424. Information Memorandum From the Assistant Secretary of State for Inter-American Affairs (Mann) to Acting Secretary of State Ball 1

SUBJECT

  • Sea-Level Canal Discussions with Central American Countries

Secretary Ailes and I visited Panama and Colombia on February 1 and 2. Secretary Ailes was unable to accompany me on visits to Nicaragua and Costa Rica (January 28 and 29) because of other commitments. Attached is the list of persons who accompanied us.2

In Nicaragua and Costa Rica, I met with the Presidents and Foreign Ministers, as well as members of the Administration and opposition parties. In Costa Rica, I also talked to all of the former Presidents since 1944.

In Panama, Secretary Ailes and I talked only to the Foreign Minister. Although we met with President Robles and other Panamanian officials, we did not engage in any extensive discussions with him on a sea-level canal, or other matters, because it was clear Robles wanted his Foreign Minister to handle the discussions.

In Colombia, we talked to the President, the Foreign Minister, and the Cabinet in separate meetings. Because Colombia has a National Front Government, this included the country’s important leaders, but it did not include as broad a spectrum of the opposition as we talked to in Costa Rica.

The atmosphere was favorable in Nicaragua, Costa Rica and Colombia—especially in Colombia. We found a general willingness to authorize preliminary reconnaissance of proposed routes and to enter into negotiations looking toward the construction of a sea-level canal. We found a general concern about the future of Panama, if the canal were constructed other than in Panama. Especially in Costa Rica and Colombia, Government leaders offered to be of assistance in bringing Panama around to a favorable attitude. In all three countries we heard [Page 901]suggestions of a multi-lateral arrangement designed to be most helpful to Panama in making the transition from the present lock canal to a sea-level canal.

We found a general misunderstanding in all of the countries about the earnings from the canal; the role which the canal plays in the Panamanian economy; the economic benefits of the canal to the US; the fact that the present canal had not been amortized; and the difference between the rights needed for the present canal and those that might be required for a sea-level canal. I believe we cleared up much of this misunderstanding, but much more needs to be done.

In Panama, we found the Foreign Minister very unhappy that we were discussing a sea-level canal with other countries. He regarded it as blackmail. He insisted that we have a legal and moral obligation to operate the present canal until Panama agrees that we might cease operation. I told him that we would be as helpful as we could to Panama, but we did not consider that existing treaties imposed such a legal or moral obligation. Panama believes that further violence in the Canal Zone would be detrimental to the world position of the US, and it therefore regards violence as a bargaining weapon. It also considers that it has a trump card, with respect to US military bases in the Canal Zone.

Panama regards a canal as its primary natural resource, and gives little evidence of a willingness to consider seriously an economic development program in which a canal is only one industry. The Foreign Minister expressed willingness to consider international control of a sea level canal during the period of amortization. But afterwards, he said the canal would be under the exclusive control of Panama. Panama would be willing to consider some restrictions on its authority to set tolls, but it was clear that Panama regarded itself as one of the world’s main toll roads, and that its present intention is to exact a tribute as high as the traffic will bear. The Foreign Minister seemed unwilling to accept our view that a canal should be thought of as a service to world commerce, with the primary benefits for Panama to be derived from secondary developments, such as new ports, industries, and other economic activity.

I will be talking to Robert Anderson in the next few days about additional personnel he may need to continue the necessary negotiations. I believe we should now move forward as rapidly as possible with the objective of concluding the necessary treaties with the interested countries by the end of this year.

  1. Source: National Archives and Records Administration, RG 59, ARA Assistant Secretary Files: Lot 70 D 295, Panama. Confidential. The date is stamped on the memorandum but is too faint to determine a day; Rusk was not in the Department February 1–14. (Johnson Library, Rusk Appointment Book) The memorandum indicates that the Acting Secretary saw it.
  2. Attached but not printed.