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Following a telephone call I made to the White House, Mr. Richard K. Cook, Special Assistant to the President, addressed a letter to me under the date of June 16, 1971, as follows:

"THE WHITE HOUSE,

Washington, D.C., June 16, 1971. "Hon. LEONOR K. SULLIVAN, House of Representatives, “Washington, D.C.

"DEAR MRS. SULLIVAN : President Nixon has requested that I reply further to your letter of May 20, 1971, expressing your views on United States jurisdiction over the Panama Canal and the Canal Zone. We are aware of and appreciate your long-standing interest in this important matter.

"We share your concern that the United States safeguard its vital interests in the Panama Canal. The question of our interests in the Canal, and how we might best maintain them in light of Panama's interests in discussing our treaty relations, is now under broad review within the Executive Branch. Please be assured your views will be taken into account during this process. “Sincerely,

"RICHARD K. Cook, "Special Assistant to the President.

An April 24-25, 1971, the St. Louis Globe-Democrat, under the by-line of Edward O'Brien, carried the following story :

“THE PANAMA CANAL; St. Louis CONGRESSWOMAN LEONOR K. SULLIVAN IS READY

To TAKE ON THE NIXON ADMINISTRATION, AS SHE DID THE JOHNSON ADMINISTRATION, IF ANOTHER ATTEMPT IS MADE TO GIVE AWAY WATERWAY

“(By Edward O'Brien)

"WASHINGTON.-A battle is building up between the Nixon Administration and a determined lady from St. Louis over the future of the Panama Canal.

Democratic Representative Leonor K. Sullivan took on the Johnson admnistration in 1967 on the same issue and won. Now she has served notice she will fight just as hard again to block what she regards as a renewed effort to give away one of this country's prize resources——the canal and the strip of land beside it from the Atlantic to the Pacific.

“A few days ago she warned the House she had learned of a step toward quiet reopening of negotiations between the state department here and officials of the Republic of Panama.

"I regard this activity on the part of the admi ration at this time to be extremely dangerous and ill advised,' she said.

"Undoubtedly, reopening negotiations will result in protest by the American people when they learn the facts.'

"As seen by Mrs. Sullivan, who was chairman of the House Panama Canal Subcommittee for 14 years, the basic facts about the canal are clear and persuasive:

"Under the original treaty of 1903, the United States built the canal, pays rent, and has operated not only for the benefit of the western hemisphere but as a trustee for the entire world.

“The United States has lived up to all its treaty obligations and in fact has voluntarily liberalized its side of the bargain on several occasions.

"The canal has been managed with showcase efficiency, bringing untold benefits to world commerce and the people of Panama.

"It has been of immense strategic importance, economically and militarily, to the United States, and has served to unify the nations of the Americas.

“After making this case, Mrs. Sullivan wonders why the United States seems eager to surrender its lawful rights, which amount to American sovereignty over the canal, and transform a solid and priceless asset into a shakey and unreliable pawn of Panamanian politics.

“Neither in 1967 nor at present has a satisfactory answer even been given to her question.

"When representatives of the two countries agreed tentatively on a revised canal treaty in 1967, after four years of talks, a principal justification for surrendering of United States control was that Washington probably would want to build a second canal in the Republic of Panama and would have to make serious concessions to obtain the needed land and permission.

“But now, according to Mrs. Sullivan, the second-canal project is just about dead. The waterway could not be built by the hoped-for nuclear excavation because of technical problems and the international ban on open-air nuclear blasts.

“Without nuclear excavation, the new canal would cost $2.5 to $3 billion. Since it would be sea-level ditch and would join the waters of the Atlantic and Pacific, serious ecological questions also were raised.

“The solution as urged by Mrs. Sullivan and others, is to continue to improve the ship-carrying capacity of the present canal. If this is done she says, the canal will be adequate until at least the year 2000.

“The 1967 treaty proposal was never signed by either country. Alerted by Mrs. Sullivan, Democratic Representative Daniel J. Flood, of Pennsylvania, and others in both parties, Congress went on record as overwhelmingly opposed to what was widely regarded as a State Department blunder of the first magnitude.

“No less than 105 resolutions were introduced in the House of Representatives demanded that the United States maintain its jurisdiction and control over the canal, and drop the proposed new treaty.

