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security as well as U.S. prosperity would be placed in serious jeopardy." Moorer's testimony followed by three days the Soviet-Panama Pact which would indicated Soviet involvement may come in a more direct manner than by proxy.

After listening to Moorer, one Senator recalled that General George Brown la d told him the Panama Canal was "important" but not "vital" to U.S. security. Moorer replied that, in his judgment, "it was vital," and the point is, said Moorer, "there is no point in surrendering this vital interest.

The constitutional issue on the separation of powers should be ignored according to one witness, Senator Gravel, and the United States ought to give the "old and obsolete" Canal to Panama and dig a new one at sea-level in Panamanian territory, so that Alaskan oil would have a better flow rate to the U.S. East Coast. "The new canal would also be built for about $5.9 billion. This would be done at U.S. taxpayers expense and then given to Panama to insure Panama's friendship and gratitude," said Gravel. He said Secretary of State Vance was enthusiastic about building a new canal at sea-level.

Senator ALLEN. Your statement previously' given to the committee appears on page 53 of part 2 of these hearings. They have just been printed.

Would you prefer that we come back immediately after the vote or break for lunch?

Mr. CRANE. I think, Mr. Chairman, since I have a conflict with a lunch, too, that if it suits the Chair I would prefer to continue after you have voted.

Senator Allen. We will continue your testimony then. Mr. Flood, if you can come back, we would like to address a few questions to you; but we will leave that up to you.

Mr. Flood. I believe the B-1 voting will keep me busy. Senator ALLEN. We appreciate your appearance here, Mr. Flood. We appreciate your leadership on this issue. Your leadership has been exceptionally fine. We hope that you will be able to exert your leadership in the House when this issue is brought before the House.

Mr. Flood. I am just a pale shadow of you, Mr. Chairman.
Senator ALLEN. Well, you have done a great job.
We are coming back immediately after the vote.
Recess taken.]
Senator ALLEN. The committee will be in order.

Mr. Crane, we are delighted to have you come before the committee to give us the benefit of your views. Please proceed.

TESTIMONY OF HON. PHILIP M. CRANE, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF ILLINOIS

Mr. CRANE. Thank you very much, Mr. Chairman.

I am indeed grateful to you and to the subcommittee for permitting me to appear and testify today.

I would like to make a reference to my distinguished colleague who left the room earlier, who was appearing today jointly with me. I am referring to Congressman Dan Flood, who, as you know, has had a long-time active interest in this issue, undoubtedly more so than any other Member of the House. His counsel on this question carries greater weight certainly than my own, and probably more than any of my colleagues in the House.

I might relate a quick anecdote, if I may. Before doing so, I would make a unanimous consent request that my prepared statement might be a part of the record.

Senator ALLEN. Without objection, so ordered. [Material follows:]

CONGRESSMAN CRANE'S PREPARED STATEMENT

"THE PANAMA CANAL TREATY: A QUESTION OF JURISDICTION"
SENATE SUB COMMITTEE ON SEPARATION OF POWERS

SEPTEMBER 8, 1977

Mr. Chairman:

I am indeed grateful to you and the other members of this

subcommittee for having me here this morning. To my way of thinking,

the proposed Panama Canal treaty is one of the, if not the, most im

portant issues to come before Congress in recent years and not the

least of the problems with it is this question of jurisdiction. Un

questionably, the President had the right to negotiate the treaty

and without doubt the Senate has an obligation to either ratify or

reject it; the question is, will the House of Representatives have

the opportunity to pass on it also.

As a sponsor of a resolution calling for authorization by both

the House and Senate before any giveaway uf U.S. territory or property

in the Canal Zone is implemented, I am not exactly an objective, disin

terested party to the debate over this question. Moreover, as one who

feels that there are enough things wrong with this treaty to warrant

its rejection regardless of the jurisdiction question, I have a vested

interest in seeing this treaty brought to a vote as many times as

possible thereby increasing the chances of its defeat. But, having thus

identified my biases, let me stress my real belief, based on the language

of Article IV, Section 3, Clause 2 of the Constitution, subsequent Supreme

Court decisions and pist precedent, that a powerlul argument can be made

for House participation in the great canal debute.

Just for the record, Article IV, Section 3, Clause 2 states that:

"Congress shall have power to dispose of, and make all Rules and Regulations respecting the Territory or other property belonging to the United States;

and nothing in this constitution shall be so construed as to prejudice any

claims of the United States, or of any particular State." While it has

been argued that,

en read with Article 11, Section 2, Clause 2 (giving

the President the power to negotiate treaties) and Article VI, Section

2 (making treaties the supreme law of the land), this clause constitutes

a concurrent grant of power (thus making it unnecessary for the President

to consult the House), the Supreme Court has recognized Article IV, Sec

tion 2, Clause 2 as an exclusive giant ur power to Congress vis-a-vis

federal-state relations and has never circumscribed that power in a

treatymaking context. Moreover, the Congress has repeatedly asserted

its exclusive right under the clause in question and both the President

and the Senate have recognized that right in the past. In fact, on at

least three occasions, the House, as well as the Senate, has been involved

in relatively minor territorial matters involving the Canal Zone. Admittedly, none of these episodes quite parallels the situation we face

today, but if it has been deemed appropriate for the House of Represen

tatives to be involved in relatively minor matters

such as the tem

porary cession of a small plot of territory to Panama so that the

U. S.

government could buid a legation

then it stands to reason

that it should be involved in what could turn out to be the biggest

giveaway in American history.

All rhetoric aside, the facts of the matter are that the United

States has spent $163.7 million to acquire rights and title to the

Canal and Canal Zone, to say nothing of the $366 million in construc

tion costs and the $6.35 billion over the years that

went for operation,

administration and defense. Just the $163.7 million for title and rights

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represents more money than it cost the U.S. to acquire all the rest of

its territorial additions combined. And now it is proposed that we not

only give this entire investment away but that we pay Panama almost $2

billion more between now and the year 2000 for tuking it. The very

thought of such an incredible arrangement simply boggles the mind; and

the American taxpayers who have footed nost of the bill, and who will

be expected to continue to do so, have every right to be upset at the

prospect. In fact, they have every right to hold each and every one of

us personally-accountable

which is yet another reason why the House of

Representatives should pass judgment on this unparalleled example of

mi sguided generosity.

Actually, misguided generosity may be too kind a term

boondoggle

is more like it. It is no secret that one reason the Panamanians insisted

that we raise our annuity and gratuity piyment from $2.3

million a year

to at least $50 million and perhaps as high us $.70 million, is that 39%

of Panama's annual budget goes to servicing their national debt and they have

almost $325 million in debt coming due this year. Significantly, much

of the debt is held by banks in the United States and the $50 million,

plus perhaps some of the economic aid money also promised Panama, would

come in handy in paying them off. So, what it appears we really

have here is not just aid to a tinhorn dictator but a bailout of a number

of banks which should have known better than to invest in Panama and,

in any event, should not escape responsibility for having done so.

If

liberals can oppose bailing out Lockheed and conservatives are opposed

to bailing out New York City, then there is no reason why all of us

should not oppose bailing out Panama and those bankers who inadvisedly

lent financial support to its dictator. Certainly, the American tax

payer should not be made to bear the burden for the mistakes of others.

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