Mr. NONNENMACHER. Yes. Would you say the greater or lesser number of the American citizens working for the Canal Company feel that the treaty will go through and that their job tenure is limited, as your statement tends to indicate?

Dr. CHEVILLE. I think most of the employees feel one way or the other at different times. The situation where we live is different from being in the Nation's Capital in that it is immediate. It does mean job changes. We have no choice but to read the newspaper, listen to the television and many of us do read and speak and understand Spanish quite well, so that the climate is unsettling no matter what you believe.

Mr. NONNENMACHER. Thank you.

Mrs. SULLIVAN. Mr. Newton, do you have any questions to ask? Mr. NEWTON. No.

Mrs. SULLIVAN. Mr. Cheville, thank you very much for taking your time to come up. You have been a good witness. I appreciate the efforts of everyone of you who have come today. Tomorrow we will get on with the other end of our problem, and that is the treaty negotiations.

Dr. CHEVILLE. If I could, on behalf of the civic councils, I would like to thank you for your support of all of us in the zone for many years and just let you know that we hold you in high esteem.

Mrs. SULLIVAN. Thank you. I loved doing it. I am going to hate to leave, but I can't wait until the last day.

May I say before we adjourn if any of the Board of Directors are in town and want to appear at the meeting tomorrow, I am certain that the meeting will not be closed to you. I know the Governor is going to be here and also those who came with him. With that, unless someone has some final thing to say, the committee will stand in recess until 10 o'clock tomorrow morning.

Thank you.

[The committee recessed at 5:10 p.m. to reconvene at 10 a.m., Thursday, April 8, 1976.]

PANAMA CANAL FINANCES

THURSDAY, APRIL 8, 1976

HOUSE OF REPRESENTATIVES,

COMMITTEE ON MERCHANT MARINE AND FISHERIES,

SUBCOMMITTEE ON THE PANAMA CANAL,

Washington, D.C.

The subcommittee met, pursuant to call, at 10:10 a.m., in room 1334, Longworth House Office Building, Hon. Leonor K. Sullivan (Chairman of the full committee), presiding.

Mrs. SULLIVAN. The Subcommittee on the Panama Canal will come to order.

Good morning fellow members, Mr. Ambassador, witnesses, ladies, and gentleman.

Today we conclude 3 days of important hearings on the Panama Canal. In the first 2 days of our hearings we took testimony and discussed the financing of the canal, an important matter which has become a problem area only in recent years.

Today we intend to focus on the impact of treaty negotiations on the canal operation and also on the influence of other events which have occurred on the Isthmus on that same operation.

We recognize the relevance of treaty negotiations for the legislative jurisdiction of other committees in the House. But when the negotiations and other events can impact upon the canal now or in the future, and when the status of U.S. controlled territory in the Canal Zone is at issue, we would be negligent if we did not address important issues that concern the operation and maintenance of the canal or the government of the Canal Zone.

As we all know, our present treaty arrangement with Panama grants to the United States all sovereign rights in the canal to the exclusion of exercise of those rights by the Republic of Panama. Since our present treaty arrangement is part of the Law of the Land, it is incumbent upon us to insure that the canal and Canal Zone are operated within the framework of that arrangement.

We are resolved that what it is illegal to do visibly and en bloc, that is, transfer control of the Canal Zone without congressional authorization, it is just as illegal to do in any veiled and piecemeal fashion. In this respect, I am concerned that the present treaty talks between the United States and Panama are casting such a cloud of uncertainty and anxiety over the whole canal operation that the ultimate objective of those treaty talks may come to pass without any authorization of the legislative branch as to a new treaty or a transfer of property. We in the Merchant Marine and Fisheries Committee have long been resolved to solve the problems that relate to the canal and zone,

not to promote confrontation or ill-will, but to defeat it. And we in the committee are resolved that the zone should run as the present treaty arrangement mandates it.

We must be concerned about the trend in the piecemeal erosion of U.S. authority on the Isthmus of Panama. It seems incredible to me that the executive branch would proceed to foster some of the ideas which they have despite the strong convictions of the Congress expressed over many years on this matter.

The House passes a resolution that the Panamanian flag should not fly in the Canal Zone and the President allows it; the Congress indicates in many ways that any land transferred to Panama should have congressional authorization and then the Executive leases an area to an agency of Panama under a spurious authority and this could be tantamount to a transfer.

