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 You are in: Under Secretary for Public Diplomacy and Public Affairs > Bureau of Public Affairs > Bureau of Public Affairs: Office of the Historian > Foreign Relations of the United States > Johnson Administration > Volume XXXI
Foreign Relations, 1964-1968, Volume XXXI, South and Central America
Released by the Office of the Historian
Documents 397-422

397. Editorial Note

On March 10, 1964, the President talked on the telephone with McGeorge Bundy about the latest proposed language for an agreement on Panama. The President was concerned about reports from Panama and in the press that an agreement with Panama leading to resumption of relations and the prospect of negotiations for a new treaty was imminent. Johnson told Bundy: "Weíre not goiní to have prima facie evidence that weíre agreeing to a new treaty." He did not want to be put in the position of being bullied by The New York Times and Washington Post into accepting an agreement that could be interpreted as U.S. acceptance of the Panamanian demand to negotiate a new treaty. Referring to some of their journalists, the President told Bundy: "I think theyíre very dangerous characters, and I donít think that we can allow them to get us boxed in here." He continued: "Letís donít have Nixon and the rest of them saying weíre negotiatiní a treaty." (Recording of telephone conversation between President Johnson and McGeorge Bundy, March 10, 10:57 a.m.; Johnson Library, Recordings and Transcripts, Tape F64.17, Side A, PNO 1)

The President then called Mann and told him that he had spoken to Bundy and there were three things he opposed in the draft: the mention of "negotiations," "Panama Canal," and "international." "Now, if I have to give," he said, "Iíd leave ĎPanama Canalí in up in the first paragraph, although itís desirable to take out, and I might even take Ďinternational.í Iím not going to take Ďnegotiationsí, though." He added:

"And Iíd squeeze their nuts a little down there, anyway, if I were you. Iíd tighten it a little bit and let them worry a little bit. I donít think we need to come hat in hand. Weíve been fair, and weíre going to continue to be fair, but letís donít-just-Iím tired of these people that recede and concur every time the U.S. is attacked. I want to resist somebody somewhere, some time. Iím not a warmonger, and donít want to go to war. But I donít think weíre goiní."

Mann said that he had "some other ideas that would protect us some." The President then told Mann:

"You were just as right as you could be, my friend, on negotiations the first day-not that it means anything other than discussion, but to them it means a new treaty, and we might as well face this thing now. If we agree and get along then when we donít have a new treaty, theyíre going to say we made a commitment and couldnít live up to it, and I donít want to be in that position. Iíd rather take the heat now." (Recording of telephone conversation between President Johnson and Thomas Mann, March 10, 11:11 a.m.; ibid., Tape F64.17, Side A, PNO 2) The portions of the conversations printed here were prepared in the Office of the Historian specifically for this volume. Another record of this conversation is in a March 10 memorandum of conversation; ibid., Papers of Thomas C. Mann, Telephone Conversations with LBJ, January 14, 1964-April 30, 1965. The Mann record of the conversation indicates that it took place at 11:40 a.m.

According the Presidentís Daily Diary, Johnson met for lunch with Rusk, Mann, and McGeorge Bundy at 1:12 p.m., March 10, during which Panama was no doubt discussed. (Johnson Library) No other record of this meeting has been found.


398. Special National Intelligence Estimate/1/

SNIE 84-64

Washington, March 11, 1964.

/1/ Source: Central Intelligence Agency, Job 79R 01012A, DDI Files, O/DDI Registry. Secret; Controlled Dissem. According to a note on the cover sheet, this estimate was prepared in the Central Intelligence Agency with the participation of the intelligence organizations of the Departments of State and Defense and the National Security Agency. The U.S. Intelligence Board concurred in this estimate on March 11.


The Problem

To examine the situation and short run prospects in Panama, with particular emphasis on the Castro-Communist threat.


A. The process of political change in Panama, where the uneasy rule of the elite was being challenged by a variety of extreme nationalists, has been accelerated by the canal crisis. With general elections scheduled for 10 May, political maneuvering is in full swing. All the candidates are virtually compelled to take a strong nationalistic stand. Candidates and party alignments are still likely to be changed. The power struggle may not be resolved at the ballot box; any of the principal candidates might resort to a coup rather than accept defeat. A new government might feel more able to compromise on the canal issue, although it would first try to consolidate its control of the government apparatus.

B. The Communists and Castroists, riding the current wave of rabid nationalism, have made substantial gains. They have established effective cooperation with each other, have expanded and improved their organizations, and have increased their influence with nationalists both in and out of government. We do not believe that they are strong enough at this stage to carry out a coup by themselves. We believe that in the immediate future they will concentrate on working with radical nationalist elements to undermine the already weakened rule of the traditional oligarchy. They will also seek to keep the canal issue alive and unresolved.

C. One durable result of the crisis is this: from a negligible factor in Panamanian life, the Communists and the Castroists have become a significant one. Their short run prospects have been sharply improved, and the longer the treaty issue remains agitated, the more lasting their gains are likely to be. Even if their strength and influence should diminish, the heightened level of nationalism will persist, and will confront the US with a succession of difficulties.

[Omitted here are sections I. "The Political Framework," II. "The Canal Issue," and III. "Riots and Their Aftermath."]

IV. The May Elections

14. The approach of the presidential election makes it extraordinarily difficult for the Chiari government, or any political group, to take a moderate stand on the canal issue. With extreme nationalism in the ascendant, each candidate will be judged by his position on this issue, and the campaign will have a high content of Yankee-phobia.

15. The Contenders. There are, at this stage, seven presidential candidates./2/ (Chiari cannot succeed himself.) There is strong pressure within the oligarchy to have the two conservative coalitions agree on a single unity candidate, but thus far neither candidate has been willing to withdraw. Of these currently running only four are of consequence.

/2/ See Annex for a complete list of Panamaís political parties and coalitions. [Footnote in the source text. The Annex is attached but not printed.]

a. Marco Robles is a member of the conservative National Liberal Party and the candidate of the parties in Chiariís governing coalition. [2 lines of source text not declassified] In effect, he will be largely judged by Chiariís success or failure.

b. Juan de Arco Galindo is a member of the conservative National Patriotic Coalition and candidate of the Opposition Alliance (OA).

[1 line of source text not declassified] The OA, like most Panamanian coalitions, is an amalgam of personalistic parties, and some of its leaders are unsavory opportunists. Galindoís main problem will be to keep the OA together.

c. Arnulfo Arias is leader and candidate of the nationalistic Panamenista Party. [7 lines of source text not declassified] Some opinion holds that Arnulfo may have come to the conclusion that accommodation with the US is a necessity. [2 lines of source text not declassified]

d. Miguel Moreno, the candidate of the small ultranationalist National Reformist Party, is also supported by a diversity of other elements. He himself has frequently expressed violently anti-US views, and the vigor with which he has recently presented Panamaís case before the OAS has made him a national figure. He still has little chance of election as the nominee of a minor party, but key members of the oligarchy may decide that his current popularity would make him a strong unity candidate. In this capacity, he would probably have the backing of Colonel Bolivar Vallarino, commander of the National Guard, with whom he has long had close personal ties. Moreover, some of the Communist leaders see in him a way to supplant the oligarchy by a transition government which could pave the way for a "socialist revolution." [less than 1 line of source text not declassified] Moreno also happens to be the only important candidate that the PdP has much hope of influencing.

16. The Election Outlook. Political forces in the country are still shifting and are likely to keep on doing so throughout the campaign. If an honest election were held with the present party line-up, Arnulfo would probably win against the divided oligarchy. We believe the chances are better than even, however, that the oligarchy will close ranks around a unity candidate, perhaps Moreno or Robles. In this event, the election would probably be close. The oligarchy controls the National Electoral Board which supervises the counting of votes and arbitrates voting disputes, and this could be decisive in a close election.

V. The Possibility of a Coup

17. With Panama in a state of acute tension there is some chance of a coup. It could come from any one of several directions. The oligarchy might seek to forestall an election victory, or a coup, by Arnulfo. Arnulfo might mount a coup himself, fearing that the oligarchy meant by chicanery or violence to keep him from the Presidency. The Communists and Castroists might come to believe that they could use the masses in the streets to nullify the governmentís police power and thus seize control with a small number of resolute activists. Such an attempt would, however, mean risking their present assets and their increasing influence. We do not regard the likelihood of a coup as very great at present; it will probably increase, especially in the event of continued economic deterioration. The period between the elections in May and the new Presidentís assumption of office in October will be a delicate one.

18. If a coup attempt were launched, the attitude of the Guardia Nacional (GN) would be crucial; indeed, any coup plotters would almost certainly seek to enlist the GNís support, or to neutralize it. The GN is Panamaís only security force and numbers about 3,500 men. It is a disciplined and fairly competent body, believed to be loyal to its commander, Colonel Bolivar Vallarino. It could probably control minor civil disorders, but in the event of widespread and sustained disturbances it would probably not be capable of maintaining control without substantial outside assistance.

19. Vallarino has in the past shown himself reluctant to undertake decisive action on his own initiative, except when the interests of the GN were involved. He is bitterly opposed both to Arnulfo and to the Communists, and realizes that he would almost certainly lose his job if either took over. Hence, we believe that Vallarino would oppose a coup attempt by either. He would probably support a coup launched by the oligarchy to prevent Arnulfoís election; he might even act to prevent Arnulfo from taking office if he were elected.

VI. The Outlook

20. The Government. The intense and conflicting pressures on Chiari will almost certainly increase. The economic consequences of the impasse will be felt more and more by the Panamanians. To some, especially the oligarchy, this argues for attempts at a settlement with the US. In the minds of most, however, it probably increases anti-US sentiment. The situation is further complicated by the May elections; if Chiari appeared to be settling for something less than a US commitment to write a new canal treaty, the government coalition would almost certainly be defeated in the election-and large-scale rioting might be renewed.

21. A new Panamanian Government might have stronger mass support and thus more room for maneuver on the canal issue. Its leaders, even if rabidly nationalistic, would no longer be under election pressures, and presumably would have to concern themselves with reversing the process of economic deterioration. However, a new government would be likely to go slow, seeking first to consolidate its control of the governmental apparatus.

22. The Castroists and the Communists. Although both the Castroists and Communists have made significant gains since the crisis, we do not believe that, at this stage, they are strong enough by themselves to seize power. Nor do we believe that they intend in the immediate future to risk their gains and assets in such an attempt; PdP leaders have expressed concern that the US might directly intervene to prevent or redress a Communist takeover. However, if it appeared that radical nationalists were about to seize power, the Castroists and Communists would probably join them in the hope of securing positions of major influence.

23. Barring such an opportunity, the short run tactics of the PdP and its sympathizers are to extend their influence, to build up their assets, and to consolidate their gains. They will continue to support the governmentís intransigent stand, and they will attempt to exert pressure on the administration to stand firm. At the same time, they will try to undermine the oligarchy, perhaps charging it with plans to betray Panama to the US. They will capitalize on any opportunity to exploit economic dissatisfactions and chronic social inequities. Even the more militant VAN can be expected to adopt similar tactics, at least for the near future.

