BACKGROUND FACTORS AFFECTING PANAMA-US RELATIONS/DISCRIMINATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83-00423R001800120001-8
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 7
• Document Creation Date: November 9, 2016
• Document Release Date: March 16, 1999
• Sequence Number: 1
• Publication Date: March 22, 1955
• Content Type: REPORT

Approved For Release 1999/09/10 : CIA-RDP83-00423R001800120001-8
TO CIA MAT y
tLOAN L
Approved For Release-1999/09/10 : CIA-RDP83-00423R001800120001-8
 Approved For Release 1999/09/10 : CIA-RDP83-00423R001800120001-8
RETURN
IN THIS
ENVELOPE
Approved For Release 1999/09/10 : CIA-RDP83-00423R001800120001-8
 ii N I
TORO1(32 NTMt'KLos
0 50UN05 LIKE EA IN EARNIEARLY
52 50UNDS LIKE $ IN SISTER
S S1YMb5 Lt-Km SA IN SRr
100 YARDS ABOve SPA LEVEL
POPULaTtON OVER 30,000
CCA '13 OF IT LIVES ON ;;ARMS
Approved For Release 1999/09/10 : CIA-RDP83-00423R001800120001-8
SLAUGHTER
HOUSE:
111
RAM ." P.
AEtoF1 Sr
L1:GEN4
~. SCHOOL
CHURCH
CITY HALL CovNT' COUNT, PC'? OFFICE I CITY POLICe
C Z HEALTR INSTtTOTS
MILL
? CINaMA
MLLL
WATER
TowapY
J
0
DEAK FEAENC ST.
TO Ki$6]SlaLLAS?KARCAG-76SPOKLAOAHY-DEBRECEN
LABASSy MAC4INE FAcrORy
%EAD QUARTER OF THE LOCAL COMNUN4ST PARTY
Bi CK FACrot?y
MAII( HIOHWAy 8ETWEEM BuDApEST-DI BREC6N
- GOAD TO SURROUNO%NG CRIES
A~,JL. POSS($LE UNIT oT HGMfS
Approved for Release 1999/09/10 : CIA-RDP83-00423R001800120001-8
 25X1
Approved For Rele 1999/09/10
I'001
WENT
BOTTOM OF PAGE FOR ADDITIONAL SPECIAL CONT
SEE
,
? CONF'ID
RT
INFORMATION RL~
This material contains information affecting the
ithi
th
h
U
i
d S
N
l D
f
f
1*./
e
n
tates w
n
ense o
te
ationa
e
t
e
meaning of the Espionage Laws, Title 18, U.S.C.
PREPARED AND DIS EMINATED BY
Secs. 793 and 794, the transmission or revelation
of which in any manner to an unauthorized per-
CENTRAL INTELLIGENCE AGNCY
son is prohibited by law.
COUNTRY
REPORT NO.
Pater ma/Canal Zone
SUBJECT
DATE DISTRIBUTED
Background Factors Affecting Panama-US Relations/
-? ) t 2~ ~S J
Discrimination
NO. OF PAGE$
NO. OF ENCLS.
UPPLEMENT TO REPORT #
25X1A
PLACE ACQUIRED (By source)
RESPONSIVE TO
DATE AC
UIRED B source) DATE OF INFORMATION (Date{; or : a es, n or between which,
events or conditions described in report existed)
About early Feb 55
SOURCE
25X1X
1.
As to relations between Panama and the US, historically, it is generally
conceded that US intervention and help enabled Panama to become a republic
in its revolt and separation from Colombia, 3 Nov 1903. The US intervened,
of course. because Colombia was not willing to permit the US to build a
Canal at Panama as it desired.-- Panama then being a province of Colombia.
2.
Almost immediately after the revolt, the US recognized Panama, which gave
Panama at' a uamong the other nations of the world. Then, very quickly,
the US mae a treaty with Panama. which enabled the US to build the Panama
Canal and ;which at the same time provided some cash (US$250 thousand in
gold annut .ly) to Panama, which needed the money to get going.
3.
