Captain TORRENS. I believe this is true. However, I do not know the statistics.

Senator ALLEN. So any imposition of added tools would just add to inflation and add to the high price of products being transported; is that right?

Captain TORRENS. That is the way I understand it.

Senator ALLEN. Senator Paul Laxalt is here and he is interested in these issues. I would like to invite him to pose any questions he might wish to present.

Senator LAXALT. Thank you. I think my senior colleague has covered the areas well. Your responses have been helpful.

You say you have 1,000 members of your council?

Captain TORRENS. Approximately 1,000, yes.

Senator LAXALT. How many members are there nationally? Who are the members of the council?

Captain TORRENS. I would say there is no other organization of ships' masters. I would say that probably we represent three-quarters of them. There are approximately 25 percent who may not be active members in the council.

Senator LAXALT. Are these mariners active at the present time or retired or both?

Captain TORRENS. Both.

Senator LAXALT. Are the bulk of them active at the present time? Captain TORRENS. The ones that we have today I would say about 50 percent are active and 50 percent are retired or have gone into some other line of work.

Senator LAXALT. Is there any division whatsoever in their sentiment toward the treaties or are they fairly unanimous ?

Captain TORRENS. I have found that in general they would have gone for a more adamant stand than my statement would indicate. Senator LAXALT. What might that have been?

Captain TORRENS. There would have been maybe a stronger statement against signing the treaty.

My statement I felt would be subject to questioning and the main concern of the council-and the executive committee agreed with me-was that the statement would be the area in which we have expertise not as to whether the canal is or is not owned in perpetuity by the United States or the like. This matter was the subject of many arguments. Whether this would be of benefit to the South American people or the Panamanian people in general could be a big argument. Whether they are entitled to certain things or not-these are areas I could not go along with. But I think there are certain members on the council who would have said or would have had a stronger flag-waving type of approach than our statement given this morning. Our statement against the treaties is confined to our area of particular expertise. Senator LAXALT. If I understand the gist of your testimony, No. 1, the use of the canal by the merchant marines is very significant and terribly important not only to the people whom you represent but also to the interests of this country.

Captain TORRENS. Yes.

Senator LAXALT. Your concern is not expressed so much in political terms-you indicate you don't know the political situation-but I

gather that your concern is that we are trading a fairly stable situation for one that we don't know to be stable.

Captain TORRENS. Right.

Senator LAXALT. As far as the Panamanians themselves are concerned it is my understanding that there are a couple of hundred ship captains in there overall, not Panamanians, but overall; is that right? Only three of them are presently Panamanians; do you know that figure?

Captain TORRENS. I do know what the actual figure is. Pilots, do you mean?

Senator LAXALT. Yes.

Captain TORRENS. The pilots in the canal, as I understand it, are taken from the U.S. merchant marines and qualified U.S. Coast Guard merchant marine officers who have served on American flagships. There may be some that are Panamanians in origin.

Senator LAXALT. As I understand, there are three or four at the present time.

Does this require a high level of expertise?

Captain TORRENS. Yes; it does.

Senator LAXALT. Over what period of time would it take to train someone who is totally unfamiliar with the process?

Captain TORRENS. I think it would take a considerable amount of time in training and ship handling, plus the apprenticeship which would be required for the particular waterway, which is the canal and entering the locks.

Again, I feel that I would not want to take it away from any individual as to what his capability would be. There may be many Panamanians who would be perfectly qualified to do this kind of work.

What I am saying, is that the responsibility that they would have toward their job and their responsibility that they would have toward running an efficient operation, is of concern to us.

Senator LAXALT. I gather in summary, that you find no compelling reason whatsoever as to why the U.S. Senate should ratify these treaties and you find many reasons why we shouldn't.

Captain TORRENS. That is correct.

Senator LAXALT. Thank you very much.

Thank you very much, Mr. Chairman.

Senator ALLEN. Thank you very much, Captain.