“In the Republic of Panama, anti-American elements also fought the treaty.

“Radicals denounced the government for making 'concessions to the United States, and the negotiators tried to defend the agreement by saying, with undeniable candor and accuracy, that it would 'reduce to a minimum the presence of the United States in Panama.'

“Today, several governments later, Panama's military dictatorship is pressing in several ways to obtain control of the canal and increase its financial take through higher tolls.

“A year-end report by Mrs. Sullivan's subcommittee stated that Panama 'has embarked on a calculated program of protest and harassment of the United States.'

"While making false charges of improper conduct against the United States, the report said, Panama has violated its own commitments by taking 'illegal and discriminatory' actions against Americans in the canal zone and has kept up 'a constant drumfire of anti-American propaganda.'

“The Sullivan report, with some charity, characterized Panamanian behavior as intended to 'force new negotiations and treaties' even more damaging to the United States.

“One of her allies in the canal fight, Sen. Strom Thurmond (Rep.), South Carolina, used stronger language.

“ 'It is clear that the Panamanians are seeking to seize upon their geographic position as a means of extorting enormous revenues, not only from the United States, but from every user of the canal,' he said recently.

“ 'If Panama were allowed to take over the operation of the canal, the canal's long history of impartial access for ships of every nation would be destroyed.

'Panama would be in the gleeful position of a pirate strategically positioned in a narrow strait.

“ 'The whole motivation of the Panama takeover and the real goal behind their crocodile tears about the alleged insult to their sovereignty and dignity can be seen as a remarkedly ingenious greed for seizing control of a waterway which must be used by the world.'

“Mrs. Sullivan is sympathetic to the plight of Panama's poor. She has criticized the country's ruling elite for selfishly exploiting the country's wealth for their own enrichment instead of raising the lot of the masses.

"In her recent subcommittee report, she suggested increased U.S. foreign aid to Panama as well as a system of assistance underwritten by the major maritime nations and principal users of the canal.

"But the canal itself, she insists, should never be tossed into the aid pot.

“Mrs. Sullivan is no longer chairman of the House Panama Canal Subcommittee. Under a new housekeeping rule in the House, she may not serve as chairman of more than one subcommittee.

“But her expertise is still recognized as it was in 1967. On the other side, Washington has sent to Panama the same chief negotiator, Robert B. Anderson, who was Treasury Secretary in the Eisenhower administration."

On June 17, 1971, the Wall Street Journal carried an article by James C. Tanner, titled “Puzzle in Panama-Torrijos Brings Calm, Prosperity to Nation at Expense of Freedom," as follows:

"PUZZLE IN PANAMA-TORRIJOS BRINGS CALM, PROSPERITY TO NATION AT EXPENSE

OF FREEDOM

“(By James C. Tanner) “PANAMA CITY.—Over lunch of chicken and rice in the sprawling white headquarters of the National Guard, Brig. Gen. Omar Torrijos, the nation's dictator, tells this story: While visiting peasants recently, he tried to explain his agrarianreform plan. But they talked and talked and wouldn't let him get a word in. Finally, he exploded. “For Pete's sake, who's the dictator here?'

“Actually there's no doubt who the dictator of Panama is. The only doubt is the direction in which this country may be headed under the 42-year-old strong man. The U.S. is concerned, of course, because of key U.S. military bases here and the strategic Panama Canal.

"That U.S. stake in Panama will come under scrutiny this month, when the U.S. and Panama begin negotiations in Washington covering controversial treaties in effect since 1903. The talks will concern replacing these pacts with new ones governing the operation of the bases and the canal.

"Aided by a heavy flow of U.S. financing, Gen. Torrijos has brought a goodly measure of prosperity and what he calls 'social peace to this volatile S-shaped isthmus since the National Guard took over in a bloodless coup in late 1968.

“The general, supported by the powerful paramilitary guard he commands, controls Panama's provisional president and a puppet cabinet. For the moment, at least, he has silenced all opposition by jailing or driving into exile major foes and by abolishing the national assembly, banning political parties and muzzling

the press.

“But now Gen. Torrijos is setting out on a bold new course to build popular support and possibly to put new pressure on the U.S. as the treaty negotiations approach. He openly admires the leftist military regimes of Peru and Bolivia, and he is beginning to steer his government to the left also.

