Foreign Relations of the United States, 1964–1968, Volume XXXI, South and Central America; Mexico

421. Draft Record of Meeting¹

Washington, December 2, 1964, 6:30 p.m.

PARTICIPANTS

• White House
  • The President
  • McGeorge Bundy
  • Robert M. Sayre
• State
  • W. Averell Harriman, Acting Secretary
  • Robert Anderson, Special Ambassador
  • Thomas C. Mann, Assistant Secretary
  • Leonard Meeker, Acting Legal Adviser
  • Jack Vaughn, Ambassador to Panama
  • Edward Clark, Director of Panamanian Affairs
• Defense
  • Cyrus Vance, Deputy Secretary
  • Steven Ailes, Secretary of the Army

The President inquired as to the status of the nine points which had been discussed as a possible interim program on the Panama Canal.²

Mr. Ailes said that the points had been studied by State and Defense and had been agreed upon, but that action had not been taken because of new suggestions which were to be discussed at the meeting.

Mr. Anderson said that the nine points had originated in a memorandum from Foreign Minister Eleta. Eleta presented them to Mr. Anderson in a meeting in New York City, and asked for a response within three or four days. Eleta said that he needed U.S. agreement on these points in his feud with Ambassador Illueca. Mr. Anderson told him that this was an internal Panamanian problem in which the United States did not want to become involved. The United States would consider the points only in the context of US-Panamanian relations.

Mr. Anderson then turned to the general problem of negotiations with Panama. He said the 1903 Treaty was an emotional problem with Panama. Panama would not be happy with any patchwork on it. He did not believe there could be any lasting settlement with Panama on such a basis. On the other hand, he was fully aware that the United States could not give up any of its essential rights. He said a draft proposal had been prepared which the President might consider, but he himself was not ready to recommend the specific draft he had in his hand.

The President asked what he was specifically expected to do. The President said he did not think a large meeting was the proper forum for a decision by him on the matter. He said such decisions invariably leaked before he was ready to make them because some of the participants felt a compulsion to talk to newsmen, or to people who leaked the decision to newsmen. He emphasized strongly that decisions affecting the national security had to be protected. Premature release of information could adversely affect our negotiating position and, therefore, the security and defense posture of the United States. He took the gravest view of the improper release of information obtained in conversations with him.

Mr. Bundy said that the purpose of the meeting was a briefing. He thought that the whole problem should be laid out so that the President would be aware of it. He saw no need for any specific decision at this point, and the President was not being asked for that. All that was desired at this time was an indication, on the basis of the briefing, whether Mr. Anderson, State and Defense, should proceed to draw up specific recommendations which the President could consider.

The President suggested Mr. Anderson proceed with his presentation.

Mr. Anderson said that there were four principles on which he thought we should proceed:

1. There had to be a new instrument. Mr. Anderson was aware of a difference in opinion between State and Defense on the tactical approach, i.e., whether you say there will be a new treaty and then negotiate with the Panamanians on what goes into that treaty, or whether you say you will negotiate with the Panamanians on what concessions you will give up and then put the remainder in a new treaty. He thought this was largely a matter of semantics. The important point was whether we agreed that there will be a new treaty. The words could be worked out for any proposed statement. In any case, everyone agreed that we had to insist that the existing treaties are binding and must be observed until a new treaty enters into force.

2. The new treaty would have a time limit, defined as a specified length of time after the new sea-level canal opens for operations. He thought that the “perpetuity clause” had to go, and the idea of limiting the new treaty in duration on the basis of opening a new canal seemed a reasonable and feasible approach.

3. The United States would recognize that Panama has sovereignty. There should be no debate about whether it is titular sovereignty, or whether the United States has rights as if it were sovereign.

4. The United States must have those rights which are essential to the operation of the canal during the life of the new agreement. He thought it entirely possible to define what those essential rights are.

Mr. Anderson thought if everyone agreed on these general principles, then he, State and Defense could draft a proposed policy statement³ which the President could review with the Congressional leadership on December 18, and such other persons as the President thought necessary.⁴ The objective would be to announce such a policy statement immediately after a discussion with the leadership. He thought that the general approach with the leadership should be that the policy statement represents what the Administration has decided must be done.

Mr. Mann associated himself with the four principles as outlined by Mr. Anderson. He said State had already drafted a proposed new treaty. The draft included all of the rights which Army and State considered essential. He regarded it as a tough document and was not certain it could be sold to Panama. He emphasized that it should be negotiated at the same time as the sea-level canal treaty and a base rights agreement. He viewed them—with respect to Panama—as one package. Mr. Vance agreed with this point.

