Collision Course on the Canal

Theodore Roosevelt considered its acquisition "the most important action I took in foreign affairs." Laying claim to the 550-sq.-mi. Panama Canal Zone indeed entailed a classic shake of the Big Stick--and so it may again. At his press conference in Minneapolis last week, Secretary of State Henry Kissinger worried aloud that the quasi-U.S. colony, which straddles the strategic waterway that links the Atlantic and Pacific Oceans, could become the focus of "a kind of nationalistic, guerrilla type of operation that we have not seen before in the Western Hemisphere." He was referring to the very real prospect of a bloody clash between U.S. troops in the zone and angry Panamanians who want to gain control of the canal by force.

The U.S. acquired sovereignty over the zone "in perpetuity" in 1903, as a reward for helping Panama to achieve its independence. Roosevelt had sent U.S. gunboats to protect a Panamanian national uprising--funded by private American and French interests--against the territory's Colombian rulers. In exchange for control of the Canal Zone, the U.S. paid a total of $10 million to the fledgling national government and agreed to pay $250,000 annually in rent. Building the canal cost the U.S. an additional $336,650,000. It is now an international commercial convenience rather than a U.S. military necessity; in fiscal 1974, 149.7 million long tons of shipping passed through it. Most of the traffic is American, though the canal is open to all. In recent years, the Panamanians have been galled by what they regard as a humiliatingly one-sided and outdated arrangement. In 1964, a series of bloody, nationalistic riots against American control of the canal left 26 people dead. The U.S. thereupon agreed to renegotiate its 1903 treaty status, with the eventual goal of returning the canal to Panamanian sovereignty.

Slow Steps. Last year Panama and the U.S. signed an eight-point agreement in principle on how to proceed with the negotiations. Brigadier General Omar Torrijos, Panama's dictatorial but populist strongman, hopes for a "step-by-step and orderly process of demilitarization and neutralization of the canal." But the steps have been slow, and the two sides are still well apart.

The U.S., through Chief Negotiator Ellsworth Bunker, has offered, in essence, a gradual ceding of partial sovereignty and Panamanian participation in the canal's operation and defense, but it wants to retain unlimited access for both civil and military aircraft to some zone airports. Panama wants all U.S. military installations phased out and, equally unacceptable to the U.S., total control of the zone and the canal itself.

High Feelings. Last month the House of Representatives got into the act by taking the unprecedented--and perhaps unconstitutional--step of voting to withhold any appropriations to pay for further negotiations (TIME, July 21). It was a sign of how high feelings run over the issue, both in Congress and, as Henry Kissinger discovered during his recent domestic forays, across the land. Former Army Secretary Howard Callaway--who is now Gerald Ford's campaign manager--declaimed that: "There's a feeling in this country that Teddy Roosevelt helped the Panamanians get their independence, negotiated the treaty, paid for it, conquered yellow fever and brought them their sole economic enterprise. There's the feeling that the canal is enormously valuable, that we paid for it, and it's ours." More than one-third of the Senate--enough to block ratification of a new treaty --also opposes any change in the old relationship. President Ford issued a statement that he "shares many of [the opponents'] feelings."

Torrijos has tried to restrain Panamanians, particularly the country's 24,000 volatile students, from launching assaults on the 39,200 "Zonians"--American servicemen, their families and employees of the Panama Canal Zone Co. "If it was not for this direct contact between Torrijos and the students, there could be a confrontation," says one young Panamanian activist. Torrijos' own reassuring refrain is that "we should not look at things negatively." He has tried to enlist the support of members of the Organization of American States and Third World countries of the United Nations behind his sovereignty campaign.

Panama's reason for wanting the canal and the zone is not hard to understand. The zone is a lush green enclave of middle-class prosperity surrounded by teeming poverty. Within it are seven golf courses, riding clubs, movie theaters, yacht clubs and tennis courts. Zonians buy their food and household goods at commissaries, where prices are often lower than in the U.S. Fresh oysters and other Stateside delicacies are flown into the area's genteel clubs and restaurants. It is a world of Southern comfort, and Southern mores. The chief beneficiary of all this is the U.S. Southern Command headquartered in the zone. The Command is ostensibly for defense of the entire Latin American region, but one of its specific tasks is defending the canal itself. Panamanians, including General Torrijos, see it more as a huge occupying army.

The zone operates its own courts, hospital, schools and even postal service, but few of the 15,000 Panamanians who work there share in the luxury. They remain largely an underclass; of 214 Canal pilots, for example, only two are Panamanian, the rest U.S. citizens. Outside the zone, per capita income averages about $1,000 annually, dropping to $123 for the lowest fifth of the population. Inside the zone, it approximates the U.S. middle class norm. Until recently, even the zone's water fountains were segregated--some for Zonians only, others for the Panamanians.

Many Zonians seem resigned to the likelihood of bloodshed. A few have left; but most are digging in. They avoid nearby Panama City. "Even little children in some parts of the city throw stones at us when they see our Canal Zone license plates," says one Zonian housewife. "One day it could be grenades." Like the Roosevelt-minded lobby in Congress, the Zonians' stated reluctance to give up the Canal has an anachronistic--but ominous--ring.

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