about when he said that if the treaty wasn't ratified he would defend the canal even if it would take 100,000 troops. Later that was raised to 200,000. There is no basis in military deployment analysis for 'either number. But neverthless, a major defense involvement in guerrilla warfare has been likened by the proponents to another Vietnam, is prophesied by the proponents if we do not yield. That is errant nonsense. There is no basis for such an assertion. That is, there is no such basis unless guerrilla action were given substantial and major outside materiel and personnel support in vast amounts by Cuba and the Soviet Union. Such a development as this would be out of the question entirely unless the Soviet Union, which wholly and absolutely controls Cuba, as our Government well knows, or should know, were prepared to risk World War III.

But if we are talkng about sabotage, efforts to disable the canal, which I understand to mean, then it would be extremely difficult to sabotage it and disable it under present conditions.

Now, if they, the Soviet Union and Cuba, wish to provide major support for the invasion of the Canal Zone with substantial guerrilla forces, organized guerrilla forces with major weapons systems, such a development could hardly be what the administration meant when it states that the Senate must ratify or else.

So, I think these are overstatements based upon the very passionate attachment to the idea that we will enter a new era of cordial relations with Latin America and also that this will usher in a new era of cordial relations with the Republic of Panama, neither of which in my judgment have any real foundation.

But I do not think the statements are reconcilable. Attempted sabotage is one thing. Guerrilla warfare is another. But a major guerrilla warfare campaign such as we encountered in Vietnam could not be undertaken by Panama alone. Parenthetically, if others are to provide the means, the United States had better be organizing major counterinsurgency forces now--not a 200,000-man conventional force. If such happened, I think anyone would understand what the consequences of that would be for the world. If that is the threat then these proposed treaties certainly are not the answer to our problem. Appeasement and surrender have never led to peace. We would need to give priority and urgent attention to other measures.

Senator LAXALT. On the worst case basis then, you are stating, I gather, that Panama just does not have any potential capability to mount any realistic military force by way of guerrilla warfare or otherwise by itself; is that right?

Mr. BENDETSEN. If I may resort to the vernacular, they can raise a lot of hell but they cannot disable the canal for an extended period of time. The riots in 1964 were certainly not a pleasant experience for us. I think you will find from available intelligence sources that they were orchestrated also.

I do not think you can find any major riot that occurs spontaneously anywhere in the world.

KEY SECURITY ELIMINATED

Senator ALLEN. If the Senator will yield, let me ask you this. Is it not correct that under the agreements they are going to eliminate

some 30 or 35 security positions which have worked with and do now work with the security devices for the canal?

Mr. BENDETSEN. I believe that is provided in one of the agreements in implementation of the treaty. I believe it is fair to say that if that were to come about it would tend to further expose this important facility, important waterway to sabotage.

DESTROYING CANAL WOULD DESTROY REVENUES

Senator ALLEN. You stated that top officials in Panama had threatened sabotage. If the treaties are given the consent of the Senatewe have not been asked for advice-would that not put Panama in a better position to give added threats of sabotage and would they not be in a better position to perform acts of sabotage under the treaties than they now have with us?

Mr. BENDETSEN. There is no question about that. I think it should be emphasized however that under present circumstances the operation of the canal provides about 25 percent of the gross national product of the Panamanian Republic. The citizens of Panama enjoy close to the highest standards of living of all of Latin America including Central America.

Senator ALLEN. From the canal operation?

Mr. BENDETSEN. Primarily because of the underlying major contribution to the gross national product, yes.

Panamanian businessmen do business in the zone. Some of them provide commercial support activity for operations of the zone. There are further opportunities for that.

But it would be rather inconceivable to me that the government could have an official policy of cutting off its nose to spite its face and destroying the canal and therefore destroying these revenues.

If they have some undisclosed agreement through the HavanaCastro axis and the Moscow axis that the Soviet Union will take care of them on the same basis as it is wholly supporting Cuba now with over $1 million a day in support, then I would not know about that. That would be a different matter.