“Observers see in the trends ominous hints of an anti-U.S. compaign designed to wring new concessions from Washington regarding the 50-mile-long canal, which splits Panama geographically and psychologically. For the coming talks, Gen. Torrijos handpicked the three negotiators, whom he describes as 'the new intellectual aristocrats' of Panama. Some Americans here fear that major demonstrations against the U.S. will follow, perhaps leading to mob violence and riots similar to those that began in 1964.

"A PROBLEM OF JURISDICTION

“Gen. Torrijos agrees that there may be violence. But he says this will occur only if the U.S. again balks on the hot issues of jurisdiction over the 10-mile-wide canal zone and of Panama's share of the waterway's growing revenues. The U.S. has repeatedly refused Panamanian demands to give up its control of the zone and to increase the flat royalty of $1,930,000 that Washington pays annually to Panama.

“Gen. Torrijos insists, however, that he has been making sweeping changes among top governmental officials not because he wants to pressure the U.S. but because he is looking to the poor of Panama for the power base he lacks. With some success he is wooing peasants, workers and students. At the same time he has decreed stiff new taxes and other measures equally distasteful to the oligarchy—the wealthy families who traditionally have owned most of Panama's resources and, until the National Guard assumed power, its politics.

“In the process, some known Marxists are finding work in key government agencies, and critics of the government contend they are being encouraged to do so by the leftists Gen. Torrijos named to top government posts. Indeed, the Moscow-leaning Communist Party in Panama is operating openly although all political parties and politicking are outlawed by the Torrijos government. (But a Peking-oriented Communist group has been smashed by the National Guard.)

"MAJOR CAUSE FOR CONCERN

"It was a recent cabinet shakeup by Gen. Torrijos, however, that is causing the most concern among businessmen, who worry that the backgrounds of some of the new ministers are a clear indication of the government's leftish push.

"Most of the new ministers term themselves pragmatic nationalists. "I believe in a social reordering that will bring justice," says Jose Guillermo Aizpu, the new finance minister. “If it's necessary to call that socialistic, then I may be a little bit to the left."

“Even some of the dictator's most avid supporters have been saddened by his appointments of Juan Materno Vasquez to the prime post of minister of government and justice and of Romula Escobar Bethancourt as rector of the University of Panama. Vasquez is a brilliant but controversial jurist known to have been a Marxist, and Escobar is an extreme leftist who numbered among his friends Cuba's late Che Guevara.

“Both are former classmates of Gen. Torrijos, who praises their political expertise and staunchly defends them. ‘As an adolescent one gets to be an anarchist by virtue of social injustice,' the dictator says. 'But if after reaching 30 he still follows that line, he is a fool.'

“Gen. Torrijos firmly declares : “Those who oppose us brand us Communists. But the humble classes of people who make up nine-tenths of our population are more concerned with the intentions of the government than its origin.' Then he adds, 'The first rule of government is not to fall.'

“Following this rule, the dictator stumps the interior by helicopter to increase his popularity among peasants and workingmen. To keep the oligarchy in hand, he exercises an old tactic of dictators—fear.

“Even if criticism of the government weren't a crime and it is—there wouldn't be any place to voice it. The six daily newspapers are run by publishers appointed by the government. All political meetings are banned. Former politicians are afraid even to be seen talking with a foreign newsman. Through an intermediary a meeting is arranged with a former president. But on the way to the site the reporter is taken on a twisting path through back streets so that anyone following will be thrown off the trail.

“Many Panamanians insist that their phones are tapped and complain of harassment by the government. It is well-known that the government has built a network of informants. The investigative arm of the National Guard openly appeals for additional informers. In a series of newspaper ads, it urged that “suspicious persons” and “important information” regarding “security of the country” be reported to the Guard.

“Government spokesmen insist that no political prisoners are being held. Other sources, maintain that at least 200 are in Panama's jails. Just after the 1968 coup, there were an estimated 1,600.

“WELL-TRAINED, LEAN AND MEAN “But plotting against the government continues despite arrests and other harsh restrictions imposed by the Guardsmen, whom one U.S. military analyst describes as “well-trained, lean and mean.” One recent plan to topple Gen. Torrijos was postponed at the last moment. But many Panamanians opposed to the dictator say any change in government depends largely on the U.S.

