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

406. National Security Action Memorandum No. 164¹

Washington, June 15, 1962.

TO

• The Secretary of State
• The Secretary of Defense
• The Secretary of the Army

1. As a result of President Chiari’s visit we are now committed to a continuing discussion of the problems arising out of our relations with the Republic of Panama from the Canal and the Canal Zone and a search for ways of dealing with them constructively. These discussions should, over time, produce an appropriate flow of concrete results in order to contain Panamanian pressures for immediate and radical treaty revision. This will require some extra attention by the responsible Departments.

2. As our representatives for the discussions with Panama, I have decided to appoint the Ambassador to Panama, Joseph Farland, and the Governor of the Canal Zone, Major General Robert Fleming.

3. I request the Secretary of State to take the leadership in organizing a small review group from the appropriate agencies to follow up the discussions between the two governments. This group should also be charged with the responsibility of examining what can be done on all the specific questions which the Panamanians have raised in their recent visit. In examining these questions, I think it important to distinguish what can be done by executive authority alone, what can be done by ordinary legislation, and what requires revision of the treaty. In considering specific problems, I think it is desirable to explore methods of dealing with them which could by-pass the traditional concern with the formalisms of sovereignty and concentrate on meeting legitimate Panamanian complaints while maintaining the practical arrangements necessary for the operation of the Canal and for our military activities in the Zone.

Some of the particular points on which the Panamanians have pressed us most are the flying of Panamanian flags on ships going through the Canal, the use of Panamanian stamps in the Canal Zone postage system, change in the jurisdiction of American courts over Panamanian citizens, and the issuance by us of exequaturs to permit Consuls accredited to Panama to function in the Zone. With the exception of the court question, these are largely symbolic matters. In addition, of course, we must continue to examine the more practical problems of U.S. commercial activity in the Zone, labor questions involving equality of treatment for Panamanians, unneeded lands, and direct Panamanian benefits from the Canal.

John Kennedy

1. Source: Department of State, NSAM Files: Lot 72 D 316, NSAM 164. Confidential.