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said in secret, I suppose—I cannot find it in the treaties. But we do not know how long this dictator will be there. The life expectancy of a dictator in that particular country, if you look at their history, is not very long. We could have a new dictator next year. His name could be "Juan Giveaway” and he might wish to make a present of the Panama Canal to some other country, perhaps the Soviet Union. If that happens what would happen to this treaty? We would be in bad shape. I think that the people of this country are tired of giving things away. I think we have a strong country and we need to stand up on this particular issue.
PANAMA CANAL ISSUE MOST INTERESTING TOPIC
Senator ALLEN. That is a sound view it seems to me.
During the congressional recess in August and early September, I visited 37 Alabama counties. The topic of most interest apparently to the people that I saw-and I saw literally thousands of people in Alabama on a one-to-one basis
was the Panama Canal issue. Frequently I would have their concern expressed to me by saying, "well, we're not only going to give them the canal but we're going to pay them to take it."
Have you had that same view expressed to you in Virginia in your travels througout the State ?
Senator CANADA. Yes, sir, Mr. Chairman, I certainly have. I traveled my State from one end to the other. It is amazing how many people with whom I have talked who bring up the Panama Canal, and I have been impressed with the importance of this issue not only by private citizens but by other people who are themselves running for public office.
They say that the first issue that comes to mind from the person with whom they are talking is this canal issue. The people want to know why we should give it away and why we should give Panama money to take it. It doesn't make sense. It is against the best interests of our Nation, and the people know it is against our best interests.
Senator ALLEN. One way that the administration proposes to give them the money, of course, is to arrange for tremendous loans to them through some of the international financial institutions. It is, of course, highly doubtful that Panama will ever pay the loans back.
CANAL COMPANY DEBT TO TREASURY
But the canal is operated not by the U.S. Government but by the Government, you might say, through the Panama Canal Company.
The Panama Canal Company owes to the Treasury some $319 million. Apparently the Canal Company, having this big debt, is to be wiped out and the Panama Canal Commission would be set up with no debt on its books.
It would seem to me from studying the documents that the administration plans to wipe out the $319 million of indebtedness. That would seem to me to be somewhat like giving somebody equity in a house, let's say, without transferring the mortgage. In other words you would say that you have a mortgage on the house and you will give him the house free but you would say also that you didn't want him to assume the mortgage and that you would clear the mortgage
for him before you turn it over to him. Most people, I would think, would be satisfied to get the house free even with a mortgage.
So here is a debt of $319 million that is going to be wiped out or rather that the people of the United States will be required to satisfy. I understand that $319 million is still the unrecovered balance of the original cost of the canal and of subsequent capital investment in it.
Do you think it is right that we wipe out this tremendous debt as we give the canal to Panama?
Senator Canada. Mr. Chairman, I certainly do not. In essence we are making a gift of $319 million. I do not think it is right. I do not think the people of my State think it is right. I don't think the people of this Nation believe that it is right or just.
I just cannot understand the logic of that thinking. Maybe I am missing something but I do not understand the logic of the treaties in general terms of the giveaway. I think it is wrong. Something has got to be done to change and reject these disastrous provisions.
Senator ALLEN. I think you have put your finger right on the point that is directly involved and most concerns some Members of the Senate now. That is the manner in which these differences in interpretation or errors in the language of the treaty can be clarified or corrected.
You are pointing out that simply because the administration says that a particular provision gives us a particular right in their construction of the provision that that assertion alone would not be sufficient to protect our interest. As you say, if the government should change down there, then the successor government would not feel bound by these exchanges of letters or even to signed documents.
I believe that fact is going to be a big point when this matter comes before the Senate whether these tremendous defects in the language of the treaties can be cured by an exchange of correspondence, whether they can be cured by a simple understanding added to the treaties by the Senate or by reservations added to the treaties, or whether they can be cured only by amendments.
It is my view-and I would like to get your opinion—that anything short of an amendment to the treaty would be an exercise in futility and wholly inadequate to correct these differing interpretations of the language of the treaty.
