These proposed treaties are at least signed, but they themselves are obviously of no value in understanding our rights, since all these extraneous documents keep having to be drafted by platoons of lawyers at the behest of ill-advised negotiators. Certainly, this latest document does nothing but add to the confusion.

Yet, Mr. President, here is former Ambassador Linowitz telling the press at the time the document was announced, and I quote from his remarks:

"There has never been any misunderstanding between President Carter and General Torrijos as to the exact meaning of the treaties. The statement is intended to put to rest any misunderstanding as to what is intended under the treaties."

There must have been some ambiguity if they had to issue a statement to clear up the ambiguity.

It would be difficult to see how there was no misunderstanding and now find the issuance of a statement to clear up ambiguity.

You know, Mr. President, I am glad former Ambassador Linowitz thinks that President Carter and Dictator Torrijos have had no misunderstanding over the exact meaning of the treaties because that at least guarantees that two people on the face of the Earth can read these treaties and make some sense out of them. But what about the rest of us? What about future Presidents? What about future dictators-or, hopefully, what about future elected Panamanian presidentswhich they do not have now, of course? What are they going to have to go on? If ratified, these treaties could stay in effect for many years and would be the best and only evidence of what was actually agreed. But it is indeed comforting. Mr. President, to know that at least the President and the dictator, according to former Ambassador Linowitz anyway, do mutually understand the exact meaning of these quote baffling provisions. Many of us do wish they would let us in on the secret.

So, Mr. President, former Ambassador Linowitz says there is a meeting of minds: let us hear what Dictator Torrijos had to say no sooner than he left the room where this so-called agreement was promulgated. Dictator Torrijos summarized the meaning of this new document this way:

"If a great power attacks the canal or puts the canal in danger, it is the right of the United States to go and defend the canal. But it does not have the right to intervene or interfere in the internal affairs of Panama."

So, Mr. President, already the Panamanians have got their own version of the meaning of the so-called agreement, and I am sure the Department of State will soon too have its own interpretation.

I might say Mr. Torrijos boasted when he got back to Panama that he had not signed a document, he had not even signed an autograph when he was in Washington, conferring with the President; so he is boasting of the fact that he has not signed anything.

Looking at the language of the document, I must say that Dictator Torrijos may well be correct in his assessment of this unsigned paper. As I read the document, it seems to be saying that the United States can take action away from Panama to defend the regime of neutrality which would be established under the neutrality treaty. But, of course, that right would be close to usefulness if the United States did not also have the right to defend in place the canal itself. In other words, if Panama-if Panama decided the canal would no longer be neutral because of an alliance formed with another nation, presumably with Cuba or with the Soviet Union, or if Panama decided that it would be convenient to impose discriminatory tolls, or if Panama decided to make difficult the passage of ships of particular nations, Dictator Torrijos or his dictator successor would be in a position to assert that, all neutrality aside, the United States had no right-no right whatsoever-to intervene within Panama or to interfere with the internal policies and affairs of Panama. Here we are, Mr. President, back at square one. What have we actually gained, Mr. President, by this latest diplomatic triumph-and I might add, Mr. President, I do not believe the country can take too many more diplomatic coups in our dealing with Panama. What have we gained? True, we all read the headlines boldly proclaiming that the President and the dictator had agreed on canal defense rights, but once again, as the truth leaks out, we learn that the document is not even signed, that the document itself is ambiguous, that the document creates problems, Mr. President, and does not solve problems.

This latter point is particularly clear when a thorough examination is given to the language purporting to clarify the rights of American warships to rapid transit of the Isthumus. This language reads as follows:

"In case of need or emergency, warships may go to the head of the line of vessels in order to transit the canal rapidly."

What this unsigned document does not say, however, is who gets to decide what is a case of need or what is a case of emergency. Panama might have one idea about what constitutes an emergency situation and we might have another idea. Why not say it, Mr. President, in simple terms? I suggest the following, which may well be offered as an amendment to the treaty when it comes up here, in the Senate:

"United States warships have the right of priority passage at any time and may at all times proceed ahead of waiting merchantmen."

No, Mr. President, I guess that is too simple so we have elected instead in this. unsigned, meaningless, nonbinding, and confusing document to foment still further potential disagreement by apparently leaving to the Panamanians the right to determine what emergency or which case of need is sufficient to justify priority passage by American war vessels. I think I shall change this word that I have suggested, "waiting merchantmen" to say merely "waiting vessels" rather than merchantmen; that U.S. warships have the right of priority passage at any time and may at all times proceed ahead of waiting vessels.