In that first treaty Panama gave the US many concessions, the former being
desperate- Panama didn't have anything to offer except a strategic physical
location for a canal; it could not contribute engineering, skilled labor,
capital, supplies or sanitation facilities. All Panama did was offer a
apiece of itselftt, that is, the 10-mile strip through its middle which be-
came the Canal Zone -- land which was, -per Is, practically valueless. The
US assumed the responsibility of providing for the health (through water
systems, sanitation systems, garbage collection, inosnuito control, etc.)
of the two terminal cities, Panama City and Colon. In this connection, it
is interesting to note at the present time that no other town in Panama
has ever made mulch progress and that it has been only these two which were
protected by the US and nurtured by it toward the US ways of cleanliness,
etc, which progressed.
4.
At the present time the people of Panama want more remuneration for their
transfer of the Canal Zone land which took place in 1903. The current de-
mand is not the first, for at intervals of every 15 to 20 years there has
been a demand in Penma for "Justice" from the US. Each time the US has made
concessions to Panama and some Zoniens feel the situation is comparable
a buyer purchasing the same real estate half a dozen times with the pri e
rising higher each time the land is purchased.
5.
No one here in Panama or in the Canal Zone really feels that the Curren
treaty is the last one. When the benefits of the current treaty have be
absorbed, a new demand will be made by Panama,
`z `~ 19`
MAR
DISTRIBUTION
ARMY NAVY AIR FBI
25X1A
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
NO DISSEM ABROAD LIMITED
offices produdkpprQ ds.E th" Gases 199 0QUQ.fe to WRDP:
teIli ence components, other
L2i( oitr8cternal Projects
or reserve personnel on short term active duty (excepting individuals who are normally full-time employees of CIA, AEC, FBI. State or Defense)
unless the written permission of the originating office has been obtained through the Assistant Director for Collection and Dissemination, CIA.
 Approved For Rele 1999/09/10 : CIA-RDP83-004.1001800120001-8
(OVIDENTW
CONPII ITIAL/US OFFICIALS ONLY
25X1A
6. Actually, Panama's highest hope would be to have the US turn the Panama
Canal o er to the Republic of Panama -- free, of course! Then Puma would
presuma y have to sell it, possibly to some friendly nation, perhaps to
the USSR.i perhaps back to Uncle Sam;
7. One thing is clear -- Panama cannot run the Cana itself. Too often Panamanian
administrative incompetence has been demonstrated in small things,, and running
ternational canal. is Just beyond Panamanian ability at this time.
. It is worth noting that Panama in the current treaty negotiations asked th,
the Panama Canal concession be limited to 99 years instead of in perpetuity
which the US bought and paid for in 1903 -- and for which the US has been
paying in increased quantity throughout the years. The US of course flatly
rejected this demand. The US also rejected a request for a more clear defin-
ition of US authority, power and control in the Canal Zone. The US apparently
believes this is clearly stated in the original treaty which gave the US the
same sovereignty over the Canal Zone which it would have if the Canal Zone
were a part of the US. (The exact wording of the original treaty is not im-
mediately available here).
9. The US, further, has been unwilling to accede to Panamanian demands that the
Panama flag be flown in the Canal Zone and that ships going through the Panama
Canal fly the Panamanian flag, and that. Panamanian stamps be used in the Canal
Zone; nor has the US been willing to agree to make Spanish as well as English
the official Language of the Canal Zone.
10. ..... One thing of considerable interest and importance is that President
,ALias in his message to the Panamanian people on the treaty spoke of the
tremendous economic gains which will result from the salary increases to be
granted Panamanian workers in the Canal Zone under the new treaty. Actually,
I have been reliably informed that such a provision definitely is not in the
treaty and, in other words, there is positively no promise of salary increases
in the treaty.
11. What has happened is that Panama is promised equality of salary and opportun-
ity for Panamanians and US citizens working in the Canal Zone. This had been
promised for years but was never carried out. At one time about 20 years ago
(about 1935) there were only about 25 Panamanian citizens on the gold payroll
of the Canal, although the treaty called for equality of treatment even then.
