Letter from George A. Connelly of San Francisco, California, to President Gerald R. Ford Regarding the Panama Canal

GENERAL FG87 F03-1/P M August 5, 1975 Dear Mr. Connolly: George A. The President has asked that I respond to your letter of June 25 regarding the Panama Canal treaty negotiations. You may be assured that the question of United States interests in the Panama Canal and how we can best protect them has been subjected to the most thorough review and continues to receive concerted attention throughout the Executive Branch. Our principal goal in these negotiations is to protect United States in- terests over the long term. As you noted in your letter, the U.S: has fulfilled all its economic obligations under the treaty throughout its re- lationship with Panama. Panama's discontent with the treaty does not relate primarily to the level of compen- sation and economic benefit it receives from the Canal. In fact, Panamanians have categorically rejected economic enticements as a substitute for the restoration of what they regard as their basic national rights. Panama has been discontented with the Treaty of 1903 since its inception and has pressed for more favorable terms with increasing intensity in recent years. We be- lieve it should prove possible to negotiate a new treaty relationship with Panama which will protect basic United States interests in the Canal (including provision for the operation and defense of the Canal by the United States for an extended period of time) while meeting some of Panama's concerns and desires. It is our belief that this is the most effective way to assure that the Canal is kept safe, open, FORD & LIBRARY GERALD AUG RECEIVED 1975 CENTRAL ares --- - 2 - efficient and neutral over the long term. The talks, however, are still continuing and a number of difficult issues remain to be discussed. We appreciate having your views on this important subject, and I have taken the liberty of forwarding a copy of your letter to the Department of State in order that it may be brought to the attention of appropriate U.S. officials concerned with the negotiations. With the President's best wishes, Sincerely, Roland L. Elliott Director of Correspondence Mr. George A. Connolly Keil, Connolly and Barbieri 244 Kearny Street San Francisco, California 94108 RLE:NSC:JHH:aby FORD LIBRARY is GERALD 4572 NATIONAL SECURITY COUNCIL July 31, 1975 MEMORANDUM FOR: JEANNE W. DAVIS FROM: STEPHEN LOW SR SUBJECT: Letter to Mr. George Connolly re Panama Canal Treaty Attached for your signature is a memo to Roland Elliott forwarding a draft reply on the Panama negotiations to a letter received from Mr. George Connolly. FORD LIBRARY & GERALD 4572 MEMORANDUM NATIONAL SECURITY COUNCIL July 31, 1975 MEMORANDUM FOR: ROLAND ELLIOTT MH FROM: for JEANNE W. DAVIS SUBJECT: Letter to Mr. George A. Connolly regarding the Panama Canal Treaty Mr. George A. Connolly wrote the President on June 25 to express his opposition to any change in our treaty with Panama regarding the Canal. He expresses the view that we have fulfilled our economic obligations and paid for the rights which we obtained. His father participated in the Commission which adjudicated property claims of Panamanian nationals in the Zone. (Tab B) Attached for your signature at Tab A is a suggested response to Mr. Connolly thanking him on behalf of the President for his letter and commenting on the reasoning which motivates our negotiations with Panama. The letter also notes that Panamanian discontent with the Treaty of 1903 does not relate primarily to the level of compensation and economic benefits it receives from the Canal. FORD LIBRARY is SERALD A find Suggested Reply Dear Mr. Connolly: The President has asked that I respond to your letter of June 25 regarding the Panama Canal treaty negotiations. You may be assured that the question of United States interests in the Panama Canal and how we can best protect them has been subjected to the most thorough review and continues to receive concerted attention throughout the Executive Branch. Our principal goal in these negotiations is to protect United States interests over the long term. As you noted in your letter, the U.S. has fulfilled all its economic obligations under the treaty throughout its relationship with Panama. Panama's discontent with the treaty does not relate primarily to the level of compensation and economic benefit it receives from the Canal. In fact, Panamanians have categorically rejected economic enticements as a substitute for the restoration of what they regard as their basic national rights. Panama has been discontented with the