24. The crisis has made many Panamanians more receptive to the ultranationalist line advanced by the Castroists and Communists. For some, especially among the lower classes, the oft-repeated charges of Yankee aggression have been proved. Especially during the election period, the Castroists and Communists will continue to profit from the strong nationalistic and anti-US sentiments rampant in Panama, whatever their origin. If and when this chauvinistic fervor diminishes, some reduction of their influence is likely. But it will not vanish away. One durable result of the crisis is this: from a negligible factor in Panamanian life, the Communists and the Castroists have become a significant one. Their short run prospects have been sharply improved, and the longer the treaty issue remains agitated, the more lasting their gains are likely to be. Even if their strength and influence should diminish, the heightened level of nationalism will persist, and will confront the US with a succession of difficulties.


399. Editorial Note

On March 12, 1964, McGeorge Bundy informed President Johnson that the delegation of five Organization of America States Ambassadors was prepared to work out with Panama the new language of an agreement that would include the most recent changes reflecting the Presidentís requirements, and that Mann was "very eager" to have the Presidentís concurrence. Johnson insisted on another look to make sure the language was right. "I know that itís awfully important that we settle some of these things," he told Bundy, "and theyíre mounting and pickiní up, but Iím not that anxious to settle it, and Iíd just rather ride íem out and take the consequences than to capitulate." He added: "Tom capitulates easier than I thought. He was the strongest guy you ever saw when he started. Are there some forces that have got him worried?" Bundy responded: "I honestly believe that he feels that he has won this one, and youíre looking for the third touchdown instead of the second." (Recording of telephone conversation between President Johnson and McGeorge Bundy, March 12, 10:31 a.m.; Johnson Library, Recordings and Transcripts, Tape F64.17, Side A, PNO 4) The text of the OAS language is in telegram 462 to Panama City, March 12; National Archives and Records Administration, RG 59, Central Files 1964-66, POL PAN-US)

Secretary Rusk, Assistant Secretary Mann, and McGeorge Bundy joined President Johnson at 1:26 p.m. in the Oval Office to discuss the situation. William J. Jorden in Panama Odyssey, includes an account of the meeting in which the Presidentís anger and disappointment with Mann, as expressed to Bundy in the telephone conversation cited above, had not subsided. According to Jordenís account, Mann threatened to resign and Johnson threatened to fire him, but the moment passed and the two agreed to work together. Mann also agreed to inform Ambassador Sanchez Gavito that the President would not accept the language. (University of Texas Press, Austin, 1984, pages 79-80)

On March 16, the third anniversary of the establishment of the Alliance for Progress, the OAS released the proposed language. At 12:10 p.m. that day the President addressed the Inter-American Committee on the Alliance for Progress on the dispute with Panama:

". . . The United States will meet with Panama any time, anywhere, to discuss anything, to work together, to cooperate with each other, to reason with one another, to review and to consider all of our problems together, to tell each other our opinions, all our desires and all our concerns, and to aim at solutions and answers that are fair and just and equitable, without regard to size or the strength or the wealth of either nation.

"We donít ask Panama to make any precommitments before we meet, and we intend to make none. Of course, we cannot begin on this work until diplomatic relations are resumed. But the United States is ready today, if Panama is ready. As of this moment I do not believe that there has been a genuine meeting of the minds between the two Presidents of the two countries involved.

"Press reports indicate that the Government of Panama feels that the language which has been under consideration for many days commits the United States to a rewriting of the 1903 treaty. We have made no such commitment and we will not think of doing so before diplomatic relations are resumed and unless a fair and satisfactory adjustment is agreed upon." The text of the Presidentís remarks is printed in Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1963-64, Book I, pages 383-384.

On March 16 at 4:40 p.m., Bundy reported to President Johnson that Mann had spoken to the OAS Ambassadors, who wanted to know whether, in the continued absence of an agreement between Panama and the United States, more mediation would be helpful. The ambassadors also inquired about a response to Panama if it asked for an agreement on the basis of the two paragraphs presented earlier in the week, and how to respond if Panama requested a U.S. Ambassador. Bundy consulted with Mann on these two points and told the President that he and Mann were in agreement that with respect to the offer for further mediation, "Weíre inclined to say, Ďno, thank you very much, youíve done your best, but we think that the problem is one of a meeting of minds between the two governments.í " He added: "to the first question we would say, Ďno, there is no meeting of the minds between the two parties, and we just have to recognize that there isnít.í " As to a possible Panamanian request for the resumption of diplomatic relations with the United States, Bundy proposed that they reply, "why certainly, if it is understood that there is no agreement between the United States to revise the treaty." Bundy also suggested that the United States "reopen the question of what these paragraphs say," to ensure that Panama cannot justify that the United States has agreed to negotiate a new treaty. Johnson told Bundy that the OAS Ambassadors should "continue to play" with the two paragraphs and go back to the Panamanians "to get them straightened out and make them quit lying and saying that weíve agreed to negotiate a treaty." (Recording of telephone conversation between President Johnson and McGeorge Bundy, March 16, 4:40 p.m.; Johnson Library, Recordings and Transcripts, Tape F64.17, Side B, PNO 2) The portions of the conversations printed here were prepared in the Office of the Historian specifically for this volume.


400. Memorandum From the Presidentís Special Assistant for National Security Affairs (Bundy) to President Johnson/1/

Washington, March 18, 1964.

/1/ Source: Johnson Library, National Security File, Country File, Panama, Vol. III, March 1964. Secret.


Ralph Dungan tells me that he spoke to you about a proposal which Sterling Cottrell has made for the next step on Panama. Cottrellís proposal was made to Tom Mann, and I have not yet had a chance to get Tomís comment on it, but here it is:/2/

/2/ The President and Bundy discussed the proposal on March 18. The President told Bundy "it appeals to me; Iím ready to do that-be glad to-go on, tell íem to do it." Johnson also stated, "Weíre anxious to resume relations, one; talk, two." (Memorandum of telephone conversation between President Johnson and McGeorge Bundy, March 18, time undetermined; Johnson Library, Recordings and Transcripts, Tape F64.18, Side A, PNO 2)

We should announce our readiness to resume normal relations in the following language-or alternatively, and to me less effectively-we could have the OAS urge this course on both countries in closely parallel language:

"The Government of the United States proposes that normal relations with the Government of Panama be restored through the reestablishment of diplomatic relations. It also proposes that Special Ambassadors from each country be appointed to ascertain and examine all outstanding issues between the two countries and to prepare a joint recommendation to both governments as to how these issues can be resolved in fair and satisfactory manner.

"If the Government of Panama agrees, relations will be restored immediately and the Special Ambassadors will be appointed within 30 days thereafter."

If you should wish to do this, it could be announced by Pierre/3/ after your OAS meeting this afternoon. My own instinct is still to wait a few days, but you may wish to turn discussion to a new proposal and away from the difficulties of recent days.

/3/ Pierre Salinger.

McG. B.


401. Editorial Note

On March 21, 1964, President Johnson informed Secretary Rusk that he had decided to make a public and background statement on Panama. The President wanted to clear the air and put the issue in perspective by focusing on the positive aspects of U.S.-Panamanian relations throughout history. He told Rusk that he intended "to invite the press in and spend 10 to 15 minutes with me, just talking with me, off the record." He read a draft of the public statement to Rusk, who thought it was "very constructive." The text of the statement released on March 21 is printed in Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1963-64, Book I, pages 404-405. Johnson then told Rusk he thought he would say to the press on background:

"Iíve seen a lot about this Panamanian situation-Iíve seen a lot of speculation and discussion, back and forth. This is a very important problem for both countries and Iíve given a lot of thought to it. Our situation has never changed since Secretary Rusk and McNamara and I met the first morning, and I called the President of Panama.

And I said, then, in effect this and I have repeated it ever since. But somehow or other, Iím not sure that everybody understands it, and this is our position then and this is our position now." (Recording of telephone conversation between President Johnson and Dean Rusk, March 21, 12:16 p.m.; Johnson Library, Recordings and Transcripts, Tape F64.18, Side B, PNO 2)

Mann agreed with Rusk that the Presidentís proposed statement was all right to be presented to the press as background. Mann reported that Rusk had just met with Ambassador de Lavalle, Chairman of the OAS, who had asked for suggestions on how relations between Panama and the United States could be restored and suggested going back to the two paragraphs on which the OAS Committee had almost succeeded in obtaining an agreement earlier in the month. "We canít do that after weíve broken up, and after they leaked everything to everybody," Johnson told Mann in a telephone conversation. "We canít ever agree on those two paragraphs. They ought to know that-or we would have agreed to íem the other day." Mann suggested getting the OAS to work with them on alternatives. Johnson indicated that his preferred alternative was "one, to resume relations; two, discuss everything-review everything." (Recording of telephone conversation between President Johnson and Thomas Mann, March 21, 1:25 p.m.; ibid., Tape F64.19, Side A, PNO 3)

After his conversation with Mann, the President consulted Senator Russell, who asked why Johnson felt it was important to issue a statement. "Itís made only, Dick, to try to get off of dead center." Johnson continued: "The Secretary of State has really had no authority in this thing-and Assistant Secretary of State either-because I told íem that Iím not goiní to agree to negotiate a new treaty, and so itís been more or less taken out of their hands, and the ballís in my court." The President indicated that the OAS should go back to Chiari. He told Russell: "What Iím going to do when I make this statement-Iím going to give it to the head of the OAS and Iím going to say to the OAS, Ďnow goddammit, Iíve gone as far as a human beiní can go. You got to make this fellow go.í Iím gonna put the ball back in his court." Russell assured Johnson that if he felt compelled to make a statement, "I think itís all right." (Recording of telephone conversation between President Johnson and Richard Russell, March 21, 1:32 p.m.; ibid., Tape F64.19, Side A, PNO 4) The portions of the conversations printed here were prepared in the Office of the Historian specifically for this volume.

The President issued his statement at a press conference held at 1:45 that afternoon at the White House. Later that afternoon, he told Mann that "he had a hell of a good press conference," and read the complete transcript of the press conference over the phone. Mann said that the statement "may help to clarify things over there." He told the President: "I donít mind fighting the Panamanians-rather enjoy it, but I donít want to fight this whole OAS." He indicated that if the United States had to negotiate an agreement with the Panamanians, "weíll go carefully." (Memorandum of conversation, March 21, 3:35 p.m.; ibid., Papers of Thomas C. Mann, Telephone Conversations with LBJ, January 14, 1964-April 30, 1965) A portion of the conversation was recorded and is ibid., Recordings and Transcripts, Tape F64.19, Side B, PNO 2.


402. Memorandum of Conversation/1/

Washington, March 23, 1964, 3:30 p.m.

/1/ Source: National Archives and Records Administration, RG 59, ARA/Panamanian Affairs Files: Lot File 66 D 329. Confidential. Drafted by Bunker. Copies were sent to Mann and Allen (RPA). A copy was also sent to Rusk under cover of a memorandum by Bunker on March 24.

Ambassador Moreno of Panama
Ambassador Bunker of the U.S.

Panama-U.S. Relations

I met Ambassador Moreno at the 1925 F Street Club for a private, off-the-record talk. I made it clear to him that I was doing this on my own responsibility and that it was important that the subject of our discussion should be kept confidential and not divulged to the press.

I said that it seemed to me President Johnsonís statement of March 21/2/ had been most constructive. In some ways it was broader and went beyond the OAS communiquť of March 15./3/ It indicated to me that there was now a genuine meeting of the minds between the two presidents. Furthermore, we had struggled over words and semantics for two and one-half months, to date without results, and it seemed to me that the time had come to substitute action for words. I suggested that one of several procedures might be followed.

/2/ See Document 401.

