Foreign Relations of the United States, 1969–1976, Volume XXII, Panama, 1973–1976

90. Minutes of a National Security Council Meeting¹

Washington, July 23, 1975, 4:50–5:45 p.m.

SUBJECT

• Panama Canal Negotiations

PRINCIPALS

• The President
• Secretary of State Henry A. Kissinger
• Secretary of Defense James Schlesinger
• Chairman, Joint Chiefs of Staff General George S. Brown
• Director of Central Intelligence William Colby

OTHER ATTENDEES

• State

  • Deputy Secretary of State Robert Ingersoll
  • Ambassador Ellsworth Bunker

• Defense

  • Deputy Secretary William Clements

• WH

  • Donald Rumsfeld

• NSC

  • Lt. Gen. Brent Scowcroft
  • Stephen Low

President: Henry, would you outline the options as you see them?

Kissinger: As things now stand, negotiations are stalled and everyone is getting itchy. We have not been able to let Bunker go back to Panama since March because he has exhausted his negotiating instructions. Unless we give him new instructions, the stalemate continues. Torrijos is under increasing pressure to take more vigorous action against us. The other Latins are getting into the act. As I pointed out to you this morning, you have a personal letter from the President of Costa Rica, who said he and the Presidents of Colombia and Venezuela together with Torrijos would march arm-in-arm into the Canal Zone as a symbol of Latin American solidarity if it is necessary.² It is not difficult to foresee that unless we begin the negotiations again there will be increasing unrest and eventually all Latin Americans will join in and we will have a cause celebre on our hands.

As I see it, you have three strategic options to choose from: first, to pronounce that we have reached an impasse and see no point to continuing the negotiations; second, tell Bunker to resume negotiations within the limits of his existing instructions; this would lead simply to stalemate. We can sweeten each of these two options by giving a little more flexibility on lands and waters and duration—that would have the advantage of making the situation more tolerable, but it would have the disadvantage of giving away things which we will need to bargain with later on. The third option would be to return Bunker to the negotiations with new negotiating instructions. We would have to consider the political situation here in the United States; in the first place, there is a strong feeling in the Congress against a treaty, and second, there is probably a feeling in the country in opposition to a treaty. Wherever I go I get unfriendly questions on the Panama Canal. We can handle the negotiations in such a way that the political considerations are mitigated.

(Discussion was interrupted for a few minutes while the President went out of the room.)

The question is, if you want a treaty, can we conduct negotiations in such a way that they do not come to a conclusion before the end of 1976? I think we can do so. We have to make some progress but not necessarily conclude an agreement. We can get an understanding with Panama that we reach certain conceptual agreements on various items, but no final agreement. Our negotiations would continue and progress during 1976 but they would not be concluded. It will not be easy to do but we think we can. If you want to go that route, it would be a mistake to give away anything just to keep the lid on things. The instructions have to be changed. As they now stand Bunker is required to negotiate 50 years for both operation and defense. We recommend a substantial reduction for operations to 25 years and defense to 45; then, as a fallback, to go not lower than 40 years for defense and 20 years for operation. We’re not insisting on exact details. The questions are, first, do you want a treaty? and do you want the negotiations to go forward? Second, will you agree to change the instructions? Then, third, what is the minimum beyond which we should not go?

President: It is my feeling that yes, we want a treaty, if it is something we have bargained for which will protect our rights. We don’t want a blow-up here in the United States or down there, either. We want the situation under control here and certainly not a renewal of the fighting from 1964 there where people were killed and we had a hell of a mess.

I’ve looked over the papers you sent me, including suggestions from the Defense Department. Jim, do you have anything to add to this?

Schlesinger: The important question you have to answer is, do you want a treaty? In my judgment we would give away 85 percent of what is most important to us in giving away sovereignty. We will be out of the Canal in 15 years whether we get 40 or 35 years’ duration. Our experience in the Philippines is an example. In 1947 we got base rights for 99 years. That was reduced to 55 years in 1966 and now they may let us remain as their guests. That is the reality. I sympathize with Ellsworth. If we want a treaty, we have to be willing to give up a little more. The question is, do you want a treaty?

President: You say we don’t want a treaty?

Schlesinger: I’ve tried to stay out of this but I’m reluctant to give up sovereignty.

