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The exception of claims cognizable under the Federal Tort Claims Act serves to preserve that act intact in its application to the Panama Canal and to restrict the scope of proposed section 17 to property-damage claims not cognizable under that act.
The Federal Tort Claims Act covers all claims for property loss or damage (or personal injury or death) caused by the negligent or wrongful act or omission of any employee while in the scope of his employment under circumstances where the United States if a private person would be liable, except that it does not apply to claims arising in a foreign country. Added section 17 will thus serve to cover tort claims arising in the Republic of Panama and the section is essential for that purpose, among others. Various operations are conducted by the Panama Canal in the Republic of Panama, particularly in the cities of Panama and Colon. Motor vehicles of the Transportation Division operate freely and necessarily in the Republic of Panama, and such operation would constitute the bulk of the claims arising in the Republic of Panama. It is thought essential that authority be had locally to settle such claims, and to achieve that end proposed section 17 is deemed far more appropriate than an extension of the Tort Claims Act with its provisions for resort to United States district courts.
Proposed section 17 will likewise serve to cover such claims as those for damages to crops or improvements of owners or occupants of the lands occasioned by construction or survey or similar operations of the Canal, such as damages to crops in the Republic of Panama as a result of test-boring operations connected with investigation of the means of increasing the capacity and security of the Canal (Public Law 280, 79th Con.), and damage to crops or improvements of agricultural licensees in the Canal Zone as a result of highway or other construction work.
Proposed section 17 will further serve to cover occasional claims for damages to or loss of personal property and effects of employees in the special and limited circumstances where such claims have heretofore been allowed, such for example as the loss of an employee's tools, while the employee is acting in the scope of his employment, upon the sinking or capsizing of floating equipment.
Claims of the classes above enumerated were neither numerous nor large even before the advent of the Tort Claims Act, and that act will now cover the greater portion of the claims heretofore settled under the appropriate language here sought to be supported by substantive legislation. In 1944 fewer than 20 claims were settled under the said appropriation language, with an aggregate amount of around $2,000, and a range in amount from $15 to $755.06. In 1945 some 50 claims were settled, with an aggregate amount of less than $1,000, and a range in amount of from $2 to $126.86. In 1946, some 32 claims were settled, amounting in the aggregate to $4,008.95 and ranging in amount from $4 to $2,409.67. Also in 1946, the Tort Claims Act having been enacted on August 2, some 10 claims were settled under the act, amounting in the aggregate to $312.39, and ranging in amount from $8.75 to $94.21.
If proposed section 17 is not enacted and if existing authority is excluded from the appropriation language, the claims above discussed, where not covered by the Tort Claims Act, will have to be submitted to the Congress. The amount of such claims would not ordinarily warrant such a course, and, in any event, such a course would not be appropriate from the standpoint of maintaining proper relations with the Republic of Panama and its nationals and residents.
SECTION 1 OF BILL, ADDING SECTION 18 OF TITLE 2, CANAL ZONE CODE
Section 1 of the bill would further add to the Canal Zone Code a section 18 of title 2, authorizing the Governor in the event of emergency because of disaster or calamity, occurring in the Canal Zone or occurring in the Republic of Panama in such circumstances as to constitute a hazard to health, safety, security, or property in the Canal Zone, to expend available funds and to utilize or furnish materials, supplies, equipment, and services for relief and protection. The section would provide support for the item in Canal appropriations, reading, "For expenses incident to any emergency arising because of calamity by flood, fire, pestilence, or like character not foreseen or otherwise provided for herein; * * *" which item first appeared in Canal appropriation language in 1916 (Sundry Civil Appropriations). The proposed section would enable the Governor to act immediately in the event of any disaster endangering life or disrupting Canal operation.
SECTION 2 OF BILL, AMENDING CHAPTER 4 OF TITLE 2, CANAL ZONE CODE
Section 2 of the bill would amend chapter 4 of title 2, Canal Zone Code, now entitled "Business Operations" and consisting of two sections Nos. 51 and 52, respectively, in such manner as to expand the designation of the chapter to "Business Operations; Sales and Services" and to include proposed sections Nos. 51 to 54, respectively.