/3/ Released on March 16, it reads: "The Governments of the Republic of Panama and of the United States of America have agreed to reestablish diplomatic relations as soon as possible to seek the prompt elimination of the causes of the conflict relative to the Panama Canal and to attempt to resolve other problems existing between them, without limitations or preconditions of any kind.

"Consequently, within 30 days following the reestablishment of diplomatic relations, both Governments will designate special ambassadors to carry out discussions and negotiations with the objective of reaching a fair and just agreement which will eliminate the above-mentioned causes of the conflict and resolve the other problems referred to above. Any agreements that may result would be subject to the constitutional processes of each country."

1. President Chiari might issue a statement welcoming President Johnsonís statement, indicating that as a result of the statement there was a genuine meeting of the minds, that it was obvious that both sides wished to resolve their difficulties and that therefore, the Government of Panama was prepared to resume diplomatic relations with the United States.

2. The Government of Panama might authorize Ambassador Moreno to state that in view of President Johnsonís statement of March 21 that the United States is prepared to review every issue that now divides the two countries and every problem which the Panamanian Government wishes to raise, the Government of Panama is prepared to resume diplomatic relations to be followed by the appointment by both countries of special representatives with full authority to discuss all problems and with the responsibility for seeking solutions.

3. We might deliver joint or simultaneously separate notes to the OAS saying that both governments are resuming diplomatic relations and expressing appreciation to the OAS for its efforts to bring about an understanding between the two governments.

Ambassador Moreno said he felt that in some ways, the "agreement" of March 15 was more specific than the wording of the Presidentís statement. I pointed out to him that there had been no "agreement", that in the course of negotiations here we had agreed to several texts which Panama had not accepted and they had agreed to a text finally which we had not accepted. It seemed to me that having gone through 28 texts we had about exhausted the possibility of finding mutually acceptable wording and that the time had come to act. I thought that now it must be evident to both sides that our procedural objectives were really identical; i.e., we both wanted to resume diplomatic relations, we were both ready to discuss, consider, review-whatever words one wished to use for the process-all of the problems existing between us in an effort in good faith to find fair, reasonable and just solutions. That being so, let us get on with the job.

Ambassador Moreno said that there had been a good reaction in Panama to President Johnsonís statement and that President Chiari would make a statement this afternoon regarding it. He would try to get the text as soon as possible. He commented that he felt there might be criticism in Panama on the procedure I had suggested on the ground that the Government was backing down still further from its original position and acting on the basis of wording less precise than that in the March 15 communiquť. I replied that it seemed to me that President Johnsonís statement was no less precise and, in fact, was more comprehensive, and therefore in a way more favorable to Panama. Ambassador Moreno then said that he would want to talk with his Government and would keep our conversation on a strictly confidential basis.


403. Memorandum From the Presidentís Special Assistant for National Security Affairs (Bundy) to President Johnson/1/

Washington, March 24, 1964.

/1/ Source: Johnson Library, National Security File, Memos to the President, McGeorge Bundy, Vol. II. No classification marking.

Chiari statement: our next move

I. If you find the Chiari statement/2/ unhelpful and wish to back away from any resumption of relations, I think we should quietly but promptly let it be known that the Chiari statement has not increased our hopes. We could point quietly to his references to the contractual clauses of the treaty and his desire to solve all differences and all problems "once and for all." We could also note his reference to "the necessary constitutional procedures," which means a treaty. On this course, we should simply be back where we were, and you would be standing pat on your statement of last Saturday./3/

/2/ On March 24 Chiari issued a statement responding to Johnsonís public statement of March 21, agreeing in principle with the proposal to resume relations and begin talks, but reiterating his support for the OAS formula-see footnote 3, Document 402. A

Department of State translation of Chiariís statement, forwarded to the White House on March 25, is in the National Archives and Records Administration, RG 59, Central Files 1964-66, POL 15-1 PAN.

/3/ March 21; see Document 401.

II. A second course would be to say that you find the Chiari statement interesting but that we need to examine more closely the two OAS paragraphs before we come to a final agreement. On this course, we could put to the OAS language which does not mention the Panama Canal directly and which replaces the words "discussions and negotiations" by less fought-over phrases. Tom Mann thinks there is a fair chance of success in this course and that with luck he could win the OAS representatives back on to our side. I think Bill Moyers has language to propose on this course.

III. The third course is to decide that a prompt de facto resumption of relations is more important than the fact that any Panamanian politician will have to speak in terms somewhat like those which Chiari uses. If we make this view, then I would advise an immediate announcement along the lines of the draft statement attached./4/

/4/ Not found attached.

I think these choices are quite clear-cut, and I doubt if we need a long discussion of it./5/

/5/ In a handwritten note at the end of the memorandum Bundy added: "P took still another course, a sort of III in which we try to resume without agreeing to 2-para formula." In a telephone conversation with Bundy that evening, Johnson inquired whether Rusk was prepared to accept Chiariís statement. Bundy responded: "I think-no sir, I donít think that. I think he did not want to have us back away, and weíre not doing that, and I think Iíve talked to Tom [Mann] more recently than I have the Secretary, and heís thought about it more. Tom, I think, will be very pleased with this thing-finding out what the hell they mean-and then going the course of trying to amend the two paragraphs in the light-in the general line that you approved tonight. I donít think weíre going to have any trouble with the Secretary on this." (Recording of telephone conversation between President Johnson and McGeorge Bundy, March 25, 7:32 p.m.; Johnson Library, Recordings and Transcripts, Tape F64.20, Side A, PNO 8)

Mc.G. B.


404. Memorandum From the Presidentís Special Assistant for National Security Affairs (Bundy) to President Johnson/1/

Washington, March 25, 1964.

/1/ Source: Johnson Library, National Security File, NSC Histories, Panama Crisis, 1964. Secret. Copies were sent to Mann and Dungan.


I have spoken with Tom Mann and set in train the negotiating process you authorized last night./2/

/2/ See footnote 5, Document 403.

Ambassador Bunker will be going to Moreno today and will make the following presentation:

1. We have made our statement;
2. You have made your statement;
3. Why donít you resume relations at once?
4. If you resume, of course we will resume and send an Ambassador forthwith.

If the Panamanians accept this dťmarche, we are in. If they come back and ask questions about our view of the OAS two paragraph formula, then Bunker will come back to Mann, and Mann will instruct him to say that if the Panamanians wish to go this more complicated route, we would have to insist on minor modifications in the formula. Tom would then negotiate to get the Panama Canal and the word "negotiations" out of the two paragraphs. This second phase is not being discussed even with Bunker until we see how the first phase works.

In all this we are keeping the number of those informed as small as possible, and we are pointing out to the Panamanians that we can negotiate quietly to resume relations, or make our case to the newspapers, but we can hardly do both at once. But we do not kid ourselves that Moreno or his compatriots will be as quiet as we would like.

McG. B./3/

/3/ Printed from a copy that bears these typed initials.


405. Telephone Conversation Between President Johnson and the Presidentís Special Assistant for National Security Affairs (Bundy)/1/

Washington, March 25, 1964, 5:30 p.m.

/1/ Source: Johnson Library, Recordings and Transcripts, Recording of telephone conversation between President Johnson and McGeorge Bundy, Tape F64.20, Side B, PNO 2. No classification marking. This transcript was prepared in the Office of the Historian specifically for this volume.

Bundy: [Tape begins mid-conversation] from Moreno who says that they just donít think that they can sell-and keep the peace-a straight resumption of relations on these two statements./2/ Ambassador Bunker would now like to go back to Moreno and suggest that there be a resumption of relations on the basis of a letter that we would send to the head of the OAS, which Iíd like to read to you, because I think itís a good play:

/2/ Reference is to Johnsonís statement of March 21 and Chiariís communiquť of March 24; see Document 401 and footnote 2, Document 403.

"I have the honor to advise Your Excellency that the Governments of Panama and the United States of America have agreed to resume diplomatic relations as of todayís date, exchange of Ambassadors forthwith. My government will appoint without delay a special representative together with a representative of government of Panama-will be empowered to review all the issues between the two countries and to seek a fair and just resolution of these issues."

Then thereís a paragraph thanking the OAS for its constructive and untiring and invaluable work, etc. This would be just a way of letting them off the hook of the fact that weíre not going to buy those two paragraphs. The question of whether we would go back and renegotiate the two paragraphs could be left down the pike and we wouldnít have to cross it. As I say, Ambassador Bunker, whoís close to this, thinks thereís-you know-a fighting chance that this would work, and I see no pain in it. Is that all right with you?

President: Now what do we do when we write íem that? Do we embrace the two paragraphs?

Bundy: No, we do not. We do not refer to the two paragraphs, and weíre simply standing on your statement in this letter. Yeah. No, we do not, Mr. President, and weíve made it clear to Moreno that those two paragraphs are not agreed and that we have not accepted them, and we cannot at this stage accept them. Thatís been made very clear to him today, and what weíd like to do is to let that sink in overnight and then go back to him tomorrow and say, now weíve got another idea which is that we could write the OAS and say weíre going ahead that weíre going to review all these issues and seek a fair and just resolution-doesnít refer to the Panama Canal, doesnít mention negotiations, and it doesnít mention the two paragraphs.

President: What makes you think that they would take this if they wouldnít take anything-

Bundy: Gives him something to say, that we have given one more statement of our intent to seek a fair and just resolution and that-what I think-I think the reason Ambassador Bunker wants to do it is not so much that the expectation of agreement is necessarily very high, but that weíre quite sure that this will be regarded as a forthcoming act from Lavalleís point of view-the head of the OAS Council-and that that would give us pressure against Panamanians from other Latin Americans, instead of having the position in which they say they seem to be the ones who are being forthcoming with respect to the OAS recommendation. I myself think, Mr. President, to be honest with you, Iím not quite as optimistic as Ambassador Bunker, but I canít see that we lose anything by trying this one more, and I think we gain to the degree that the OAS people begin to think weíre the ones who put the ball back in their court. If it doesnít work, then at least itís their play, and we arenít being asked what our next step is.

President: Well, I donít understand it. It doesnít have any appeal to me, but if you and Rusk think itís all right, and think itís the thing to do, Iíd go ahead.

Bundy: Well, the real question is whether it has any negative to you, Mr. President.

President: No, no.

Bundy: And I donít see anything in that-itís a perfect-itís a diplomatic play.

President: No, it doesnít have any negative. The reason it doesnít is because I canít see what purpose it serves.

Bundy: [unintelligible] any positive in it either [laughter].

President: Thatís right, but I donít want-I donít quite understand it, and I donít want to be obstinate. If you and Rusk think itís all right, itís all right with me.

Bundy: We do, yes sir, and so does Tom.

President: All right.

Bundy: Aye, aye, sir.


406. Telegram From the Presidentís Special Assistant for National Security Affairs (Bundy) to President Johnson in Texas/1/

Washington, March 30, 1964, 2257Z.

/1/ Source: Johnson Library, National Security File, Country File, Panama, Vol. III, March 1964. Secret. The telegram bears a handwritten note by Jack Valenti that reads: "LBJ approved by phone to Secy Rusk, 3/30/64."

CAP 64105. On Panama, Secretary Rusk, Mann, and I would now like your authority for Bunker to propose the following letter to Moreno for possible delivery by both governments in identical notes to the Chairman of the OAS Council. We do not believe the Panamanians will accept this solution, but we do believe it is useful to offer it as a means of getting basic responsibility fixed back on Panama./2/ The operative paragraph is paragraph 2, and you will want to check it word for word.

