"Foreign Affairs: The Need for Leadership" eText - Primary Source

Primary Source

Under the agreement the United States signed with Panama in 1977, control of the Panama Canal was set to transfer to Panama in December 1999. © BETTMANN/CORBIS. REPRODUCED BY PERMISSION. Under the agreement the United States signed with Panama in 1977, control of the Panama Canal was set to transfer to Panama in December 1999. © BETTMANN/CORBIS. REPRODUCED BY PERMISSION. Published by Gale Cengage © BETTMANN/CORBIS. REPRODUCED BY PERMISSION.


By: Ronald Reagan

Date: March 17, 1978

Source: Reagan, Ronald. "Foreign Affairs: The Need for Leadership." March 17, 1978, speech delivered to the Conservative Political Action Conference in Washington, D.C. Available online at ; website home page: http://www.reaganlegacy.org (accessed May 25, 2003).

About the Author: Ronald Reagan (1911–) was a successful movie and television actor from the 1930s through the 1950s. In his first bid for political office, he won the governorship of California in 1966 on a pro-business platform that took direct aim at the liberalism of the era. Despite an unsuccessful presidential run in 1976, Reagan remained in the national political spotlight and emerged as the Republican presidential nominee in 1980. Reagan (served 1981–1989) went on to win the election and served two terms as the nation's fortieth president.


The isthmus of Panama's value as a transport point between the Atlantic and Pacific Oceans became crucially important during the nineteenth century, when international trade, spurred by the Industrial Revolution, greatly expanded. The United States had formally been involved in the region since the 1850s, when it entered into an agreement with Great Britain to share control of a proposed canal connecting the Atlantic and Pacific oceans. It was another half century, however, before work on the Panama Canal actually began. After the United States encouraged and supported a revolt to establish a separate nation of Panama, previously part of Colombia, the two countries signed the Hay-Bunau-Varilla Treaty in 1903. Under the terms of the treaty, the United States retained exclusive control through the end of 1999 of a ten-mile wide canal zone in Panama, for which it paid $10 million up front and $250,000 annually thereafter. The amount of the annual payment was regularly increased, and, by the 1970s, the United States paid Panama over $2.3 million each year for its continued rights to the Panama Canal Zone.

Although the canal and its related operations were a boon to their economy, the American presence irked many Panamanians, who routinely accused the United States of exercising undue influence on the nation's domestic affairs. Calls for the return of the Canal Zone to full Panamanian control picked up pace in the 1960s, and, in the 1970s, the threat of civil unrest in the country spurred the United States and Panama to enter into negotiations over the return of the Canal Zone to Panamanian sovereignty. Despite significant opposition to handing over the Canal Zone, President Carter (served 1977–1981) ushered two treaties through Congress in 1977, one to return the canal to Panama—known as the Panama Canal Treaty—and the other to guarantee the right of the United States to undertake military action, if necessary, to keep the canal open—known as the Neutrality Treaty.


Of the two agreements, the Panama Canal Treaty provoked a storm of criticism, particularly by conservatives who viewed the return of the canal as another sign of the United States' diminished reputation in international affairs. To these critics, it seemed that the United States had been bullied by a much smaller and weaker nation into handing over an extremely valuable asset for which it had the full rights to retain for more than another decade. Led by isolationist North Carolina senator Jesse Helms, the anti-Canal Treaty advocates almost succeeded in preventing the agreement from being ratified. It passed by just one more vote needed for a two-thirds majority, and it was duly ratified on April 18, 1978. Although the United States retained operational control of part of the Canal Zone until the end of 1999, Panama resumed its authority over the entire area after the treaties went into effect in 1979.

President Carter viewed his success in implementing the Panama Canal Treaty as one of his greatest foreign policy accomplishments. Not only did the agreement recognize Panama's sovereignty over its own lands, but arranged for a peaceful transfer of control that did not interrupt trade through the region. The treaties also reflected a new respect between the United States and its Latin American neighbors. In the past, the United States had sometimes acted unilaterally to achieve its goals in the region, generating mistrust and resentment among its southern neighbors. Carter and other supporters of the agreements hoped that the example set by the Panama Canal Treaty would go a long way towards fostering trust and goodwill throughout the western hemisphere.

