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The following discussion between Rep. Murphy, Rep. Sullivan, Ambassador John C. Mundt, Deputy Chief Negotiator for the treaty with Panama, and Carl F. Salans, Deputy Legal Adviser, Department of State, attempts to determine a definition of titular sovereignty at a recent congressional hearing.3

Mr. MURPHY. We get into the sovereignty issue so much. Has anyone defined titular sovereignty?

Mr. MUNDT. Not that I know of. Perhaps one of these other gentlemen can answer that. I do not think that President Taft defined it at that time. Perhaps he did.

Mr. SALANS. I might just say a few words about that. I do not think that the doctrine has been very clearly defined.

We have had this notion both with respect to the Ryukyu Islands, Okinawa, under the Treaty of Peace with Japan and also with the Republic of Panama in respect to the Canal Zone.

In both instances, the United States has a right to exercise all kinds of administrative and other powers. It was understood the United States did not have sovereignty. There was a remaining interest in Japan, in the case of Okinawa, and in Panama in the case of the Canal Zone, and that is what we refer to as titular sovereignty.

Mr. MURPHY. You quote Secretary of War Taft on page 4 of your statemnt. I would like to refer other members of the committee to it.

You state Secretary of War Taft testified in 1906 that Panama retained "titular sovereignty" over the canal.

Are you representing to this subcommittee that that statement is a true reflection of Taft's understanding of the words "titular sovereignty," because in that same testimony Taft referred to "titular sovereignty," as a "barren ideality," that he agreed that this characterized that term and he went on in an address as President in 1909, and I quote:

Under the treaty with Panama, we are entitled to exercise all the sovereignty and all the rights of sovereignty that we would exercise if we were sovereign and Panama is excluded from exercising any rights to the contrary of those conceded to us. Now that may be a ticklish argument, but I do not care whether it is or not. We are there. We have the right to govern that strip and we are going to govern it.

That is a pretty clear definition of "titular sovereignty" as of the time of the negotiated treaty.

Mr. SALANS. It remains the same today, Mr. Chairman.

I think that is perfectly consistent with what I said. We have all the rights as if we are sovereign, but the fact is we are not sovereign.

That leaves something for Panama and that is something that is a reversionary interest in normal property terms.

Secretary Taft labeled it titular sovereignty and that notion has developed throughout the years as meaning that somehow Panama had a final, ultimate interest, a recognition that the United States was not, in fact, the sovereign, did not have sovereignty.

We have all rights as if we were the sovereign, but we do not have the elusive thing called sovereignty.

Mrs. SULLIVAN. If the chairman would yield, is it not true that what it would mean as long as we were there doing what we were supposed to do under the treaty we would have all these rights. Once we left, it, the ground, water and everything there, goes to Panama.

Mr. SALANS. I think that is exactly right.

Mrs. SULLIVAN. As long as we are under a legitimate treaty we have the right to act as though we were sovereign.

III. Impact of the 1936 Treaty on Sovereignty

Mr. Bell remarks in his letter that, "This distinction between the right to exercise jurisdiction within the Zone area and its international status was recognized in Article III of the Treaty of Friendship and Cooperation of March 2, 1936 (53 Stat. 1807; TS 945), which refers to the Zone as 'territory of the Republic of Panama under the jurisdiction of the United States.'

Hearings on Panama Canal Treaty Negotiations before the Subcommittee on Panama Canal of the House Committee on Merchant Marine and Fisheries, 92nd Cong., 2d Sess., Ser. No. 92-30 (1971 and 1972) at 21-22.

This is the same argument posed by the Panamanian Ambassador to the United States in 1960, when he stated that

“*** Article III of the 1936 Treaty settles it once and for all stipulating that the Canal Zone 'is territory of the Republic of Panama under the jurisdiction of the United States.'" 4

The line referred to by Mr. Bell and the Panamanian Ambassador appears in paragraph 6 of Article III. Article III refers to commercial agreements, and does not make any direct statement concerning sovereignty. Moreover, when read in conjunction with the 1903 Convention, and Articles I and XI of the 1936 Treaty, it is apparent that the sovereign powers exercised by the United States remained unchanged.5

The basic U.S. position has been restated since 1936. In August of 1956, Secretary of State Dulles commented that

"The Panama Canal is a waterway in a zone where, by treaty, the United States has all the rights which it could possess if it were the sovereign to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power, or authority' ***"6

The attached excerpts from Hearings of the Senate Foreign Relations Committee, held after the signing of the 1955 treaty, further support the position that there had been no yielding of any sovereignty previously retained by the United States.