/2/ The Consul in Panama (Taylor) reported on March 28 that, with the Panamanian elections scheduled for early May, "Chiariís present seemingly rigid stand motivated by political considerations." He also indicated that "Senator Fulbrightís remarks have bolstered Chiariís belief that if he stands firm he will eventually obtain close to what he originally stipulated." (Telegram 514 from Panama City, March 28; National Archives and Records Administration, RG 59, Central Files 1964-66, POL PAN-US) Regarding Fulbrightís remarks, see footnote 3 below.

The word "re-examine" is safe, and I think we should stick with it at this stage. We could also use nearly any other word except "negotiate," but I think we should allow the Panamanians to make further suggestions if they have enough interest.

If you approve this move by word to Valenti or Connell, Bunker would present this proposal to Moreno tomorrow, along with a clear statement that this is the best we can do and that he should not expect any softening of the U.S. position because of the Fulbright speech. FBI reports make it clear that Moreno and Chiari have put undue weight on Fulbrightís remarks,/3/ thinking that they indicate public pressure in the U.S. for an early settlement on terms more favorable to Panama than those we are proposing.

/3/ On March 25 Fulbright made a speech advocating that the United States renegotiate the Panama Canal Treaty. Johnson complained: "Iím just within an inch of gettiní an agreement with them and every time I do, The New York Times, The Washington Post, or some damn fool Senator gets up and knocks it off." (Recording of telephone conversation between President Johnson and Spessard Holland, March 25, 4:40 p.m.; Johnson Library, Recordings and Transcripts, Tape 64.20, Side A, PNO 10) The President also complained to Bundy that "they all assume Fulbright speaks for the administration." Bundy responded that it was "extraordinary that Fulbright would take such a stance." The President replied, "Fulbrightís that way, though. He is very unpredictable." Johnson also recalled Trumanís onetime quip that Fulbright was only "half-bright." (Recording of telephone conversation between President Johnson and McGeorge Bundy, March 25, 4:35 p.m.; ibid., PNO 11)

Bunker believes that this offer of identical notes will regain support for us in the OAS Committee.

Draft letter follows:

Note: In second paragraph in place of re-examine, we might use deal with.

Draft Note-United States

Your Excellency:

1. I have the honor to advise Your Excellency that the Governments of the Republic of Panama and the United States of America have agreed to resume diplomatic relations as of todayís date.

2. In order to seek the prompt elimination of the causes of conflict existing between them, my government will also appoint without delay a special Ambassador with sufficient powers to re-examine all the issues between the two countries, without limitation or preconditions of any kind, with the objective of reaching a fair and just agreement, subject to the constitutional processes of each country.

3. The Government of the United States of America desires to express its gratitude for the untiring and invaluable efforts of the members of the Inter-American Peace Committee, the Council of the Organization of American States, the General Committee and the Special Delegation, without which this constructive result would not have been possible.

4. Accept, Excellency, the renewed assurances of my highest consideration.

Ellsworth Bunker
Representative of the United States of America on the Council of the Organization of American States

His Excellency
Dr. Juan Bautista de Lavalle,
Chairman of the General Committee of the Council
of the Organization of American States,
Acting Provisionally as Organ of Consultation.


407. Memorandum From the Presidentís Special Assistant for National Security Affairs (Bundy) to President Johnson/1/

Washington, April 1, 1964.

/1/ Source: Johnson Library, National Security File, Memos to the President, McGeorge Bundy, Vol. III. No classification marking.

Ambassador Bunkerís meeting with Moreno

Bunker reports that he had a quite satisfactory talk with Moreno this afternoon./2/ He presented to Moreno the attached redraft, from which the direct reference to the Panama Canal has been removed./3/ He told Moreno that he had your personal backing in making this proposal and that what you were aiming at was the simplest, clearest understanding that was possible. He told Moreno further that you did not want complicated language which might stand in the way of getting an agreement through the Senate at some later time. He told Moreno that we had no fall-back position and that if this did not work we thought it would be best to wait until the elections.

/2/ In a telephone conversation earlier that afternoon, Bundy told the President that "weíre again sort of within a very few inches of an agreement" with Panama. (Recording of telephone conversation between President Johnson and McGeorge Bundy, April 1, 2:23 p.m.; ibid., Transcripts and Recordings, Tape F64.22, Side A, PNO 2)

/3/ Not attached; the language as approved is printed in Department of State Bulletin, April 27, 1964, p. 656, and American Foreign Policy: Current Documents, 1964, pp. 365-366.

All in all, he sounds as if he had acted like the excellent Ambassador that he is, and I wish we had used the technique of sending him in with your direct instructions before now.

Moreno did not seem to be terribly distressed at the omission of the Panama Canal reference, but he did argue strongly for the inclusion of the footnote saying that the word "agreement" is used "in the broadest sense that the word has in international law." Bunker told him that we did not want that clause in the statement of agreement, but when Moreno said that it would be only a repetition of what the Chairman of the Council has said before, Bunker indicated that we would not object to having Chairman Lavalle repeat it on his own. He took this position because Dean Rusk had told him earlier that phrase was really no bother to us, and that in fact it protects us. Deanís reasoning is that "the broadest sense" covers everything from an informal oral understanding to a treaty. It remains true that some Panamanians will read this note as meaning that the agreement which is being sought will be a new treaty.

But as long as we are not pinned to this understanding directly, and as long as we are protected by the fundamental clause of the whole arrangement-"without limitations or preconditions of any kind"-I think we can endure to have the Chairman interpret the agreement in this way. Do you agree? If not, we should tell Bunker at once.

Moreno left Bunker saying that he would do his best to button up an agreement on this basis. My own guess is that we may get one more bit of pressure from Panama, but Bunker is optimistic./4/

/4/ On April 2 the NSC met to review a number of issues including Panama. According to Bromley Smithís account of the meeting, Rusk stated that "there may be developments later today with respect to wording of an announcement which would be acceptable to us." (Summary Record of NSC Meeting No. 525, April 2, noon; Johnson Library, National Security File, NSC Meetings File, Vol. I, Tab 6, 4/2/64) According to McConeís account of the meeting, Rusk reported that "there was a possibility that today or tomorrow there would be a break which would permit us to move to the conference table" with Panama. McCone noted in his record of this NSC meeting that "on April 1st, the President asked me personally if I thought we were acting correctly on this Panama issue. I replied that I felt his position was defendable and would not recommend any changes." (Memorandum for the record by McCone, April 2; Central Intelligence Agency, DCI (McCone) Files, Job 80-B01285A, Meetings with the President) Prior to the NSC meeting on April 2, Johnson queried McNamara about the pending agreement. He responded that having an agreement would be helpful and the timing, in spite of the Fulbright speech, was all right. "I think if it drifts on too long, thereíll be criticism mounting in our own press, so I would conclude it." (Recording of telephone conversation between President Johnson and Robert McNamara, April 2, 11:15 a.m.; Johnson Library, Recordings and Transcripts, Tape F64.22, Side A, PNO 5)

McG. B./5/

/5/ Printed from a copy that bears these typed initials.


408. Telephone Conversation Between President Johnson and Robert Anderson/1/

Washington, April 3, 1964, 12:55 p.m.

/1/ Source: Johnson Library, Recordings and Transcripts, Recording of telephone conversation between President Johnson and Robert Anderson, Tape F64.22, Side B, PNO 2. No classification marking. This transcript was prepared in the Office of the Historian specifically for this volume. Robert Anderson was a lawyer and former Secretary of the Treasury under President Eisenhower.

Anderson: Hello, Mr. President.

President: Say, looks like we are going to get this Panama agreement worked out.

Anderson: Yes.

President: And then we are going to have to negotiate-uh, resolve some problems we have between the two of us.

Anderson: Yes.

President: And weíll have a full time ambassador and all the staff we need but we want you to be the top lawyer on negotiatiní with them.

Anderson: Iíll do whatever you say, Mr. President.

President: Well, thatís what I want, and Iíll give you everything you need and I just want to-if we have to rewrite a treaty-well, we want to look at it carefully and I just want some fella that I have absolute confidence in. And I want to be measured by only one standard, and thatís what is right and just and fair. And I think if you do that, you could be very helpful. You could start íem off and then come in from time to time, but just be kinda my advisor on it, and let me name you as my man./2/

/2/ Shortly before this conversation, the President consulted Mann, who urged that Anderson be designated to head the team: "We need a tough guy now to get down to the hard negotiating and I would try to talk Bob into it." (Telephone conversation between President Johnson and Thomas Mann, April 3, 12:06 p.m.; ibid., PNO 1)

Anderson: All right, sir. Now, you know, of course, that I donít really know much about-

President: I donít care about that. Good thing you donít.

Anderson: All right, sir.

President: You still got your law license, havenít you?

Anderson: That is correct.

President: Good-bye. Bye.

Anderson: Okay, my friend.


409. Summary Record of the 526th Meeting of the National Security Council With the Congressional Leaders/1/

Washington, April 3, 1964, 2 p.m.

/1/ Source: Johnson Library, National Security File, NSC Meetings File, Vol. 1, Tab 7, 4/3/64. Top Secret. Drafted by Bromley Smith. The meeting lasted no later than 3:35 p.m. (Ibid., Presidentís Daily Diary) McCone has a much briefer account of the Panama discussion in his record of this meeting. (Central Intelligence Agency, DCI (McCone) Files, Job 80-B01285A, Memoranda for the Record)

Various Subjects

The President opened the meeting with the Congressional Leaders by saying that his purpose was to bring them up to date on recent developments. Various Council members would report on current situations. He first called on Secretary Rusk for a summary of developments in Brazil.

[Omitted here is discussion of Brazil (Document 208) and Vietnam (Foreign Relations, 1964-1968, Volume I, Document 107).]

The President then turned to Panama and read the declaration which he said he would make this afternoon if the Council approved./2/ He summarized the U.S. position on the Panama negotiations, i.e., that we would not accept preconditions but we were prepared to review with the Panamanians all problems. He characterized the declaration as containing nothing offensive to either side and as stating the same position he had taken during his first telephone conversation with President Chiari of Panama/3/ which took place immediately after the incident in Panama. He informed the group that he had chosen former Secretary of the Treasury Robert Anderson as his Special Ambassador to conduct the negotiations with the Panamanians.

/2/ See footnote 3, Document 407.

/3/ Document 370.

Senator Mansfield and Senator Fulbright interrupted to state their belief that the agreement proposed by the President was an excellent one.

The President then announced that he was seeking Panamanian agreement for Jack Vaughn as U.S. Ambassador. He summarized in detail the career of Mr. Vaughn.

The President asked whether the Council approved the declaration, and hearing no objection, the President said we would proceed to give our statement to the OAS group. He then praised Ambassador Bunker for his contribution to reaching an agreement.

Secretary Rusk explained that we could not accept any precommitment with respect to negotiation with the Panamanians because, if we did not reach any agreement, we could be accused of bad faith. If the Panamanians denounced the existing treaty they could use a charge of our bad faith in arguing before the International Court that the treaty was no longer valid. There is no reference to the Panama Canal in the agreement. We are not calling attention to this because if we did we would create a problem for President Chiari. Chiariís opponents could say he had retreated from his position that he would not renew relations with the U.S. until we had agreed to renegotiate the treaty. Secretary Rusk said that the solution of the current phase of the Panama problem would clear the atmosphere for OAS action on the Cuban arms cache in Venezuela.