Mr. Mann said we should negotiate with Panama, Colombia and Nicaragua–Costa Rica simultaneously.

The President inquired why these negotiations were necessary and why a new treaty was necessary. Would it not be possible to do what was proposed by executive action?

Mr. Mann said there were several sites for a canal. He thought we should look at them. He did not think the decision could be made on the basis of cost alone. It might be cheaper to build a canal in Panama, but not get a treaty there that is politically acceptable.

Mr. Anderson said that there are matters which cannot be settled except by treaty. The nine points could probably be carried out by executive decision. But return to Panama of unnecessary lands required Congressional approval. He referred to a triangle of land (Shaler Triangle) that is of absolutely no use to the United States, but without a treaty we cannot return it to Panama.

Mr. Ailes said estimates on digging a new canal in Panama are about $750,000,000. Digging one in Colombia would cost about $1.1 billion. He said digging it by conventional means, or using atomic detonations, would make a difference in the cost. He had no estimate on the route through Nicaragua-Costa Rica.

Mr. Anderson thought that the “how” of digging a canal should not be a consideration now. Nor did he think that the cost should be the basis for a determination. Mr. Mann agreed. He thought we should consider the technical aspects and the cost, but we also had to consider the political situation.

Mr. Harriman said we should avoid any discussion of “how,” especially any discussion of the use of atomic power. With the test ban treaty we could not use atomic detonations. In 10 or 15 years, when we get ready to build a canal, the whole state of the art might be different.

The President asked for Ambassador Vaughn’s comments.

Ambassador Vaughn said he agreed with the views expressed by Ambassador Anderson. He viewed the anniversary date of the riots in 1964—January 9—as a crucial date. He expected riots of even more serious proportions unless some action were taken before that time which would remove the Canal Zone as a popular issue.⁵

The President inquired whether the United States had failed to live up to its commitments taken in April 1964, to appoint special Ambassadors and to begin discussions immediately and in good faith.

Ambassador Vaughn said that it was fulfilling its commitments. He did not regard this as the problem. He noted that the January 1964 riots were carried out without any effort by the Chiari Government to control them, and some reason to believe the Government supported them. The situation was different now. The Robles Government had responded effectively to demonstrations in November. He did not expect it to be behind demonstrations this January. The leaders now would be the communists, hyper-nationalists and the Castroites. They would have an issue—no apparent progress in a year. Unless we could effectively deflate this issue, he saw these anti-American elements uniting into an FALN-type operation. (The FALN is a Castroite-Communist terrorist organization operating in Venezuela.) He expected this would lead to bombings, including an effort to bomb the canal. He did not want to “cry wolf,” but he honestly believed we were in for real trouble unless we acted.

Ambassador Vaughn regarded the Canal Zone as the classic colony. In our national interest he thought it had to be eliminated or else we were in for the same kind of trouble we see in Africa. In response to a question, he said he did not expect it to go the way of Africa because he thought we were smarter than de Gaulle.

Mr. Bundy interjected that the dietary habits were different in Panama also.

Mr. Anderson said there was no suggestion that we had been derelict. Ambassador Illueca (Panama’s special Ambassador for discussions on Panama) was engaged in a personal feud with Foreign Minister Eleta. He wanted to be the spokesman. He did not want to respond to instructions from the Foreign Office. Eleta decided to remove him. Panama has now named five Ambassadors to conduct discussions with the United States. De la Rosa had been elected the spokesman. If Panama had its way, Ambassador Anderson said it wanted us to get out of the Canal entirely and let Panama run it. Then it would try to profit from what it considers its monopoly position. He said he had made it completely clear to the Panamanians that the United States would not agree. The canal was essential to our security. It was essential to world commerce. We had obligations which we could not ignore.

Ambassador Anderson said that the Panamanian negotiating group told him they had 52 points which they wanted to discuss. He offered to discuss them. But he said it should be done informally. No papers would be passed. While they were talking, if they said one day that they accepted a point and the next day that they had to reject it, he would understand. At the same time, he would have the same options. He said there should be nothing in writing until the discussions had progressed to a point where it was obvious there was an area of agreement. Second, he said he wanted it clear that what he said today would not be in the paper tomorrow. He said the Panamanians accepted this approach.

Ambassador Anderson said that the Panamanians then proposed a joint declaration. It gave the Panamanians the best of both worlds. He offered to discuss it with them on Friday, December 4. They wanted agreement immediately because they had to leave next week and would not be back until January 2 or 3. When Ambassador Anderson inquired why, they said they had to go back and consult to get approval on the 52 points. At the same time, they insisted that they had to have something before January 9. Ambassador Anderson said that this led him to conclude that the United States would have to act unilaterally so that it could be said this month.

