It is within this framework that the Panama position is of the greatest significance to the strategic control of the Caribbean and to the security of the United States in the area-already threatened by Castroism and communism-would probably be engulfed by a hostile sea. Thus, the Panama Canal, strategically significant in its own right, is far more important to the United States as a part of the vital whole of Caribbean-Gulf of Mexico security.

ECONOMIC CONSIDERATIONS

The economic factor is also of major importance in the canal-Caribbean equation. In the past four years, the canal, for the first time in its history, has lost money, despite its first toll increases in seventy years. Part of this loss appears to be due to a change in bookkeeping practice: for the first time amortization costs for the original excavations of the Panama Canal were charged off, apparently in anticipation of a treaty transferring sovereignty. But there were more important economic causes. The world recession and the reopening of the Suez Canal in 1975, currency devaluations, and rapid inflation which increased the canal's operating expenses from about $182 million to $260 million in four years, as well as the increase in "land-bridge" traffic (that is, the shipment of containers from Atlantic to Pacific ports by rail) all contributed materially to a recent period in which ship transits, contrary to the long-term trend, did not increase on an annual basis but stabilized or declined.

Nevertheless, in recent years, there have been some 12,000 to 14,000 ship transits annually; vessels of all the nations of the world have been lifted from sea to sea economically and efficiently. Ships flying the Liberian and Panamanian flags-socalled flags of convenience-many of them actually owned by U.S. citizens, ships of Latin American nations, and vessels flying the flags of Latin American nations, and vessels flying the flags of Great Britain and the United States are among the greatest users of the canal. The fees they pay (still only half as high as the Suez Canal fees) are a small price for the savings and convenience of the short transit. To the American economy, and particularly to U.S. overseas shippers and importers, the canal has major importance; it has been estimated that, of all cargoes transiting the canal in ships of all flags, about 60 to 70 percent are bound to or from U.S. ports. More than 1,000 transits annually are by U.S. flag ships, and an increasing number of them are “Panamax" vessels specially designed to fit snugly the locks of the canal. Many of these are engaged in the growing container-ship traffic from the East Coast and Europe to the Orient.

Some thirteen major trade routes funnel through the Caribbean Sea-Gulf of Mexico-Panama Canal region. The skies and waters of the Caribbean and the Gulf are vital arteries for U.S. industry and trade, through which pass coffee and fibers, manganese and iron ore, beryl and colombium from Brazil; oil and iron ore from Venezuela; bananas and other tropical fruits from Central America; copper from Peru and Chile; bauxite from Jamaica, Surinam, the Dominican Republic, and Haiti; antimony and tin and tungsten from Bolivia; zinc from Mexico and Peru; sugar from the sugar islands of the Caribbean. These products and others are essential to U.S. industry, and Latin American markets help to maintain U.S. prosperity.

The so-called Sun Belt of the United States, that growing and prosperous region extending across the country from southern California to Florida and Georgia, is greatly dependent upon its gateways to the world. The most important of these are the Gulf Coast ports and the entrance to the mighty Mississippi River. All the approaches to this area lie through the Caribbean-Gulf of Mexico region. The seas that wash these shores also border Mexico, where newly discovered major reserves of petroleum add immeasurably to the importance of this vast southern region for our future security.

There is, too, in the Gulf of Mexico, extending seaward farther and farther from our shores, a resource that is increasingly more precious than gold-the offshore and undersea deposits of gas and oil, resources which require security for their development. And one of the plans for transporting the oil of Alaska's North Slope to the hungry markets of the "lower forty-eight" contemplates shipment by tanker through the Panama Canal to Gulf and East Coast ports.

POLITICAL AND PSYCHOLOGICAL FACTORS

Even more compelling than the military and economic importance of the canal are the political and psychological considerations. Since the failure at the Bay of Pigs, U.S. foreign policy has suffered a series of severe defeats; we have

been in retreat in many places around the world; human errors, gloomy Spenglerian indecisiveness and confusion, poor leadership, and a lack of mobilized national will have led to the loss of Vietnam and our retreat from Southeast Asia, the debacle of Angola, the substitution of Communist for U.S. influence in Ethiopia-and, in the Caribbean, the transformation of a friendly Cuba into a springboard for Soviet imperialism in the Western Hemisphere. As the Pueblo, Mayaguez, and other incidents have shown, even second- and third-rate powers now dare to tweak Uncle Sam's nose.

This process of losing not only face and prestige but also control has gone far in the Caribbean; it will accelerate greatly if we abandon the canal. The muchmaligned domino theory was valid for Southeast Asia; along with Vietnam, Cambodia and Laos fell to Communist governments; Thailand expelled our forces; the Philippines immediately announced a shift away from the United States and demanded a revision of our base agreements; and all over the world, U.S. resolution and will were questioned. The domino theory is equally valid for the Caribbean: if Panama goes, all our positions there may eventually follow.