The President said that our insistence on talking without preconditions was our first and last position. We may be prepared to accept changes in the treaty but we could not do so until the Panamanians had agreed to talk without preconditions.

There followed a brief procedural discussion as to how Special Ambassador Anderson would be formally empowered to proceed. Confirmation by the Senate is not required because he will have the personal rank of Ambassador.

Senator Hickenlooper said the Panamanians had denounced the treaties. What would we do if in the first discussion the Panamanians took the position that no treaty existed? Secretary Rusk replied that as far as he knew the Panamanians had not denounced the treaties. They recognized the existence of the treaties and their language attacking them had not gone so far as to claim that they had no validity.

Senator Morse said that the Panamanian agreement was a great agreement and he congratulated the President and the Secretary of State. He said, however, he felt obliged to say that he disagrees entirely with the program for South Vietnam.

[Omitted here is further discussion of Vietnam.]

Turning to Panama, Senator Saltonstall said that in his view the problem there arose because of the attitude of U.S. citizens in the Canal Zone. He asked what we were doing to improve this situation. The President replied that Deputy Secretary of Defense Vance had gone down to Panama, had reviewed the situation, and had recommended certain changes which have already taken place. In addition, General OíMeara, Commander-in-Chief, U.S. Southern Command, is to make additional recommendations on this subject.

[Omitted here is discussion of Africa.]

The President then read a draft press statement which would be issued following the conclusion of the meeting (copy attached)./4/ The statement was approved by those present.

/4/ Not attached but an apparent reference to a statement made to the White House correspondents by Press Secretary George Reedy, at 3:40 p.m. (Johnson Library, National Security File, NSC Meetings, Vol. I)

The President then read a statement which he is going to make to the OAS Ambassadors at 4:00 PM covering the Panama agreement (copy attached)./5/

/5/ Not attached; printed in Department of State Bulletin, April 27, 1964, pp. 655 and 656, and American Foreign Policy: Current Documents, 1964, pp. 366-367.

Senator Humphrey stated that the Presidentís statement on Panama was excellent. He said our forbearance and patience had paid off.

[Omitted here is discussion of Vietnam, Cuba, and Cyprus.]

The President then explained to the group that he had put in a call to President Chiari of Panama on the assumption that the meeting would be finished. President Chiari was now on the line and he said he would now talk to him. (The photographers entered to take pictures.) The record of the conversation is attached./6/ Only one side of the conversation was audible to those present. At the conclusion of the conversation the President commented that President Chiari had broken into English at the end to say, "Thatís the way to do it," then returning to Spanish.

/6/ Not attached; for the transcript of this telephone conversation, see Document 410.

[Omitted here is discussion of Zanzibar and Indonesia.]

The President asked all those present to go with him to the Fish Room to meet the OAS Ambassadors gathered there to hear the Presidentís statement on Panama. The Cabinet Room had to be vacated so that the television cameras could be put in place.

Bromley Smith/7/

/7/ Printed from a copy that bears this typed signature.


410. Telephone Conversation Between President Johnson and Panamanian President Chiari/1/

April 3, 1964, 3:35 p.m.

/1/ Source: Johnson Library, Recordings and Transcripts, Recording of telephone conversation between President Johnson and President Chiari, Tape F64.22, Side B, PNO 4. No classification marking. This transcript was prepared in the Office of the Historian specifically for this volume. President Johnson was in Washington; President Chiari in Panama City. Except where noted, President Chiari spoke through a translator.

President: Hello, Mr. President, this is Lyndon Johnson. I wanted to express our great pleasure at the agreement that has been reached.

President Chiari: He is delighted, Mr. President, that both nations have been able to find a formula in order to re-establish diplomatic relations. He wishes to thank you for that and he is delighted that the two nations now will be able to discuss the problems that for so long have been between them.

President: We appreciate your desire to move on to a lasting agreement, Mr. President, that will resolve these difficulties, and I am today appointing the ablest and strongest man that I know, former Secretary of Treasury Mr. Robert Anderson, to be our Special Ambassador.

President Chiari: Has he been named as Special Ambassador?

President: Yes, sir, he will be named as Special Ambassador to do the negotiating. He was Secretary of the Treasury under President Eisenhower and is a man that enjoys my unlimited confidence.

President Chiari: He is delighted, Mr. President, and he wishes to thank you very much. He wishes to assure you that sometime during tomorrow they will nominate a very capable Panamanian to represent Panama in Washington as Ambassador.

President: Thank him very much, and we look forward to hearing about his nomination. Tell him that Mr. Anderson is a first-rate lawyer, having been a Professor of Law. Heís-his instructions will be to secure a fair and just agreement that will be satisfactory to the people of both nations.

President Chiari: He is delighted, Mr. President, and he is certain that as long as there is good will and good faith on both sides that we will be able to resolve these long standing problems that have existed between the two nations, and that he looks forward to a future of the friendliest possible relations between the two nations, since they have the same common objectives.

President: Well, tell him as we stated in the very first conversation we had together that we cannot have any pre-commitments. But Mr. Anderson will listen to all the differences that exist between the two nations and we will try to find an agreement that will be satisfactory.

President Chiari: Fine, Mr. President. Thatís very fine.

President: Tell him we expect to name a Mr. Jack Vaughn who has lived in Panama a goodly part of his time and who is now head of the Peace Corps for Latin America, to be our regular Ambassador there.

President Chiari: Fine, and Iím delighted, Mr. President.

President: He has had a decade of service in Latin America and heís been on the faculty of Johns Hopkins School of International Studies here.

President Chiari: Fine. Thank you very much, Mr. President.

President: He spent from 1952 to 1960 in and out of Panama and some of his friends no doubt will know him.

President Chiari: He is certain that that will be the case, Mr.


President: And tell him that we would like to have clearance on him just as quickly as we can, and weíll submit it through channels shortly.

President Chiari: Fine, with a great deal of pleasure, Mr. President. And we will do the same with you, Mr. President, as soon as possible.

President: All right. So tell him that the two countries can now sit down together without limitations or pre-conditions of any kind and as friends try to find the proper and fair answers.

President Chiari: [in English] That is the right way to do it and I hope we get success on that. [through translator] That is the right way to do it and I hope we get together on that.

President: [Chuckle] Thank you, Mr. President. Iím lookiní forward to seeiní ya.

President Chiari: [in English] Okay. Good-bye.


411. Editorial Note

[text not declassified]


412. Memorandum From Albert E. Carter in the Bureau of Intelligence and Research to the Director (Hughes)

Washington, April 10, 1964.

[Source: Department of State, INR/IL Historical Files, ARA/CIA Weekly Meetings, 1964-1965. Secret. 2 pages of source text not declassified.]


413. Memorandum for the Record

Washington, April 17, 1964.

[Source: Central Intelligence Agency, DCI (McCone) Files, Job 80-B012785A, 303 Committee, 1964. Secret; Eyes Only. 3 pages of source text not declassified.]


414. National Security Action Memorandum No. 296/1/

Washington, April 25, 1964.

/1/ Source: Johnson Library, National Security File, Country File, Panama, Vol. V, May-June 1964. Secret.

Secretary of State
Secretary of Defense

Interdepartmental organization for Panamanian affairs

The President has approved the following organizational arrangements relating to the formulation and execution of U.S. policy in Panama.

1. Panama Review Group

a. The Panama Review Group, composed of the Secretary of the Army, the Assistant Secretary of State for Inter-American Affairs, the Special Representative, a White House representative, and chaired by the Assistant Secretary of State for Inter-American Affairs, will be the principal point of focus below the President for the formulation and execution of policy with regard to Panama. The Executive Secretary of the Panama Review Group will be designated by the Department of State.

b. The Panama Review Group will work closely with the officers supporting the Special Representative in exercising control over actions which might affect the treaty discussions, publicity, and security.

2. Panama Review Committee

A Committee composed of the Ambassador to Panama, CINCSO, and the Governor of the Panama Canal Zone, and chaired by the Ambassador, will be established and will meet periodically at the call of any member to discuss conditions in Panama and the Zone and exchange reports and proposals on actions to be undertaken in the interests of the United States and better U.S./Panamanian relations. The President expects that the members of this Committee will share their concern fully and frankly with each other, and will work together closely in discharging their respective responsibilities. Any differences which may arise will be referred to the Panama Review Group located in Washington. Any action agreed upon by the Panama Review Committee will be reported to Washington by the Ambassador before this action is taken, whenever such action could affect the work of the Special Representative. The Special Representative will be notified through Washington of such proposed action.

McGeorge Bundy


415. Memorandum From the Presidentís Special Assistant for National Security Affairs (Bundy) to President Johnson/1/

Washington, May 8, 1964.

/1/ Source: Johnson Library, National Security File, Country File, Panama, Vol. V, May-June 1964. Secret.

Panamanian Elections

1. A meeting of the Panama Review Group was held today to discuss the Panamanian elections, scheduled for Sunday./2/

/2/ May 10. The memorandum for the record of this meeting, held at the White House and drafted by FitzGerald on May 12, is in the Central Intelligence Agency, Job 78-03041, Directorate of Operations, [file name not declassified].

2. The group agreed that the general shape of the problem is as follows: First, we can expect to see attempts at vote-fixing by all three candidates-Robles, Arnulfo, and Galindo. Second, while it is not a certainty, there probably will be some violence during the elections, particularly on Monday and Tuesday when the votes will be counted. Such violence will be primarily and initially between Panamanians. But we cannot discount the possibility that Communist and student elements will take the opportunity to make attacks against American targets, in and out of the Zone./3/

/3/ The CIA warned of this possibility in [document number not declassified], May 7. (Johnson Library, National Security File, Country File, Panama, Vol. V, May-June 1964) In a May 8 telegram from the Canal Zone, USCINCSO indicated that the CIA conclusions were "entirely reasonable." (Telegram SC3415DA for JCS; National Archives and Records Administration, RG 59, Central Files 1964-66, POL PAN-US) According to Gordon Chase of the NSC staff, "State and Ambassador Vaughn seem to feel that CIA has overstated the dangers of a serious explosion." (Memorandum from Chase to Bundy, May 8; Johnson Library, National Security File, Country File, Panama, Vol. V, May-June 1964) Lansing Collins reported that Vaughn had indicated that "he agreed with the tone" of the CIA report, although he thought the conclusions "slightly exaggerated." (Memorandum of conversation, May 8; ibid.)

3. We have no favorites in the election and our posture throughout this period will be strictly "hands-off." Generally speaking, there are only two exceptions to this policy. We will take appropriate steps to protect American lives and property, if it becomes necessary to do so. And we will act if there is a clear danger of a Communist take-over, which is not likely.

4. The following U.S. Government actions have been taken or are in train.

(a) U.S. military forces have been readied to take prompt action in the event they are needed. 2000 airborne troops will be available to arrive in the Canal Zone in 10 hours. About 1300 Marines will be 20 miles off Panama shores (but out of sight) by Sunday morning. All this is most privately done and Cy Vance assures me there will be no leak.

(b) Appropriate Government departments and agencies will be alerted to watch the Panama situation closely on a 24 hour basis.

(c) To minimize the possibility that the press will blame us for whatever happens in the elections, State plans to make it clear, on a background basis, that we have no favorites in this election; as a matter of fact, none of the candidates are shining lights.