Kissinger: Then none of these things we’re talking about makes any difference.

Schlesinger: I tried to indicate that. The flexibility you’re seeking here is a moot point, because the length you stay in the Canal will be determined by what the Panama Government decides to do ten years from now. It will not be something we can protect.

President: Bill, what’s your view?

Clements: I don’t feel as strongly as Jim. He is consistent in his desire not to give up sovereignty. The world we live in today is not the world of Teddy Roosevelt; those circumstances just don’t exist today. If we want to maintain our relationships with South America, and they are important, we need to have a more enlightened view than that of trying to maintain our sovereignty over the Panama Canal. If we work at it, and the Army will do so, if we give them the right framework to work in, we can maintain the right relationship. If we go down there and apply ourselves and make it worth their while, give them a stake in keeping the Canal going, then I think we can look forward to long tenure and the betterment of our position in Latin America.

President: Then you feel we can achieve the two objectives—of keeping an explosion from occurring in Panama, and the situation under control here in the United States? If we can agree on terms to protect our interests, we can proceed to an understanding.

Clements: Yes, sir. It won’t be easy and it’s complex, and will require your help. You’ll have to inject yourself in a moderating sense; you’ll have to say, “These things are happening under my direction.”

President: If we show good faith, and they act in a sophisticated way, we can achieve our purposes. We have a problem with the Americans in that area. I have been involved for a long time in this question from back in 1953 and 1954. They have a sinecure down there which they don’t want to give up. I’m not going to let them dictate American policy. There is a long history of Americans who have a good life down there. But they are not going to decide this. Bill has indicated a reasonable approach, and it coincides with Henry’s view. Can it be handled, Ellsworth?

Bunker: Yes, we will need to reach some conceptual agreements by . . .

President: The spring of ’76?

Bunker: I think by January of 1976, when they have the anniversary of the riots. But there won’t be any treaty writing. We can complete the agreement in late 1976, early 1977, sign it in December of 1976 or January of 1977. Torrijos would go along. He understands our problems.

President: George, what are your views?

Brown: The Chiefs are agreed with the Clements paper which was sent to you.³ We need 40 years-plus on defense. Personally, I agree with Jim. We are committed, and you can’t be half-pregnant. We are committed through proposals that have been made earlier. Everyone who has communicated with us about this is dead-set against it, but we’re already started down the road and we can’t back out now.

President: Do you think 45 and 25 years is defensible?

Brown: Yes, and the Chiefs do too. We’ve looked at lands and waters this morning with Bill Clements and I looked at it again this afternoon; this is key and we need to be forthcoming. The management of defense at the turn of the century required lands that we don’t need now. But we don’t want to give any more than the Ambassador has already been authorized.

Bunker: But the Panamanians have turned that down.

Kissinger: Have you offered them everything that the Chiefs have authorized you to?

Bunker: I have offered everything and have been turned down.

Kissinger: I have a suggestion: would it be possible, after you have made a decision that you want to go ahead with this, to see whether State and Defense can sit down to write up where they agree and where they disagree and come to you for the decision with pro’s and con’s. I have never studied this thing really. On duration I agree with Jim—once you decide you want a treaty of a determinate length, a few years one way or another don’t make much difference. On lands and waters, I have not studied this myself and I couldn’t give you an opinion on whom I support; I don’t know the State or the Defense position. State and Defense and the Joint Chiefs and the CIA could get together in a week and have ready for you on your return the issues in the negotiations. If there is agreement, we can submit it to you by paper. If we disagree, then we can have another meeting.

Clements: I’d like to make one comment. Our attitude is as important as anything else. There’s a lot of cosmetics in a thing like this. We run the place down there like a U.S. colony. The people in India under the British Empire weren’t treated any worse.

President: You said it the way I feel and better.

Clements: There are a lot of things we can do down there to assist Ellsworth.

Brown: It’s not the way the U.S. citizens are treated but the Panamanian employees. Their schooling is different, their treatment, their pay, the facilities available to them.

President: Exactly—the same job but different pay. I know from my experience on the committees that they can be very vocal and have a disproportionate influence from their numbers. Somewhat like the Greeks.

Kissinger: Much greater.

Schlesinger: There are only 17,000 Zonians.