WARD S. REED hairman

W. HERBERT ice-Chairman E. POMEROY

cretary-Treasurer

C. GUIDRY

xecutive Secretary, Legal Advisor

MID-GULF SEAPORTS

MARINE TERMINAL CONFERENCE

International Trade Mart Building / P. O. Box 60016 / New Orleans, La 70:60

WEDNESDAY, SEPTEMBER 28, 1977

TO: THE PRESIDENT OF THE UNITED STATES

NEW ORLEANS, LOUISIANA

THE MEMBERS OF THE CONGRESS, AND THE SECRETARY OF COMMERCE

MR. PRESIDENT, CONGRESSMEN AND MADAME SECRETARY:

THE MEMBERS OF THE MID-GULF SEAPORTS MARINE TERMINAL CONFERENCE

WHOSE FACILITIES HANDLE ANNUALLY OVER 13,600 OCEAN-GOING VESSELS

ENGAGED IN INTERNATIONAL TRADE AND COMMERCE MOST STRONGLY URGE AND

REQUEST THAT THE PANAMA CANAL TREATY NOT BE RATIFIED UNTIL AND UNLESS

PROVISIONS ARE MADE TO LIMIT TOLLS AND CHARGES AT THE PANAMA CANAL

TO THAT LEVEL NEEDED TO DEFRAY OPERATING, MAINTENANCE AND CAPITAL
COSTS OF SAID FACILITY, AND THAT THE MARITIME TRADE AND COMMERCE OF
THE UNITED STATES OF AMERICA NOT BE BURDENED WITH THE COSTS OF INTER-
NATIONAL DIPLOMACY, EXPENSES THAT ARE COMPLETELY UNRELATED TO THE

ECONOMIC COST OF PROVIDING CROSS-ISTHMUS PASSAGE OF VESSELS AND

CARGOES. THE COSTS OF PAYMENTS TO THE GOVERNMENT OF THE REPUBLIC

OF PANAMA, IF MET BY INCREASED PANAMA CANAL TOLLS, MAY WELL RESULT

IN DECREASED USE WITH A RESULTANT DECREASE IN TOTAL CANAL REVENUES

AS WELL AS BURDENING SPECIFIC AMERICAN EXPORTS, ESPECIALLY GRAIN
AND MACHINERY MOVING TO THE FAR EASTERN, ASIATIC AND PACIFIC
NATIONS, TO SUCH AN EXTENT AS TO PRICE THEM OUT OF WORLD COMPETITION
THEREBY DEPRIVING OUR NATION AND ITS ECONOMY OF THE LARGEST AND BEST

SOURCE OF FOREIGN EXCHANGE AND INCOME SO VITAL TO A FAVORABLE

BALANCE OF PAYMENTS.

MEMBER PORTS

i

RESPECTFULLY,

EDWARD S. REED
CHAIRMAN

MID-GULF SEAPORTS MARINE

TERMINAL CONFERENCE

CATON ROUGE I BEAUMONT I GALVESTON I GULFPORT I HOUSTON I LAKE CHARLES I MOBILE I NEW ORLEANS I ORANGE

SEPTEMBER 28, 1977

GULFPORT, HISSISSIPPI

TO: THE PRESIDENT OF THE UNITED STATES, THE MEMBERS OF THE CONGRESS

MR. PRESIDENT & CONGRESSMEN:

