LETTER TO THE PRESIDENT FROM JOHN A. MCCONE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01676R000400160026-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 20, 2016
• Document Release Date: July 13, 2007
• Sequence Number: 26
• Publication Date: December 17, 1964
• Content Type: LETTER

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k . gel%xY
Ex~cur__e
President:
Yester ay, by arrsngetment workeeu out with
McGeorge Bundy, I seat a CIA officer to Chicago to
-General Eisenhower who, was enroutee Nil est by train
House
Washington, 3, C
NSC REVIEWED NO OBJECTION TO DECLASSIFICATION AND
and submitted to him a draft of your proposed statement
He then suggested certain editorial changes which have
been submitted to McGeorge Bundy,
tament carefully and that "my approval is complete.
After rereading the statement, the General
ealleedd me by telephone and stated that he had read the
I specifically asked if he approv.d the use
of his name as indicated on the first page and he answered
that doing a* was - perfectly all right with ine.
You will be interested to know that your new
:secretary of Conunercee, Jack Colmar, was in my office
when Ike called and, white he had no knowledge of the
above conversation, I told General ]Eisenhower of the new
appointr*ont, put Connor on the telephone, and I am pleased
to report to you that the now appointment was received with
very great enthusiasm by General Fisenhowe.r.
cc: Mr. McGeorge Bundy
Respectfully lours,
Signed: John A. McCone
John A. AdcCone
JAM/mfb
1cu - DCI White House Background attached.
16c - DCI Chrono
Note: AI Iof DDI's office took the draft to Gen. E
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17 c r 1964
General Dwight D. * aeenhoser'a C eents
on Draft State nt on Panama, Dated
14 Decauber 19
1. A copy of the draft statement for President
Johnson to give on the ftnem Canal ISO" and a COW
of Intelligence mmmorandm entitled " nem--Th [anal
Issue", eel No. 2043/64 of 7 ember 196# eee care-
fully, read by General Dwight D. lisle bower aboard his
special car on W-stbou 3 Banta a Train No. ' 1 in Chicago
Illinois in the afternoon of 16 December.
ca"fully resi both documents twice,
r said that "by and large" the draft
We of an impact. felt that a of
Lrg IL* and by sing it nor* simple it
ma with it. However, he bslieves that
ftmaw in "all right" and that be dioesn t
Iles uldbeleft fortes rhi on the
a. After line 12 of page 2 to insert a state--
worth considering
meat such as, "The Awnrican go rrrr*snt is prepared to
begin nagotiationo with the P1U cIManisn gorers 11myt for-
'
,
,Y to rt3aee the as .sting on* icl-. etdaeiitedl
.lee pointing out early on in the
is position.
b. suggested deleting beginning with the
,jej~s on line 16 ~ through.,-tSbould
h* first Sentence *-a
ti~;O are oatl details not entirely
3ece ry for this stat4ment.
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SPOCifically, be SUMO ed the fallow:
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. . ?' on line 8 of sm4te 6 could go.
He fe+eln that the sentence
of w* d b inning with the Words .. ere
He also, feels that the paragraph beginning
in built. . . . - aei t be beeeeficial,,
a bit too detailed. Re ted
that the tatoly follOVIng ph could cover
It by reading as follown, We will. also take every pos-
sible stop to protect the es?lo eat rights and e n c
transition period of both the
United states citizens. .. .- The
to would added to the went draft.
if be, Could keep a espy of
Y and said that he would again
he had further suggestions he
later in the afternoon or early
S.
ollowed 9t brief chat on the current
General 21senbor reed that
for about four bra
tuation had moped
pleased to bear that the now sta.
to the kited states Is Ricardo Arias
high onto personally. . He Went lone
n stem tiing from as far back as
921-24 when h was stationed there as a young & my
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..~ war
NSC REVIEWED NO OBJECTION TO DECLASSIFICATION AND
CONFIDENTIAL
DRAFT 12/ 14/64 STATEMENT
I have reviewed the problem of a Western Hemisphere interoceanic canal
in all of its aspects. The conclusions which I have reached as a result of this
study have the full concurrence of the Secretary of State, the Secretary of De-
fense and the Joint Chiefs of Staff. In view o' the importance of the subject,
I have also consulted with General Eisenhower and Mr. Truman and they have
expressed to me their general concurrenc(' with what I am about to say. On
December 18 I consulted with th? leadership in Congress of both political
parties and found a substantial degree of support there.