Treaty of 1903 since its inception and has pressed for more favorable terms with increasing intensity in recent years. We believe it should prove possible to negotiate a new treaty relationship with Panama which will protect basic United States interests in the Canal (including provision for the operation and defense of the Canal by the United States for an extended period of time) while meeting some of Panama's concerns and desires. It is our belief that this is the most effective way to assure that the Canal is kept safe, open, efficient and neutral over the long term. The talks, FORD is LIBRARY GERALD 2 however, are still continuing and a number of difficult issues remain to be discussed. We appreciate having your views on this important subject, and I have taken the liberty of forwarding a copy of your letter to the Department of State in order that it may be brought to the attention of appropriate U.S. officials concerned with the negotiations. with the President's Sincerely, best wish, Roland Elliott Mr. George A. Connolly Keil, Connolly and Barbieri 244 Kearny Street San Francisco, California 94108 RLE/NSC/JA FORD i LIBRARY GERALD B (CLASSIE ICATION) DEPARTMENT OF STATE S/S: 7513438 EXECUTIVE SECRETARIAT TRANSMITTAL FORM Date:July 17, 1975 For: Lt. Gen. Brent Scowcroft National Security Council The White House Pursuant to referral dated 7/2/75 , NSC No. 7504572 (if any) a copy of which is attached, we are enclosing the following: Information copy of direct reply Translation Other X Draft reply for: President's signature X Other signature We believe no response is necessary for the reason cited below The attached item, which was sent directly to the Department of State, is being forwarded .for your attention. We believe no response is necessary for the reason cited below A draft reply is attached A draft reply will be forwarded A translation is attached Other REMARKS: DOCUMENT DESCRIPTION: To: The President From: George Connolly Date: 6/25/75 Subject: Panama Canal Zone LhiP GERALD R FORD LIBRARY George S. Springsteen Executive Secretary SUGGESTED REPLY Dear Mr. Connolly: The President has asked that I reply to your let- ter of June 25 concerning the Panama Canal treaty ne- gotiations. You seem to have a clear understanding of the terms of the 1903 treaty in which the United States was granted extensive jurisdictional rights in the Canal Zone. The interests of Panama, the U.S. and world shipping have been served efficiently under that treaty, as revised in 1936 and 1955. However, the last 70 years have seen many changes throughout the world. These changes are to some degree inconsistent with the terms of the treaty of 1903 and our present relationship with Panama. In seeking a new treaty which will accommodate the important interests of both Panama and the U.S., the Executive Branch is not attempting, as you imply, to com- pensate for past slights to Panama. As you have noted, the U.S. has fulfilled all its economic obligations under the treaty throughout its relationship with Panama. How- ever, it is not true that Panama's current grievances and Mr. George A. Connolly, 244 Kearny Street, San Francisco, California 94108. FORD & LIBRARY GERALD - 2 - discontent relate primarily to the level of compensa- tion it receives from the canal. In fact, Panamanians have categorically rejected economic enticements as a substitute for the restoration of what they regard as their basic national rights. The Panamanian people harbor deep feelings of resentment and feel the Canal Zone is an insult to their national dignity. This intensifying Panamanian restiveness has been engendered primarily by the portions of the 1903 treaty which give the U.S. rights "as if it were the sovereign" and "in perpetuity." This, in reality, would mean the presence forever of a mini-United States government on Panamanian territory. We believe that our exercise of these broad juris- dictional rights is today merely an unnecessary source of friction and will itself be a growing threat to our real interest in the canal, because it antagonizes the Panamanians so severely. In contrast, we believe that a new treaty based on partnership will restore Panamanian consent and at the the same time provide us the specific treaty rights we require to continue efficient operation and defense of the canal during the life of the new treaty. The commercial importance of the canal to the United States, while still great, is not as large as it has been in the past. Moreover, the canal is only of economic FORD LIBRARY & GERALD - 3 - value when open and efficiently run. Therefore, our prime objective is to