But listen, Mr. President, what former Ambassador Linowitz is reported to have said on this subject:

"We are hoping it will lay to rest the questions that have been raised so that we can go forward with the approval of the treaties. I don't think, personally, that any further action will be required."

Former Ambassador Linowitz does not seem to be paying too much attention to what is going on over here on the Senate floor, Mr. President, because if he did, he would know that this unsigned, ambiguous document clarifies nothing and does nothing whatsoever to address the many, many other serious—indeed, fatal— defects found throughout the proposed treaties.

I would suggest, Mr. President, that the Department of State pay closer attention to what is being said over here in the Senate because sooner or later, the Department of State has to face up to the simple fact that these treaties are so poorly drafted throughout that the Senate could not properly consent to their ratification. Even proponents of a canal giveaway recognize that fact. Even proponents recognize that both treaties must be rewritten in their entirety.

In my judgment, Mr. President, the Senate should undertake this onerous task. The Senate should, by amendment, rewrite these disastrous proposals now under study in the Committee on Foreign Relations. The Senate should, acting as the Committee of the Whole, sit down to the hard work of undoing the damage and unraveling the mystery of why the Department of State was incapable of reaching an agreement with the Panamanian negotiators which could, at a minimum, protect the vital national security interests of our country.

Unsigned documents clarifying nothing, understandings of no binding legal effect, reservations of rights not agreed to by the other party, are not going to be sufficient. Fanfare and hoopla in the press is not going to be sufficient. The only course of action is extensive and thorough page-by-page, paragraph-by-paragraph, sentence-by-sentence, word-by-word consideration and amendment of each and every provision of both treaties. Both treaties, Mr. President. This process will be long and tedious, very long and very tedious, but if these treaties are not soon withdrawn, it is a duty, Mr. President, we must soon undertake inasmuch as others have not. We must unfortunately also go ahead with the painful process of resolving all of the questions surrounding the peculiar manner in which the treaties were negotiated.

Mr. President, I feel that, as time goes on, we shall see other statements to clear up other ambiguities. I feel that, in the final analysis, we are going to have to amend these treaties here, on the floor of the Senate, and send this amended treaty back to the negotiators to serve as a guideline for further negotiation. Mr. President, I appreciate the Chair's lenience. I know I have consumed all my time. I yield the floor.

99-592-78-16

PANAMANIAN LEADERS GET ASSETS-U.S.

TAXPAYERS GET LIABILITIES

[From the Congressional Record, Oct. 20, 1977-S17376]

THE PANAMA CANAL TREATIES-No. 18

Mr. ALLEN. Mr. President, on several occasions I have brought to the attention of the Senate the various devices and schemes proposed by our negotiators to deliver cash to the Panamanian dictator without the necessity of including those means and methods in the terms of the treaties and without the necessity of seeking, through the constitutional process, appropriations for such purposes in the form of legislation originating in the House of Representatives. In short, Mr. President, I have already previously and frequently expressed my own sense of outrage at the many and varied methods employed to circumvent the Constitution both with respect to appropriations and with respect to the right of the Senate to advise and consent to treaties without action by the House of Representatives providing for the disposition of the property of the United States, that is, the Canal Zone and the Panama Canal. But unfortunately, there is more to discover. We have seen how soft loan agreements are proposed to be used to funnel sums to the Panamanian dictator; we have been how the successor corporation to the Panama Canal Company would be pillaged by mandated payments to Panama; we have seen how commerce will be burdened by increased tolls levied to provide for loan repayment to the large international banks; we have seen how the present Panama Canal Company would be stripped of its most profitable assets, such as the Panama Canal Railroad and the Panama Canal refueling facilities, in order to provide ready cash direct to General Torrijos; we even have seen how U.S. taxpayers would be asked to pay $10 million per year to Panama for the privilege of being subjected to the oppression of the so-called legal system of the dictator-and certainly that is the height of irony, Mr. President, that upon our delivery up to Panama of U.S. territory and property, we would thereafter pay Panama to oppress our own 37,000 U.S. citizens now living in the Canal Zone.

Mr. President, we have seen all these things, and we have accepted the opinion of Nicolas Ardito Barletta, Panamanian Minister of Economic Planning, that the projected cash flow over the 23-year term of the Canal Treaty will be $2.262 billion in 1977 dollars. All this, Mr. President, without a single appropriation and in large measure without even Senate advice or consent.

