Foreign Relations of the United States, 1964–1968, Volume XXXI, South and Central America; Mexico

384. Memorandum of Conversation¹

Washington, January 29, 1964.

SUBJECT

• Panamanian Complaints concerning the Canal Zone

PARTICIPANTS

• Ambassador Tejera Paris, Chairman, Inter-American Peace Committee
• Ambassador Miguel J. Moreno, Jr., of Panama
• Ambassador Ellsworth Bunker of the United States²

I suggested to Ambassador Tejera that it might be helpful if he, Ambassador Moreno and I could have an informal talk to see whether we could find any alternative formula which might bring the two sides closer together. Accordingly, we had lunch together, and in the course of our conversation I said to Ambassador Moreno that I thought it might be helpful if he could tell me the major issues with which Panama was concerned.

Ambassador Moreno replied that, in the first place, he wanted to make it clear that the nationalization, security, or demilitarization of the Canal was not an issue. Panama recognized that the security of the Canal was an obligation of the United States which it could not and should not give up.

The points, however, with which Panama was concerned were the following:

1. Perpetuity

The Ambassador said that he did not want to specify what might seem a reasonable period, but that some time limit should be written into the Treaty, and that there was a strong feeling among all Panamanians that the perpetuity clause was outdated and unnecessary today. He doubted that if a treaty were to be negotiated today anywhere, a perpetuity clause would be acceptable.

2. Re-examination of Panama’s Sovereign Rights in the Zone

Flying the flag, he said, is one way of achieving this. There has been a feeling, however, among Panamanians that whenever the question of sovereign rights is raised by Panama, the United States is prone to fall back on Article III of the 1903 Treaty.

3. Larger Benefits from Operation of the Canal

Ambassador Moreno felt that Panama should have a greater share in revenue from the Canal. Panama also felt that it suffered from unfair competition from U.S. commissaries, which sold luxury goods at very low prices.

4. The Position of Panamanian Workers

While the principle of equal pay applied, the fact was that most of the higher-paying jobs are occupied by Americans and the lower-paying ones, by Panamanians. The provision that security positions should be occupied only by Americans had been used to pre-empt positions for U.S. citizens. The number of security positions, he said, had been increased to some 3000 in order, it was felt, to eliminate Panamanians.

Ambassador Moreno went on to say that Panama was not intransigent, that President Roosevelt had agreed to negotiations in 1934, with the result that a treaty had been agreed to in 1936. President Eisenhower had also agreed to negotiate in 1953, and a treaty had been agreed to in 1955. It was difficult for him to understand, therefore, why the United States was so fearful of an agreement to negotiate. I explained to him again that the interpretation which President Chiari had put on the word had made agreement to negotiate a revision a precondition for entering negotiations. As I had explained in the meetings of the IAPC, this we could not and would not do. I did not believe that any country would be willing to enter negotiations on the basis of prior conditions.

Ambassador Moreno went on to say that because of past experience in negotiating with the United States, precise language in the communiqué to be issued by the IAPC was important. I asked whether he could suggest language and whether we could attempt to work out language which would be mutually acceptable. He then suggested the following as a substitute for paragraph 3:

“Within the thirty days following the re-establishment of said relations, the parties will designate Special Ambassadors with sufficient powers to reconsider, without limitation, the relations between the two countries, including the review (revisión) of the Treaties and other agreements regarding the Canal, with sufficient powers to enter into new pacts (pactos) which may result from said review.”

I said that I would consult my government to see whether some such wording would be acceptable, and that I would meet with him and Ambassador Tejera after a meeting which was scheduled for the White House at 3:45 p.m.³

Ambassador Tejera remarked that he felt it would be unfortunate to have the dispute go to the Council. It would result in stirring up old hatreds and playing into the hands of the communists, who would resort to the demagogic appeal of anti-imperialism. This could be dangerous for his own country as well as for other Latin American nations.

After the White House meeting, I met with Ambassador Tejera and Ambassador Moreno at 6:00 p.m., and informed them that the language proposed by Ambassador Moreno was not acceptable. Ambassador Moreno said that he would have no alternative then but to present his government’s note to the Chairman of the Council, requesting that a meeting be convened. He telephoned me later at 10:00 p.m. to say that this was then being done.⁴

1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL PAN–US. Confidential. Drafted by Bunker.
2. Bunker was confirmed by the Senate as U.S. Representative to the Council of the Organization of American States on January 23.
3. Bunker, Mann, Ball, Vance, and Dungan met with the President at 3:50 p.m., and then they were joined in the Cabinet Room by the Congressional leadership to discuss Panama. This meeting lasted until 5:15 p.m., when the Congressional leadership departed. At 5:25 p.m. the remaining group convened with the President in the Oval Office until 6 p.m. (Johnson Library, President’s Daily Diary) No other record of these meetings has been found.
4. On January 29 Panama broke off talks with the Inter-American Peace Committee and formally requested a meeting of the OAS Council in order to invoke the Rio Treaty on the grounds of United States aggression. The Panamanian request is in OAS doc, OEA/SerG./V/C–d–1189. Bunker’s statement to the OAS Council rejecting all charges of U.S. aggression against Panama, January 31, is in Department of State Bulletin, February 24, 1964, pp. 300–302. In circular telegram 1390 to all ARA posts and CINCSO for Martin, January 30, the Department of State presented the basic U.S. position in the OAS Council, pointing out that “informal soundings” among other COAS representatives indicated “considerable doubt” that the Panamanians could obtain the necessary 11 votes to invoke the Rio Treaty. (National Archives and Records Administration, RG 59, Central Files 1964–66, POL PAN–US)