May, 26, 1976

Canal Issue 'Small Potatoes'

As an election year issue the Panama Canal is small potatoes.

But the Republican presidential candidates have chosen to fight it out on this ground so we must evaluate the arguments in order to judge Gerald Ford and Ronald Reagan.

Reagan contends the canal is "sovereign U.S. territory."  His rally cry is, "We bought it, we paid for it, we built it, and we intend to keep it."

Ford proposes to treat the canal "realistically."  He points out that the Panamanians bottled up the waterway in 1964 by a series of riots and that it could be knocked out of commission with hand grenades tossed over the fences.

His negotiators declare, "Our interest in keeping the canal open and operating for our own strategic and economic purposes is best served by a partnership agreement."

Panama's military leader, Gen. Omar Torrijos Herrera promises: "I will lead a war of national liberation to regain our territory" unless a new treaty is ready next year giving him more of the action.

At present, Panama gets something over $200 million as its share of the ship tolls, about double the take before the 1964 riots.  Gen Herrera wants to double the take again and then talk about future raises.

Reagan's supporters claim the canal is private U.S. property, and we can whip the Panamanians with a single battalion of Marines.  Ford's backers wring their hands and shiver over the possibility of sabotage that would tie up oceanic commerce.

As usual, it's mostly campaign rhetoric.  Both candidates gloss over the historical and economic facts governing operation of the Panama Canal.

The French proposed an Isthmus canal between the Atlantic and Pacific Oceans in 1876 and appointed Count Ferdinand Marie deLesseps to head a study committee.  He was famous for building the Suez Canal.  While deLesseps dawdled an American promoter, Lucien N.  B.  Wyse, secured a concession from the Colombian government granting exclusive privilege for the construction and operation of a canal.

Thus arose a French-American competition that brought about a series of complex maneuvers and deals to gain control of the project.  Finally the French began excavating in 1883.  Within two years it was evident that the physical problems and resulting costs were many times greater than anticipated.  deLesseps was sent home in disgrace to face court charges of mismanagement and misuse of funds.  A second French effort in 1889 likewise failed.

By 1902 the United States was ready to make a new bid for the canal rights.  A treaty was negotiated with Colombia, but that nation's parliament would not ratify the agreement.

U.S. President Teddy Roosevelt - famous for "speaking softly and carrying a big stick" - was furious.  He encouraged dissident Colombians in the isthmus to "revolt" and set up their own nation to take advantage of the U.S. offer to complete the canal.

The "revolution" took place the first week in November 1903.  A canal treaty was signed on Nov. 18, and a hastily assembled Panama parliament ratified it Dec. 2, 1903.

Remember, this was a half century before any such things as a Central Intelligence Agency or Congressional Oversight Committee.

We paid to our Panamanian puppets $10 million for ratification of the treaty and $250 thousand annually in gold thereafter.

In return we got a treaty that gave the U.S. rights, powers and authority "in perpetuity" over 553 square miles of Panamanian territory which it could "possess and exercise as if it were the sovereign of the territory."

In the beginning the U.S. was very careful to emphasize that the "as if" did not mean we had any real sovereign responsibilities.  We were afraid we would "get stuck" with taking care of the indigent Panamanians.

Thus, precedent over the years has well established the principle of Panamanian ownership of the territory.

The real issue is not sovereignty, but contractual rights.  On this point the U.S. position is clear.  We have the legal right to operate the canal so long as we kick in the annual rent.  Under pressure we have "voluntarily" sweetened the kitty several times.

Economically the canal is no longer vital to U.S. commerce.  Shortly before World War II, half the U.S. intercoastal trade passed through the canal.  Today, less than six percent of our output goes through the canal.

However, this small U.S. usage constitutes nearly half the activity of the Panama Canal.  While tolls rise, ship usage drops.

In view of the declining importance of the Panama Canal to U.S and world trade, the positions of Reagan and Ford shrink to Tweedledee and Tweedledum.

It makes little difference in the overall scheme of things whether the U.S takes a firm stand and gives the Panamanians an excuse to blow up the canal - or whether we bug out a la Vietnam and let the local boys wreck their own economy.

It is galling to have our noses rubbed into the dirt once again, but there is not enough at stake to warrant so much political hot air.

Author: Lindsey Williams