You know, Mr. President, the principal check on the power of the executive branch, a check heretofore carefully and jealously guarded by the Congress, is the power to appropriate or, more properly, the power to refuse to appropriate from the Treasury.

I see the distinguished Senator from Idaho (Mr. CHURCH), the second-ranking majority member of the Foreign Relations Committee. He has been a strong advocate through the years of the Congress using the power to control the purse strings of the Nation to influence foreign policy. Unquestionably, the war in Vietnam was brought to a close because Congress refused to appropriate further the carrying on of that war. So we have power, which has been carefully and jealously guarded by the Congress, to appropriate, or, more appropriately, in this case, we should have the power to refuse to appropriate, from the Treasury.

The deliberate circumvention of Congress in forking over these vast sums to a reprehensible dictator is beyond the pale, cannot on any grounds be supported, and would certainly itself alone be grounds for defeat of any elected official who permitted the people of the United States to be plundered by the unthinking for the benefit of the unjust.

Mr. President, in our prior discussions of these rip-offs, we may have overlooked by accident an item amounting to some $319 million which our negotiators propose to, in effect, extract from American workers and American taxpayers. To be sure, in the grandiose schemes conceived down there at the Depart

ment of State $319 million must look like a drop in the bucket. But frankly, Mr. President, it galls me that our negotiators must have figured we here in the Senate would not even notice this particular strategy.

Mr. President, the Panama Canal Company is a corporate entity run as a business and subject to the Corporation Control Act of 1950. At present, the unrecovered investment of the Company is $319 million. That is what the Canal Company owes the U.S. Treasury as the balance of the cost for building the canal. This unrecovered investment is, in effect, a debt to the U.S. Treasury. Since the opening of the Panama Canal, this debt has produced over the years some $642,080,000 in interest payments from the Canal Company into the U.S. Treasury. Additionally, Mr. President, $40 million of the principal sum initially owed to the Treasury has also over the years been repaid. These payments of principal have occurred as follows: $10 million in 1955; $5 million in 1956; $10 million in 1960; $10 million in 1968; and $5 million in 1969. Annual interest payments have also been quite substantial, and in 1976, Mr. President, the Panama Canal Company paid to the Treasury $16,600,000 in interest on the present outstanding unpaid principal of $319 million.

So, Mr. President, the operator of the canal owes the U.S. Treasury $319 million. What we are doing under the treaties, is giving Panama this canal on which $319 million is still owed free from any indebtedness whatsoever, giving them free and clear title, not requiring the $319 million to be paid.

This is a business, Mr. President, a business which has a liability, a business which has over the years reduced its debt and has paid interest into the Treasury for the benefit of U.S. taxpayers.

Certainly, if Panama should take over the canal under these treaties, why should they not be required to pay off the mortgage, so to speak? If a person has a house on which there is a mortgage and that person gives the house to someone, would it not be proper for them to pay off the existing mortgage on the house rather than to make a gift of the house free and clear?

That is what we are being called upon to do. The Canal Company, the operator of the canal, owes the U.S. Treasury, owes the American people, $319 million. But as we give the canal to them under the treaties, we do not require this $319 million to be paid.

The operation of the Panama Canal is a profitable business. They are able to keep up their interest payments; they are able to make their principal payments. If we give the canal to them, why not give it to them subject to this indebtedness so that the U.S. Treasury could at least get back a portion of the cost of the canal? Do not give it to them free and clear; give it to them subject to existing mortgage, shall we say.

But let us look, Mr. President, at what our negotiators have worked out with the Panamanians. Bear in mind, Mr. President, that our negotiators are proposing to give away the Panama Canal Zone, the Panama Canal, all the plant and facilities belonging to the Panama Canal Company-our negotiators are planning to more or less give away the whole operation lock, stock and barrel. Yet, Mr. President, as part of this process and in addition to the $2.262 billion in 1977 dollars already slated for delivery to the dictator, our negotiators have worked out a way to stick the American taxpayer with this $319 million debt. Our negotiators propose to set up an entirely new operating entity in Panama to carry out the present business being conducted by the Panama Canal Company. This new operating entity would be called the Panama Canal Commission. It is just a change of words, but they can start off owing no money and canceling this $319 million debt for this new company.

