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

432. Memorandum From the President’s Special Assistant (Rostow)¹

Washington, July 27, 1966.

MEMORANDUM FOR

• The Secretary of State
• Administrator Gaud
• Director Helms
• Secretary Resor
• Assistant Secretary Gordon
• Ambassador Anderson

SUBJECT

• Presidential Directives on Panama

In order that we all have a clear understanding of the directives given by the President at the conclusion of our Panama review meeting on Tuesday, July 26, I thought it useful to recapitulate them as follows:

1. Director Helms is to review the [less than 1 line of source text not declassified] to assure that it is in a position to furnish ample and timely intelligence on developments.²

2. Assistant Secretary Gordon is to establish a Contingency Planning Group and immediately to proceed to develop alternative courses of action should the treaty negotiations reach an impasse.³ Ambassador Irwin will give special attention to determining maximum concessions which we might make to the Panamanians, taking into consideration the requirements to retain United States control of operation and defense of the Canal and what the Congress is likely to accept. Assistant Secretary Gordon and Ambassador Irwin will work closely together in carrying out their respective assignments and both keep Ambassador Anderson fully informed.

3. Assistant Secretary Gordon, in consultation with Administrator Gaud, is to:

a. establish a group to review actual and planned assistance to Panama with a view to developing and putting into effect as rapidly as feasible sound projects for economic and social development, with special emphasis on those having more immediate human impact.⁴

b. develop a plan for a Panama Development Authority, which Mr. Gordon will try to persuade the Panamanians to accept.

c. assist United States businessmen interested in private investment in Panama.

4. Secretary Gordon is to proceed with arrangements for further grant assistance to strengthen the National Guard.

5. In order to assure full coordination within the government, Secretary Gordon is to pass on all public statements and new initiatives relating to Panama. He is to coordinate these closely with Ambassador Anderson for their possible effect on the canal negotiations.

W. W. Rostow

1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL PAN–US. Secret; Sensitive.
2. In a July 27 memorandum to the CIA’s Deputy Director for Plans setting forth the President’s directive for the Agency, Helms noted that “the President wants us to watch the situation in Panama most closely and to do everything we can to guard against being caught by surprise in terms of riots, attempts to overthrow the government, and other possible troubles in the area.” (Central Intelligence Agency, Job 80–B01285A, DCI (Helms) Chronological Files, July 1, 1966–December 31, 1966)
3. A draft of a Department of State contingency study on Panama, based on the President’s directive, was prepared on September 16. (Johnson Library, National Security File, Memos to the President, Walt W. Rostow, Vol. 15)
4. Department of State and AID proposals for dealing with economic and political issues in Panama were presented to the President under cover of a July 25 memorandum from Rusk to Johnson. (National Archives and Records Administration, RG 59, Central Files 1964–66, POL PAN–US)