Do you feel that amendment is what it would take to clarify the misunderstandings!
Senator CANADA. Mr. Chairman, I agree with you. I think anything short of an amendment—and I am not an expert in international law by any means but I am a lawyer—you must have a simple and accurate contract between the parties, otherwise it is not enforceable. If you don't have
contract, you can have all the side agreements you want and you will still find it impossible to enforce. I think the principles applied on the local basis with respect to regular contracts will also apply to treaties. If the treaty is ambiguous or if it is subject to differences of opinion and it is not precisely written, then we will have real problems in trying to enforce it.
Senaator ALLEN. You speak of contracts. One of the first things I learned in a course on contracts that I took as a freshman at the University of Alabama Law School was that there has to be a meeting of the minds before you can have a valid contract. So obviously there is
no meeting of the minds here because Torrijos says one thing and our negotiators say the opposite. So there is a difference of opinion.
They have worked 13 years on this language. It does seem that they could have come up with a little bit clearer language after working on it for 13 years. We hear a whole lot about high school graduates not being able to read. It looks like some of our high-priced negotiators have not been able to put into clear language just what has been agreed. I can't understand why not. Is it lack of education or were they afraid to set out before the public the bargain struck?
Senator Scott. If the Senator will yield, the distinguished chairman mentioned an elementary contract. That is that there had to be a meeting of the minds to have it be a valid contract. I would ask the chairman this. Would you also agree that in order to be a valid contract there has to be consideration and mutuality of contract from one party to the other party. You can have a gift without consideration, but you cannot have a valid contract. But where you have no consideration passing from Panama to the United States, would it not be more proper to call this treaty a gift rather than a contract? Panama is bound to nothing and simply takes all.
Senator ALLEN. There is certainly reason for agreeing with the logic of your statement.
Getting back to the matter of the amendments—and I think you are absolutely right, Senator Canada-there seem to be at least three stages in the manner of handling these obvious problems. The proponents of the treaties are going to try to get by with just as little in the way of clarification as they can. As a first stage then, possibly there might be an exchange of correspondence. But I do not believe the Senate will agree to that.
Going from that stage to a second stage, an understanding might be added to treaty but understandings would merely give our interpretation and would have no binding effect whatsoever on the other side. Understanding too would be unacceptable.
Finally as a third stage the proponents will suggest that a reservation could be added. A reservation would not take any additional negotiation, not a new treaty. It would merely be acquiesced in by the other side. Reservations also would have no true binding effect and cannot solve these problems.
Amendments, which I feel and I am glad that you concur-would require the renegotiation and resubmission of the treaty, are the only acceptable solution. I believe that that is the route that the Senate ought to follow and will follow. We might deal with our right to defend the canal and our right to have priority for our ships-certainly our warships-transitting the canal. There is also the matter of our not being able to negotiate for 23 years with another nation for another canal and binding us to do nothing for that length of time. All of these things can be corrected by amendment only.
Once we amend it, as the Senate might see fit to do, then this amended document, while it would be void as a treaty, could serve as a guideline to our negotiators in the future to show what the Senate would accept. So, I agree with you that the matter should be handled by amendment.
What do you think of the provision in the treaty that we cannot, during the life of the treaty until the year 2,000, negotiate for another route with another country? Do you think that protects our country? Senator CANADA. Mr. Chairman, I cannot understand why any negotiator after working 13 years would put something that outrageous in there. It is against the best interest of our Nation. Should something happen in Panama we are prohibited under the treaty without their consent from building a new waterway. It is certainly not in our best interest but only in the best interest of the recipient of the gift as Senator Scott pointed out.
Senator ALLEN. That is a fine comment and clearly accurate.
Senator SCOTT. Mr. Chairman, I would like to make some brief comments.
Mr. Chairman, you referred to the debt that remains for the construction of the canal. As I understand it, we have had this canal in operation for almost 65 years. I believe it was completed around 1914. We have been using it.
