland and President Chiari in which the latter stated that talks about the canal were necessary because of Panama’s need for additional revenues. (Ibid., 611.19/8-1461)
5. Not printed; it made a number of recommendations. (Ibid., 611.19/5-1261)
6. Dated August 23; it transmitted the text of a draft letter. (Ibid., 611.19/8-2361)
7. Farland reported in telegram 231 from Panama City, September 2, that he had conveyed the U.S. position to Chiari and Foreign Minister Solis, but that Chiari said he intended to send the letter. (Ibid., 611.1913/9-261)