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22. The White House Memo states (p. 8) that:

"Under the proposed terms of a new treaty now being
discussed, the United States would in effect have
until the year 2000 to train Panama in operations
of the canal."

Comment: Where could Panama find the human and material resources
to operate the canal? They do not exist in Panama, which would have
to call upon the U.S. taxpayers to pay the cost of this training
and on other countries for assistance.

The problem of maintenance alone is highly technical and requires enormous resources far beyond the capability of Panama.

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"Under the new treaty we clearly would have the right
to defend the canal against military actions directed
against the canal. Also, we intend to have adequate
assurances that the canal always will be open to the
ships of all nations..."

Comment: Defense of the canal under full sovereignty is far different from defense under treaty provisions and no amount of sophistry can alter this basic fact. What would "adequate assurances" by Panama mean? Nothing.

24. The White House Memo states (p. 9) that:

"Panama's current government has been in power since 1968 and

shows considerable stability." Comment: Panama has the stability of the police state. As always, there are elements in Panama ready to overthrow the present government, which is in debt to certain U.S. and other banks to the extent of some $2.77 billion.

Panama has also signed on July 19, 1977, an economic pact with the U.S.S.R. which may be an opening wedge for Soviet use of Old France Field in the Canal Zone as a part of the Colon Free Zone. Would this not be a beachhead inside the Canal Zone for the further advance of Caribbean Communism?

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PANAMA CANAL TREATY (DISPOSITION OF UNITED STATES TERRITORY)

THURSDAY, OCTOBER 13, 1977

U.S. SENATE,
SUBCOMMITTEE ON SEPARATION OF POWERS,
COMMITTEE ON THE JUDICIARY,

Washington, D.C. The subcommittee met, pursuant to notice, at 9:10 a.m., in room 1318, Dirksen Senate Office Building, Hon. James B. Allen of Alabama (chairman of the subcommittee) presiding.

Also present: Senator Scott of Virginia.

Staff present: Quentin Crommelin, chief counsel and staff director; Dr. James McClellan, professional staff (minority) ; Paul Guller, editorial director; and Melinda Campbell, chief clerk.

OPENING STATEMENT OF CHAIRMAN ALLEN

Senator ALLEN. The committee will

please come to order. This is the fourth hearing that the Subcommittee on Separation of Powers of the Judiciary Committee has held on the question of the Panama Canal Treaties.

The main thrust of the committee's inquiry has been to determine whether article IV, section 3, paragraph 2 of the Constitution should be applicable to the Panama Canal Treaties inasmuch as they do make disposition of property belonging to the United States.

This section of article IV of the Constitution gives Congress the power to dispose of and to make all the needful rules and regulations respecting the territory or property of the United States. The power granted is exclusive, so the investigation of that power has constituted the main thrust of the committee hearings.

At the same time, we have felt it appropriate for the committee to study and to report upon the advisability of ratifying the proposed treaties from the standpoint of our national security and of our national economic interest.

We have had a series of witnesses to express their views on the constitutional issues involved. We have had numerous witnesses who have given their views on the advisability of entering into these treatieswhether the Senate should give its advice and consent to the treaties.

This morning our witness will be presented in a moment by the distinguished Senator from Virginia who is a member of the subcommittee, Senator Scott. This morning we will have before the committee Senator A. Joseph Canada, Jr., a member of the Virginia General Assembly

In addition to the constitutional question involved I understand that Senator Canada does wish to comment on the adverse economic impact that Senate consent to these treaties would have on the economy of the State of Virginia. Necessarily then adverse effects would occur in the economy of the entire Nation.

So, we are delighted to have Senator Canada here before the committee. We look forward to hearing his testimony:

At this time I will call on Senator Scott of Virginia, at whose suggestion this hearing is being held, to present Senator Canada.

Senator Scott. As you know Virginia is one of our closest States. The people of Virginia are very much interested in commerce. We have large shipyards within Virginia, and we are especially pleased that one of our State senators from the Tidewater of Virginia, Senator Joe Canada of Virginia Beach who has twice been elected to the Senate from Virginia, can come here and express his views not only with regard to the proposed Panama Canal Treaties generally but the effect of such treaties or denial of access to this vital artery of commerce would have on our State and on the Nation.

As you may know, Senator Canada is a candidate for the lieutenant governorship of Virginia and I believe this will be an issue that will be involved in the campaign. The citizens of Virginia will determine whether or not it is an issue that should be involved in the campaign.

Senator Canada is well able to speak for himself, so I present to you Senator Joe Canada of Virginia.

Senator ALLEN. I might say, Senator Scott, that I had not mentioned the fact that Senator Canada is a candidate. I want to make clear that the committee will be glad to hear from any citizen of Virginia who might also be engaged in politics even if he is in the same

The committee is seeking views of representative citizens and a hearing on this issue would be available to any representative citizen of Virginia or any State whether he be a candidate or not.

Senator SCOTT. Mr. Chairman, I would be glad to present to the committee any interested person from Virginia of either political party.

Senator ALLEN. You may proceed.

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STATEMENT OF HON. A. JOSEPH CANADA, SENATOR OF THE

SENATE OF THE STATE OF VIRGINIA

Senator Canada. Thank you very much, Mr. Chairman and distinguished members of the Subcommittee on Separation of Powers. I would like to thank very much Senator Scott for asking me to come here today.