(d) Long-standing emergency instructions to Americans in Panama are in effect (e.g. stay off the streets). In the event of attacks on the Zone, the Zone police will minimize shooting and will rely, insofar as possible, on such devices as tear gas, which they now have in plentiful supply./4/

/4/ A Contingency Plan for Panama, prepared on May 1 and approved by the Departments of State and Defense, and the CIA, was forwarded to Bundy at the White House on May 7. (Washington National Records Center, OSD Files: FRC 330 69A 4023, Panama, 1964)

5. The White House Situation Room has been alerted to watch the elections closely; for spot status reports over the weekend, you may want to call the Situation Room directly. For "deeper" analysis, I will, of course, be available. But we probably wonít know much before Monday.

McG. B.


416. Telegram From the Embassy in Panama to the Department of State/1/

Panama City, June 1, 1964, 2 p.m.

/1/ Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 14 PAN. Confidential. Repeated to CINCSO, CINCLANT, Governor of the Canal Zone, and DIA.

672. Drama of May 10 Panamanian presidential election will formally close June 6 when Marco Robles scheduled receive credentials as President-elect in formal ceremony at Los Santos./2/ Following is Embassyís preliminary assessment of aftermath of election:

/2/ On May 29 the Embassy has reported on the results of the election in Panama, in which Robles received 130,154 votes; Arnulfo Arias 119, 786 votes; Galindo 47,629 votes; Molino 9,714; and three other candidates shared just over 10,000 votes. (Telegram 667 from Panama, May 29; ibid.)

Possibility of widespread violence in protest against Robles victory now seems slight because: governmentís political organization was skillful enough and sufficiently well-heeled to keep its backstage manipulations fairly well hidden; Arnulfo Arias apparently has no stomach for an effort at violent rebellion, at least at this time; and National Guard remains alert and capable and is backing Robles.

Robles is widely regarded as honest man who, while no great statesman or intellect, will nevertheless be more forceful President than Chiari has been. It is generally thought he will be less tolerant than Chiari was of Communist and crypto-Communist elements. He describes himself as simple country boy from the interior who won honest election, who is compromised by no political debts, and who will run his government with firm hand./3/

/3/ CIA and ARA representatives met on May 15 to review the election. CIA reported that after Galindo refused to withdraw, Robles was "under no illusion that he is running ahead of Arnulfo Arias." Robles believed that he would "ostensibly win the election due to National Guard support and its control of balloting." (Memorandum from Carter to Hughes, May 15; Department of State, INR/IL Historical Files, ARA-CIA Weekly Meetings, 1964-1965)

Trouble with this portrait is that political organization which engineered his victory was just as crooked as any other in living memory in Panama, he or his close associates have already shown disconcerting readiness to cooperate with certain leftists, and his victory was heavily financed by number of people who will certainly present him with political bill he will probably not be able refuse even if he wants to.

This is not to say however, that Robles is not, from our point of view, an improvement over Chiari, but how much of one is problematical. He is probably somewhat stronger character; he is perhaps educable; he doubtless realizes it is good politics, at least in short-term, to seek improved relations with US; and he has cooperated with US in past.

Not clear yet what kind of National Assembly Robles will have to work with since official count not yet finished and all kinds of frantic deals are being made. Prospects are he will command narrow majority but will be confronted with very active opposition. Assembly will probably also contain one or two able and energetic Commies or near-Commies.

Chiari government is undoubtedly in difficult financial straits which will be worse by October when new administration takes over. We will almost certainly be importuned to bail them out.

In short, prospects are: (1) next four months will be difficult going for Chiari government which encountering severe financial problems (2) economic conditions may so deteriorate that Panamenistas and Communists may find pretext to undertake, perhaps jointly, major protest efforts such as mass demonstrations, general strike, etc. (3) Chiari government will weather interim period and (4) in October Robles will take over government facing economic and financial problems with which unable cope without external financial assistance.

Present indications are Robles government will follow much along same pattern as that of Chiari and other recent Panamanian governments and will be largely representative of same pressure groups, but it does not appear that in immediate future we will face another crisis like last January. Time is running out, however, and we shall have to work harder to get Panamanians begin face up to their fundamental social and economic problems.



417. Memorandum From Secretary of Defense McNamara to President Johnson/1/

Washington, August 27, 1964.

/1/ Source: Johnson Library, National Security File, Country File, Panama, Vol. VI, August 1964-January 1965. Confidential. A note on the first page reads: "Classified confidential only because of the references to the hiring of Panamanians for the Canal Zone police force (Item 4), and the proposed reduction in the 25% tropical differential pay (Item 7). These are sensitive matters with our U.S. citizen employees."

Actions Taken in the Canal Zone to Improve Relations with Panama Since the Riots of January 1964

Under the supervision of the Secretary of the Army, as a part of a continuing program to improve relations with Panama, the following specific actions have been taken since January by the Canal Zone Government and the Panama Canal Company.

1. Flying Panamanian flags in the Canal Zone.

Action. During the January riots, the decision was made to adhere meticulously to the agreement to fly the Panamanian flag wherever the U.S. flag is flown on land by the civilian authorities in the Canal Zone. Dual flag poles and dual flags have been installed at all schools in the Canal Zone. A formal agreement with the Republic for the half-masting of flags on national days of mourning is under discussion. Pending such agreement, the flags of both nations are half-masted for either nationís days of mourning.

2. Disciplinary action against U.S. citizen employees.

Action. Two employees whose opposition to the Administrationís policies exceeded normally acceptable standards have been discharged, and a third has been demoted. These employeesí acts included publication of libelous material and other acts of rank insubordination. The discharged employeesí appeals are currently under consideration in the U.S. Civil Service Commission. These discharges will have a salutary effect on any employee who may be inclined to make inflamatory public statements in opposition to conciliatory moves toward Panama.

3. Wage increases to Panamanian employees.

Action. A series of wage increases was initiated in 1962, designed to eliminate the marked gap between wage levels in categories of jobs held for the most part by Panamanian citizens and the categories held mostly by U.S. citizens. The third and final increase under this program was put into effect in July 1964. The program will increase annual labor costs in Canal Zone agencies by approximately seven and one-half million dollars.

4. Hiring of Panamanian citizens for the Panama police force.

Action. In the past all police positions in the Canal Zone have been designated as Security Positions, reserved for U.S. citizens only. Thus, law enforcement in the all-negro non-U.S. citizen communities within the Canal Zone and along the Canal Zone border has been carried out by white U.S. citizen policemen, creating both national and racial conflicts in police actions involving Panamanians. On August 21, 1964, by an amendment to Army regulations made possible by Executive Order 11171, authority was granted to the Governor of the Canal Zone to employ 25 Panamanian citizens for the police force outside the Security Position category. This action was not taken in response to any Panamanian demand, but it gives promise of better relations between the Canal Zone police and the Panamanian citizens in the Zone. It also opens a new category of jobs formerly closed to Panamanian citizens.

5. Review of security positions.

Action. At the time of the establishment of the Canal Zone Merit System in 1959 some 4,000 jobs in the Canal Zone were classified as Security Positions, reserved for U.S. citizens. Periodic reviews since that time reduced the number to approximately 2,500. The Governor of the Canal Zone has been directed to restudy the Security Positions in the Canal organization with a view to further reducing the total.

6. Desegregation of public accommodations.

Action. Traditionally, Canal Zone communities and public accommodations have been segregated along national lines, which amounted to racial segregation in that most Panamanian citizen employees are negro. With the passage of the Civil Rights Act in the U.S., the Governor of the Canal Zone issued orders eliminating the last vestiges of racial segregation by desegregating all swimming pools and Government housing within the Zone.

7. Reduction of the tropical differential.

Action. While again, not in response to any Panamanian demand, the Secretary of the Army has formally proposed to the employee organization in the Zone a prospective reduction in the tropical differential paid to U.S. citizen employees from 25% to 15%. Although not done for this purpose, such a reduction would have a beneficial effect on relations with Panama. When carried out, it would help eliminate accusations of inequality of treatment and will create some additional job opportunities for Panamanians. This action derives from a three-year study and is now in the final stages of discussion with employee representatives. The Secretary of the Army will visit the Canal Zone on 28 August to participate in these discussions. A final decision on implementing details of the reduction is expected soon afterward.

8. Establishment of a Labor Advisory Committee.

Action. For approximately two years, the Governor of the Canal Zone has been discussing with representatives of the Government of Panama the establishment of a bi-national Labor Advisory Committee to advise him on labor matters involving Panamanian employees of the Canal enterprise. General agreement has been reached with Panama on the terms of reference for the Committee, and its early establishment is anticipated.

9. Panamanian Consultants to the Board of Directors of the Panama Canal Company.

Action. Panama has long aspired to some participation in the management of the Panama Canal Company. The President recently approved the recommendation of the Secretary of the Army that two prominent residents of Panama, one Panamanian citizen and one U.S. citizen businessman, be appointed as consultants to the Board of Directors of the Panama Canal Company. The U.S. Ambassador and the Governor of the Canal Zone have nominated appropriate individuals and invitations will be extended to them at an early date.

10. Scholarships in the Canal Zone College.

Action. In early June, the Governor of the Canal Zone announced a scholarship program for ten Panamanians to attend the Canal Zone College. Forty-seven applicants took examinations, and final selection of the winners was made on August 15.

11. 50th Anniversary of the Panama Canal.

Action. The 50th Anniversary of the opening of the Canal occurred on August 15th of this year. The Anniversary was commemorated by quiet and restrained ceremonies which were not offensive to Panama.

12. Resumption of community relations programs.

Action. The Governor of the Canal Zone and the U.S. Ambassador have discussed with the Foreign Minister of Panama the resumption of various Canal Zone-Republic of Panama community relations programs. Canal Zone support of rural medical clinics has been resumed, and the city officials of Colon joined in Canal Zone 4th of July celebrations. Other similar activities are being encouraged.

13. Electric power and water for Panamanian border communities.

Action. Prior to the January riots, action was under way to provide Canal Zone water and electric power to several Panamanian border communities remote from Panamanian sources. The lines required within the Canal Zone have been installed, and initiation of service awaits only the completion of installations required on the Panamanian side.

14. Coordination of public information activities.

Action. Steps have been initiated to improve coordination of the public information activities of the Canal organization, the military commands, and the U.S. Embassy, both in normal times and during emergencies.

15. Sea level canal proposal.

Action. At the invitation of Ambassador Anderson, the Secretary of the Army explained the status of the sea level canal project to Ambassador Illueca of Panama on 7 July. The scope of the engineering problems, the economic advantages to Panama of such an arrangement, and the possibilities of a canal in Colombia were covered. Subsequent statements by Panamanian officials indicate their recognition that the U.S. must eventually build a sea level canal and could possibly build it outside Panama.

The numbered actions above are confined to those primarily within the authority of the Secretary of the Army and the Governor of the Canal Zone. They do not include actions such as AID activities, loans, and grants, wholly within the authority of the U.S. Ambassador and the Department of State or actions within the Canal Zone in support of State Department discussions. The latter are being handled by the Department of State through Ambassador Anderson and Ambassador Vaughn and are still in the preliminary discussion stages. They include proposals such as the extension of Panamaís commercial activity in the Canal Zone, release of unneeded lands and installations, a corridor under Panamaís jurisdiction across the Zone, enforcement of certain Panamanian laws in the Canal Zone, and many other Panamanian aspirations requiring inter-agency action of Congressional approval to accomplish. Progress on these broader matters has been delayed pending the installation of the new President in Panama. They will also be affected by Panamaís reaction to a formal U.S. proposal for site surveys including the required option for operating rights in a sea level canal.

