President Johnson's announcement on December 18, 1964, that the United States is prepared to renegotiate the 1903 Panama Canal Treaty apparently has given encouragement to the efforts of the new Panama Government to find a basis for reconciling the differences between the two countries and has stiffened its determination to control the dissidents who have been planning further demonstrations of the kind that led to the flag-raising incident and riots of January 1964. The warmth with which the President's statement was first received has since then somewhat cooled, but the fact that he expressed the intention to meet Panama at least halfway has diminished the tensions which had been mounting steadily because of the apparent lack of progress in the discussions begun last spring.

The President's expressed interest in sea-level canal routes in Colombia and in Costa Rica-Nicaragua, as well as in two possible routes in Panama, conveys the impression that they are fully competitive. Actually, Panama enjoys a double advantage in the fact that the two best routes are both within her borders. Preliminary studies have favored a sea-level canal excavated by the use of nuclear explosives in eastern Panama close to the Colombian border. If nuclear explosives cannot be used in the construction, then the conversion of the existing lock canal to sea level is for many reasons the best solution. Indeed, it is preferable in any case.

Since the first indication some months ago that the United States was interested in several possible routes in the general area extending from Mexico to Colombia, a suspicion has developed that we would not be above playing the several countries against one another. This assumes that treaty concessions relating to the construction and operation of a sea-level canal would be the prime factor in the negotiations. Yet there is no evidence that any of the isthmian countries would yield such "rights, power and authority" as we now possess in the 1903 Panama Canal Treaty; moreover, the President's statement neither demands nor appears to expect a similar treaty arrangement for a new sea-level canal. Thus, the bargaining, if it should come to that, would seem to revolve around the factors of construction cost, the sharing of toll receipts and the managerial and administrative arrangements for the control of the canal and its operation. Other problems that must be resolved are the question of defense and the right of unrestricted passage of United States military forces through the new canal at all times; on these points we might call on the Organization of American States to assist in devising acceptable formulas.


One of the basic decisions to be made is whether the new canal is to be dug by nuclear or conventional methods. Advocates of nuclear explosives claim that great savings can be made in the total cost. The estimates for a canal on the site in eastern Panama range from $500 million to $700 million, of which about two-thirds would be for the excavation and the balance for the infrastructure and other features necessary for the canal's operation. The $2.3 billion estimate for the conversion of the existing lock canal to sea level by conventional methods provides approximately $1.1 billion for the control of tidal currents, the control of flood flows from streams emptying into the canal, new highways, a vehicular tunnel crossing under the canal, power and other utilities, sanitation, relocations, housing for construction workers over the ten-year construction period, and other miscellaneous items.

Many, if not most, of these elements would also be required in the construction of any sea-level canal in a remote area-and remote it must be if nuclear explosives are to be used. New towns would be required in addition, with housing for the permanent staff, with roads, streets, water supply, sewage disposal, power generation facilities, schools, etc., as well as one or more high-level vehicular bridges or tunnels crossing the new canal. The cost of such a bridge or tunnel would be significantly increased because powerful nuclear explosives would disturb the foundation formations. Additional associated costs would be for marine salvage equipment, tugs and other craft to assist ships which become disabled during transit; a dry dock for ship and craft repair; and suitable harbors, piers and warehouses for unloading of imports for the needs of the populace. Either a military or a police complement would be needed for security reasons; housing, utilities, air fields and other facilities for the security contingent would be required.

At the hearings before the Joint Congressional Committee on Atomic Energy, the Chairman of the Atomic Energy Commission, Dr. Glenn T. Seaborg, estimated that "at the optimum" it would take five years to develop the devices and the nuclear excavation technology for a canal project and that the cost of such a program would be of the order of $250 million. At least part of this cost should be considered a charge against a sea-level canal excavated with nuclear explosives.

The novelty of the idea of using nuclear explosives to excavate a canal has a certain appeal. An adverse factor, however, is that radioactive fallout cannot as yet be discounted; there are still serious differences of opinion on this subject. Nations throughout the world are reluctant to accept further risk of fallout. However, a waiver by the signatory nations to the test-ban treaty might be secured if the Soviet Union and other powers have projects in view which would use nuclear explosives.

The authorized canal studies will unquestionably provide realistic estimates of the construction costs (including infrastructure and supporting facilities) of a sea-level canal at each of the routes investigated. It may be safely predicted, all things considered, that the total cost of a sea-level canal at any route remote from that of the present site will closely approximate the cost of converting the existing canal to sea level.

Meanwhile, the extensive studies conducted in 1946-48 under Congressional authorization remain relevant. Thirty sea-level routes, from Tehuantepec in Mexico to the Atrato River in Colombia, were evaluated. The recommended route was the site of the present lock canal. The estimated cost of conversion was $2.3 billion, and since then improved technology has offset rising prices so that the figure is still valid. A sea-level canal constructed by conventional methods in any other country would cost twice as much as converting the present Panama Canal.

The merits of the Panama route, which led originally to its selection by the French, far overshadow all others for either a lock-type or a sea-level canal. When the United States acquired the French canal holdings, Philippe Bunau-Varilla, the French engineer who negotiated the sale, urged President Theodore Roosevelt to continue the French plan for a sea-level canal or, failing this, to construct the locks in such manner as to facilitate conversion to a sea-level route, which he envisioned as ultimately necessary. Public pressure to complete the canal at an early date led President Theodore Roosevelt and the Congress to reject the 1905 majority report of the Board of Consulting Engineers recommending a sea-level canal. And although the lock canal was constructed without the provisions to facilitate conversion, an effective method for overcoming this lack was proposed in the 1946-48 studies.