RULING TRIUMVIRATE

But if that were the case and if we confirmed these treaties, and if the zone ceased to exist, and if the sovereignty would be indeed in the Panama Republic, and if they have secret understandings then sabotage would be far easier, it would be possible to disable the canal for long periods. In this case perhaps the Soviet Union would support Panama as she does Cuba. Surely under such a scenario the United States would not be in a position to restore the canal. So the risk is much greater if we confirm the treaties than it would be if we do not do so.

When England, France, and Israel attempted to force Egypt to fulfill its commitment, who interceded to prevent them from doing it? The United States did. You will remember that.

That prompted the real drive to get this canal some day.

Senator LAXALT. Wouldn't that be a gross violation of the terms of the treaty?

Mr. BENDETSEN. Of course, it would be a gross violation of the terms of the treaty. I do not suppose that that would prevent them from going through with it if they were willing to assess the calculated risk that they would be taking and go ahead. It has happened before.

I don't think the Soviet orbit has a well-established reputation for being bound by understandings and commitments and treaties. They did not keep any of those they made at Yalta and Potsdam after World War II in Eastern Europe.

Senator LAXALT. But we would have a proprietary interest of sorts under the conditions of the treaty until the year 2000. Do you think the Soviets or Castro would take that kind of risk to nationalize?

Mr. BENDETSEN. We have a fundamental interest in this waterway. We are about to propose to the Senate that it ratify a treaty which causes that interest to be unprotected very largely because we no longer control. We take on responsibility with no authority. That has never worked anywhere at any time when it has to work.

Senator LAXALT. Do you mean that under the terms of the treaty we have no authority between now and the year 2000?

Mr. BENDETSEN. None whatsoever. We would not be the sovereign. We are now. The treaty if confirmed would immediately end our authority, jurisdiction, and power.

The Canal Zone ceases to exist upon the coming into force of the proposed treaty.

What do we then have? Analogously I would describe this as a "management contract" to operate the canal for 22 years at our own expense. Unless tolls are substantially increased, there will be deficits on the backs of the U.S. taxpayers which will undoubtedly increase the deficit of the United States. We would pay the Panamanians $10 million a year to collect garbage and do other municipal functions. They have not had a lot of experience with that because we have had to collect it for most of the time since 1914 in Panama City, and elsewhere in their own country. But they will take it over. We pay them that.

We would pay them 30 cents a ton out of tolls. We would guarantee to pay them, above those amounts, $10 million a year which will be a fixed expense whether we earn it or not. Then we agree to pay them another $10 million out of earnings. But if it is not earned it is still an obligation, if you read the treaty carefully you will see that it is.

At the end of that time we will have paid them at least approximately $1,600,000,000 in 22 years. There are 114 million people in Panama. On a per capita basis that is $1,066 per person. If one would extrapolate that per capita payment into a comparable payment to the United States, I think you would find that it would be about $213 billion.

Proportionately that is what we are agreeing to. If at the end of the time the obligations that I have mentioned have not been earned or if the Panama Canal Commission, which is some sort of a vague entity which the Secretary of the Treasury seems to think has the power to borrow money from the United States does borrow the shortfall then this will further increase the national deficit, which will be monetized and added to inflation. All of this will be at the cost of and on the backs of U.S. taxpayers. They, the taxpayers, will absorb the unrecovered $6 billion U.S. investment in the Canal Zone. The whole plan is truly incredible.

Senator LAXALT. How do you reconcile that this country then is coming to the point where we have this treaty before, us for U.S. Senate ratification in the offing when it appears on its face to be intolerable to the interest of this country? How do you explain that?

Mr. BENDETSEN. It takes some undisclosed perspective. I cannot explain it unless there are reasons which have never been disclosed. If there are I cannot imagine any that would actually justify the adverse consequences.

Senator LAXALT. What would that perspective be in your estimation?

Mr. BENDETSEN. There are the statements made by the proponents. I don't question their good faith. They must somehow believe what they say. I know many of them. Many with whom I have been acquainted for many years. They have a different perspective somehow. They have said that this will enhance our security.

