have power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States." I might say at this point, Mr. Chairman, as I understand the decision of the Supreme Court of the United States in its ruling on the case brought on this point, this leaves the matter entirely to the Congress and places on the Congress even more responsibility in seeing that the constitutional procedures and processes are followed, because the Supreme Court says that is something for the Congress to determine and to act upon. So it places a greater burden, a greater responsibility on the Congress itself to see that the constitutional procedures are followed. Mr. Chairman, the Attorney General has advised that the proposed treaties do not in any respect violate this clause but, with all due deference to him as a very able lawyer, in this instance he is serving a client, and I cannot share his rationalization of the clear unambiguous language of the Constitution on this subject, nor can I agree with his faulty characterization of consistent past practice in our dealings with Panama in matters of property transfer. As the chairman has made reference to, when Justice Jackson was deciding a case before the Supreme Court, an opinion which he had given when he was Attorney General was called to his attention, and it was directly contrary to his views as a sitting Judge on the Supreme Court. He said that he would not give any weight to the Attorney General's opinion because even though it was his own, at that time he was acting as attorney for a client, the client being the U.S. Government. In 1936 and again in 1955, the chairman made reference to these instances, cessions of U.S. territory or property to Panama were made expressly contingent on congressional authorization. Yet now that a truly major cession of virtually all U.S. territory in the Isthmus of Panama is contemplated, the executive branch has seen fit to assert a novel theory by which the administration would circumvent the Congress. The reason for development of this novel theory of congressional law is, I believe, a matter of practical politics rather than legal scholarship since public opposition to giving up the Canal is so overwhelming that any congressional authorization of a cession of territory would be difficult, if not impossible, to obtain. So, Mr. Chairman, the Congress should not lightly endorse this proposed departure from sound Constitutional principles simply for the perceived political expediency of the moment. The Senate particularly should, instead, guard the prerogatives of the whole Congress by amending the proposed treaties at all appropriate points to make cessions of territory or property to Panama subject to the prior enactment of authorizing legislation by the Congress-in other words, no authorizing statute, then no property transfer and a void treaty. My own hope, of course, would be that such a statute would never pass, and I would certainly work to see its defeat. But notwithstanding a member's position on the Canal giveaway, we are all sworn to uphold the Constitution, and in this instance the issue is clear and there can be no room for doubt but that the whole Congress must act before any transfer can legally occur. Finally, Mr. Chairman, I wish to emphasize that I have not reached this conclusion without study. As chairman of the Subcommittee on Separation of Powers of the Senate Committee on the Judiciary, I have heard the testimony of 34 witnesses over 7 days of hearing dealing almost exclusively with this very question, and the overwhelming evidence is that the administration position is devoid of any substantive legal support and ought to be rejected out of hand. Now, Mr. Chairman, I have prepared a list here of the witnesses who testified before our subcommittee in favor of exclusive congressional power headed by Dr. Raoul Berger, former Professor of Constitutional Law at Harvard Law School; Charles E. Rice, Professor of Constitutional Law at Notre Dame Law School; Judge Guthrie F. Crowe who is the Federal judge in the Canal Zone; Dr. Donald M. Dozer, professor at the University of California; Karl R. Bendetsen, former Under Secretary of the Army and chairman of the board of Panama Canal Co.; Senator Jesse Helms; our own distinguished chairman, John M. Murphy; Admiral Thomas H. Moorer, and others. I would ask unanimous consent that this list of witnesses who testified in favor of exclusive congressional power and those who testified asserting concurrent congressional power be inserted in the record. The CHAIRMAN. Without objection, it will be put in the record at this point. [The following was received for the record:] WITNESSES IN FAVOR OF EXCLUSIVE CONGRESSIONAL POWER Dr. Raoul Berger, Professor of Constitutional Law at Harvard Law School. Charles E. Rice, Professor of Constitutional Law at Notre Dame Law School. Judge Guthrie F. Crowe. Dr. Donald M. Dozer, Professor at University of California. Karl R. Bendetsen, former Under Secretary of the Army and Chairman of the Board of Panama Canal Company. Senator Jesse Helms. Representative John M. Murphy. Adm. Thomas H. Moorer. George S. Leonard, Esq. William R. Drummond, Canal Zone Police Lodge. Representative Daniel J. Flood. Capt. Miles DuVal, USN (Ret.). Donald H. Schwab, VFW. Governor Ronald Reagan. Representative Philip M. Crane. Adm. John McCain, former Commander in Chief of the Pacific Fleet. WITNESSES ASSERTING CONCURRENT CONGRESSIONAL POWER Robert Beckel, Deputy Asst. Secretary of State. Arnold Nachmanoff, Asst. Secretary of the Treasury. Richard N. Cooper, Under Secretary of State for Economic Affairs. Herbert J. Hansell, Legal Advisor, Department of State. Russell L. Mink, Asst. General Counsel for International Affairs, Dept. of the Treasury. Leonard Meeker, Center for Law and Social Policy. 