This is particularly true of Guantánamo Bay at the western tip of Cuba, a base important for training and, because of its geographical location, commanding the Windward Passage. The treaty that governs our use of the base is remarkably similar in some ways to the Panamanian treaty. We enjoy at Guantánamo Bay "complete jurisdiction and control," or de facto exercise of sovereign rights, over some 29,000 acres of land and water. (There is a major difference; we concede in the Cuban case that "ultimate sovereignty"—not defined in the treaty— resides in Cuba, but our "complete jurisdiction and control" continue indefinitely until the United States voluntarily "abandons" the base or agrees mutually with Cuba to revise the treaty.) In other words, we lease the Cuban base and under the terms of the lease, which can be terminated only by mutual agreement, we hold sovereignty over it. But we do not-as we do in Panama-own the land or water.

If we give up our sovereign rights in Panama and abandon the canal, it seems certain that Castro-who long ago cut off the Guantánamo Bay reservation from the rest of Cuba-will reassert his past demands that the United States get out. Nor is "Gitmo," as the Navy calls it, the only threatened point d'appui. Castro has never made any secret of his ambition to be, in his own right, a dominant figure in the Caribbean and, with help from the Communist bloc, to make the neighboring island and mainland countries safe for Marxism. Indeed, his Communist and Third World alinement has led him with Moscow's encouragement and support far afield from the Caribbean, to the African continent, where Cuban troops armed by the Soviet Union have been operating in various countries for years. By far the largest and most ambitious manifestation of Castro's determination to make the world safe for communism was, of course, Angola, where a leftwing faction in a three-way civil war took over the country only because some 12,000 to 20,000 Cuban troops, transported chiefly by Moscow and armed and supplied by the Soviet Union, easily overran the primitive guerrillas that opposed them. Castro must be judged by his actions as well as by his words, and his actions-endorsed and supported by the Soviet Union-are clear. Indeed, Castro and Brezhnev jointly reiterated during Castro's visit to Moscow in the spring of 1977 their determination to continue to support revolutions around the worlda public statement that seemed to cause few ripples in Washington, intent on "normalizing" relations with Cuba.

At Russian urging, Castro abandoned some years ago his overt attempts to subvert other Latin American countries; his strategy is now more insidious being largely, though not entirely, covert. His Russian-trained agents operate secretly in numerous countries, through propaganda, subversion, and infiltration of key government positions. He has encouraged and supported all left-wing governments in the Caribbean, with training missions, agents provocateurs, guerrillas. His spore, which is to say the spore of Soviet communism, is everywhere in the area; his agents have appeared in Jamaica, Guayana, Puerto Rico, and Panama. Nor would "better relations" between Cuba and the United States halt these subversive manipulations; any Communist program includes, alongside the formal and overt implements of policy, their unofficial and covert counterparts.

Even more important, a U.S. retreat from Panama would probably put the last nail in the coffin of the Monroe Doctrine. Until Castro took power and Cuba became a Soviet protectorate, this 150-year-old policy-that the Western Hemi

sphere was for the Americas-was a no-trespassing-sign to Moscow's imperialism. Under the Monroe Doctrine the Caribbean had been-particularly throughout the twentieth century-within the U.S. "sphere of influence," a term that today is too often misunderstood and denigrated. This southern sea has been as important to us as Eastern Europe has been to the Kremlin. It has lost none of that importance, but communism in Cuba, fortified by the largest Soviettrained and equipped army in Latin America, a Soviet submarine base at Cienfuegos, Soviet antiaircraft missiles in large numbers, and modern Soviet aircraft flying from Cuban bases, some of them piloted by Russians, has gravely threatened our predominance.

A retreat from Panama would be certain, therefore, to further impair our political and psychological position in the Caribbean and throughout the world; its specific effects cannot be forecast. It is clear, however, that a cession of sovereignty by the United States, in the face of the open demands and threats of violence made by Panama's Torrijos government with the overt backing of Castro and Moscow would weaken our power position, our prestige, and our pride. Guantánamo Bay would be next to go and the ripples would spread far. The world would again ask as it did after the Pueblo, Vietnam, Angola: Is the United States a paper tiger? Are its will and resolution to be depended on? Where would Washington draw the line if not at its own back door?

ARGUMENTS FOR ENDING U.S. SOVEREIGNTY

All of these considerations appear to support so clearly the retention of the Panama Canal under U.S. sovereignty that one may well ask why the question of transferring the canal to Panama is even an issue. What possible arguments can be made for it?

There are, I think, three principal reasons for Washington's persistence in adhering to what the great majority of Americans (according to the polls) believe to be an aberration, a mistaken policy, namely, the relinquishment of sovereignty. These reasons are related and mutually reenforcing.