THE GULF PORTS ASSOCIATION, AN ORGANIZATION REPRESENTING THE PUBLIC DEEPWATER PORTS OF THE STATES OF ALABAMA, FLORIDA, LOUISIANA, MISSISSIPPI AND TEXAS THROUGH WHOSE FACILITIES OVER ONE-HALF OF ALL GRAIN EXPORTS FROM THIS UNITED STATES MOVE AND THROUGH WHOSE PORTS SOME 37.8% OF ALL U.S. CARGOES MOVE IN INTERNATIONAL TRADE AND COMMERCE, SINCERELY AND VIGOROUSLY URGE THAT THE PANAMA CANAL TREATY NOT BE RATIFIED AND BECOME EFFECTIVE UNLESS AND UNTIL REALISTIC, EFFECTIVE AND CONTROLLABLE SAFEGUARDS ARE EFFECTED TO ASSURE FAIR, EQUITABLE AND ECONOMICALLY REALISTIC CANAL TOLLS, RATES DIRECTLY RELATED TO THE OPERATION AND MAINTENANCE OF THE CANAL, AND NOT INCLUDING THE COST OF INTERNATIONAL DIPLOMACY. TO BURDEN THE CARGOS AND VESSELS TRANSVERSING THE CANAL WITH THE ADDITIONAL AND VERY SUBSTANTIAL NON-OPERATIONS COSTS OF PAYMENTS TO THE GOVERNMENT OF THE REPUBLIC OF PANAMA CAN HAVE AN EXTREMELY ADVERSE EFFECT ON NOT ONLY THE CANAL MOVEMENTS, BUT CAN WELL PRICE CERTAIN U.S. EXPORTS WHICH CAN NOT ECONOMICALLY UTILIZE OTHER ROUTINGS OUT OF WORLD COMMERCE. THE EFFECT ON ALL OF THE UNITED STATES PORTS LOCATED ON THE GULF OF MEXICO COULD BE DRAMATICALLY DETRIMENTAL UNLESS RATES AND TOLLS ARE MAINTAINED AT A LEVEL COMMENSURATE WITH THE COSTS OF

CANAL OPERATION.

RESPECTFULLY,

ROBERT C. ENGRAM, PRESIDENT
GULF PORTS ASSOCIATION

Senator ALLEN. Our next witness is Mr. Karl R. Bendetsen. We are delighted to have Mr. Bendetsen appear as a witness. He is one of the mos knowledgeable persons in the country on the history of the Panama Canal, on the history of the various treaties that we have had with Panama, and on the actual operation of the Panama Canal. Under President Truman he was Under Secretary of the Army and had direct control over the operation of the canal from his post as Chairman of the Board of the Panama Canal Company which of course is responsible for the actual operation of the canal.

Mr. Bendetsen has prepared a remarkable statement here which I think should be required reading for all persons in the country who are interested in this question.

There is so much lack of knowledge about the Panama Canal and the treaties regarding the canal and the manner in which the canal came into existence that if every person in the country who is interested in the Panama Canal could read Mr. Bendetsen's statement, then each would certainly have a good working knowledge of just what the situation is.

Both of these statements today will be part of these hearings in book form. We certainly want to see them made available to as many members of the American public as possible.

We look forward to viewing the testimony of Mr. Bendetsen.

We do have time constraints. I would suggest that if it is satisfactory to you, Mr. Bende'sen, that you give a summary of your overall statement with the understanding, of course, that your full statement will be made a part of the record. This would be on account of the time constraints that we have.

Under the Senate rules our committee can meet only for 2 hours after the Senate goes into session. Inasmuch as it went into session at 9 o'clock this morning the rule would require us to conclude our testimony at 11 o'clock.

So, I would like for you to handle matters as you see fit within those time limitations.

TESTIMONY OF KARL R. BENDETSEN, FORMER UNDER SECRETARY OF THE ARMY AND CHAIRMAN OF THE BOARD OF THE PANAMA CANAL COMPANY

Mr. BENDETSEN. Mr. Chairman and Senator Laxalt, I thank you for the complimentary sentiments you have expressed. It is, of course, satisfactory to me to proceed with the convenience of the committee in mind. I have my extended statement here which if need be I can make available.

Senator ALLEN. That will be put in the record exactly as prepared. Mr. BENDETSEN. I will depart from the extended statement and I shall undertake to condense my remarks. There may be time, perhaps, for some discussion.

My first introduction to the canal and the Panama Railroad Company was under the act of 1950, September 26, in which the entire structure was changed. The Congress created the Panama Canal Company, a New York corporation, known as the Panama Railroad Company was merged into it.