Mr. Ailes said a sea-level canal could be built at its present location. He said Congress had appropriated $400,000 to initiate the work of an Interoceanic Canal Commission, but wanted site surveys first before it appropriated any money for a canal.

Mr. Anderson said that he was thinking of December 18 as the date for a meeting with the leadership to review the Administration’s plans. In the proposed sea-level canal, he said we were thinking of an international commission to run the canal. We knew Panama opposed this. Maybe they would come around. Mr. Mann interjected that simultaneous negotiations with Colombia and Nicaragua–Costa Rica should help. We favored an international commission because it gets us away from the big-little country controversy.

In response to a question, Ambassador Vaughn said there were probably 600 card-carrying Communists in Panama. He estimated there were 300 Cuban trained terrorists. The Communists have cells in the rural areas. They claim they can bring 20,000 demonstrators from there into Panama within a day. He thought they could. At the moment, they have no issue. He thought there were 20,000 sympathizers. The Communist stronghold is in the University. The danger is not the Communists alone. It arises when the Communists and the nationalists (and on the Canal issue every Panamanian is a nationalist) combine over an issue. January 9 provided such an issue.

The President inquired why things had quieted down in April. Ambassador Vaughn said he thought that the agreement which had been reached at that time gave the Panamanians hope that their aspirations would be realized. Mr. Bundy thought a major reason was also that the Panamanians had grown weary. Mr. Mann observed that the economic pinch which resulted from the unrest, lack of tourists, fall of business activity, etc., was certainly a major reason.

Ambassador Vaughn thought that a policy statement, based on the four principles Ambassador Anderson had outlined, would keep things reasonably quiet.

Mr. Mann said that the nine points which had been discussed were no longer considered to be an adequate interim program.

Mr. Ailes thought this might be true, but an announcement of a new treaty would stir up old attitudes on the Hill. He recognized that the January 1964 riots had shaken those old attitudes and that there was more understanding of the problem now.

Mr. Vance added that there has also been changes in the composition of the Congress, which had helped.

Mr. Mann said he thought a statement was necessary domestically to put the problem in prospective, and to get the people to look to the future instead of to the past.

The President said he would consider a statement after it had been prepared by Ambassador Anderson, State and Defense.⁶ Thereupon the meeting ended 7:20 PM.

1. Source: Johnson Library, National Security File, Files of McGeorge Bundy, Miscellaneous Meetings, Vol. I. Confidential. Drafted by Sayre on December 4. The meeting was held in the Cabinet Room at the White House. No other record of this meeting was found.
2. The nine points were contained in a November 19 memorandum from Mann to McNamara; see footnote 2, Document 420.
3. President Johnson issued a statement concerning a decision by the United States to build a sea-level canal and to negotiate a new treaty with Panama on December 18. For text, see Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1963–64, Book II, pp. 1663–1665, and American Foreign Policy: Current Documents, 1964, pp. 370–372.
4. In JCSM–1052–64, December 17, the JCS informed McNamara that they agreed in principle with a draft of the President’s statement on Panama, provided the draft incorporated some proposed changes. The JCS also indicated that a “policy directive delineating a specific course of action is urgently required” and recommended its development “as a matter of priority.” (Washington National Records Center, OSD Files; FRC 330 69A 7425, Pan 381 (18 January, 1964), Panama Crisis, August–December 1964) Former President Eisenhower was consulted on December 16 and according to the record of this briefing said “that ‘by and large’ the draft statement on Panama is ‘all right’ and that he doesn’t see anything wrong with it.” (Memorandum prepared in the CIA, December 17; Johnson Library, National Security File, Country File, Panama, Vol. VI, August 1964–January 1965) The record of meeting with the Congressional leadership on December 18 is ibid., Bundy Files.
5. According to a December 9 memorandum from Jessup to Bundy, “Mr. McCone has been riding the Panama horse quite hard lately.” Jessup continued, “He feels strongly that time is running out unless the U.S. is prepared to make substantial concessions here and that anything short of a bilateral agreement which meets the issue head on will result in the fall of Robles.” (National Security Council, Files of the 5412 Special Group/303 Committee, Panama)
6. According to the President’s Daily Diary, Anderson and the President met alone in the Oval Office from 7:16 to 8:18 p.m. (Ibid.) In Panama Odyssey, William Jordan briefly recounts this meeting. (p. 100)