Present sections 51 and 52 of title 2, which are limited in scope to the provision of materials, supplies, and services for vessels, are here quoted for convenient reference:
"CHAPTER 4.-BUSINESS OPERATIONS
"SECTION 51. PROVIDING MATERIALS, SUPPLIES, AND SERVICES FOR VESSELS.-The President is authorized to establish, maintain, and operate, through the Panama Railroad Company or otherwise, drydocks, repair shops, yards, docks, wharves, warehouses, storehouses, and other necessary facilities and appurtenances for the purpose of providing coal and other materials, labor, repairs, and supplies for vessels of the Government of the United States and, incidentally, for supplying such at reasonable prices to passing vessels, in accordance with appropriations hereby authorized to be made from time to time by Congress as a part of the maintenance and operation of the Panama Canal. (Aug. 24, 1912, ch. 390, sec. 6, 37 Stat. 563 (U. S. Code, title 48, sec. 1323).)
RECEIPTS FROM SUCH BUSINESS; APPROPRIATION FOR EXPENDITURE AND
"52. Moneys received from the conduct of the business referred to in the next preceding section, may be expended and reinvested for such purposes without being covered into the Treasury of the United States; and such moneys are hereby appropriated for such purposes, but all deposits of such funds shall be subject to the provisions of existing law relating to the deposit of other public funds of the United States, and any net profits accruing from such business shall annually be covered into the Treasury of the United States. Monthly reports of such receipts and expenditures shall be made to the President by the persons in charge, and annual reports shall be made to the Congress. (Aug. 24, 1912, ch. 390, sec. 6, 37 Stat. 563 (U. S. Code, title 48, sec. 1323).)”
The provisions in the appropriation language as contained in the budget for fiscal year 1948 bearing upon the subject matter of the proposed new chapter are as follows:
"For every expenditure requisite for and incident to the maintenance and operation, sanitation, and civil government of the Panama Canal and Canal Zone, and construction of additional facilities, including: ; printing
and binding; *, purchase (not to exceed thirty-five in the fiscal year 1948), and hire of passenger motor vehicles; * ; expenses incurred in assembling, assorting, storing, repairing, and selling material, machinery, and equipment heretofore or hereafter purchased or acquired for the construction of the Panama Canal which are unserviceable or, no longer needed, to be reimbursed from the proceeds of such sale;
"Maintenance and operation of the Panama Canal: * ; purchase, inspection, delivery, handling, and storing of materials, supplies, and equipment for issue to all departments of the Panama Canal, the Panama Railroad, other branches of the United States Government, and for authorized sales; * * * in all, $16,850,000, together with all moneys arising from the conduct of business operations authorized by the Panama Canal Act.
"Total Panama Canal, $24,226,000, to be available until expended.
"In addition to the foregoing sums there is hereby made available for the fiscal year 1948 for expenditures and reinvestment under the several heads of appropriation aforesaid, without being covered into the Treasury of the United States, and to remain available until expended, all moneys received by the Panama Canal during the fiscal year 1948 from services rendered or materials and supplies furnished to the United States, the Panama Railroad Company, the Canal Zone government, or to their employees, respectively, or to the Panama Government, from hotel and hospital supplies and services; from rentals, wharfage, and like serv
ices; from labor, materials, and supplies and other services furnished to vessels other than those passing through the Canal, and to others unable to obtain the same elsewhere; from the sale of scrap and other byproducts of manufacturing and shop operations; from the sale of obsolete and unserviceable materials, supplies, and equipment purchased or acquired for the operation, maintenance, protection, sanitation, and government of the Canal and Canal Zone; and any net profits accruing from such business to the Panama Canal shall annually be covered into the Treasury of the United States.
"There is also made available for the fiscal year 1948 for the operation, maintenance, and extension of waterworks, sewers, and pavements in the cities of Panama and Colon, to remain available until expended, the necessary portions of such sums as shall be paid during that fiscal year as water rentals or directly by the Government of Panama for such expenses.'
Proposed sections 51 to 54 combine, restate, and clarify the provisions contained in present sections 51 and 52 and those appearing from year to year in Panama Canal appropriation language relating to facilities maintained and auxiliary business activities established and conducted on the Isthmus in connection with, and essential to, the maintenance and operation, sanitation and civil government of the Panama Canal and Canal Zone, and relating to the use and disposition of moneys received from such operations. The Panama Canal as a whole is a large and important business organization of the Government. Since the beginning of operations the basic laws relating to its fiscal and administrative operations have consisted of the original Panama Canal Act of August 24, 1912 (now incorporated in the Canal Zone Code) and the various legislative provisions included from year to year in the annual appropriations acts. The intent of these provisions has been well understood and for many years now the operations have been carried on under interpretations which the Panama Canal believes pursue that intent and which have been understood by the various succeeding appropriations committees.