"STATEMENT OF HENRY F. HOLLAND, ASSISTANT SECRETARY OF STATE

FOR INTER-AMERICAN AFFAIRS

"Basic principles followed during negotiation

"In a general way, I would say to the committee that our consideration of the Panamanian proposals were based on most careful analysis and study of each individual problem. We adopted the general principle, in considering these proposals, that it was to the interest of the United States to assist Panama to develop its economy so that Panama will be less dependent on the canal as such as a major source of income, so long as any arrangements in this regard would not conflict with the essential interests of the United States and those of individuals resident in the zone. It was possible to take a number of steps of this nature in the hope of building greater economic and political stability in this area so vital to us. On the other hand, Panama made a number of requests which, if accepted, might have weakened the jurisdictional position of the United States in the Canal Zone, or might have accorded Panama a special position in economic relations with the United States or required the United States to assume financial obligations in matters for which the United States was not prepared to accept responsibility. The United States could not favorably consider these requests. "The United States, for its part, obtained certain concessions which are beneficial to the United States in the discharge of its responsibilities in the Canal Zone.s

"Senator FULBRIGHT. Would you say that any significant rights of this Government are waived by this treaty?

"Mr. HOLLAND. No. Senator. I believe that I can say without any reservations at all that through the course of the negotiations we were successful in preserving every significant right of the United States of present importance in the Canal Zone or related to the Canal Zone; and it is my conviction that no such rights are impaired by this proposed treaty.

Senator FULBRIGHT. Would you say that there is anything in this agreement which might possibly be construed as a waiver of our paramount rights in the Canal Zone?

"Mr. HOLLAND. No, sir: and, as a matter of fact, I believe that the permanency and stability of those rights are strengthened by this treaty because of the inclusion in the treaty of the phrases that I referred to in my opening statement. That is the inclusion of the phraseology in the preamble that no part of the treaty of 1903 or the treaty of 1936 or this treaty can be changed save by mutual

cited in Whiteman at 1152.

5 footnote 1. supra.

XXXV Bulletin, Dept. of State, No. 898, September 10, 1956, pg. 411, cited in Whiteman at 1150.

784th Congress-Hearings vol. 172.

8 Id. at 41-43.

agreement of the parties, and the specific and affirmative recognition in article I by the parties of the absence of any obligation on the part of either party to change the annuity.

"Senator FULBRIGHT. Yes.

“Mr. HOLLAND. I think the sanctity of those rights is thereby strengthened.o "Senator WILEY. As I understand from you, Secretary Holland, there is nothing in this present treaty that would in the slightest degree depreciate all the attributes of sovereignty that we possess.

"Mr. HOLLAND. That is true; and so true is it, that in the course of the negotiations the Panamanians advanced several small requests which, 1 by 1, had considerable appeal, but all of which we refused, because we did not want to leave 1 grain of evidence that could a hundred years hence be interpreted as implying any admission by the United States that we possess and exercise anything less than 100 percent of the rights of sovereignty in this area.

"For example, they asked that ships transiting the canal, as a token of deference to Panama, fly the Panamanian flag as well as the United States flag.

"Now, it seemed, perhaps, a little unfriendly to say, 'No,' but we said, 'No.' because while the gentlemen representing Panama would never have any misunderstanding as to why that might be done, generations coming after us might have some misunderstanding as to why that was done, and we felt we could not agree to do anything, nor would the Senate approve it if we were to agree to it, which could be construed a hundred years hence as receding one millimeter from the position that we possess and exercise all of the rights that we would have if we were the sovereign in that area." 10

On Feb. 7, 1974, Secretary of State Kissinger and the Panamanian Minister of Foreign Affairs (TACK) announced a series of principles to guide the negotiation of a new Panama Canal Treaty. These principles are

1. The treaty of 1903 and its amendments will be abrogated by the conclusion of an entirely new interoceanic canal treaty.

2. The concept of perpetuity will be eliminated. The new treaty concerning the lock canal shall have a fixed termination date.