First, there is particularly among our intellectuals, our literate and literary opinion molders, our academics, and our liberal political thinkers-what Robert M. Utley has well described as "a national guilt complex that would expiate sin by bending history to modern social purposes." This stems, I believe, from the great emphasis in the past two decades on civil rights (particularly for the Negro, the Indian, and minorities), the excesses of Watergate, the trauma of Vietnam, and blind frustration at the changing world about us. The American pride of the past has given way to the breast-beating shame of the present. This guilt complex has been particularly pronounced in that small but highly important group of managers and public servants and opinion formers who tend to make policy.

The second reason is simply obfuscation-what has been described as "our lack of purpose, our strategic self-effacement, and our confusion."2 These are particularly evident in the State Department's canal policy. There has been little evidence of firm, coherent, positive policy; rather we have been diffident, divided, and defensive. Our great efforts have been largely patch-and-mend. Compromise and concession are essential parts of diplomacy, but when they are used merely to paper over cracks, they inevitably lead to defeat and retreat, especially when the adversary is aggressive, strong, and expansionist. A third reason is the change, since World War II, in the world around us— the end of empire (except the Soviet empire), the excoriation of colonialism, the gradual exhaustion of some U.S. raw materials such as oil, and the consequent increasing political and in some cases economic importance of a plethora of newly independent Third World countries. In particular, the ultimately successful seizure of control of the Suez Canal by Egypt has had an important influence, not only upon the government of Panama but also upon some of our own intellectuals.

And now the chickens have come home to roost. As a result of all past mistakes and fruitless concessions, we are facing a put-up-or-shut-up situation.

The waffling of past administrations and, since the Suez takeover in 1956, a long series of concessions reached a point of no return in 1974 when Secretary

1 Robert M. Utley, The Contribution of the Frontier to the American Military Tradition, Harmon Memorial Lecture, U.S. Air Force Academy, Sept. 30, 1976.

2 Roger Fontaine. Introduction to Mario Lazo, Panama Canal Giveway, Special Study No. 1 (Washington, D.C.: Council for Inter-American Security, 1977).

97-565-77-4

of State Henry Kissinger, in a personal visit to Panama, initiated a document which set guidelines for the treaty negotiations that are now reaching their culmination. This Joint Statement of Principles proposed that at some future undetermined date the operation and defense of the canal would become a joint U.S.-Panamanian responsibility, but that the canal and the U.S. territory of the Canal Zone would ultimately be transferred to Panama.

This unprecedented action, which, in effect, would give to Panama territory over which the U.S. flag has flown for more than seventy years and canal installations that have cost the U.S. taxpayer a total of perhaps $7 to $8 billion, was a unilateral action of the executive branch, unauthorized by Congress, indeed, unknown to most congressmen until after the fact. In brief, this is what the current debate and the battle still to come in the Senate are all about: will the Senate rubber-stamp Henry Kissinger's fait accompli, or will it reassert, as it has done on other issues in the past decade, its ancient prerogatives?

THE HISTORY OF U.S. SOVEREIGNTY

Many of the arguments for the switch in sovereignty and much of the conscious or subconscious motivation for it stem, in part, from ignorance or distortion of the manner in which the Panama Canal territory was acquired by the United States and of the wording of the original treaty of 1903. S. I. Hayakawa, now a senator from California, spoke last fall in his eccentric campaign about our "stealing" the canal. Even President Carter has contributed to the perpetuation of myths spawned by revisionist historians and liberals. In his telephone call-in last March, he told a caller that "the treaty signed when Theodore Roosevelt was President gave Panama sovereignty over the Panama Canal Zone itself."

But, contrary to these assertions from public officials who should know better, we did not steal the canal, nor does Panama have residual, titular, or any other kind of sovereignty over it. The United States bought the canal territory-a strip across the Isthmus of Panama some fifty miles long and ten miles wide-at a cost to the American taxpayer that far exceeded the cost of the Louisiana purchase, the Mexican cession, the Florida purchase, the purchase of Alaska, or any other territorial acquisition.

An isthmian canal had been talked about for centuries and became an overriding issue when the California gold rush drew thousands westward. But it was not until the turn of the century that Panama became the preferred locale; in fact, up until the digging began, many American experts preferred a route through Nicaragua. A French company lost $260 million in an abortive attempt, ending in 1889, to construct an isthmian canal. In 1901, when the canal issue was still hot politically as a result of the Spanish-American war and the battleship Oregon's inad dash through the Straits of Magellan to bolster the Atlantic Fleet, the United States ratified the first of a series of enabling treaties which led to the construction of the Panama Canal. The Hay-Pauncefote Treaty of 1901 between Britain and the United States established guidelines for the operation of an isthmian canal, when completed; it provided (as did the arrangements governing the Suez Canal, then controlled by the French and the British) for unhindered passage by the ships of all nations. In that treaty-which is still operative-Britain agreed that the United States should have "the exclusive right of providing for the regulation and management of the canal" and that "no change of territorial sovereignty or of the international relations of the country or countries traversed by the . . . canal, shall affect the general principle of neutralisation or the obligation of the High Contracting Parties (Britain and the United States) under the present Treaty." 3