In 1903 when the United States undt?rtook to build a canal through the Re-
public of Panama it had the primary objective of service to world commerce.
As Elihu Root, the Secretary of War when the Canal was begun, said before
the United States Senate in 1913:
By public declarations, by the solemn asservations of our treaties
with Colombia in 1846, with Great Britain in 1850, our treaties with
Nicaragua, our treaty with Great Britain in 1901, our treaty with Panama in
1903, we have presented to the world the most unequivocal quaranty of dis-
interested action for the common benefit of mankind and not for our own selfish
advantage.
Since the canal was constructed it has been open to the ships of all nations
on terms of entirelequality. The tolls charged to the commerce of all nations
have been on an equal basis. The United States has sought no profit from .~s
operation of the Canal and has made none. The United States investment ir,
the construction and improvement of the Canal has not been fu11y mortizeu
even though the Canal has been in operation for over fifty years.
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CONFIDENTIAL
A second United States objective was to have the Canal contribute to the
peace and security of the Western Hemisphere. The Canal is important to
hemisphere security and to the security of the United States because it shortens
greatly the time required for the transit of vessels from one ocean to the other.
The present Canal has served these two objectives well.
At the same time it has contributed greatly to the economy of Panama.
United States purchases of goods and services offset to a large extent Panama~e
balance of payments deficit with the rest of the world. In 1963, Panama's
gross sales of goods and services to U. S. agencies and residents of the Canal
Zone amounted to over $90 million, or about one-fifth of its gross national
product. Our activities in the Canal Zone! currently employabout 15, 000
Panamanians -- over three times the number of U. S. civilian employees.
The fact is that the present Canal will soon be inadequate for the needs of
world commerce. Within a relatively few years ships wishing to transit the
Canal will have to wait in line for progressively longer periods of time. Al-
ready there are some 308 ships afloat or under construction either too large
AI~S_171e 7-
for the Canal to accommodate or which- cannot transit the locks when fully laden.
This number would be larger but for the fact that the present size of the Canal
has inhibited the ship building industry from building larger and more economical
ships.
Our newest and most powerful aircraft carriers are unable to transit the
present Canal.
INSERT
The American government is prepared to begin negotiations with the
Panamanian government for a treaty to replace the existing one which,
admittedly is obsolete in some of its provisions.
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CONFIDENTIAL - 3 -
Furthermore, the complex locks and seaways are vulnerable to sabotage
which could put the Canal out of operation for a period as long as two years
-- perhaps in an emergency when we and others dependent on it most needed
it. A sea level canal would be much less vulnerable to sabotage.
Finally, modern construction techniques and the low operating costs of a
sea level canal indicate that such an undertaking is economically feasible.
The present Canal consists of a series of complicated locks and water sys-
tems, which are expensive to operate and maintain. By comparison a sea
level canal would be relatively simple to operate, and the number of em-
plovees required to operate it would obviously be much smaller than required
to operate the present Canal.
Therefore, it is clear that we must start now to prepare for the construc-
tion of a more modern facility in the relatively near future.
Recognizing these facts, the Congress has already authorized the expendi-
ture of up to $17 million dollars to study the feasibility of the construction of
an interoceanic sea level canal and to determine the site which is most desirable.
According to our present information, the most feasible routes from a technical.
point of view would seem to be through Panama, at approximately the sit(if the
present Canal or through the Sasardi-Morti route through the Darien region of
Panama; through the northern aart of Colombia in the region of Rio Atrato; or
through Nicaragua and possibly Costa Rica passing near Lake Nicaragua.
I have issued instructions to the Secretary of State to begin discussions with
all of the governments concerned to determine whether they would be interested
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CONFIDENTIAL
in our going forward with the surveys authorized by Congress. If they are, the
United States is prepared to begin immediately negotiations on the terms and
conditions for the construction and operation of a sea level canal. Depending
on the results of these negotiations, we would expect to go forward with
selected site surveys.
We have in mind a treaty in which sovereignty over the canal area would
remain in the country or countries through which the canal would pass. The
United States would be authorized, alone or with others, to undertake construc-
tion. Financing would be the primary responsibility of the United States Govern-
ment but the door could be left open to contributions from other sources, both
public and private.