It would more or less spring to life upon implementation of these treaties, somewhat as Athena sprang from the head of Zeus. With no prior history and as a corporate entity unto itself, this new proposed Panama Canal Commission would get nearly all the assets of the Panama Canal but none of the liabilities. If a person sells a business to somebody, it is sold subject to its indebtedness, or take account of the indebtedness into consideration on the price to be paid. But no price is to be paid here. It is going to be a free gift with the cancelation of the mortgage, in effect, which is now on the canal.

Of course, Mr. President, some of the assets of the Panama Canal Company would be ripped off right at the beginning and given directly to the Dictator, but the great bulk of the assets of the Panama Canal Company would be transferred to this new Panama Canal Commission: the $319 million debt, however, would remain a liability of the defunct Panama Canal Company.

It would not have any income or any assets, but they would owe the money. This debt would not be transferred to the operating company, the Panama Canal Commission.

Mr. President, there is no ambiguity about these provisions. They are very clear as to what is going to happen. This is certainly the case of a needed amendment to the treaties to at least provide that this new commission which is going to take over will assume this indebtedness of $319 million to the people of the United States.

So, really, the Panama Canal Company owes this money and it should be paid. It should be paid out of the revenue. They are making enough money to continue paying the interest and, gradually, to reduce the principal. That is not being required, though, in the treaty. I think that is certainly one basis for an amendment that I hope the Senate will adopt.

So they get the canal, Mr. President, they get the business, but they do not get the debt. The United States taxpayer-you know who he is, Mr. President. He is the man that always foots the bill; he is the man out there working on a dock trying to earn a living for his family; he is the man in a cornfield in Iowa working in the hot sun; he is the man in a steel mill in Youngstown, Ohio, sweating to produce steel so that other workers can assemble automobiles. And, Mr. President, he is the man that, every time the Department of State gets its fingers in the pie, has to pay. So the taxpayer is going to have to pay this $300 million and it is not going to come out of the revenues of the canal. They go to this new commission, which, in effect, is saying that they go to Panama.

And whom does he have to pay, Mr. President? In this case, he has to pay a repressive, petty gangster dictator. In this case, he has to pay an elitist gangster government which makes no effort on behalf of its own destitute people but which is perpetually preoccupied with the pursuit of individual personal profit by whatever means, apparently even illegal means resulting in the death and suffering of our own citizens in this country.

But I am disgressing, Mr. President, from my purpose, because even though I find disgusting the suggestion that our Nation ought to give this gangster regime one of our most valuable national assets while, at the same time, paying to it billions in U.S. funds, my real purpose in speaking this morning is simply to raise the impropriety-as a matter of simple business ethics-my purpose is simply to raise the clear impropriety of delivering all of the assets of one company to another new company and thereafter saddling the stockholders of the old company with all the debts, all the liabilities, and none of the benefits.

But I do not suppose that fact ever occurred to anyone down there at the Department of State. I do not suppose they have given any thought as to what business the Panama Canal Company could go into to cover its $319 million debt to U.S. taxpayers. With no assets and no business to operate, it is going to be pretty rough to come up with that kind of money. It is going to take a real miracle worker just to come up with the annual interest of $16 million from a company with no income and no assets.

Obviously, Mr. President, the Panama Canal Company would be bankrupt if these treaties are ratified, and the owners of the Panama Canal Company, the people of the United States, would again be left holding the bag.

What did our negotiators obtain for this $319 million concession? What benefits are likely to accrue from saddling U.S. taxpayers with this unpaid liability? Frankly, Mr. President, I can find nothing whatsoever anywhere in the treaties. to justify the assumption of this debt or of the payment to Panama of the other tremendous sums proposed to be paid. We have gained no concessions whatsoever from the Panamanians. We have gained no rights which we did not already possess under the existing treaty structure. Our negotiators have given in on every issue and our negotiators have even proposed that we assume the debts of the potentially profitable business we are presenting to Panama.

These treaties lack mutuality of contract; these treaties are unsupported by consideration; these treaties are, as they have been identified from the outset, a simple giveaway. One almost questions the necessity for having a treaty at all if these are the sort of proposals being advanced by the Department of State. It is all give and absolutely no take.

There is one final footnote to this particular deception which I have made the subject of my speech this morning. Inasmuch as the new Panama Canal Commission would be free from debt and would possess perhaps the most valuable commercial assets in the world, the Panama Canal, would we not very soon see demands made by our Panamanian partners that the newly acquired assets of