177. Memorandum From the Special Assistant to the President (Cutler) to the Special Assistant to the President (Adams)1
SUBJECT
- National Security Aspects of the Existing Panama Canal and Alternatives to It
As you know, the Panama Canal Company, prior to undertaking a $19 million four-year improvement program for the existing canal, has sought assurance that the Administration has no present plan to reconstruct the present canal as a sea level canal or to construct through Panama or Nicaragua a new canal.
On September 18, at the President’s request, I wrote the Secretary of Defense asking for current Joint Chiefs of Staff views as to the military importance and priority of a project to convert the present Panama Canal into a sea level canal or to provide a new or [Page 349] alternative canal through Panama or Nicaragua. Also at the President’s request, I asked the Secretary of State to provide a current expression of foreign policy views on this matter. I have now received from the Secretary of Defense and the Under Secretary of State2 the attached views which may be summarized as follows:
- a.
- JCS: A sea level conversion of the present Canal would reduce its vulnerability and would increase its operational capabilities against nuclear attack. The present Canal is strategically important. Construction of a sea level canal in Panama is not as important strategically and should not be undertaken at the expense of military projects or activities required for national security. The cost of a second canal would be disproportionate to the additional degree of security provided because it would require little more effort for an enemy to damage two canals in the same general area than to damage one.
- b.
- State: Reconstruction of the Panama Canal appears more advantageous than construction of a new canal. A new canal through Panama or Nicaragua would require negotiation of a treaty probably involving a degree of Panamanian or Nicaraguan participation in ownership and operation. A Nicaraguan Canal would cost $6 billion as against $5 billion for reconstruction of the Panama Canal; would probably antagonize the Panamanian government; and might oblige us to negotiate with Costa Rica as well. Rights of El Salvador, and possibly Honduras, might also be involved; consultation with other Western Hemisphere countries might be necessary. On the other hand, a Nicaraguan Canal would provide a shorter and alternative route, lessening risks of delay from accidents and assuring expeditious handling of increased traffic in the Panama Canal.
P.S. My personal appraisal of these replies is that a canal through Nicaragua is not favored and that a reconstruction of the existing Canal to sea level is at a pretty low priority in the scale of our national security needs.