President: It’s the Zonians who go on from one generation to another.

Kissinger: My mail is 100 percent against a treaty.

President: I think it’s similar in the White House. This is a delicate problem. It has to be handled with skill. Going back to 1954, when I think payment for the Canal was about $456,000,⁴ and President Eisenhower increased it to several million, there was a hullabaloo. That was first modification of the treaty.

Bunker: I believe there were amendments in 1936 and 1954.⁵

President: There was a real hullabaloo raised then. Most of the objections came from the Zonians.

Schlesinger: No one else really cares about the financial transactions.

President: We all agree this is a very sensitive subject. Jim has a different view, but I am sure we agree that this is very sensitive. It is incumbent on us, with the sensitivity that this problem has, that we keep our differences, if any, to an absolute minimum, and certainly avoid public differences. Any discussion of what we talk about here could be misinterpreted. Since we all understand, it is mandatory we keep it to the eight or nine who are here and we work with Ellsworth.

Schlesinger: There is a former Secretary of the Army who has some very strong views—I’d like to make three points: first, you may want to talk to Bo Callaway, your campaign manager, about this; he has some very strong views, and he is supposed to be supporting you. Second, a point of intelligence. I don’t agree with the general tendency of the intelligence analyses of the Latins’ attitudes on this. [3 lines not declassified] Third, on the matter of duration: whether it’s 40 or 35 years, we are creating a phantasm in that once they control operations, then they can stop the Canal. Defense would be moot. I’d like to ask the Committee to see if 30 years for each would not make more sense. Under those circumstances, we might have rights but couldn’t keep the Canal open.

Colby: On the intelligence point, I agree with you, Jim, when you are talking about Ecuador, Peru and Chile, which are directly affected by this. But there are many other Latin Americans—in the Caribbean and elsewhere—who are chiefly concerned about the political issues and are not so directly involved.

Kissinger: Peru won’t do us any good, whatever Velasco said to Walters. They will be in the vocal forefront of those attacking us on this issue.

Schlesinger: I agree that on the surface there is no support for the U.S., but under the surface there is much more.

Colby: Whatever deal we work out, 40 or 30 years, someone will come around in ten years to raise the issue again. The relationship between us is the important thing.

Kissinger: I agree that when you give up sovereignty you move into a new era. The question is whether you can hold on to it at an acceptable cost. I think we probably could maintain our sovereignty if we wanted to, but not at an acceptable cost. It would become a major propaganda point; it would engulf even the moderates and our friends. People like the Brazilians at these conferences support the Panamanians totally. In six years another President will face the same problem again. I agree with the dangers which Jim has outlined, but it would be a little more manageable if we could get ahead of the curve.

Schlesinger: You are in a difficult position, once President Johnson decided to modernize our relationship. To go back on that is difficult. The position of President Nixon was tougher than the one in 1967.

Kissinger: Even the position of Nixon didn’t go to the heart of Jim’s point. It was tougher than LBJ’s but 40 or 60 years are not ultimately the question, as long as there is a limit.

President: As I remember Bob Anderson talking to me in 1966 and 1967, what we talked about was more forthcoming than what we are talking about now.

Schlesinger: The present position is quite a bit tougher.

Kissinger: It’s one of the liabilities we’re working under, if you add the ten years which have elapsed—our position automatically becomes more difficult.

Schlesinger: Mr. President, I think you’re facing three choices: you can acquiesce, you can recant, or you can procrastinate.

Clements: Opportunity is another choice.

President: We want to be sure that the method we select is the right one.

Kissinger: They should get together. We won’t do anything until they get together—we won’t tell Torrijos anything.

1. Source: Ford Library, National Security Adviser, NSC Meetings File, Box 2, NSC Meeting, July 23, 1975. Top Secret; Sensitive. The meeting took place in the Cabinet Room.
2. See Document 70. The memorandum of conversation of Kissinger’s morning meeting with the President is in the Ford Library, National Security Adviser, Memoranda of Conversations, Box 14, July 23, 1975—Ford, Kissinger.
3. See Document 82.
4. The actual sum was $430,000.
5. In 1936 and 1954, the United States renegotiated aspects of the 1903 Panama Canal Treaty, including raising the annual payment to Panama.