Panama Settlement

February 26, 1964

Report Outline
Dispute Over the Canal and the Zone
Origin of American Rights in Panama
Differences Over Treaty Stipulations
Proposed Changes of Policy on Canal
Special Focus

Dispute Over the Canal and the Zone

Panama's quarrel with the United States continues to defy settlement, seven weeks after the rioting that led to severance of diplomatic relations between the two countries. Although the incident that set off the violence—a schoolboy squabble over raising of the American flag in front of the Balboa High School—seemed trivial to the average observer in the United States, its consequences were grave. The disorders of Jan. 9 and 10 in the Canal Zone and nearby areas of the republic took the lives of three American soldiers and of 21 Panamanian citizens, and they caused Panama not only to break relations with this country but also to lodge charges of aggression against the United States with the Council of the Organization of American States.

Efforts to mediate the dispute have yielded no results to date. President Johnson, speaking at Los Angeles on Feb. 21, assured the government and people of Panama that the United States was “prepared, calmly and without pressure, to consider all the problems which exist between us—and to try our dead-level best to find a solution to them promptly.” But Washington refuses to make an advance commitment to revise the treaty which defines the rights of the United States in the Panama Canal and the Canal Zone.

Panama, fearing that discussions may not bring about the changes it desires, insists that the United States agree to enter negotiations for a new treaty before diplomatic relations are restored. It threatens, if the current stalemate continues, to take the case to the United Nations Security Council. An O.A.S. committee, which had gone to Panama to investigate the January riots, returned to Washington Feb. 19 but has not yet made public its report.

ISSUE TRACKER for Related Reports
Nov. 26, 1999  Panama Canal
Oct. 24, 1975  Panama and Latin Policy
Feb. 26, 1964  Panama Settlement
Exports and Imports
Regional Political Affairs: Latin America and the Caribbean
Waterways and Harbors