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

396. Memorandum of Conversation¹

Washington, September 15, 1961, 10:05-10:20 a.m.

SUBJECT

• Call of Ricardo Chiari on the President

PARTICIPANTS

• The President
• Ambassador Arango of Panama
• Mr. Ricardo Chiari, brother of President of Panama, Roberto Chiari
• Assistant Secretary Woodward
• Mr. Richard Goodwin, Special Assistant to the President
• Mrs. Katherine W. Bracken, Director, Office of Central American and Panamanian Affairs

The President referred to Ambassador Arango’s participation in the work of the OAS Subcommittee visiting the Dominican Republic. He expressed his hope that democracy could be developed there without the country’s falling into a military dictatorship, that this was a difficult task, and that a favorable result would be an outstanding achievement.

Mr. Chiari conveyed the greetings of his brother, the President of Panama, and handed President Kennedy a letter from President Chiari.² The President read the letter and commented that he recognized that problems exist with regard to the canal, that he would like to discuss with Secretary Rusk and Mr. Woodward how best to go about the questions President Chiari’s letter raised. He questioned Mr. Chiari on the principal causes for concern to Panama arising from the Canal treaties. Mr. Chiari mentioned first the sovereignty issue, that the in perpetuity provision was deprecating to the Panamanian people. He said that Panama’s economy is in a precarious state and the country needed to exploit its resources, one of which is the canal.

The President asked the amount of the annuity. Mr. Chiari replied $750,000; the Ambassador interposed a correction, to $1,930,000, and pointed out there were two sources: one the annuity, the other the contribution from Canal Zone operations which ran from $40 to $60 million a year, usually the latter, or 1/6 the gross national product of Panama. Mr. Chiari remarked that Canal tolls should be increased since they had remained the same since 1914. Mr. Woodward suggested a survey should be made to determine what the traffic would bear and at what point it would be cheaper to ship by trans-continental railroad or around the Cape.

In closing, the President said he would consult with Secretary Rusk and Mr. Woodward and would try to have a reply by October 1 since he understood there was some pressure on President Chiari because of the opening of the Assembly. He would like his reply to be responsive. However, he did not believe we should sit down to discuss negotiations without knowing how the discussions were going to come out. He did not want discussions to end in disagreement and felt it was preferable to wait until we were satisfied that we could come to a mutually agreeable conclusion.

1. Source: Department of State, Central Files, 611.1913/9-1561. Limited Official Use. Drafted by Bracken and approved by the White House on September 27. The time of the meeting is taken from Kennedy’s Appointment Book. (Kennedy Library)
2. A translation of this letter, dated September 8, is filed with a covering memorandum of September 28 from Executive Secretary Battle to Goodwin. (Department of State, Central Files, 611.19/9-2861)