“Some are bitter because the U.S. hasn't at least choked off funds that help the general stay in power. And a former holder of a high Panamanian political post says the U.S. is "morally obligated to intervene.”

"Except for a handful of Congressmen who charge that the Soviet shadow is beginning to reach across the Panama Canal, U.S. officials generally disagree with the theory that Washington should intervene. These officials note that President Nixon's approach is to deal with governments as they are.

"Because of the restraints against politicking and criticism, there apparently isn't anyone closer than Miami who has a chance of overthrowing Gen. Torrijos. The most likely prospect is Arnulfo Arias, the legally elected president of Panama. "BATTING AVERAGE: THREE FOR THREE

“Mr. Arias is perhaps the most popular and controversial political figure ever to emerge in Panama. A former wealthy plantation owner and Harvard-trained surgeon, he has always drawn strong support among the nation's poor. But some in the oligarchy scorn him, and the National Guard has always fought him. He has been elected president three times, only to be ousted by the Guard on each occasion. The last time he served as president for only 11 days. Now nearing 70, Mr. Arias lives in exile in Miami.

“Mr. Torrijos, a major in a province garrison at the time, surfaced as one of the instigators of the October 1968 Guard revolt against President Arias. Subsequently, Mr. Torrijos emerged as the leader. In December 1969 while the general was on a trip to Mexico, a group of colonels in the Guard staged a countercoupbrief and unsuccessful. Gen. Torrijos hustled back to Panama, marching triumphantly into the capital just in time to intercept telegrams intended for his would-be successors.

"Moving to strengthen his political base, Gen. Torrijos appointed as provisional president Demetrio B. Lakas, a Panama contractor and trusted friend. Speaking in a Texas accent after seven years spent in that state, President Lakas bridles at talk that the general now is turning to the left. 'I will never follow a Communist,' the president declares, but I will follow a man with social sensibility.

“A suggestion of this 'social sensibility came a year ago. In a letter to Sen. Edward Kennedy, Gen. Torrijos predicted the emergence of a new type of military' in Latin America ‘convinced of the value of peaceful changes that promote the replacement of old structures.'

"EXCEDRIN HEADACHE-LATIN STYLE "Today Gen. Torrijos doesn't give any indication he plans to restore constitutional government at any time soon. 'One thing proved in the America's, he says, 'is that the parliamentary systems and political parties are obsolete museum figures.' He contends that every country has to look for its own brand of aspirin to cure its own headaches.'

"Indications that the general was setting out on a deliberate course to cross the U.S. began appearing months ago. First, he refused to renew an agreement on U.S. use of the Rio Hato air base, from which Americans now have withdrawn. Then he told the Peace Corps to go home. And he recently announced that Japan was interested in bidding on construction of a new sea-level canal across Panama, a waterway that many authorities believe will soon be needed to handle increasingly larger ships.

“Whatever his differences with the U.S., Gen. Torrijos is getting some plus marks at home. His government attracts bright young men with advanced degrees from U.S. universities who are pleased at the social challenges and the lack of bureaucratic red tape. To get laws passed, all they have to do is persuade the general to issue a decree. "Technicians and intellectuals disappear from the political arena when a government is dangerous. Here there is a remigration of brains,' says Hernan F. Porras, the minister of commerce and industries.

“The streets of the capital are free of garbage-long a political issue—and the gross national product of Panama has reached $1 billion and grows in real terms at a rate of 4% to 5% a year. Per-capita annual income approaches $625, ranking third or fourth in Latin America.

THE ROLE OF THE CANAL

“The canal is a big contributor. In payrolls and purchases, it adds about $160 million a year to the Panamanian economy. The U.S. has lent Panama $100 million in the past 10 years, much of it since Gen. Torrijos has taken power.

“How much of the prosperity is due to government pump-priming isn't known. It has borrowed heavily from abroad, and some observers suggest that Panama may be nearing a credit crunch. ‘What happens when the money runs out? one observer asks.

“The government, however, is beginning a push for tourists and is trying to attract more foreign investments. A wave of such investments is coming in from South America, Europe and Japan, and U.S. companies have already invested $1 billion here.

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