The time has now arrived, however, for a clear and comprehensive restatement of these provisions in general law. It is felt that the fundamental operating law of this organization should be so clear and explicit that no question can arise as to its intent and meaning. The proposed sections are intended to bring about that result. The sections do not change the methods which have actually been followed for years and which stood the test of time and experience in the administrative control of this large enterprise, the operation of which has been uniformly efficient and successful. Located as this organization is, far from the United States, and doing a large business subject to sudden changes and emergencies at any time in any of its many complex operations, the Congress has wisely given the organization the latitude that is needed and then held it responsible for results. Experience has confirmed the wisdom of the course followed and it is felt that no change should be made without the most careful thought on the part of the Congress. There follows a brief discussion of the proposed sections, individually.
PROPOSED SECTION 51 OF TITLE 2, CANAL ZONE CODE
Paragraph (a) of proposed section 51 of title 2, Canal Zone Code, may be said to consist of three parts, as follows:
First, an enumeration of the facilities and appurtenances authorized to be established, maintained, and operated; such enumeration being specific as to principal facilities and general as to others of lesser importance;
Second, an enumeration of the purposes for which the facilities and appurtenances may be maintained and operated, in terms of the character of materials, supplies, and services which they may provide;
And third, a general enumeration of the agencies, entities, and persons to whom such sales, services, supplies and materials may be made or furnished. The general purpose of paragraph (a) of proposed section 51 is to provide adequate support in substantive legislation for the continued maintenance and operation of the facilities and appurtenances which are necessary in connection with the Canal enterprise including the government of the Canal Zone.
The third part of paragraph (a), after authorizing the making or furnishing of sales, services, and supplies, to vessels and to Government agencies and employees, concludes with an authorization for the making or furnishing of sales, services, and supplies, generally, to any other entities or persons eligible to make or receive the same "under the laws prevailing at the time and the policies heretofore or hereafter adopted consistently with such laws." The
present restrictions upon these operations are to be found in the general treaty of friendship and cooperation concluded with the Republic of Panama on March 2. 1936, and in the accessory notes exchanged between the two Governments on that date. (Treaty Series No. 945; 53 Stat. 1807.) These restrictions include restrictions (a) as to the classes of persons to whom goods may be sold; (b) as to persons entitled to reside or occupy dwellings in the Canal Zone; (c) as to the conduct of private business enterprises in the Canal Zone; (d) as to hotel operations; (e) as to sales to vessels; and (f) as to the use and services of Canal Zone facilities such as hospitals, dispensaries, restaurants, lunchrooms, messes, laundries, and cleaning and pressing establishments.
In section 51 as proposed in H. R. 5587, Seventy-ninth Congress, the power in reference to establishment, maintenance, and operation of these facilities was placed in "the Governor of the Panama Canal under the general supervision of the President"; however, in section 51 as now proposed these powers are vested in the President as in present section 51, hereinbefore quoted, because these powers are believed more appropriate for placing in the President. In section 51 in H. R. 5587 the placing of these powers in the Governor was accomplished without any marked feeling of necessity therefor, and principally because there was had in view the then-current project of the President to divest his office of detailed powers and duties.
Paragraph (b) of proposed section 51 did not appear in H. R. 5587, but instead is an outgrowth of the current project for reincorporation of the Panama Railroad Company by act of Congress pursuant to the provisions of section 304 (b) of the Government Corporation Control Act. In the event the President elects to operate through the Panama Railroad Company any of the facilities and appurtenances referred to in sections 51 and 52 of title 2, theretofore maintained and operated by the Panama Canal, paragraph (a) authorizes the President to transfer to the Panama Railroad the personnel, property, records, funds, et cetera, of or appertaining to the said facility and its appurtenances. The proposed legislation to incorporate the Panama Railroad Company parallels, and coordinates with, section 51 in this bill by vesting in the corporation the necessary power to operate the facilities and appurtenances in the event of transfer, and by providing for the receipt of the transferred facilities and appurtenances, and for an appropriate increase in the amount of the capital stock of the corporation upon any such transfer.
PROPOSED SECTION 52 OF TITLE 2, CANAL ZONE CODE
Proposed section 52 of title 2, Canal Zone Code, would authorize, and ratify, the setting up as "business operations" of any of the facilities and appurtenances referred to in proposed section 51, in which case any net profits accruing therefrom would be required to be covered annually into the Treasury. This procedure has been and would continue to be followed in the case of facilities and appurtenances susceptible of being operated on a self-sustaining basis. Since inclusion in H. R. 5587, this section, like proposed section 51, has been revised so as to vest its powers in the President rather than in the Governor under the general supervision of the President.