Foreign policy conservatives, however, took a different view. For a country still reeling from the humiliations of the Vietnam War (1964–1975), it seemed that turning over the Panama Canal further tarnished the image of the United States in the eyes of the international community. It also appeared damaging to acknowledge a far smaller and weaker country as the equal of the United States, regardless of the goodwill it generated in the region. In the following decade, the conservative point of view would triumph as Ronald Reagan, one of the leading critics of the Panama Canal Treaty, swept into office in 1980.

Primary Source: "Foreign Affairs: The Need for Leadership [excerpt]

SYNOPSIS: In this speech excerpt, the central themes of soon-to-be presidential candidate Ronald Reagan's political outlook are evident: pride in the United States, confidence that the American people would prevail in a just cause, and faith that free market economics would improve the lives of people everywhere. Reagan returned time and again to these same themes, serving as the basis for his ideological battle against the Soviet Union in the Cold War. Here he addresses the U.S. position towards Latin America, particularly Panama.

As a part-time journalist faced with producing a syndicated daily radio broadcast and twice-a-week newspaper column, I find being on the mailing lists of an almost endless array of organizations most helpful. Now some of the flood of materials crosses my desk very swiftly. But not all of it. One thick handout I got late last year was especially fascinating, not only because of content but just because it was mailed to me at all.

It was from the White House Press Office. Under the title "Domestic and Foreign Policy Accomplishments" it told me, in 21 single-spaced pages, of the wonders of the Carter administration's first year.

Beginning with the modest statement that—quote—"The president tackled directly and comprehensively major domestic problems that had been almost completely ignored in previous years."—unquote—it then recited an impressive list of major accomplishments. True, the White House hadn't claimed to find a way to control the weather or to eliminate crab grass on the White House lawn, but it did think it had solved—or nearly solved—our energy problems, Social Security's $17-trillion deficit, the size of a big government (we added 52,000 new employees in the first 10 months of 1977), the welfare mess and a host of other problems that have been center stage in American life for quite some time.

Tonight, perhaps we should discuss some of those White House claims and see if they have stood the test of even the three months that have passed since they were made. I know that's a little cruel—like checking up on someone's New Year's resolutions. After all, the administration has scarcely gotten a single domestic program worth noting through Congress. I'll tell you what. Let us concentrate on the administration's handling of foreign affairs, national security and its sense of priorities.…

Few Americans accept the belief of some of those now in positions of importance in guiding our foreign policy that America's purpose in the world is to appease the might out of a sense of fear or to appease the weak out of a sense of guilt.

But a question remains. Is the faulty thinking that has led us to these particular treaties an isolated particle, or is it part of a much larger whole?

In reviewing the foreign policy of this administration, one can only come to the conclusion that the mistaken assumptions that led to its course on the Panama Canal treaties are being duplicated around the world.

Its policy is rooted in well-meaning intentions, but it shows a woeful uncertainty as to America's purpose in the world.…

First, let us end this cycle of American indifference, followed by frenzied activity in Latin America (as it has been elsewhere). It leaves our southern neighbors bewildered and cynical. Instead, I propose a steadier course in which Latin America's growing

importance is recognized not as an act of charity, but in our own self-interest. Latin America, with all its resources and vitality, should be encouraged to join not the Third World, much less the Communists' Second World, but the First World—that community of stable, prosperous and free nations of Western Europe, North America and Japan.

Today, there is hope that much of Latin America might do so. First, many nations have learned the cost of Socialist experimentation: Argentina under the Perons, Chile under Allende, Peru under Velasco, Mexico under Echeverria. All suffered economic catastrophe. Their successors learned the bitter truth that defying the laws of economics benefits no one and, in fact, hurts most the poor whose cause those earlier leaders so demagogically espoused.