These are just two of the many actions that have been taken, and those actions which have occurred in the last decade to erode our authority in the Canal Zone do not hold a candle to the proposals which, if they had been approved, would have totally dissipated our tenure on the Isthmus.

I would hope today that we could have some real communication on the matters of treaty negotiations, the nature of U.S. authority in the Canal Zone, and the future of the canal area irrespective of a new treaty.

Due to the sensitive nature of the material that will be discussed here today, the Chair will ask at an appropriate point that this hearing go into closed session. I hope that the members of the subcommittee here would join me in an effort to close the hearing at the proper time so that we can get the information we need and get it to the proper people.

I have been waiting for some of the other members to come in. There is a caucus this morning, but it should be over by now. While we are waiting, I have invited a gentleman to present a short statement concerning certain background on the question of sovereignty of the United States over the Canal Zone.

At this time I will call to the witness table Franz Otto Willenbucher, retired Captain from the U.S. Navy.

Captain Willenbucher is a lawyer. He graduated from Georgetown University Law School for his L.L.B., and also has his Master's in Law. He served on active duty for 32 years in the Navy, throughout World War I and World War II.

Captain Willenbucher graduated from the U.S. Naval Academy in 1918. The Captain has worked as a member of the Austrian Field Party, American Commission to Negotiate Peace after World War I, under Archibald Cory Coolidge. This group studied the economic, social, and political status of the Central Powers back in 1918 and 1919. Captain Willenbucher has performed much active Naval Service in the Caribbean Sea area, including some at the Naval Station at Guantanamo Bay in Cuba, and he participated in the preparation of war plans for that area in 1929-30.

I think the Captain is qualified to be heard on the question into which we will go into this morning. and I have asked him to give us about a 10 minute specification of his knowledge of this subject.

I believe we should limit the questions to the Captain to no more than 10 minutes.

After the Captain is finished, then I am going to ask unanimous consent that the meeting be closed, if Ambassador Bunker requests it, so that he can talk more freely about the negotiations with Panama. After the Ambassador's testimony and subsequent questioning has been completed, the meeting would then be opened up again to hear the other witnesses.

If Ambassador Bunker does not want the meeting closed, then we will leave it open.

Captain, we welcome you.

STATEMENT OF FRANZ OTTO WILLENBUCHER, CAPTAIN, U.S. NAVY (RETIRED), ACCOMPANIED BY MILES P. DuVAL, JR., CAPTAIN U.S. NAVY (RETIRED)

Captain WILLENBUCHER. Madam Chairman, I am to have with me here Miles P. DuVal, Jr., who is well known as a noted historian, particularly on the canal question, and who has written two books on this subject.

I would like to indulge the committee for just a second, and let me say that I am very pleased to be here.

I want to say that this is not my first occasion of appearing before this committee, but the last time I appeared was quite long ago, during World War II, when Hon. Schuyler Otis Bland was chairman, whom I held in very warm respect, and it was on a subject dealing with the security of the United States on legislation which I had the pleasure of drafting, which later went before Senator Wheeler and Senator White over in the Senate.

I shall address myself to the question of sovereignty. First, the U.S. Sovereignty over the Canal Zone is complete, and was granted to the United States in perpetuity. In articles II and III of the Hay-Bunau Vavilla Treaty of 1903 in clear terms by Panama.

The rights, power and authority of the United States to exercise sovereignty over the zone are so clear, and so unambiguous that there never was any necessity of judicial interpretation to define their

nature or scope.

It is well established that in the absence of fraud where language is clear and unambiguous there is no necessity for judicial determination as to the extent or the right or the scope or duration of any such matters as this when the language covers them.

Notwithstanding this, there have been three U.S. Supreme Court considerations of the grant of sovereignty to the United States over the Canal Zone under special circumstances, and on narrow questions, none of which dealt squarely on the question of whether and to what extent the U.S. possessed all of the rights, power and authority to exercise sovereign power in perpetuity over the Canal Zone.

There have also been innumerable opinions by Attorneys General, the General Accounting Office, and other administrative agencies, and by Presidents. and Secretaries of State.

These latter fully recognized the completeness of the sovereign rights, power and authority to govern the Canal Zone, although some

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