3. Termination of United States jurisdiction over Panamanian territory shall take place promptly in accordance with terms specified in the treaty.

4. The Panamanian territory in which the canal is situated shall be returned to the jurisdiction of the Republic of Panama. The Republic of Panama, in its capacity as territorial sovereign, shall grant to the United States of America, for the duration of the new interoceanic canal treaty and in accordance with what that treaty states, the right to use the lands, waters and airspace which may be necessary for the operation, maintenance, protection and defense of the canal and the transit of ships.

5. The Republic of Panama shall have a just and equitable share of the benefits derived from the operation of the canal in its territory. It is recognized that the geographic position of its territory constitutes the principal resource of the Republic of Panama.

6. The Republic of Panama shall participate in the administration of the canal, in accordance with a procedure to be agreed upon in the treaty. The treaty shall also provide that Panama will assume total responsibility for the operation of the canal upon the termination of the treaty. The Republic of Panama shall grant to the United States of America the rights necessary to regulate the transit of ships through the canal and operate, maintain, protect and defend the canal, and to undertake any other specific activity related to those ends, as may be agreed upon in the treaty.

7. The Republic of Panama shall participate with the United States of America in the protection and defense of the canal in accordance with what is agreed upon in the new treaty.

8. The United States of America and the Republic of Panama, recognizing the important services rendered by the interoceanic Panama Canal to international maritime traffic, and bearing in mind the possibility that the present canal could become inadequate for said traffic, shall agree bilaterally on provisions for new projects which will enlarge canal capacity. Such provisions will be incorporated in the new treaty in accord with the concepts established in principle 2.11

⚫ Id. at 45.

10 Id. at 164.

11 70 Dept. State Bulletin 181, 184 (1974).

At the time that the joint statement was signed, Secretary Kissinger emphasized that the purpose of the treaty would be to "RESTORE Panama's sovereignty.' ." 12 Obviously, if one is to restore sovereignty, it cannot be said to already exist.

Hon. M. GENE SNYDER,
House of Representatives

AUGUST 18, 1976.

DEAR MR. SNYDER: During the Negotiators' testimony before the Panama Canal Subcommittee on April 8, you contested the view that the Canal Zone is territory of the Republic of Panama. On that occasion you took exception to a point raised in my December letter which you regard as of key significance in determining the status of the Canal Zone. That point is that Article III, Section (6) of the 1936 Treaty with Panama recognizes the Canal Zone as "Territory of the Republic of Panama under the jurisdiction of the United States of America".

It was your view that the quote referred not to the Canal Zone as such but rather to specific areas owned in 1936 by the Panama Railroad Company which were located outside the Zone in the cities of Panama and Colon. In response the Negotiators stated that this phrase of the 1936 Treaty could not refer to these particular properties outside the Zone, because they never had been under the jurisdiction of the United States. Rather, as Article V of the 1955 Treaty states in referring to these areas in the cities of Panama and Colon, they were "held by the United States of America or its agencies (i.e. the Panama Railroad Company) . . . in Territory under the jurisdiction of the Republic of Panama".

You subsequently issued a statement with your April 18 press release on the testimony which said, in part: "neither Ambassador Bunker nor his aides were able to substantiate in the slightest degree the claim they have been making around the country in public speeches that a phrase in Article III of the 1936 Treaty of Friendship with Panama refers to the Canal Zone as 'territory of the Republic of Panama under the jurisdiction of the U.S.'"

You went on to demand that this view be publicly substantiated or retracted and concluded that "to lie to the American people is nothing less than malfeasance in office".

The Department completely agrees that this matter should be put to rest, and welcomes this opportunity to clarify the legal status of the Canal Zone. Attached is the official record on this particular aspect of the 1936 negotiation-the Joint Minutes of the 107th Negotiating Session which commenced at 11:00 a.m. in Washington, D.C. on February 1, 1936, pages 20-26.

As you will note, the Joint Minutes demonstrate that this phrase of the 1936 Treaty, which received the advice and consent of the Senate and was ratified by the President, was intended to reflect the status of the Canal Zone as territory of the Republic of Panama under the jurisdiction of the United States.