The best prospect for a major improvement in U.S.-Panamanian relations is that offered by the sea level canal project. If the United States and the Republic of Panama can agree on the nature of the operating rights which the United States must have if a sea level canal is to be constructed in Panama, this agreement would put to rest many of the emotional issues which now plague our relations. It would also clear the air of many of the uncertainties with respect to United States policy which are the source of most of the unrest among the U.S. citizens in the Zone. Initially, this agreement would be operative only with respect to survey rights but would also include a detailed option for further arrangements for U.S. operating rights in a sea level canal. It would not commit the U.S. in any way to the construction of such a canal. The Department of State and the Department of the Army are actively engaged drafting a proposal along these lines which will be ready for clearance with appropriate Congressional committees and discussion with Panama in the near future.

S. 2701, the site survey authorization bill, has passed the Senate and is scheduled for House action in early September. A hearing was held on 17 August 1964 before the Senate Appropriations Committee on the proposed FY 1965 funds for the site surveys which are the first step in the sea level canal project./2/

/2/ This bill became Public Law 88-609 on September 22, and created the Atlantic-Pacific Interoceanic Canal Study Commission to determine the best means of construction, and estimated cost of such canal.

Robert S. McNamara


418. Telegram From the Embassy in Panama to the Department of State/1/

Panama City, October 8, 1964, noon.

/1/ Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL PAN-US. Secret. Repeated to Governor of the Canal Zone, USCINCSO, and CIA.

251. Subject: Current Assessment of US-Panama Relations.

With advent Robles government we find our position here greatly improved in several respects:

1. We are now dealing with a more responsible Panamanian Government which is determined tackle number Panamaís chronic problems with courage and vigor. For example, it is already moving forward with realistic plan for development of countryís interior, something US has long advocated. It has pledged itself to thorough tax and budgetary reform in accordance with Alliance for Progress precepts and Robles has so committed himself to US in detail and in writing. More importantly, he has already undertaken some measures along these lines with sufficient signs of meaning business that he has raised real crisis of anguish from traditional vested interests, including some of his own political supporters.

2. We can communicate sensibly and candidly with Robles government.

3. Robles has pledged himself to firm stand against Communist agitation, in welcome contrast to his predecessor, and his past conduct as Minister of Government and Justice gives credence to his present statements of intent.

4. Both publicly and privately Robles has indicated willingness negotiate sea-level canal treaty with US and his FonMin has indicated willingness negotiate military base rights.

Thus on whole we have in Robles and his government something far better, from point of view US interests, than might have been hoped for under circumstances-stagnant state of Panamanian economy; four years of drifting and corruption under Chiari; acute, universal, and long-standing Panamanian dissatisfaction with arrangements governing Panama Canal; and still fresh memory of events of January 1964 which saw our bilateral relations plummet to their lowest point in history and caused US to be charged with aggression before UN and OAS.

All this looks good and I believe there is much on plus side of ledger, much more perhaps than we had any right to expect. I am persuaded, however, that these circumstances do no more than provide us with brief breathing spell and do not in any way eliminate severe problems which face us as result profound and continuing Panamanian dissatisfaction with existing treaty arrangements governing present canal. They provide us time to find solutions to our present problems, although they perhaps provide us time to find solutions.

We cannot realistically expect Robles to be satisfied with mere talk about future canal or even with negotiation of liberal arrangements providing for new canal. Pressures are increasing for changes, here and now, with regard to present canal. Robles will not be able to ignore them. Neither will we.

I share Governor Flemingís great concern, as reflected in minutes of Panama Review Committee meetings and in his own reporting to Washington, over adverse image which Panama Canal (and therefore US) enjoys here. I am constrained to add, however, that I do not believe it can be improved without actual changes in practice, most probably including changes in law and treaty structure, we are not going to solve our problems by better or more accurate or more extensive public relations measures.

I submit following propositions as guides to policy formulation for next few weeks and months:

1. Whatever we propose do about sea-level canal, we must prepare ourselves for substantial early adjustments in present arrangements. In my judgment these should include (a) increased annuity (b) greater direct Panamanian participation in commercial activities in Canal Zone (c) agreement to further symbols of Panamanian sovereignty such as issue of Panamanian stamps in Canal Zone and requirements for merchant vessels to fly Panamanian flag as well as US flag during transit of canal and (d) some formula which would put terminus (10 years? 15 years? Opening of sea-level canal?) on our present perpetual rights in Canal Zone.

Elusive problem of sovereignty, which is what sticks most in Panamanian craw, would not be eliminated by any of above and might, in long run, be increased. I think we would however alleviate problem for short run which is presumably all we need.

2. Panama remains small, immature, backward country trying to deal with worldís most powerful nation. Fact that Panamanians have not yet, so far as I am aware, produced coherent bill of particulars in forum of special ambassadors will not relieve US of burden of producing sensible proposal. We are not thereby relieved of our basic problem of engendering healthful political atmosphere of partnership, in absence of which we will have only unpersuasive legalisms and physical force to protect our vital interests.

3. Next January 9 is date of crucial importance. If Robles is unable by then to point to substantial concrete progress in negotiations with US he will be faced with severe internal pressures which will put great strain on his ability to control situation, could result in fall of his government, and could lead to assumption of power by extremist regime of either right or left and in any event will sorely tempt him deflect these internal pressures onto US. Neither alternative appears helpful to say the least. (One possible device to relieve situation might be state visit by Robles to Washington in, say, December, but here again there would have to be more than eyewash.)

I recognize there are two fundamental questions which my argument raises and which deserve answer. First is why should we give away quids without, apparently, exacting equivalent quos? Answer lies, I believe, in fact that only real quo of lasting value to us here is responsible stable Panamanian Government and society which can and will work with US in enduring partnership solidly based in political reality. Robles has it in his power to give us such quo provided we protect him by actions which make clear that we are sympathetic to Panamanian aspirations and are prepared to go long way to meet them, in short that to cooperate with US is compatible with Panamanian pride. I am convinced that if we are forthcoming Panama will also be forthcoming, at least to far greater degree than if, as in the past, we hold back and force Panama to wring reluctant concessions from us in atmosphere of acrimonious and niggardly bargaining.

Secondly, why should we give anything away until we have nailed down all future guarantees we need? Answer is that we do not have luxury of time and Panama simply will not play this game anyway. One sure way to prevent our getting arrangements we want for future canal is totally to resist Panamanian efforts to modernize present arrangements. We should not underestimate Panamaís capacity to cut off its nose to spite our face.



419. Memorandum of Telephone Conversation/1/

Washington, November 18, 1964, 2:35 p.m.

/1/ Source: Johnson Library, Papers of Thomas C. Mann, Telephone Conversations with LBJ, January 14, 1964-April 30, 1964. No classification marking.

The President
Mr. Mann

The President called and asked Mr. Mann what was happening in Panama. Mr. Mann explained about the change in Ambassadors and asked if that was what the President was referring to. The President said he wanted to know how Andersonís negotiations were coming and mentioned the up-coming anniversary of the riots of last year.

Mr. Mann said this situation was charged with dynamite./2/ He said he was leaving in 15 minutes to talk to Secretary Ailes. Mr. Mann said that he was working on a sea level canal treaty on which the Department agrees and to which they hope to get Defenseís agreement./3/ Mr. Mann said that they are going to have to talk to the President about calling in the Leadership and going over it with them, if the President is satisfied with the text of the sea level canal. Mr. Mann said we are getting ready to negotiate with Colombia, Panama and Nicaragua and then crank up some publicity to improve our image. Mr. Mann said what we wanted is reasonable but the Panamanians wonít like it. He said what they wanted essentially is for us to dig the ditch and turn it over to them after we get our money back.

/2/ On October 13 Robert M. Sayre of the NSC staff wrote Bundy that Vaughn suggested "the United States must make meaningful concessions to Panama, or anti-U.S. elements in Panama will use the anniversary of January 9, 1965 for another blowup." (Ibid., National Security File, Country File, Panama, VI, August 1964-January 1965) On November 12 Mann told a meeting of officials from ARA and CIA that he "considered it likely that Ďall hell will break looseí in Panama January 9." (Memorandum from Carter (INR) to Hughes; Department of State, INR/IL Historical Files, ARA-CIA Weekly Meetings, 1964-1965)

/3/ Documentation on U.S.-Panama negotiations on the Canal treaty, from 1964 through the Johnson administration is in the National Archives and Records Administration, RG 59, ARA/SR/PAN Files: Lots 73 D 286 and 73 D 216, and ARA/LA/PAN Files: Lot 75 D 457.

Mr. Mann said that we have kept Bob Anderson informed about all these things, that he has a copy and knows what we are doing. Mr. Mann said the Panamanians themselves have not done much negotiating because they have not been able to agree on a position among themselves and they have used our elections as an excuse. The President said that we should push Mr. Anderson to push them and say that he is ready to go.

Mr. Mann said that the record is very clear that we have pushed them, not once but many times.

The President said to add it again today. To tell them he is ready to talk. He told Mr. Mann to instruct Anderson to proceed and contact them and say that the President is waiting on them. The President said perhaps it would help if we could make some adjustment in wages and show a little social consciousness. Mr. Mann said he thought we could. He said so far Defense, the Governor and OíMeara are all opposed to recommendations made by the Ambassador. The President asked what some of these recommendations were and Mr. Mann mentioned the following:

Flying flags all over the place, including on ships that pass through the canal.

Making Spanish an official language, a second language.
Collecting Panamanian income taxes inside the Zone for the Government of Panama.
Use of Panamanian postage stamps in Canal Zone.
Appointment of consultant to the Board of Directors.
Establishment of labor advisory committee.
Supplying them with free potable water to increase annuity.

Mr. Mann said he thought we are going to be able to do some of these and we have to do it before Christmas. The President said even before that. The President said that the students were not as well disciplined as he. He mentioned that a year later we were right where we started.

The President asked Mr. Mann if he should tell McNamara to review this thing again and see what he can do. Mr. Mann said this sounded good and said he would tell Steve Ailes and they would go over it.

The President asked Mr. Mann if he had spoken to Adlai Stevenson after his visit and Mr. Mann said he had not seen him, but that he had received a letter and a memo from Stevenson and had written him a letter./4/

/4/ None found.

The President asked who had turned down these recommendations and Mr. Mann said Steve Ailes, the Chairman of the Board of the Panama Canal Company. He said he thought [garble] stockholder.

The President said he thought that McNamara had more social consciousness than that and that he would rather make adjustments in time than to plant his feet in concrete.

Mr. Mann told the President that the thing that is going to help us the most is to get out in front with a lot of publicity on this new canal. He said then we can get this whole thing in perspective, we can tell everyone here and in Panama and the whole world that the present canal is limited and that we are going to build a new one and therefore we are dealing with a wasting asset. Mr. Mann said what we were not going to be able to do, unless the President thought it was politically possible, is to make the sweeping concessions on sovereignty and perpetuity that they want.

The President said that he would talk to McNamara/5/ and told Mr. Mann to put a red flag on two things; one the conference with Leadership-to notify them plenty ahead of time so that he did not have to call them in on Christmas Day on a crisis basis-to move it up,

/5/ Apparently having just spoken to the President, McNamara called Mann to say that "he was very anxious to see us make changes" in Panama and required a list of things Mann would like done sent "over immediately." (Memorandum of telephone conversation between Mann and McNamara, November 18, 2:45 p.m.; Johnson Library, Papers of Thomas C. Mann, Telephone Conversations with LBJ, January 14, 1964-April 30, 1965)

and secondly see if we canít get the Ambassadorís recommendations re-worked.


