CANAL ZONE: Puzzling Affair

Along Fourth of July Avenue, which forms the international boundary between Panama City and a residential area of the U.S.-controlled Canal Zone, 2,000 demonstrators and students, angry at being turned back when they tried to plant Panamanian flags on zone soil, stoned zone policemen. Across the city, 150 taut-faced Panamanians advanced on the U.S. embassy, hauled down the U.S. flag, hoisted Panama’s, ripped the flag to shreds. With bird guns, bayonets and bazookas, U.S. troops came to guard the boundary. They had pinked nine Panamanians with bayonets, wounded three with bullets, sprayed nine more with bird shot.

At his press conference next day, President Eisenhower confessed that the affair was “puzzling.” The treaty by which the canal was first built has twice been modified, he pointed out, each revision granting “a greater degree or level of rights to the Panamanians.” What caused this puzzling tension between the U.S. and Panama, and the violence that grew out of it?

The Treaty Writer. The causes are historical, emotional, economic and political. They go back to the turn of the century, when President Theodore Roosevelt became convinced that the U.S. must build a canal through the section of the isthmus then controlled by Colombia (“I do not think that the Bogotá lot of jack rabbits should be allowed permanently to bar one of the future highways of civilization”). Sounded out by Philippe Bunau-Varilla, a Frenchman and chief engineer in Ferdinand de Lesseps’ unsuccessful earlier attempt to build a Panama Canal. President Roosevelt gave tacit support to a Panamanian revolution against Colombia. The U.S.-backed plot succeeded; Bunau-Varilla (who went on in later years to lose a leg in an air raid near Verdun) suddenly became Panamanian Minister to the U.S.

He thereupon drew up a treaty stating that “sovereignty of such territory” is “actually vested in the Republic of Panama,” but giving to the U.S. “all the rights, power and authority within the zone . . . which the U.S. would possess and exercise if it were the sovereign . . . to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, powers or authority.” Thus the U.S. flag flies over a strip of land that divides Panama—an emotional situation easily exploitable by politicians.

The economic grievances go back almost as far as the emotional. For decades a double wage standard divided U.S. and Panamanian employees of the canal into well-paid “gold” and poorly paid “silver” classifications, though in some cases they even did the same work. A 1955 agreement provided that “the basic wage for any given [job] will be the same for any employee . . . without regard to whether he is a citizen of the U.S. or of the Republic of Panama.” In practice, the U.S. still divides the payroll into categories, some filled mostly by U.S. employees on U.S. pay scales, and the rest filled mostly by Panamanians paid according to Panama pay scales (plus bonuses of 30% or more). When the change went into effect, Panamanian day laborers and artisans were led by politicians to think that they were going to be paid New York-level wages; when they were not, discontent began nagging.

“Panama, Like Egypt . . .” The Panamanian who has symbolized the discontent and would like to capitalize on it politically is Aquilino Boyd, 38, a handsome lawyer from a Panamanian “best” family, who would like to be elected President next year. For months, Boyd has been whipping up feeling. “Panama, like Egypt,” he said, “could not build her own canal because she is a small nation and had to accept foreign aid. Every day the idea is gaining force that eventually Panama should regain jurisdiction.” What that meant precisely, he never said, but he did not want the canal itself for Panama. Instead, he would settle for a fifty-fifty split of gross canal revenue (fiscal 1958: $83 million). Boyd touched off last week’s violence by entering the Canal Zone with a Panamanian flag, a cluster of followers and photographers.

With all the emotional, economic and political issues involved, a vital difference remains between the demands of Boyd’s unruly mobs and Egypt’s once unruly Nasser. Whereas Nasser acted in his official capacity as chief of state to reach out and grab the Suez Canal, Panama’s President de la Guardia shuns such ambition, and even the mob so far aspires only to seeing the Panamanian flag flying over the “sovereign” territory.