Office of the Historian

398. Memorandum From Secretary of State Rusk to President Kennedy1

Washington, October 9, 1961.

SUBJECT

  • Recommendations on Improving Relations with Panama

Your memorandum of September 15, 1961 requests the establishment of a special working group to prepare recommendations on improving relations with Panama.

Such a group, under the chairmanship of Under Secretary George W. Ball, and including representatives from Defense, the Budget Bureau and the White House staff has carefully examined this problem in the last two weeks.

The group has found that an analysis of our basic interests in the Canal Zone, a determination of the concessions we might make to Panama, and the terms on which we could reasonably expect to get a long-term settlement of our problems with Panama, are matters which require far more detailed study than is possible for the group to undertake in such a short period of time.

To formulate a workable policy governing our relations with Panama and the Canal will require an intensive study by a group of experts. To achieve this, it is recommended that you designate the policy group [Page 817] under Mr. Ball as an NSC Working Group and authorize the appointment of a special study group of experts, under the chairmanship of the Department, to examine in detail problems confronting us in our relations with Panama. The Department would propose to appoint Ambassador Muccio,2 who has had extensive experience in treaty renegotiation with Panama in 1955, as Coordinator of this study group. The study group’s report would be submitted to Mr. Ball’s policy group within 90 days.

Suggested terms of reference for the proposed subgroup are enclosed.3

Pending the completion of the report of the NSC Working Group, it is recommended that we proceed on a selective basis with certain administrative actions which can improve our relations with Panama without treaty change, as outlined in the second enclosure.

A draft reply to the letter from President Chiari, requesting that we renegotiate the canal treaties, is also enclosed.

Dean Rusk4
  1. Source: Department of State, NSAM Files: Lot 72 D 316, NSAM 95. Secret. No drafting information appears on the source text, but it was approved by Goodwin on October 18.↩
  2. Ambassador to Guatemala John J. Muccio.↩
  3. Entitled “Administrative Actions to Improve Relationships.” None of the enclosures is printed.↩
  4. Printed from a copy that indicates Rusk signed the original.↩