keep the canal safe, open, efficient and neutral. Thus, in pursuit of our own best interests, the U.S. seeks a new treaty which will ensure continued U.S. oper- ation and defense of the canal for an extended time period, while accommodating Panama's need for the full exercise of its sovereignty. In my view, such a new partnership will avoid an unnecessary confrontation. It should not be viewed as a surrender of U.S. territory or an apology to Panama for past misdeeds, but rather as the best means of insuring what is of interest to both countries -- a well run and se- cure canal. I am enclosing for your information copies of the Background and Status of the Panama Canal Treaty Negoti- ations and a recent speech by Ambassador Bunker on the treaty issue. I do hope the foregoing thoughts have been helpful to you. Sincerely, FORD & LIBRARY GERALD CLASSIFICATION NSC REFERRAL TO STATE SECRETARIAT Date: July 2, 1975 MEMORANDUM FOR: GEORGE SPRINGSTEEN NSC LOG# 7504572 EXECUTIVE SECRETARY DEPARTMENT OF STATE DOCUMENT DESCRIPTION: TO: President FROM: George Connolly DATE: June 25, 1975 SUBJECT: Panama Canal Zone ACTION REQUESTED: XX DRAFT REPLY FOR: PRESIDENT'S SIGNATURE XX WHITE HOUSE STAFF SIGNATURE OTHER DIRECT REPLY FURNISH INFO COPY DISPATCH RECOMMENDATIONS/COMMENTS TRANSLATION APPROPRIATE HANDLING INFORMATION FOR ADDITIONAL PROCESSING AS INDICATED: DUE DATE: July 14, 1975 URGENT ROUTINE COMMENTS: for JEANNE W. DAVIS Staff Secretary FORD LIBRARY & GERALD CLASSIFICATION Pro mI Retain Panama Canal 4572 enclo KEIL, CONNOLLY & BARBIERI ATTORNEYS AT LAW EDWARD D. KEIL KEIL BUILDING CHARLES P. KNIGHTS (1890-1968) GEORGE A. CONNOLLY 244 KEARNY STREET GEORGE F. BARRY, JR. (1901-1970) ROBERT J. BARBIERI SAN FRANCISCO, CALIFORNIA 94108 WILLIAM D. SOMMER TELEPHONE (415) 986-4667 JACK F. BONANNO SIDNEY R. SHERAY H. KELLY OGLE June 25, 1975 HK Honorable Gerald R. Ford President of the United States White House Washington, D. C. My dear President Ford: I have noted in the newspapers recently, news items and accounts with respect to the urgings and demands of the Republic of Panama, that the United States of America cede to Panama, territorial rights of the United States to the Panama Canal and the Panama Canal Zone. The latter comprises an area of approximately 500 sq. miles (5 miles on each side of the approximate 50 mile length of the Panama Canal itself across the isthmus of Panama). The territorial rights of the United States to Panama Canal and the Canal Zone, stem from the treaty between the United States and the Republic of Panama which I believe was signed on November 18, 1903, which treaty granted to the United States the right to construct the canal across the isthmus of Panama and gave to the United States certain territorial rights over the Canal Zone. The treaty, I believe, provided for the payment by the United States of periodic payments to the Republic of Panama and required the United States to settle with the owners of private property taken for the Canal and for the Canal Zone, fair compensation for the property rights so taken. I believe that the Congress has on several occasions, increased the amounts of the required payments by the United States to the Republic of Panama for the treaty rights of the United States in and to Panama Canal and the Canal Zone. My own father who died in 1928 and who was a San Francisco lawyer and had the same name as the writer, was appointed on September 1, 1917, as one of the two American commissioners of the Joint Commission of the United States and the Republic of Panama, for the appraisement and settlement of damages to property rights taken in the Canal Zone. That Commission had two United States commissioners; two Panamanian commissioners; and one FORD & LIBRARY GERALD Honorable Gerald R. Ford June 25, 1975 Page Two Spanish umpire and the Commission sat at Ancon on the Pacific side of the Canal Zone, for approximately two and one half years to decide and adjudicate property claims of the Panamanian nationals. My father sat on that Commission and performed his required duties and our family, consisting of my father, mother, sister and myself, lived together in Ancon on the Pacific side of the Canal Zone during the greater part of that time. I was then in 1917 a boy 10 years of age. I greatly deplore the moves and efforts to have the territorial rights of the United States to the Panama Canal and the Canal Zone, ceded back to Panama. Our country by its treaty has paid for our rights, including far greater amounts than were called for by the original treaty. Enclosed is a photocopy of a news account appearing in the San