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final authority for determining rate changes would be preserved, and the President would retain the power to modify or reject the recommendations of the Commission's directors.
QUESTIONS SUBMITTED BY SENATOR GORDON J. HUMPHREY, ANSWERS SUPPLIED BY WARREN M. CHRISTOPHER
Question. At a hearing before the Panama Canal Subcommittee of the House of Representatives Committee on Merchant Marine and Fisheries a representative of your Department testified that of the three elements of the Sandinistas, all are Marxists. Do you agree?
Answer. The official who testified for the Department before the Panama Canal Subcommittee may have been misquoted. However, the transcript is not available to the Department at this time, and thus the question of whether he did so testify cannot be verified. In response to the question, it would be more precise to say that two of the three Sandinista factions have announced avowedly Marxist/Leninist aims. The third and largest, the Terciario or Insurrectionist Faction, has not publicly expressed the goal of a Marxist Nicaragua, and has attracted the largest number of new anti-Somoza recruits to its ranks. While a substantial number of this faction's leaders have been identified as Marxists and long-time members of the FSLN, by and large, the membership is motivated ideologically by a desire to oust Somoza.
Question. Your Department has recently called for the ouster of General Somoza of Nicaragua. Should that initiative fail and Somoza retain his control of the Nicaraguan Government, would this have a bearing on the Panama Canal Treaty of 1977. Why?
Answer, The development of the situation in Nicaragua has no bearing on the Panama Canal Treaty of 1977. That Treaty spells out the rights and responsibilities of Panama and the United States with respect to the Canal until the year 2000, and provides for the continued operation and defense of the Canal by the United States until then. The Neutrality Treaty safeguards United States rights with respect to the defense of the Canal thereafter.
Question. Did the State Department know of the revolutionary intentions of the Government of Panama when it urged the Senate to consent to the Panama Canal Treaty of 1977?
Answer. The phrase "revolutionary intentions" is not an accurate description of the policies of the Government of Panama either under General Torrijos up to October 1978 or under President Royo since that date.
Question. If it did, why was that information withheld from the Senate? If it was not so aware, does this new knowledge change the view of the State Department of the viability of the Treaty? Why not?
Answer. Since the Panamanian Government does not in the Department's view hold "revolutionary intentions," the above questions are moot.
Question. Secretary Vance testified that the Treaty would not cost the taxpayer anything. Do you see a difference between a tax burden which directly benefits Panama and one which only indirectly benefits that country?
Answer. Actually, the context of the Secretary's remarks was a discussion of payments to Panama under the 1977 Treaty. Payments for the benefit of the Government of Panama under the Treaty will be funded by revenues generated by the Canal and will not constitute a burden on the taxpayers.
During the life of the new Treaty, no U.S. tax dollars will be used for the benefit of Panama. While Panama's economy will continue to benefit indirectly from the continued presence of the United States in Panama, e.g. salaries and wages for Panamanian employees, expenditures in Panama by U.S. citizens for goods and services, it should be understood the portion of such benefits derived from U.S. tax dollars is made only because of its direct and immediate benefit t:o the United States.
Once the Treaty period ends at the end of the century all facilities built and operated by the United States will go to Panama. Therefore, Panama will eventually benefit from any investment made by the United States during the Treaty period whether financed by tax dollars or by Canal revenues. Of course, such investment will have more immediately directly benefited the interests of the United States in the operation and defense of the Canal.
Question. How was your estimate of cost so badly in error? Is it possible that e:_ven greater errors in cost could be discovered after the treaty goes into force?