29-613-78-2 OTHER WITNESSES Harold R. Parfitt, Governor of Panama Canal Zone. Lt. Gen. Dennis P. McAuliffe, Commander, U.S. Southern Command. Senator S. I. Hayakawa. Capt. K. C. Torrens, Council of American Master Mariners. Herbert R. Haar, Jr., Port of New Orleans. Leland L. Riggs, former Special Agent for Drug Enforcement Administration. Edward S. Reed, Mid-Gulf Seaports Marine Terminal Conference. Robert C. Engram, Gulf Ports Association. Senator ALLEN. The next item I would like to discuss is the fact that Panama is to be given $2.262 billion for the right to cede the Canal Zone to Panama. In addition to getting the Canal Zone, it is ceded $2.262 billion. I regret to say to this distinguished committee that the Constitution is ignored elsewhere in these treaties and related documents. Most citizens learn in eighth grade civics that bills for appropriation must originate in the House of Representatives and that the people's representatives in the House are charged with primary responsibility in matters regarding the Nation's purse strings. Yet, Mr. Chairman, our negotiators have somehow figured out a means for bilking the users of the canal and the American taxpayers of at least $2.262 billion without any need to seek an appropriation from the Congress. You know, Mr. Chairman, ordinarily the grantee pays the grantor, but our clever negotiators have figured out a way for us to give away the Canal Zone and pay the recipient at the same time. They have also figured out a way to make these payments without congressional approval. That is to be allowed to do what they apparently intend to do. I will not insist on going into great detail on how this $2.262 billion in 1977 dollars is to be paid to Panama because I know this committee is fully familiar with the financial ramifications of this proposed arrangement. However, I would recommend to the committee a careful reading of a speech given August 19, 1977, before the Panamanian National Assembly by Panamanian Planning and Economic Policy Minister, Nicolas Ardito Barletta. Minister Barletta's analysis of the cash flow to Panama proposed by these arrangements is, in my judgment, highly accurate, and it is from his work rather than from the misleading Department of State estimates that I have drawn the figure $2.262 billion. Why are we proposing to pay these tremendous sums to Panama ? Why would we permit these proposed toll increases which will surely burden commerce and inflate consumer prices in the United States? The only reason I can ascertain is a desire to provide Panama with funds to repay outstanding loans from the large international banks. The Library of Congress did a study at my request which indicates that the external public debt of Panama is some $1.7 billion. Interest on that sum is a tremendous burden on this small country of only 1.5 million inhabitants, and already 40 percent of current revenues in Panama go to carrying present indebtedness. Stating the matter bluntly, Panama is on the verge of bankruptcy and many of our large banks hold loans which may soon be bad debts, that is, of course, unless the United States' taxpayer rescues the banks by providing the funds to Panama for repayment. The executive branch proposed to channel these funds to Panama through a new Panama Canal Commission, which would be a U.S. Government corporation structured much as is the present Panama Canal Co., which now operates the Canal, of course. This proposed new Panama Canal Commission, just change the one word from Company to Commission, would replace the Panama Canal Co. and would acquire back from Panama for a term of years, until year 2,000, use of the principal assets now owned by the Panama Canal Co., save certain lucrative assets immediately transferred to Panama but not returned. This new commission would then operate the canal, serving up off the top, so to speak, Panama's slice of the pie. And that slice is a pretty big slice which all admit would require immediate toll increases and, no doubt, later new borrowings from the U.S. Treasury to enable the commission to pony up this proposed average $100 million annual payment to Panama. But under this plan what happens to the existing Panama Canal Co.? This question is one of the many not yet answered satisfactorily by the administration. Also unanswered, and more importantly, what happens to the existing $319 million debt of the Panama Canal Co. to the Treasury, that is the unrecovered capital investment of the United States in the canal? It is a sum