Senator LAXALT. You have demonstrated pretty graphically that it does not. How do you explain it?

Mr. BENDETSEN. I am at a loss to do so in the face of the facts, particularly in the face of the fact that the present Panamanian Government is dominated by Marxists. No Marxist can ever have any honorable intentions toward the United States although it is part of their game to lead us to believe that they do. They never do. To all Marxists-we, the United States, are the enemy.

DRUG TRAFFICKING BY PANAMA OFFICIALS

Senator ALLEN. I have one other question..

Do you know if there is any substance to the allegations that high officials in the Panamanian Government have engaged in criminal activities, possibly involving the trafficking in drugs within the United States? Do you have any knowledge of that?

Mr. BENDETSEN. I have no personal knowledge and no direct information on any of this. I have seen in the Congressional Record a very serious report which I believe was filed by Senator Helms when he made those remarks under unanimous consent on the floor of the Senate. It looks very grim.

I know through hearsay in my various travels in Central America that this is something many people speak about. I have no personal knowledge of it.

Senator ALLEN. I see. We thank you very much and you may continue as you see fit.

Mr. BENDETSEN. I would refer to whether these treaties would generate friendly relations with Panama. I quote from one of the members of the ruling triumvirate, Dr. Escobar, on August 12, when he was addressing the students at the university. You know that is an open university. Anybody can go there. A good many students are 45 or 50 years old. They don't have to graduate. It is quite a place for them to conduct their various activities.

The students were unhappy with the treaty because we would still have some sort of a presence there.

So he said:

In the past when we set bombs against our oligarchy in Panama, and when we challenged the regimes established in our country, we never asked anyone

for permission. You have never asked anyone for permission. When one wants a confrontation, one puts his knapsack on his back, his bomb at his waist and goes to stage the confrontation.

What he had to say to them about the pending treaty was simply this: "If you do not like some of the ugly features of it"—and those were his words "go to it."

There is nothing in any of the treaties that could prevent Panama from doing what Egypt did in Suez.

The people who really run affairs in Panama are Marxist or associated with Marxists. They despise the United States. All Marxists do. Nothing will buy Panamanian friendship. Neither appeasement nor surrender nor money will buy it. The rulers hate us.

Senator LAXALT. Are you speaking purely of the Government and not the people?

Mr. BENDETSEN. Yes, of the ruling circle. I know many fine people in Panama. There are many fine people there.

Senator LAXALT. Are you saying the Government is so oriented in a Marxist direction that there is no way that we could ever buy their affection or good will?

Mr. BENDETSEN. I do not believe the good will of any nation can be bought. In the case of Marxist Socialists-the United States is the enemy and under all circumstances will remain so. From their viewpoint there can never be any reconciliation although they will stop at nothing to deceive us into believing that accommodation is possible. Many of our people in and out of our own Government are somehow so deceived.

In returning home from signing in the great Pan American Union, the proposed treaty, as Torrijos was flying over the skies of Cuba he sent a message to Castro. I quote it in English from the Spanish translation. This is on September 10.

In returning to my country and flying over the sky of Cuba, I salute you with my everlasting friendship. I wish that the Cuban people under your well-aimed direction will continue its forward march toward progress. In Latin America, your name is associated with the sentiments of dignity that is channeled to the termination of all forms of shameful colonialism.

The friendly words of the Panamanian Government? Friendly to the United States, that is? I doubt it.

DEATH TO THE GRINGO

I have in my written statement something about what the Panama National Guard troops and their chant at the Fort Cimmaron training center. I put it in English. It is like an esprit de corps chant. It says: "Death to the gringo, down to the gringo, to the wall with the gringo." That is their chant and under the proposed treaty, defense is supposed to be joint. A friendly government? Joint defense?

We are assured that the canal is now obsolescent and will soon be obsolete. Our major Nimitz class aircraft carriers cannot transit it. We have one more Nimitz class nuclear carrier on the way. But all other future naval vessels are canal configured including those aircraft carriers of a new generation now being planned. All other naval ships, well over 95 percent, are canal configured.