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At the very core of Washington's diplomatic and political consciousness is an issue-the Panama Canal-that is providing a severe and illuminating test of America's post-Vietnam global intentions and of the U.S. government's post-Watergate capacity to compose a responsible foreign policy. The issue centers on the effort, conducted intermittently for the 11 years since the Panamanian "flag riots" of 1964, to negotiate a new treaty replacing the Hay-Bunau-Varilla Treaty of 1903. Signed for Panama by a French commission agent at Secretary of State John Hay's home two hours before the arrival of the official commission Panama had sent to negotiate, that agreement granted the United States "in perpetuity the use, occupation and control" of a ten-mile-wide zone to build, run and protect a canal. "We shall have a Treaty," Hay said, "vastly advantageous to the United States, and we must confess, not so advantageous to Panama."