394. Memorandum From the Joint Chiefs of Staff to Secretary of Defense McNamara 1



  • US Policy Toward Panama (U)
In consequence of the present difficulties in US-Panamanian relations, the Joint Chiefs of Staff have undertaken an appraisal of US military requirements in Panama for consideration in the development of a national position toward that nation. The salient features of this appraisal, amplified in the Appendix and Annexes hereto,2 are summarized below.
Access to a canal remains vital to the economic, political, and military interests of the United States. If denied access to such a canal, the United States could defend its interests in limited or general war, [Page 837]but its ability to do so would be impaired. Without the availability of such a canal, transportation costs would be increased with adverse economic effects on the United States and certain Latin American countries, whose political stability, in consequence, would be adversely affected.
As long as the Panama Canal remains the sole water route across Central America, security of these vital interests of the United States dictates the continued employment of a substantial number of US citizens for an indefinite period and a buffer zone for its protection. The former places affluent American communities next to Panamanian slums. The latter results in unused land over which Panama is denied the exercise of sovereignty. Given this situation, it is difficult to devise any arrangement permanently satisfactory to both the United States and Panama.
The present Panama Canal is, in some respects, already inadequate and, during the last quarter of this century, will reach the point at which it will not be able to handle the volume of traffic demanding its services. The construction of a wider, deeper, sea-level canal would be advantageous to the military, economic, and political interests of the United States. It would be less vulnerable to sabotage, fewer forces would be required for its protection, and the largest naval ships could be accommodated. Over the long range, its construction would permit modification of the basic factors which are presently the source of continuing US-Panamanian friction. Over the short range, early decision and active manifestation of a US intent to construct such a canal might facilitate US discussion with Panama. Of various plans for a new sea-level canal, one which reduces vulnerability to disruption of the existing and proposed canal by a single military attack, or by the action of a single political group, is preferred militarily.
In addition to the protection of the canal, the US military presence in Panama is associated with hemispheric security. The importance of this latter mission is increasing with the growing threat of Castro-communist subversion. Panama is valuable in this connection because US forces and facilities are already there. The United States could acquire, but only at a substantial price, comparable facilities elsewhere. Nevertheless, no substitute presently exists, and the United States should seek to maintain the military base complex in Panama considered essential for the purpose of hemispheric security.
To provide a basis for the determination of a US position and the development of detailed positions necessary to support national policy, the Joint Chiefs of Staff recommend that the Secretary of Defense:
An early decision for the construction of a sea-level interoceanic canal at a location which reduces vulnerability to disruption [Page 838]of both the existing and proposed canals by a single military attack, or by the action of a single political group.
Action which will clearly indicate that the early construction of such a canal is a firm US intention.
The concept that discussion with Panama be premised on the firm US intent to construct such a canal.
The view that the United States should insist on maintaining military areas and facilities related to the operation, maintenance, sanitation, and protection of the Panama Canal and to hemispheric security. However, nonessential areas and facilities in the Canal Zone, including acreage not required for a minimum buffer zone, should be identified by US agencies for possible transfer to Panama in the event further concessions are deemed necessary. In return for any US concessions, the United States should insist on Panamanian recognition that at present, and for the foreseeable future:
The US military presence in Panama is important to and in furtherance of hemispheric security.
The conclusion of an agreement pertaining to base rights and the status of military forces outside the Canal Zone is an important and appropriate contribution Panama can and should make to the inter-American system.
In implementation of subparagraph 6 a (4) above, request the Secretary of the Army, in his capacity as personal representative of the President and as the stockholder of the Panama Canal Company, to:
Provide appropriate guidance to the Governor of the Canal Zone/President of the Panama Canal Company for a joint study, with the Commander in Chief, US Southern Command, of areas and facilities which might be transferred to US military jurisdiction.
Determine whether the Canal Zone Government will agree to transfer to US military jurisdiction that part of the Coco Solo complex, with attendant housing, which is presently under Canal Zone Government control.
In implementation of subparagraph 6 a (4) (b) above, direct the preparation of a proposed base rights and status of forces agreement for eventual use in discussions with the Republic of Panama.
For the Joint Chiefs of Staff:
Maxwell D. Taylor
Joint Chiefs of Staff
  1. Source: Washington National Records Center, FRC 330 69 A 7425, PAN 381, Panama Crisis, January–March, 1964. Secret. A note on the memorandum reads: “Sec Def has seen.”
  2. Attached but not printed.