which apparently would not be transferred to the proposed new Commission. What happens to the approximately $16 million in annual interest payments the United States receives on that debt? The answer is the same answer we have been giving the people down through the years here in the Congress-the American taxpayer, as usual, will pick up the tab. That is right, Mr. Chairman. This section setting up this proposed Panama Canal Commission is going to cost our Treasury $319 million right off the bat and is going to deprive our taxpayers of some $16 to $17 million in annual interest payments that have amounted so far to over $600 million in payments into the Treasury. But there is an even greater surprise waiting for the American taxpayer of year 2000 because, in year 2000, the Panama Canal Commission folds up and is out of business, much as the Panama Canal Co. is now slated for collapse. And once again, Mr. Chairman, the Department of State would have us promise to Panama, under article XIII of the Canal Treaty, that the Panama Canal Commission would leave Panama in the year 2000 and turn over all of the operating assets of the Canal to Panama clear of any liens or encumbrances. In other words, American taxpayers in the year 2000 are going to be forced to swallow one more defunct government corporation with massive liabilities and no assets. Mr. Chairman, we have no way of predicting what it will cost us in the year 2000 when the business of the Panama Canal Commission is wound up, but certainly if the experience of the last few years is any guide, that expense will be well above the $319 million the taxpayers are being asked to write off today. Then there is the small matter, is going to cost our Treasury $319 million right off the bat, and here the appropriation power of the House of Representatives has disregarded. Then there is a small matter of $345 million in various so-called soft loans which the State Department has seen fit to promise to Dictator Torrijos. I use the term "small matter" not because I consider it a small matter but because the big thinkers and planners down there at the Department of State figure $345 million is a mere drop in the bucket against the backdrop of $6 billion annually in foreign aid pork barrel. Bear in mind, in assessing the magnitude of this figure, that we are talking about a country of only some 1.5 million people. But, Mr. Chairman, the really annoying part about this $345 million is not so much the fact that it is an exorbitant sum but that, in blandly promising this $345 million, the Department of State has ignored entirely the Congress and, with the exception of certain appropriated moneys in the military portion of the $345 million, the Department of State plans to get this money for Panama out of existing authority without any action by the Congress and without any action by the Senate in consenting to these loans as part of the proposed treaties. Again the prerogatives of the Congress are being ignored by appointed bureaucrats answerable apparently to no one. Now, the extremely important matter of the defense of the Canal. I suppose that the United States could absorb this financial rip-off. Certainly we have paid needlessly vast sums in the past down a variety of rat holes and yet continued as a great and strong Nation. But other aspects of these proposed treaties are far more dangerous in the long term to our national well-being than are the massive proposed cash payments to Panama. Chief among these considerations is the dangerous and obviously adverse strategic effect of abandoning-after a decent interval-the Canal and the Canal Zone to a pro-Marxist dictator who receives direction from Cuba and the Soviet Union. What folly this is. The defense provisions set forth are, on their face, unworkable and portend a complete withdrawal of the U.S. forces from the Canal Zone well in advance of the projected date of 2000 A.D. The administration proposes to surrender 10 out of 14 bases. Now, they say the Canal is indefensible, it cannot be defended. If that be true, why is it we are reducing our bases immediately from 14 down to 4. So certainly that would indicate that we are going to be less able to defend the Canal after the treaties are agreed to, if they are, than we are now able to do. Thus, we are asked at the outset to permit the surrender of 10 out of 14 military bases and to permit our forces defending the Canal to be hemmed in from day one in four relatively small enclaves. These bases would indeed be enclaves because our freedom of action outside of the four bases would be severely limited by the treaty requirement for approval of operations by a joint military board in which the United States and Panama will have equal authority. Apparently, the doctrine of unity of command is imperfectly understood at the Department of State, but the Panamanians no doubt recognize fully that this provision of the executive agreement would give a de facto veto of U.S. operations outside of the four retained bases. So our forces would be restricted to four relatively small enclaves, and only the naive would doubt that we would very soon see pressure |