Francisco Chronicle issue of Thursday, June 19, 1975, which purports to quote the views and statements of Ambassador William Mailliard in support of ceding the Panama Canal area back to Panama. I strenuously disagree with the views of Ambassador Mailliard for I feel that our country has been punctilious in heeding its obligations to the Republic of Panama and that the rights which we have in the Panama Canal and the Canal Zone were granted to us with ample quid pro quo on the part of the United States. I forward this letter to you, my dear Mr. President, in all good faith and urge you and your Administration to retain our Panama Canal rights, exactly in accordance with our existing treaty. Very sincerely yours, GEORGE A. CONNOLLY GAC/eca FORD LIBRARY & GERALD Just Isn't Worth the Price' San Francisco Chronicie 15 Thurs., June 19, 1975 formal sanctions from trad- Mailliard Urges U.S. to Cede Panama Canal ing with Cuba, leaving each nation in the hemisphere free to decide whether to continue the embargo. Ambassador William Mail- CO Congressman said in an al control of the canal to the 100,000 tons. Even if the can- The one difficulty with "I don't think we would liard declared yesterday interview. Mailliard, who is United States. al were closed off complete- getting approval from the trade with Cuba right that the United Statesis now now U.S. Ambasador to "We can keep control, but ly, he argued, swift Navy Senate for a new Panama away," he aded. in a position to make the Organization of Ameri- do we want to send a couple ships could go around Cape Canal treaty, Mailliard prompt, dignified settle- can States, was in San Fran- of divisions of marines to do Horn with comparatively lit- said, is the strong opposition ments to long-standing dis- cisco for a visit with his it? We have no support on tle loss of time. from the American Legion, Canada-Viet Talks putes over the status of the family. our claim from any other Now when our relations the Daughters of the Ameri- Ottawa Panama Canal and the "What price does the Unit- country in the world. It just with Panama are good is the can Revolution and similar Formal talks are expected blockade of Cuba. ed States want to pay for a isn't worth the price." time to protect the United organizations. soon between Canada and It is time to recognize that treaty that no government in The canal has lost much of States with a new treaty The ambassador said he South Vietnam on reopening Panama has the right to the world would sign to- its strategic value, Mailliard rather than have to with- expects technical steps to be missions in each others cap- claim sovereignty over the day?" asked Mailliard, re- said, because it cannot be draw under fire in a period taken at a conference of itals, a Foreign Ministry canal that bisects its territo- ferring to Panama's earlier used by aircraft carriers or of protest and terrorizing," American states in Costa spokesman said yesterday. ry, the former San Francis- agreement to yield perpetu- any tankers larger than Mailliard said. Rica in mid-July to remove Reuters GERALD FORD LIBRARY DOC RECD LOG NBR INITIAL ACTION O NSC CORRESPONDENCE PROFILE MO DA MO DA HR 6 25 7 2 17 250 4572 Connolly, KISSINGER COLBY, W George S/S OTHER REFERENCE: CIRCLE AS APPROPRIATE TO: PRES * FROM: UNCLAS LOG IN/OUT kissinger LOU NO FORN NODIS SOURCE/CLASS/DESCRIPTION SCOWCROFT SCHLESINGER, J C EYES ONLY EXDIS DAVIS ST EX SEC S CODEWORD SUBJECT: Ock lt Pres TS SENSITIVE his news to obtain control of Panama Canal INTERNAL ROUTING AND DISTRIBUTION REC ACTION REQUIRED ACTION INFO CY ADVANCE CYS TO HAK/SCOWCROFT FOR MEMO FOR HAK ( ) STAFF SECRETARY MEMO FOR PRES ( ) REPLY FOR FAR EAST ( ) SUB-SAHARAN AFRICA APPROPRIATE ACTION ( ) DISTRIBUTION/INITIAL ACTION ASGMT MID EAST / NO. AFRICA / so. ASIA MEMO TO ( ) RECOMMENDATIONS ( ) EUROPE / CANADA LATIN AMERICA x x JOINT MEMO ( ) UNITED NATIONS REFER TO FOR: ( ) ECONOMIC ANY ACTION NECESSARY? ( ) SCIENTIFIC CONCURRENCE ( ) DUE DATE: NSC PLANNING PROGRAM ANALYSIS Press COMMENTS: (INCLUDING SPECIAL INSTRUCTIONS) CONGRESSIONA OCEANS POLICY INTELLIGENCE To State pr Janar DATE FROM TO S SUBSEQUENT ACTION REQUIRED (OR TAKEN): CY TO 7/2 State D 7/17 Reed state draft 2513438 draft reply for WH (7- 14) SUBSEQUENT ROUTING/ACTIONS 7/17 Low S Memo DAVIS to R. Elliot (7- 24) 7/31 Low s 1/37 Caris memo Se Memo to R.Ellint In Elliots DISPATCH B/1/75 alattach or CY RQMTS: SEE ABOVE PLUS: MICROFILM & FILE RQMTS: NSC/S DISP INSTR NOTIFY & DATE BY AUG 1975 BY A&C SPECIAL DISPOSITION: CRT ID: SA SF CROSS REF W/ OPEN ADC HP NS SUSPENSE CY ATTACHED: FOLDER: CLOSE ADC WH EP PA DY ( NSC 75-22 575-600 )