PROPOSED SECTION 53 OF TITLE 2, CANAL ZONE CODE
Proposed section 53 of title 2, Canal Zone Code, restates and clarifies present section 52 and present appropriation language, in authorizing the expenditure or reinvestment under the several heads of appropriation for the Panama Canal, without coverage into the Treasury (except in the case of net profits of business operations), of the receipts of the operations authorized by proposed sections 51 and 52, and, in fact, of all receipts from sales made and services rendered with the exception of tolls, taxes, court fees, or fines. This section would support an appropriation of receipts for expenditure and reinvestment such as that contained in the current appropriation language and quoted in paragraph 21 hereof. Proposed section 53 would require, as in present section 52, monthly reports of such receipts and expenditures to the President, and annual reports to the Congress.
PROPOSED SECTION 54 OF TITLE 2, CANAL ZONE CODE
Proposed section 54 of title 2, Canal Zone Code, would render sections 51 to 53 inapplicable to operations of the Canal Zone postal service or to the operation of Panama Canal clubhouses. The operations of the Canal Zone postal service
are already provided for in substantive legislation in chapter 14 (secs. 271 to 281) of title 2, Canal Zone Code as restated by amendment in act June 13, 1940 (ch. 357, sec. 2, 54 Stat. 389; 48 U. S. Code, secs. 1323a-1323j). In excluding the operation of Panama Canal clubhouses from the operation of proposed sections 51 to 53 the purpose is to permit the continued conduct of those operations substantially as at present. The clubhouses were originally authorized by the Isthmian Canal Commission in 1905 for the purpose of providing recreational, religious, and welfare facilities for the employees. The buildings and structures were provided from appropriated funds but the operations were financed from^ membership dues and revenues. At the present time clubhouse operations are entirely self-supporting. The clubhouses are patronized mostly by employees and their families; however, their facilities are also available to members of the armed forces. Under a note accessory to the 1936 general treaty with the Republic of Panama the use of clubhouse facilities is limited to residents of the Canal Zone and to officers and employees of the Government and members of the armed forces and their families. Clubhouses are operated in all civilian towns and provide essential services such as restaurants; soda fountains; sale of tobacco; magazines, and toilet articles; moving pictures; bowling alleys; and assembly rooms. Three swimming pools and two bathing beaches are also operated.
Prior to the war appropriations were required to finance expansion of plant; however, the favorable net earnings in the past few years have provided funds for this purpose. An accounting for these funds is made monthly to the General Accounting Office and the transactions are subject to audit verification by representatives of the General Accounting Office, who review the accounts during their annual inspections in the Canal Zone. Except for a small cash working balance, the funds are deposited with the Treasurer of the United States. Although no appropriations are required, the program of clubhouse operations is included in the annual estimates submitted to the Director of the Bureau of the Budget.
The proviso in proposed section 54, like paragraph (b) of proposed section 51, is an outgrowth of the current project for reincorporation of the Panama Railroad Company by act of Congress; and the purpose of the proviso and the relationship of the proviso to the proposed legislation to incorporate the Panama Railroad Company are substantially identical to those hereinbefore outlined with reference to paragraph (b) of section 51.
SECTION 3 OF BILL, ADDING SECTION 85 OF TITLE 2, CANAL ZONE CODE Section 3 of the bill would add to the Canal Zone Code a section 85 of title 2, authorizing the Governor, within the limits of appropriations made therefor, to provide for the special training in the United States or elsewhere of any employee of the Panama Canal when in the judgment of the Governor such special training would be of benefit to the work of the Panama Canal, and would authorize, during such special training, the payment of the employee's regular compensation and his traveling and subsistence expenses.
Chapter 6 of title 2, Canal Zone Code, deals with employees, and article 1 thereof, wherein proposed section 85 would be placed deals with appointment and compensation of employees in general. While article 1 now consists of but three sections, numbered 81 to 83, respectively, an additional section numbered 84 has heretofore been allotted to a section unrelated to this bill and which is contained in bill H. R. 2817, Eightieth Congress.
* * *
Since 1939 Panama Canal appropriations have contained an item reading: "For every expenditure requisite for and incident to the maintenance including the following: *; not to exceed $2,000 for travel and subsistence expenses of the members of the police and fire forces of the Panama Canal incident to their special training in the United States;
The quoted item was inserted to authorize attendance by selected employees at any one of several police and fire department training schools in the United States and thus aid the local organization in keeping abreast of advanced scientific methods, a problem rendered difficult by the isolated location of the Isthmus. Proposed section 85 would support the quoted item but would also broaden the authorization to include, in the discretion of the Governor, other classes of special training where needed in order to enable the organization to modernize and improve its methods and procedures in the light of scientific and technical advancements in the United States.