48. Memorandum From the President’s Assistant for National Security Affairs (Brzezinski) to President Carter1


  • Panama

Here is the information you requested on Panama Canal operating expenses and revenues.2 Also included in this report is information on payments to Panama.

Besides tolls, Panama Canal operating revenues are drawn from Canal supporting activities, administrative operations and Canal Zone Government activities many of which will not be performed under the new treaty by the Canal operating agency. Operating expenses include the net cost of the Canal Zone Government which will disappear at the treaty’s start.

(U.S. $ Millions)
Fiscal Year Tolls Other Total
1976 135.0 115.1 250.1
Transition Quarter 34.5 30.4 64.9
1977 (Estimate) 166.6 122.7 289.3
1978 (Estimate) 177.6 134.7 312.3
(U.S. $ Millions)
Fiscal Year Expenses
1976 256.7
Transition Quarter 66.6
1977 (Estimate) 284.5
1978 (Estimate) 303.3
[Page 155]

The Panama Canal Company is currently required by statute to pay interest to the Treasury on the net direct investment of the United States in the Canal (the expense totals above include these interest payments). This obligation is estimated to be $20 million in Fiscal Year 1978. However, the Panama Canal Company may exercise the right to defer payment to the Treasury of the interest payment to the extent of any net operating loss.

Toll rates currently charged are:

a. Merchant vessels, Army and Navy transports, tankers, hospital ships and yachts—$1.29 per net vessel ton of 100 cubic feet of actual earning capacity.

b. Vessels in ballast—$1.03 per net vessel ton.

c. Other floating craft—$0.72 per ton of displacement.

As for payments to Panama, the United States under its current treaty obligations pays an annuity of $2.3 million.

The above information was provided by the State Department. Other information on the Canal, which you requested in response to Secretary Vance’s Evening Report of May 28,4 will be provided shortly.

  1. Source: Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 60, Panama, 1–10/77. Secret. Carter initialed the memorandum and wrote: “Zbig—Does House have to approve property Xfers as Rhodes mentioned?”
  2. See footnote 10, Document 42.
  3. Carter wrote in the left margin: “There is no way we can approve payment above profits to Panama as we return the Canal Zone to them.”
  4. See Document 42.