Today, as a result of those experiments which went so badly out of control, more and more of our neighbors are turning to the free market as a model of development. Their acceptance of economic rationality should be neither ignored nor penalized but actively encouraged.

At the same time, we must recognize that Latin America is once again leaving a period of strictly military rule and entering a more democratic phase. But in this case the United States is doing too much pushing, rather than too little.

Unhappily, the change from military to civilian rule is not an easy one. Nor can it be rushed. If it is, we will only succeed in creating weak and vulnerable democratic governments that will soon be swept out of power by just another generation of military strongmen even more convinced of the defects of democracy.

Above all, we want a free and prosperous Latin America. And, to obtain that, we cannot continue to reward our self-declared enemies and then turn around and punish our friends.

That leads me again to Panama. The treaties that have occupied so much of our attention in recent months represent both the good instincts and the bad impulses of American diplomacy.

The bad, for reasons I have repeated on many occasions: the feeling that we are guilty of some sin for which we must now atone and our inability to say "no," not out of truculence, but because it was the proper thing to say to secure our interests and to reaffirm our greater responsibility, which is leadership of all that remains of the free world.

Yes, the treaties represent the good instincts of American diplomacy, too—a spirit of generosity and willingness to change with times. A good foreign policy must have both elements: the need to say "no" and the willingness to change, in just the right proportions. Unfortunately, accepting change because it seems fashionable to do so, with little real regard for the consequences, seems to dominate our foreign policy today.

Too many in positions of importance believe that through generosity and self-effacement we can avoid trouble, whether it's with Panama and the canal or the Soviet Union and SALT.

But, like it or not, trouble will not be avoided. The American people and their elected leaders will continue to be faced with hard choices and difficult moments, for resolve is continually being tested by those who envy us our prosperity and begrudge us our freedom.

America will remain great and act responsibly so long as it exercises power—wisely, and not in the bullying sense—but exercises it, nonetheless.

Leadership is a great burden. We grow weary of it at times. And the Carter administration, despite its own cheerful propaganda about accomplishments, reflects that weariness.

But if we are not to shoulder the burdens of leadership in the free world, then who will?

The alternatives are neither pleasant nor acceptable. Great nations which fail to meet their responsibilities are consigned to the dust bin of history. We grew from that small, weak republic which had as its assets spirit, optimism, faith in God and an unshakeable belief that free men and women could govern themselves wisely. We became the leader of the free world, an example for all those who cherish freedom.

If we are to continue to be that example—if we are to preserve our own freedom—we must understand those who would dominate us and deal with them with determination.

We must shoulder our burden with our eyes fixed on the future, but recognizing the realities of today, not counting on mere hope or wishes. We must be willing to carry out our responsibility as the custodian of individual freedom. Then we will achieve our destiny to be as a shining city on a hill for all mankind to see.

Further Resources


Buckley, Kevin. Panama: The Whole Story. New York: Simon and Schuster, 1991.

Falcoff, Mark. Panama's Canal: What Happens When the United States Gives a Small Country What It Wants? Washington, D.C.: AEI Press, 1998.

Gold, Susan Dudley. The Panama Canal Transfer: Controversy at the Crossroads. Austin, Tex.: Raintree Steck-Vaughan, 1999.

Knapp, Herbert, and Mary Knapp. Red, White, and Blue Paradise: The American Canal Zone in Panama. San Diego: Harcourt Brace Jovanovich, 1984.

McCullough, David. The Path Between the Seas: The Creation of the Panama Canal, 1870–1914. New York: Simon and Schuster, 1977.


"A Man, a Plan, a Canal, Panama!" Available online at http://memory.loc.gov/ammem/today/sep07.html; website home page http://memory.loc.gov (accessed May 25, 2003).

"Panama Canal Treaty Information." Available online at ; website home page http://www.orbi.net (accessed May 25, 2003).