Summary: Unresolved issues relating to the implementation of the Panama Canal Treaty include: the form of U.S. Government organization that the proposed Panama Canal Commission would take; provision for external audits; transfer of property to Panama, recovery of U.S. investment in the Canal, depreciation policy, and future capital outlays; treatment of interest currently paid to the Treasury on the interest bearing investment of the United States; treaty payments to the Republic of Panama; resolution of Panama's debt for past services; increased benefit payments to employees for repatriations, early retirements, and relocations; and the impact of the treaty on toll rates. A fundamental economic aspect of the treaty that needs to be addressed by the Congress is the question of whether the investment of the United States should be recovered over the life of the treaty. This decision will have a profound effect on the financial operations of the new organization, the toll rates, and the taxpayer. It is doubtful that toll rates could be successfully raised to recover both the new payments to Panama and increased depreciation charges designed to recover the past U.S. investment in the Canal. Panama's debt for past services, which is not mentioned in the treaty, should be resolved either through a lump sum payment to the United States or as a credit against U.S. treaty payments to Panama.