Now there are a couple of hundred Panamanians on the poll. If followed,
the treaty would require replacement of at least half of the US citizens in
the Zone with Panamanians. This is not expected to happen as promised, the
principal drawback being security, there being many nsensitiveei positions in
the Canal Zone which must be cleared by the Office of Internal Security before
an employee can be hired. It is doubtful that any sensitive position could
be filled by an alien. How many positions you can declare "sensitive" without
getting into a row about noncompliance with the treaty remains to be seen.
12. Equality thus has been written in the books but it just has never worked out.
US employees in the Canal Zone fight the employment of Panamanians tooth and
nail in any classified or skilled fob. This fear of losing their jobs has
been behind the anti-Panamanian feeling for years. It is expected that once
the Panamanian employees get a toe hold, the US workers must get up and move
out.
13. Color is another problem. If Panamanians were given US-type jobs, at US-type
salaries, they would live in the same quarters, share the same schools and
stores with the US workers.-Less than 10 per cent of the Panamanian people
even claim to be white; and many of that 10 per cent are mistaken about it.
CONFIDENTIAL/US OFFICIALS ONLY
Approved For Release 1999/09/10 QKflX1
N1.NIAL3R001 800120001-8
 Approved For Ref' Wse 1999/09/10 : CIA-RDP83-00 3R001800120001-8
C IDENTU
CONFID1TIAL/US OFFICIAL ONLY
-3-
25X1A
14." Many. US workers hate to visualize Negro and brown and Indian Panamanians
living with them, playing with their children, the young people intermarry--
tng, etc, but that. is just what is happening to a considerable extent al-
ready and the results are not good.
15. Discrimination between US and local workers started with the construction
of the Panama Railroad in 1949. Even in those days native workers were not
worth their hire; and they have not improved much. To build the Panama
Railroad in Panama, workers came from China, England,Irel d, India, etc?
just as day laborers. Panamanians were too risky. Chinese and West Indians
provided the bulk of the labor force. Then these West Indian Negroes stayed
here and darkened Panamanians by marriage. Thus when building the Panama
Railroad, the US white workers got one wage scale and the illiterate, un-
trained laborers got another. There were two strata of employees. When the
Panama Canal was started in 1904, the same donditions prevailed. Panamanians
could not do anything; or if they could, they didn't. Hence, labor was im-
ported from foreign countries to do the work which the Panamanians could
have done if they would have tried it. During the Panama Canal construction
days, the US white supervisors, superintendents, etc, were paid in gold
coins while the miscellaneous workers, mostly Negroes, were paid in silver
coins. Paper money was not popular in those days on the Isthmus of Panama.
As the Panama Canal was completed and the permanent structure set up, there
were two payrolls -- GOLD (for white workers in supervisory positions) and
SILVER (for miscellaneous workers needing constant supervision). The pay-
ments were made by pay receipts and gold and silver coins were discontinued
but the classification GOLD or SILVER stayed until the last decade.
17. In 1955, as in 1904, there is a GOLD and SILVER setup in the Canal Zone.
It is not marked by regulations. The SILVER employee can use a GOLD toilet,
eat in a GOLD restaurant, shop in a GOLD commissary store or attend a GOLD
movie, but he doesn't! He has his own SILVER toilets, resteaarents, movie
halls, etc. The names have been changed. The current payment is US rate
for US workers and.LOCAG rate for non-US citizen. Tare is no GOLD or SILVER
in finance officially.
When the Canal Zone abolished official discrimination, it did not abolish
the dual system of quarters, stores, etc, for the two classes. This dis-
crimination still exists, a little less than before, but 80 per cent, per-
haps, of what it was 10 years ago still exists. There is now a voluntary
discrimination. The Blacks know they can use White facilities but they
just don't do it becazse;
(a) They are not wanted;
(b) They feel uncomfortable because they are not among their
awn kind either socially or economically;
(c) They may consider that their actions might lead to retalia-
tion.in the employment field in the long run; and
(d) They are reasonably content in their Canal Zone local-rate
community which is at least 100 per cent better than that
which they would have in Panama.