The Hay-Pauncefote Treaty, which would seem to preclude any transfer of sovereignty to Panama without British agreement, was followed in 1902 by the Spooner Act, in which Congress provided President Theodore Roosevelt with $40 million with which to purchase the right to an isthmian canal obtained by the French from Colombia. The act provided specifically for "perpetual" control by the United States of any canal that might be built. A Colombian representative agreed to the transfer in perpetuity of a strip of isthmian land to the United States, but the government of Colombia rejected the treaty.

3 Treaty between the United States and Great Britain to Facilitate the Construction of a Ship Canal, signed in Washington, D.C., Nov. 18, 1901; manuscript, U.S. Department of State. Archives, Treaty Series, No. 401; quoted in U.S. Congress, House, Subcommittee on the Panama Canal of the Committee on Merchant Marine and Fisheries, Panama Canal Finances, 95th Cong., 2d sess., 1977.

In 1903, the Colombian province of Panama-which had once been independent and had occasionally seethed with revolt since its autonomy had been revoked by Bogotá-saw its golden opportunity slipping through its fingers and falling to its rival, Nicaragua. With some French and American encouragement and help, a bloodless revolution occurred; Colombian ships and troops were held at arm's length by a U.S. show of force, and the Republic of Panama, now one of the most economically favored of Latin American nations, was born out of a pestilential swampland.

The establishment of Panama led almost immediately to the conclusion of the Hay-Bunau-Varilla Treaty between the United States and Panama in 1903. This treaty has governed the administration, operation, and control of the canal and the Canal Zone ever since. The fundamental terms of this treaty, which Secretary Kissinger and before him President Johnson abandoned, are now at issue.

...

The articles which have aroused so much discussion and debate are Articles 2 and 3. Article 2 states that "the Republic of Panama grants to the United States in perpetuity [a reiteration of the language of the Spooner Act; italics added] the use, occupation and control of" the Canal Zone, of which the dimensions are then described. Article 3 states, "the Republic of Panama grants to the United States all the rights, power and authority within the zone mentioned and described in Article 2 ... which the United States would possess and exercise if it were the sovereign . . . to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority." For this outright transfer of territory the United States paid the new republic an initial $10 million. In the same treaty, the U.S. government assumed the annual obligations of the Panama Railroad Company, a private company that had built a rail link across the isthmus many years before. Washington bought the entire stock of the company as an aid to construction of the canal and undertook to pay to Panama the $250,000 annuity or "compensation" the private company had previously paid to Colombia annually. From this clause the annuity or grant for the railroad right of way—has arisen the myth that we are paying Panama rent for the Canal Zone, although the term lease is nowhere mentioned in the treaties and the transfer of sovereignty is specific.

Ratifications of this treaty were exchanged, and in May 1904 the foreign minister of the Republic of Panama formally notified Washington that the Republic of Panama considered that its justification over the zone had ceased. The United States then purchased, in accordance with the treaty, title in fee simple to all privately owned lands within the Canal Zone, at a cost of something more than $4 million. Thus, the initial acquisition of the Canal Zone entirely aside from the accumulation over the years of the annual annuity paid to Panama, the later transfer of millions of dollars worth of U.S. property to Panama, and the cost of construction and modernization of the canal itemcost the United States some $54 million.

The 1903 and 1904 agreements were implemented by provisional boundary agreements delineating the Canal Zone, in which the Panama specifically ceded (the word is used four times) the land defined to the United States. The National Assembly of Panama ratified the agreements and used the word "ceded" in so doing. This provisional agreement was finalized and formalized in 1914 (when the canal was completed) and established the boundary lines "permanently."

Following the initial treaties a three-year struggle to conquer yellow fever and reduce malaria, then endemic in the area, permitted the construction of what was and still is an engineering marvel. Many of the laborers who helped to build the canal were not, contrary to present belief, Panamanians, but blacks from West Indian islands. The canal was completed in 1914 at an initial cost (including the $54 million acquisition payments to Panama, the French company, and private landowners) of $366,650,000. Together, this initial outlay and all the improvements, modernization, and maintenance of some seven decades now total almost $2 billion, exclusive of cumulative defense costs.

In the year the canal was completed, disgruntled Colombia, which had always wanted more American dollars, settled its differences with the United States in the Thomson-Urrutia Treaty, which was finally ratified in 1922. As a result of this treaty the United States gave Colombia valuable canal and railroad transit rights across the isthmus and paid Colombia $25 million in compensation for the loss of the province that had become the Republic of Panama. Colombia recognized Panama's independence, formalized the boundaries between them and