372. Telegram From the U.S. Southern Command to the Department of State 1

SC1118A. For Secretary Rusk from Assistant Secretary Mann.

Secretary Vance and I met for an hour and a half with President Chiari, Foreign Minister Solis, and Mr. Morgan, Head of the US Section, Foreign Office.

We first said that in our opinion the most urgent question was to reestablish peace and law. President readily agreed. Vance made point that US would maintain order in the Canal Zone.

Chiari then referred to his telephone conversation with President Johnson 2 and in forceful tones said that more conversations would serve no useful purpose unless Washington group had authority to agree immediately to a “structural revision” of outdated 1903, 1936, and 1955 treaties. Chiari said that unless we had this authority he would proceed to break diplomatic relations and leave the whole problem to his successor. He said little had come of his talk two years ago with President Kennedy and that the Panamanian people were tired of excuses and delays and particularly tired of hearing the US say “this or that treaty provision is not negotiable.”

I made it very clear that I had no authority to agree to discuss “structural revision” of the treaty, but said I would report his statement to the President and to the Secretary of State. I said that in my personal and unofficial opinion the answer would be automatically negative simply because there were certain things politically impossible in the US just as there are in Panama; that politics was the art of the possible; that there were a number of states we did not have relations with; and while we would regret having no relations with Panama, this was something we could live with even though this would create an impasse which would make it impossible for the two governments to deal with urgent problems; and finally, this would be contrary to the best interests of both governments.

While we were stuck on this point, I inquired what he meant by use of expression “structural revision.” He said he simply meant an agreement under which representatives of the two countries would meet and start with a clean slate to negotiate a completely new treaty. [Page 783]He thought that specifics of the needed revisions could best be developed during the course of those negotiations.

I then inquired whether he thought it was worth while for the US and Panama to try to reach as large an area of agreement as possible on what had actually happened in the last two days. I said that Washington regretted this as much as Panama and I pointed out that American lives had also been lost. I said I hoped we could stipulate a good many facts. Chiari replied that he thought that this was the job of the Peace Committee and so there was no reason to try to reach an understanding on what had happened because “Our people will blame you and your people will blame us.” To this I replied that there were a number of gaps in our information and I presumed a number of gaps in his, for example, was the Panamanian flag torn by American students or by Panamanian students? We have some pictures of this part of the incident that might be of interest to him. Who fired the first shot? What factors were responsible for the relatively heavy gunfire? Toward the end of this part of discussion, Chiari seemed to warm to this idea of a fact finding Panama-US group. It is not impossible that we will get to work with a Panamanian committee to determine the true facts.

I told Chiari that we had information which indicated that the Communists were involved in the disturbances. Chiari readily agreed that this was the case. I pointed out that Castro agents in Panama were as great a danger to Panama as they are to the US Government. We are both in the same boat.

I then pointed out to him that considerable progress had been made in cooperating with Panama since 1960. The Thatcher Bridge exists; the Zone honors Panamanian exequaturs; Panamanians have received wage increases; the number of security jobs for which Panamanians were not eligible has been reduced; agreement has been reached on withholding Panamanian income taxes for Panamanian employees; agreements have been reached on flying the Panamanian flag along with US flags in the Zone. Chiari agreed that this was progress but stated that the Thatcher Bridge had been agreed to in 1942 and that Governor Fleming unilaterally decided on wage increases without Washington’s instructions.

Chiari then took off on the flag issue in very strong language and said the US had not lived up to its agreement. He said that after his conversation with President Kennedy in 1961 he believed that Panama and the US had reached a reasonable agreement. In the ensuing months, however, US restrictions were noted with respect to flying the Panamanian flag at military installations, the US schools, and on ships transitting the Canal, moreover, he pointed out that the US elected to lower the US flags at certain installations rather than fly the Panamanian flag at those agreed to places. He seemed to be impressed when we replied [Page 784]that Washington was not aware until last night that this was a serious issue. I said he should understand very clearly that the US lives up to its agreements. He agreed that flag issue should be discussed, stating that it was the “hot potato” of the moment.

We agreed to discuss the flag issue tomorrow evening at a time and place to be arranged after discussions with the Foreign Minister. I suggested that we might meet with the Foreign Minister and report back to him.

Chiari said that the US ought to withdraw its military forces from the Zone border area and replace them with police and firemen. I said that this illustrated the divergencies in our information since we understand that General O’Meara’s troops fired only at individual snipers. It was police that were engaged in the heaviest fire. Chiari did not reply to this.

We both deplored the loss of life and I pointed out that American lives had been lost on the Atlantic side without any return shots being fired by US. Chiari said “All I know is that 16 Panamanians died and over 200 are wounded.”

We were met at the airport and conducted to the palace in cloak and dagger fashion and much of the conversation was conducted with background of 600 Panamanians outside chanting “Out with the gringos.” All of this could have been staged. Nevertheless, conversation which began in a cool and almost hostile atmosphere ended on warm note. In beginning Chiari’s intention may have been to probe hard for a soft spot on issue of “structural revision” of treaty.

Recommend I be authorized to inform Chiari that US will not now agree to negotiations to bring about “structural” changes in treaty; and that I be authorized to say that this does not necessarily close the door for all time for discussions on treaty revisions, since it is possible that current studies on feasibility of sea level canal may eventually lead to a change in our attitude. Entire Washington group concurs in this recommendation.

Saturday morning we expect to send separate telegram on flag issue.3

  1. Source: Johnson Library, National Security File, NSC Histories, Panama Crisis, 1964. Confidential. Repeated to OSD and JCS and passed to the White House.
  2. See Document 370.
  3. In telegram SC1125A to McNamara, January 11, Vance reported that he planned to inform the Panamanian Foreign Minister that U.S. and Panamanian flags would be flown outside public schools in the Canal Zone. (Johnson Library, National Security File, Country File, Panama, Riots, Part A, Vol. II, January–February, 1964)