Operation of the canal could be entrusted to an international commission
of
composed of representatives of the Government of the United States and, the
country or countries through which the canal would run and of representatives
of-the users; of the groups putting tip the financing and of the Organization of
American States. Thus, should it be decided by the Governments concerned
to establish a multinational operating commission the operation would be inter-
national rather than national or bi-national in character. This international
commission would by treaty be authorized to promulgate the regulations neces-
sary for the operation, maintenance and security of the canal, including the
fixing of tolls. The United States and the country or countries through which
the canal runs would jointly undertake the defense of the canal. 1
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CONFIDENTIAL
'The tollsvould be fixed in such a way as to put the canal on a self-sustain-
ing basis to amortize this investment and to serve the interests of world com-
merce. Like the present canal, the new interoceanic canal would be open to
the vessels of all countries on the basis of equality.
Whatever treaties are agreed upon would, of course, be subject to approval
and ratification in accordance with the constitutional procedures of the United
States and the other country or countries involved.
In the case of Panama, there is this additional problem.: The Government
and people of Panama attach considerable importance to modernizing the
present treaty arrangements governing the operations of the Panama Canal.
We appreciate this concern. We are glad to join with the Government of
Panama in searching for solutions which are compatible with the dignity,
responsibility and sovereignty of both nations. It is clear that we must make
provision for the continued protection and operation of the Canal by the United
States until it is replaced.
We are prepared to negotiate a new treaty with Panama, based on the re-
tention by the United States of all rights necessary to the operation and protec-
tion of the Canal, including administration of the areas required for these
purposes. This treaty would replace the 1903 Treaty and its amendments. It
would recognize Panama's sovereignty over the Canal and would provide for a
termination date for rights retained by the United States based on the operational
date of a sea level canal wherever it might be constructed. The present treaties
would, of course, remain in effect until a new agreement is reached.
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In connection with the existing lock canal, our two countries have recognized
the responsibilities we bear and the contributions we make toward hemispheric
defense. In order that both of our nations may continue as allies and partners
in the inter-American defense system and to provide for the defense and security
of the hemisphere on a basis compatible with the sovereignty, dignity and in-
terest of both countries, I have issued instructions for the commencement of
negotiations at this time for a new defense facilities agreement to come into
cha n agreement would reflect
effect upon the closing of the present canal. u
Es ,
our joint contribution toward the preservation of peace and security in the
hemisphere.
In summary, we foresee three principal tasks in order to satisfy the re-
quirements of the present and the future:
1. Working out satisfactory arrangements for the construction and
operation of a new sea level canal;
2. Providng a new treaty framework for the interim period to govern
the operation, defense and administration of the present lock canal; and
3. Agreement on the terms of future arrangements for facilities for the
defense of the sea level canal and the Hemisphere.
It is our hope that these problems can be addressed immediately, simultaneous-
ly and effectively, so that their resolution will establish our relations on a. new
higher plane of understanding and cooperation in the important!task of providing
an indispensable service to the world.
Wherever the new canal is built it will create
new opportunities. To be su:re, closing of the present
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canal would cause economic problems for Panama, but
these would be offset to a great extent by those new
opportunities which would be created if the sea level
canal were built there. Panama would benefit not only
from the actual construction of such a canal but would
also continue to enjoy the benefits of the present canal
until the new one were completed. We are prepared to
consider now with Panama a program of how best to take
advantage of these opportunities and to meet these problems.
The efficient employment of Panamanian workers employed
in the present canal whose services would not be needed
in the operation and maintenance of the sea level canal
will form a major topic of our discussions with Panama
We will also take every possible step to protect the employment rights
Lr:, hJ~ f li i /ti'1 Z4 1 fr\
and economic security during the transition perioof~the United States citizens
now employed in connection with the operation, maintenance, and defense of the
present Canal. We shall do what is necessary to find them employment fitting
their skills and experience and by providing retraining where this is called for.
Let me emphasize that while the replacement of the present canal will
present problems, these are not problems of despair, but rather, of how best
to take advantage of the opportunities presented. To meet the urgent and im-
portant needs of world commerce and the security of the hemisphere will re-
quire the imagination and resourcefulness of all of us working together for this
great common goal. We must look boldly and confidently to the future, not to
the past.
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