420. Memorandum From the Presidentís Special Assistant for National Security Affairs (Bundy) to President Johnson/1/

Washington, undated.

/1/ Source: Johnson Library, National Security Security File, Country File, Panama, Vol. VI, August 1964-January 1965. Confidential.

Relations with Panama and Sea-Level Canal Negotiations

A briefing for you on relations with Panama and proposals for negotiations with Panama on canal problems has been arranged for December 2 at 5:45 PM.

Relations with Panama

The Robles Administration passed a test of strength during the week of November 23-27 against Communist and anti-American elements. The demonstrations which occurred were not primarily directed at the United States, but were intended to protest what these elements regarded as a weakening of the Panamanian position in its negotiations with the United States. Although the National Assembly sustained the Government, it did so in a resolution which called for abrogation of the 1903 Treaty. Before these events, it was hoped that a satisfactory interim program, until a sea-level canal were opened, might be the nine-points agreed to between State and Defense (Tab A)./2/ It is doubtful now that such an interim program would be adequate. State suggests the following program, on which McNamara has not yet had a chance to decide his position.

/2/ Tab A, atttached but not printed, is a November 19 memorandum from Mann to McNamara, that contains nine interim steps that would demonstrate to Panama progress in the negotiations and reduce the possibility of violence. These were: (1) flying Panamanian flags in addition to the American flag and flag of registry; (2) Spanish as an official language in the Zone; (3) use of Panamanian postage stamps with Canal authority overprinting in the Zone; (4) a Panamanian and an American citizen resident in Panama to join the Canal Board of Directors; (5) negotiations for a Labor Advisory Committee;

(6) negotiations for an agreement for purchase of gasoline for use in the Zone; (7) negotiations for withholding and remittance to Panama of income taxes of Panamanian employees of private companies in the Zone; (8) negotiations to permit private Panamanian companies to establish businesses in the Zone; and (9) free treated water to Panama.

Possible Package Program

1. A general policy statement which discusses relations with Panama and negotiations on a sea-level canal (draft attached Tab B)./3/ Such a statement, if made this month, would permit us to seize the initiative and dampen current efforts by anti-American elements in Panama to stage large anti-American demonstrations on January 9; avoid any appearance of responding to pressure generated by demonstrations; and provide the terms of reference for the conduct of negotiations with Panama and other countries on a sea-level canal.

/3/ Tab B, attached but not printed, is a draft outline of a policy statement prepared by Mann on November 28.

Such a statement would restate our major objectives in operating the present or any future canal; recognize that the existing canal and treaty arrangements are becoming obsolete; note the Congressional authorization for a sea-level canal study, and give some ideas on how the surveys would be conducted, and how a sea-level canal would be financed, constructed, operated, maintained and defended; discuss what we propose to do about the present canal during the interim period until a new one is opened, including the protection of the interest of American and Panamanian employees; and request the cooperation of all in this forward-looking program.

2. A sea-level canal treaty which would give us the right to conduct necessary surveys and construct a new canal at our option. (Draft of November 18 is attached at Tab C./4/ There are still some disagreements between State and Defense on this draft which they hope to reconcile before the December 2 meeting.) The treaty would separate the security aspects from the business of operating a canal. The canal would be operated and maintained by an international commission on a self-sustaining basis. Defense of the sea-level canal would be the responsibility of the United States and Panama (Colombia or Nicaragua-Costa Rica) with almost the entire burden falling on the United States./5/

/4/ Tab C, attached but not printed, is a draft of the treaty prepared November 18.

/5/ The Joint Chiefs addressed the issue of a proposed sea-level canal in two memoranda to McNamara on December 2, JCSM-1012-64 and CM-285-64. (Washington National Records Center, OSD Files: FRC 330 70 A 1266, Pan 800 (4 January, 1965), Sea Level Canal, and Johnson Library, National Security File, Country File, Panama, VI, August 1964-January 1965, respectively) The JCS generally concurred in the proposed treaty provided "joint defense" included the right of the United States to defend the host country against Communist domination as well as to defend the canal. The JCS also noted that the draft treaty should be submitted to careful analysis and interagency coordination before it was adopted as policy.

The country in which the canal is located would retain sovereignty, but would grant to the Commission specific rights which would enable the Commission to control, operate, maintain and protect the canal. The suggested composition of the Commission is such that we would have a majority.

This treaty, and the base rights treaty under 3 below, would be negotiated with Panama, Colombia, and Nicaragua-Costa Rica before we begin surveys or other works. Such simultaneous negotiations in advance would put us in the best bargaining position with these countries. Panamanian oligarchs will not like the international approach on operating the canal, but this offers the best basis for selling it to world opinion and puts us in a favorable position.

3. A base rights treaty to accompany a sea-level canal treaty which covers the continued stationing of our forces in Panama (Colombia or Nicaragua-Costa Rica). Present treaties permit such forces only for defense of the canal, and we need to broaden this to cover hemisphere defense. Such a treaty would be similar to the NATO status of forces agreements, but it cannot be drafted until Defense determines what areas of lands it needs for bases.

4. A new treaty with Panama which would replace all existing treaties and would remain in force until two years after a sea-level canal opens. The Panamanian Foreign Minister has informed us that the Robles Administration must obtain agreement to negotiate a new treaty if it is to remain in office. Ambassador Vaughn agrees with this assessment. In drafting it, we would follow the same technique as on the sea-level canal-recognize Panamanian sovereignty but then provide specific grants of rights to the United States. Some 80% of the provisions could be the same as in the three existing treaties. (State has prepared a rough draft, which is attached Tab D.)/6/

/6/ Tab D, attached but not printed, is the Department of State draft prepared on November 26.

The purpose of such a treaty would be in great part psychological-to remove those emotional issues (sovereignty, etc.) which provide grist for agitators in Panama, and at the same time, preserve our essential rights and requirements for operation, maintenance and protection of the canal (operation of courts, police jurisdiction, stationing of military forces, etc.). It would include those items from the nine-point interim program (Tab A above) that are appropriate. At the same time we must expect the Panamanians to insist that many of the peripheral privileges we have hitherto enjoyed, which cannot reasonably be justified as necessary for the operation, maintenance and protection of the canal, will probably have to be eliminated (operation of commissaries, movie houses, bowling alleys, use of Canal Zone stamps, use of unneeded land and facilities, and so forth). We should be able to soften the blow on civilian employees by cost-of-living allowances or agreement by Panama that the employees may run cooperative stores, or both.

5. An undertaking on our part to help Panama to adjust economically to the construction of a sea-level canal elsewhere in Panama or in another country.

For the meeting on December 2, it is proposed that we concentrate primarily on the proposed policy statement. If you approve the statement, you could then review it with the leadership on December 18, and any others you thought appropriate, such as General Eisenhower. It is hoped that the statement could be issued before Christmas.

It is intended that all the proposed treaties be negotiated with Panama at the same time, and the package then presented to the Senate for ratification. Only the sea-level canal and base rights treaties would be negotiated with Colombia and Nicaragua-Costa Rica.

Secretary McNamara plans to bring Cyrus Vance and Steve Ailes to the briefing.

Tom Mann would be accompanied by Robert Anderson, Leonard Meeker (Stateís Acting Legal Adviser), Ambassador Vaughn and Edward Clark (Director of Panamanian Affairs). Secretary Rusk is meeting with Foreign Ministers who will be in New York for the meeting of the U.N. General Assembly. He has reviewed the general features of the program outlined above and concurs in them. But he does not believe we should at this time raise the possibility of using nuclear detonations to build the canal.

Bob Sayre and I would also attend the briefing.

McGeorge Bundy/7/

/7/ Printed from a copy that bears this typed signature.


421. Draft Record of Meeting/1/

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

/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.


White House
The President
McGeorge Bundy
Robert M. Sayre

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

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/

/2/ The nine points were contained in a November 19 memorandum from Mann to McNamara; see footnote 2, Document 420.

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 statement/3/ 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.

/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 Presidentís 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 Ďby and largeí the draft statement on Panama is Ďall rightí and that he doesnít 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.

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 Vaughnís 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/

/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)

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 (Panamaís 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 Administrationís 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.

/6/ According to the Presidentís 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)


422. Memorandum From the Assistant Secretary of State for Inter-American Affairs (Mann) to the Presidentís Special Assistant for National Security Affairs (Bundy)/1/

Washington, undated.

/1/ Source: Johnson Library, National Security File, Country File, Panama, Vol. VI, August 1964-January 1965. Secret.


This is in response to your query whether (1) we should be taking any further action to prevent trouble in Panama on January 9 or in the near future, and (2) whether there is anything we should do, overtly or covertly, to prevent Panamanian public opinion from swinging against the presence of our military forces there.

As regards the possibility of disturbances on January 9, the Communists have been thrown off balance by the Presidentís statement, President Robles has assured Ambassador Vaughn that no trouble will be tolerated, and what appears to be a very satisfactory solution to the half-masting of flags on that date has been worked out between the Canal Zone and the Panamanian Government. Ambassador Arias has likewise informed the Department that the Panamanian Government anticipates no difficulty in handling any attempts at disorders on January 9. Embassy Panamaís telegram 427, December 31,/2/ indicates belief that prospects are good of getting through this period without major difficulty.

/2/ Not printed. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 23-8 PAN)

In view of the above, we agree that there is nothing further now that we can effectively do to minimize the possibility of disturbances on January 9, but we are launching a longer-term program to capitalize on the initiative the Presidentís statement has given us. A telegram outlining our views is already in draft, and we shall be in touch with the White House and other agencies on this program in the next few days.

With regard to the problem of influencing Panamanian public opinion on the question of our military forces and bases, we have considered the possibility of inducing an official Panamanian statement disowning the recent statement by Castillero Pimentel in which he called for the withdrawal of U.S. forces. Foreign Minister Eleta discussed this statement with Ambassador Vaughn, indicating that Castillero had been reprimanded and soliciting Vaughnís advice regards the advisability of the Panamanian Government issuing a statement that Castillero was not speaking for the Government. Ambassador Vaughn expressed his judgment to Eleta that it would be preferable not to make such a statement at this time.

We are inclined to agree with Ambassador Vaughnís on-the-spot judgment on this point, although we believe that such a statement might be appropriate a little later after the ground has been prepared. To this end, [less than 1 line of source text not declassified] through the Panamanian press, radio and TV which will have the objective of educating the Panamanian public regarding the important part the United States military presence plays in the Panamanian economy, pointing up the disastrous consequences for Panama if the United States bases should ever be closed and pointing the finger at the Communists as those who are pushing this line for their own ends./3/

/3/ At a meeting with CIA and ARA representatives on December 30, Mann reported that the President had phoned him and asked "for guarantees that there would be no trouble in Panama on January 9." FitzGerald assured Mann that Robles had been "strengthened greatly by President Johnsonís statement on the canal." Mann asked what CIA had done to ensure that there would be no trouble. FitzGerald told Mann that "Robles had been assured of all the support he asked for" and "any demonstrations would be easily controlled by the Panamanian Government." (Memorandum from Stuart to Hughes, Denney, and Evans, December 31; Department of State, INR/IL Historical Files, ARA-CIA Weekly Meetings, 1964-1965) Another record of this meeting was prepared by FitzGerald. (Memorandum for the record, December 31; Central Intelligence Agency, Job 78-03041R, DDO/IMS Files, [file name not declassified])



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