I have been told that the locks are still in almost as good condition as they were at the time that they were installed. That is due to the maintenance, to the good maintenance which has been made by the United States.
In the event that we turn over the maintenance of the canal to the Panamanians, there is serious doubt in my own mind as to whether the people of Panama have the management skills or expertise or the will to maintain these locks as they have been maintained so that they can be used efficiently.
I have flown over these in a helicopter on two occasions. I have seen dredging vessels that are in operation constantly dredging material from the canal. There was one large cut through the canal and it has been dredged so that it is now 500 feet in width. The ships that pass through the canal may well be 100 feet wide. But this is 500 feet. This is a channel which goes through a large cut in the mountain which is 500 feet wide. These dredging vessels work constantly down there to keep the material out of the channel so that the vessels can go through.
I wonder, Senator Canada, if you would have any thoughts that you might want to share with us as to whether or not you believe that you would have any reservations about continuing the efficiency of the operation of the canal in the event the United States did turn the management over.
As I understand it, immediately 6 months after the ratification of the canal, then title would pass to the country of Panama. Thereafter, gradually we would turn over management until I believe somewhere in 1989 or thereabouts, and then we would have an administrator who would be a Panamanian. That would be well before the year 2000. Even then we would have Panamanian management.
Would you have an opinion as to whether or not the management skills or the expertise or the will is there or whether on the other hand the profits might be drained off for social programs or other less laudible purposes within Panama ? Would you have any fear of any. thing like that happening?
Senator CANADA. Senator Scott, I can relate to you information I received from talking with people who have lived and worked down there and other information that I have been able to find out on my own although I have never been down there.
I would say this. I have some serious doubts, based on the conversations with many people who have lived and worked down there and one gentleman worked there for 27 years
Senator SCOTT. We have the former Governor of the canal who lives in Virginia. Senator CANADA. Yes.
. They all have serious reservations about the Panamanians ability properly to maintain the canal. Look at Panama's budget for this year; 39 percent of it is for interest payments on the debts. So we see they despera'ely need money.
I would be guessing but I would say that more than likely they will do all that they can to drain off all the money that they can. They would be reluctant to put a great deal back into maintenance I think. The banks will be pressing their demands.
I think many of the other countries are also concerned about that possibility. I believe we would have serious trouble with the operation of the canal if it is turned over to them. But I do not think they have the required expertise, as you pointed out, nor the will.
Senator Scott. Mr. Chairman, in my personal conversations with some of the leaders of the Latin American nations they have privately expressed concern about the maintenance of the canal as well as about the tolls that would be charged.
We hear of solidarity among the Latin American nations, but it is not there.
Thank you, Mr. Chairman.
Senator ALLEN. Senator Canada, I believe your statement was to the effect that a poll in Virginia shows 67 percent of those responding were opposed to the treaties. Senator Scott says that his mail is 96 percent against them.
Your statement did not state how many were in favor of the treaty. Did the other 33 percent favor it? How were they divided as between those who expressed no opinion and didn't know, and those who were opposed? Do you know?
Senator CANADA. I do not have that information. But I know that the percentage of people who were in favor of giving it away as opposed to those who had no opinion was very small.
In my personal travels I have found very few people who were in favor of giving it away.
Very few have said that they have not really thought about it, but most of the people I have talked to—a large majority—are strongly against it. They say it is another indication of our country just giving something away and giving a lot of money away for no apparent reason. They cannot see that it will do any good. On the other hand, they think it will hurt jobs in our State and in our Nation.
I think the potential for job loss is the chief point that I want to express to the committee this morning. I am concerned about jobs in Virginia. Anybody in the Virginia State Senate from an area that would be affected is interested and should be interested.
Senator ALLEN. Senator Canada, I think you have made a real fine statement. You have made a distinct contribution to the work of the committee and to the public good.
I have no doubt that when this matter comes before the Senate on the floor—the proposed treaties are in the Foreign Relations Committee at this time but when these treaties come for discussion in the Sen