The excavation and dredging of more than one billion cubic yards of earth and rock would be undertaken in such a way as not to interfere with the canal traffic. This would be accomplished by leaving water-retaining natural rock dikes in place to maintain canal levels during the excavation; when the excavation was completed, the dikes would progressively be demolished by blasting them into adjacent deep pits excavated in advance. The lowering of the lock canal water to sea level would take place over a period of seven days; this would be the only time in the ten-year construction period that canal traffic would be disrupted.


Far more important than the engineering factors entering into the choice of route and the dubious savings that might be made by using nuclear explosives are the political considerations involved in deciding whether to build the new canal on the present site, elsewhere in Panama or in another country. The President's statement set forth the concept of a changing relationship between the United States and Panama, in which the first step would be a new treaty to replace the treaty of 1903. Under the arrangement proposed, the United States would retain the rights necessary for the effective operation of the canal and the administration of the areas required for these purposes. The new treaty would recognize the sovereignty of Panama, provide for the effective discharge of common responsibilities for hemispheric defense and provide for its own termination when a sea- level canal comes into operation. The statement gave no inkling of the terms to be asked by the United States in entering into an arrangement for a sea-level canal and presumably these are left for eventual negotiation. Possibilities are joint participation in the operation, management by a Users' Association, or even hemispheric participation in the financing, construction and operation.

In preparation for the route surveys authorized by Congress, the United States is asking for the coöperation of the governments concerned, without precondition or precommitment by either side. However, the action of the Nicaraguan Congress in mid-1964 in repudiating the Bryan-Chamorro Treaty, giving the United States canal rights in that country in perpetuity, would, if adopted by other countries, limit if not preclude the studies. It is seriously to be questioned whether the proposed studies are essential. If so, it might be assumed that the action of the Nicaraguan Congress was intended to stake out a strong negotiating position.

The need for a canal invulnerable to attack and of sufficient capacity to meet the growing needs of commerce is becoming increasingly acute. A single sea-level canal could handle all traffic in the foreseeable future, and it would be needlessly expensive to keep the existing canal in service if a sea-level canal is constructed elsewhere. But to abandon the existing canal would seriously disrupt the large sector of the Panamanian economy which depends on the present Canal Zone. The Canal is Panama's largest industry and its largest employer. As has often been noted, the withdrawal of the United States would be a catastrophe for the Panamanians. This would be true whether it was preliminary to opening a new canal in another Latin American country or building a new canal elsewhere in Panama.

The burden of redress for the disruption, if not ruination, of the economy of the affected area in Panama by the closing of the present Canal, or by placing it on stand-by status, would unquestionably fall on the United States. Until such time as our presence in the Canal Zone becomes untenable, one must view the 1903 Treaty not only as a grant of rights and privileges but also as an acceptance by the United States of an obligation, moral if not legal, to sustain, or at least not deliberately to cripple, that part of the Panamanian economy which the Canal brought into being. Compensation payments by the United States would seem inescapable and would be measured in the hundreds of millions of dollars. This would be a part of the price that would have to be paid for the abandonment of the existing canal route.

Even if a sea-level canal is constructed on the present site, the economy of Panama will suffer as the result of a significant reduction in the labor needed to operate the canal and in the businesses and services required by civilian and military complements stationed in the Canal Zone. In recent years Panama has stepped up its industrial and agricultural economy and this trend, if properly nourished in the ten-year period during which the new canal is being built, should materially reduce the impact of the changeover. There is little doubt that the United States would act energetically to ease the economic stress that would result from the displacement of the large labor force now dependent directly or indirectly on the lock canal.

Panama has been and is still fully aware of the many advantages to the United States in maintaining the existing canal route and of the significant political and economic factors which weigh in her favor. On the other hand, the United States is not without alternatives, and intransigence on Panama's part could bring about her ruin. The pressure to avoid a prolonged diplomatic stalemate is heavier on Panama than on the United States and should in the end lend reasonableness to her demands.

If an accommodation with Panama cannot be worked out, then the alternative would be for the United States to exercise sovereignty over the Canal Zone as a foreign enclave within the borders of Panama. In effect, this is the arrangement which developed in the interval immediately following the suspension of diplomatic relations after the January flag-raising incident. A complete impasse between the United States and Panama would not necessarily force the United States to seek a sea-level route elsewhere, although this is the impression conveyed by our show of interest in alternative routes in other countries. The 1903 Treaty does not prevent the United States from proceeding unilaterally to convert the present lock canal to one at sea level, though naturally it would not undertake this until all efforts to reach an accommodation with Panama had been exhausted. But the threat of such a possibility is there.

Since cost of construction does not weigh heavily, if at all, in making the choice of route, and since the United States is unlikely to obtain from any other country more favorable treaty arrangements than it can from Panama, the question must be asked: What purpose will be accomplished by the extensive route studies now proposed? Is there not the possibility that we will be accused of playing one country against the other and that we will thereby alienate many of our Latin American friends? We can well afford to be generous with Panama, as the President has indicated we are prepared to be. It will then be up to Panama to accept the President's offer in the spirit in which it was tendered. The conversion of the existing canal is the best possible solution, and there can be no excuse for failure to achieve it.

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