In this same regard, you have also taken the view that the phraseology of Article III Section (6) could not diminish or otherwise affect the rights of the United States under the 1903 Treaty, in view of Article XI of the 1936 Treaty, which provides that the rights and obligations of the parties under other treaties then in force between them are not affected by the 1936 Treaty unless specifically altered or modified by provisions of the 1936 Treaty.

We share that view entirely. As was stated in the testimony of the Negotiators, we have never maintained that this phraseology in any way altered our rights under the 1903 Treaty. It only reflected in clear terms the legal status of the Canal Zone as it had been since the 1903 Treaty entered into forceterritory of Panama under United States jurisdiction.

I trust that this letter clarifies the points you have raised.
Sincerely.

Attachment.

12 Id. at 182 (emphasis added).

S. MOREY BELL, Minister, Deputy U.S. Negotiator.

JOINT MINUTES OF THE 107TH MEETING OF THE PANAMANIAN COMMISSIONERS WITH THE DEPARTMENT OF STATE RELATING TO THE NEGOTIATION OF AGREEMENTS BETWEEN THE TWO COUNTRIES

Present: Dr. Alfaro, Dr. Garay, Mr. Welles, Mr. Baker, Mr. Duggan, Mr. Castle and Mr. Daniels.

Mr. WELLES. I understand that the sixth section of the third article of the general treaty was tentatively agreed upon in the following form. (Mr. Daniels distributes drafts.)

"The Republic of Panama will permit vessels entering at or clearing from the ports of Panama and Colon, in case of emergency and also under suitable regulations and upon the payment of proper charges, to use and enjoy the dockage and other facilities of said ports for the purpose of receiving or disembarking passengers to or from the territory under the jurisdiction of the United States of America, and of loading and unloading cargoes either in transit or destined for the service of the Canal or of works pertaining to the Canal."

May I ask if that text is satisfactory to the Commissioners?

Dr. ALFARO. That text is satisfactory as the one we had agreed upon with Mr. Duggan.

Mr. WELLES. That is then agreed.

Dr. ALFARO. We made the remark that the expression herein contained "territory under the jurisdiction of the United States" is not objectionable in substance to us, but we had used the expression "Canal Zone" because we are speaking of the ports of Panama and Colon and any person going to those ports or leaving those ports will necessarily come from the Canal Zone or go into the Canal Zone. Now from the Canal Zone he might go to other territory under jurisdiction of the United States, but of course that is not the usual result.

Mr. WELLES. With that clarification, is that satisfactory then? With the clarification you have just given.

Dr. ALFARO. The clarification is to explain why we have proposed the expression "Canal Zone" as more precise.

Mr. WELLES. I understand.

Dr. ALFARO. Of course, if you insist on that...

Mr. WELLES. It would be preferable from my standpoint. Your clarification makes our understanding perfectly clear.

Dr. GARAY. I understand, Mr. Welles, that the reason for this change was that by the words "Canal Zone" you fear that additional lands may be left outside, but at the same time we have the same feeling you have. It might refer also to the United States.

Mr. Welles. It would hardly seem to me that it would be possible for that interpretation to be given. Would it seem to you, Mr. Baker?

Mr. BAKER. I don't think so.

Mr. WELLES. The whole context, I would say, would make that outside of the bonds of possibility.

Dr. ALFARO. Of course, that expression has never been used. We have had to refer to territory within the jurisdiction of Panama because the territory of Panama, of course, comprises territory under the jurisdiction of the United States, by reason of the Canal treaty. In the case of the United States there is the Canal Zone and additional lands, but in this specific matter if we speak of receiving or disembarking passengers to or from the ports of Panama and Colon, necessarily they have to come from the Canal Zone or go into the Canal Zone since the Canal Zone surrounds the two ports.

Mr. DUGGAN. Does the Canal Zone entirely surround the port of Panama? Might there not be some other access?

Dr. ALFARO. Yes, but in that case the provision does not apply. If you bring passengers from other ports into the ports of Panama, for instance, suppose you disembark a passenger from Punta Mala or from the Punta Mala station to go to Panama through the Canal Zone. If he goes through the Canal Zone, then that is the correct expression. The reason is that people who will read this treaty when they see in the first paragraph of Article VI that we speak of the ports of the Canal Zone and the territory under the jurisdiction of Panama, will wonder why should we speak here of territory under the juris

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