I am grateful for this opportunity to speak to you today about a matter of great economic significance to the citizens of the United States and in particular to the citizens of the Commonwealth of Virginia—the ratification of the Panama Canal Treaties. The treaties have become a major issue to the people of the State of Virginia. My purpose in coming here today is to alert you and the Members of the U.S. Senate to the fact that these treaties would seriously injure the economy of Virginia if they are approved.

My office has been in close consultation with the major government agencies and businesses that would be affected by the ratification of the treaties as well as various business and labor leaders throughout

the Old Dominion. These include the Virginia Port Authority, the Association of American Railroads, the Virginia Coal Association, Maritime Terminals, Inc., and the Norfolk & Western Railroad. The information gathered from these sources leaves no doubt in my mind that treaty ratification could have a strongly detrimental economic impact on the Commonwealth of Virginia, and, I am certain, on the entire country.

Let me also emphasize that the Panama Canal issue has been a matter of grave concern to the Virginians I have encountered in my travels across the State. Virginians, I am proud to say, have a long and honorable tradition as staunch'defenders of America's freedom and security.

67 PERCENT OF VIRGINIANS OPPOSE TREATIES

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No better examples of this exist than Virginia's two distinguished members of the U.S. Senate, William L. Scott and Harry F. Byrd, Jr. In line with this tradition is the fact that the subject of the canal treaties is up front on the minds of many of our voters, both for economic and national security reasons. In fact, a very recent poll shows that 67 percent of Virginia's voters are opposed to the ratification of the Panama Canal Treaties.

One of the principal concerns of Virginians regarding treaty ratification is the grave impact ratification would have on Virginia's economy. There are three major industry areas that would be affected by ratification-shipping in the Hampton Roads ports, coal mining in the southwest, and freight railroads that transport the coal from the mines to the docks. Obviously a change for the worse in the economic status of one or more of these industries could produce a rippling effect on the State's entire economy.

One, if we are denied access; and, two, if the toll would go up. are denied access we know that the ships would have to travel an additional 8,000 miles which would take approximately 30 days. The average size ship costs approximately $12,000 a day to sail it. If you multiply this times 30 which is extra time that would be involved, it amounts to $360,000 per shipment.

The Panamanian Government is near bankruptcy and needs money desperately. I know that this year 39 percent of their budget was for interest payments on their debts.

While the tolls are going up—the news media has indicated it will go up according to the recent discussions about 25 or 30 percent. Gov. Harold Crawford of the Canal Zone testified to this committee that the plans are made to have the tolls go up. The cost will be passed on to the ports and to the people of Virginia.

Tolls increases since 1974 will be 49.5 percent under the existing agreements. The Panama Canal Company has indicated that the tolls will go up as much as 46 percent on top of the 49.5 percent that they will go up anyway. This would amount to almost a 100-percent increase since 1974.

According to a State Department document entitled “Environmental Impact on the New Panama Canal Treaties” dated August 1977, adverse environmental effects cannot be avoided. The 50-percent increase in tolls would result in unavoidable effects and loss from unemployment. This comes from the Carter administration's own State Department.

We have approximately $8 billion worth of cargo which goes through the Port of Hampton Roads each year. Of that amount, $2 billion goes through the Panama Canal or approximately 25 percent. There are approximately 356,000 jobs that depend on our ports; 114,000 depend on cargo transportation. So 25,000 jobs depend on the canal access at reasonable toll rates.

Each job represents not only one person but a family, sometimes one or two or many children. So the entire Tidewater area would be adversely affected if these treaties are ratified.

Let's take the coal mining industry, for example, for a moment. My grandfather was a coal miner for 34 years. So I think I know something about coal mining. There are approximately 17,000 coal miners in our State. Seventy percent of all of the cargo that goes through the Port of Hampton Roads is coal. In 1976, to show you how delicate the balance in world trade, Japan which is the chief recipient of our coal exports found because of freight rates according to the Virginia Port Authority, that they could buy coal cheaper at another place. We had a 9-percent drop in metallurgical coal in Virginia in 1976. This drop was projected according to port authority for 1977 to go to 18 percent.

If the tolls go up an additional 30 or 35 percent it will have a disastrous effect on the coal industry. It would have the ripple effect of hurting the railroad industry and many other supplemental jobs that are related.

The entire southwest depends on coal mining. If the canal were closed it would plunge the southwest and probably most of our State into a deep depression.

The railroad industry would be vitally affected. There are approximately 15,000 railroad workers in Virginia; 10,000 of them work for the Norfolk & Western Railroad whose primary activity is to transport coal. This is not political rhetoric. These are facts.

This is not something new that we have just been talking about.

On May 26, 1976, the Virginia Port Authority Board of Commissioners meeting in Norfolk passed a resolution expressing their concern over the future of the Panama Canal and the new proposed toll increases at that time. They indicated that we had to pr canal in order to protect shipping. They requested that the proposed toll rate not be enacted because they felt as though it would have an adverse effect on the economy and on the economy of the entire State.

On August 4 of this year the Virginia Port Authority Executive Committee drafted a resolution to submit to the board of directors expressing strong concern over the need to protect the continued use of the Panama Canal for free world shipping.

The Virginia General Assembly bas thought about this question and on February 13, 1974, over 342 years ago, I, along with some other senators in the Virginia General Assembly, introduced Senate Joint Resolution 51 which was adopted by the Virginia General Assembly with overwhelming bipartisan support. This expressed our concern over any encroachments upon the sovereignty of the Panama Canal. We felt as though the treaty of 1903 should be kept intact and no modifications should be made.

I have attached a copy of the resolutions that are mentioned in my statement. I ask they be included, Mr. Chairman, in the record.

The material follows:

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