19. The actual local workers as such have seldom corrmplained. It is the pro-
vincial agitators, the 010-Communist-tinged organizers, who get them to
scream for more, and a few provincial agitators among the LOCAL-rate workers
themselves have asked for better positions, more pay--- but not effectively
or loudly, The salary scale, housing and working conditions, and life pro-
tection of the LOCAL-rate workers of the Canal Zone are considered not less
then 100 per cent improved in the past 20 years. This has been voluntary
on the part of the Canal Zone government. It is slow, but there is constant,
steady improvement. The Negro workers of the Canal Zone have a two-year
junior college comparable approximately to a white American junior college.
CONPIDENTIAL/US OFFICIALS ONLY
Approved For Release 1999 O 3-00423 R001800120001-8
 Approved For Rele 1999/09~" 0001800120001-8
CONFIDENTIAL/US OIFICIAIS ONLY
25X1A
20. As suggested, discrimination is indicated in the schools. The system is
composed of LOCAL-rate schools called Latin-American schools, and the US
citizens school.
,gr
21. N, o-US citizens attend the so-called white or American School this year
robably school year starting September 1954) for the first time.
L p
Thus there is no discrimination educationally among US citizens this
22. It is the honest opinion of observers in this area Z "Panama and the Canal
Zone- that the new treaty between the US and Panama will call for elimina-
tion of the discrimination between US and local, workers, but that will not
be accomplished in a hurry. Several years at the minimum will be required
to see any actual diminuition of the discrimination on an individual basis.
On an employment basis the Panama Canal Company will have to yield on the
lower jobs and there grudgingly and only if forced. One more point relat-
ing to the average Panamanian's lack of qualifications to do the work of
the average US worker is that he lacks education, often has a language
barrier and a general background which does not fit him for the work.
There are plenty of exceptions, of course.
23. .... Panama itself has a law against discrimination, but discrimination
does exist in Panama. Negroes only recently have had any high offices;
the best top clubs have no Negro members. Negroes are not seen at such
places as the Hotel El Panama, etc.
24. Incidentally, exception of Panama from the "buy American" act will not
mean much. The canal is honestly trying to buy everything it needs which
is produced in Panama from Panama. In four years this has totalled
US$8,500,000 which is a lot for this area....
25. Increased business in Panama resulting from the teaty will not rear bene-
fit the Panamanian people. Only a tiny handful of Panamanians, real Pan-
amanians, are in business here. The great majority of businessmen are
from Syria, Lebanon and the Near East, Curacao and the West Indies, plus
many Chinese merchants. Jewish refugees flooded Panama about 15-18 years
ago (about 1937-1940) and promised to farm. None did. They are all in
business now....
26. If the treaty provision for equal opportunities is followed in the employ-
ment field, Panama will have to demonstrate whether or not she can produce
educationally trained people for the crafts, provisional and supervisory
positions of responsibility. Most US workers in the Zone think not....
27. The following are the remarks of a US employee which is illustrative of
the general problem:
"I am not anti Panamanian: or anti-Negro in any active sense. I have
dogs. When white Americans walk by my house, the dogs do not
bark. When Negroes or Panamanians walk by, the dogs rush out and
bark at them day or night. Why? I have not trained them to do so
and neither has anyone in my family.
"Those dogs seem to sense that these passers-by are not part.of the
community where we live. whey sense their 'difference' from us. I
believe that this illustrates the discrimination in the Canal Zone
which is so actual that even the dogs are opposed to Negroes and
Panamanians without being taught to be.
25X1A
"A poor Panamanian (poor in funds, that is) walking through the Canal
Zone is always on the defensive. The police patrol cars are apt to
slow down and look him over if he is in a US residential district;
the same is true for a Negro. Panamanians who drive cars are less
subject to scrutiny, but a man who hasn't a ear gets Ithe eye'. There
are many thefts in the Canal Zone and at least 99 per cent of them
are estimated to be by non-US citizens. This makes police suspicious."
CONFI]I NTI.A /U8 a PICIALS
~y
*CT-UI f [ i Efl.TrI.siTc dim.:
elease 1999/0 8 -0042 R001 8001 2000 1-8
CI~F~~QEtJT~AL s3-