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MONDAY, JUNE 7, 1948

UNITED STATES SENATE,
SUBCOMMITTEE OF THE COMMITTEE ON ARMED SERVICES,

Washington, D.C. The subcommittee met, pursuant to notice, at 9:30 a. m. in room 212, Senate Office Building, Senator Wayne Morse (chairman of the subcommittee) presiding.

Present: Senator Morse.
Senator MORSE. The committee will come to order.

The subcommittee, composed of Senator Baldwin, of Connecticut; Senator Kilgore, of West Virginia; and Senator Morse, of Oregon, has called this meeting for the consideration of S. 2003.

(S. 2003 is as follows:)

[S. 2003, 80th Cong., 2d sess.)

A BILL To amend the Canal Zone Code, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That title 2 of the Canal Zone Code is amended by adding in chapter 1 thereof three new sections numbered 16 to 18, respectively, and reading as follows:

“16. ACQUISITION OR CONSTRUCTION OF STRUCTURES, EQUIPMENT, AND IMPROVEMENTS.—The Governor of the Panama Canal is authorized, within the limits of available funds, to purchase or otherwise acquire, construct, repair, replace, alter, or enlarge any building, structure, equipment, or other improvement, when in his judgment such action is necessary for the operation, maintenance, sanitation, or government of the Panama Canal or Canal Zone.

“17. CLAIMS FOR LOSSES OF OR DAMAGES TO PROPERTY.-Authority is hereby conferred upon the Governor of the Panama Canal, or his designee for the purpose, to consider, adjust, determine, and settle claims for losses of or damages to property arising from the conduct by the Panama Canal of authorized business operations, or arising from the maintenance, operation, improvement, or enlargement of capacity of the Panama Canal or from the sanitation or civil government of the Canal Zone: Provided, however, That this section shall not apply to claims cognizable either under section 10 of this title, as amended, or under the Federal Tort Claims Act.

"Any award made to any claimant pursuant to this section shall be payable out of any moneys appropriated or made available for the maintenance and operation, sanitation, and civil government of the Panama Canal and Canal Zone; and the acceptance by the claimant of any such award shall be final and conclusive on the claimant, and shall constitute a complete release by the claimant of such claim against the United States.

"18. DISASTER RELIEF.—In the event of emergency arising because of disaster or calamity by flood, hurricane, earthquake, fire, pestilence, or like cause, not foreseen or otherwise provided for, and occurring in the Canal Zone, or occurring in the Republic of Panama in such circumstances as to constitute an actual or potential hazard to health, safety, security or property in the Canal Zone, the Governor of the Panama Canal is authorized to expend available funds and to utilize or furnish materials, supplies, equipment, and services for relief, assistance, and protection."

SEC. 2. Chapter 4 of title 2, Canal Zone Code, which chapter is now entitled “Business Operations" and consists of sections 51 and 52 of said title 2, is amended to read as follows:

“CHAPTER 4-BUSINESS OPERATIONS; SALES AND SERVICES

Sec.

Sec. “51. Authorization for establishment and 53. Receipts from such operations, sales, and operation of various facilities.

services; expenditure and reinvest52. Organization and conduct of any such

ment; reports. facilities by Panama Canal as 'busi- 54. Exception of Canal Zone Postal Service ness operations.'

and Panama Canal clubhouse operations; authorization for conducting clubhouse operations through Panama

Railroad Company. “SEC. 51. AUTHORIZATION FOR ESTABLISHMENT AND OPERATION OF VARIOUS FACILITIES.—(a) In connection with the opertaion, maintenance, sanitation, and civil government of the Panama Canal and Canal Zone, the President is authorized to establish, maintain, and operate, through the Panama Railroad Company or otherwise, docks, wharves, piers, drydocks, shops, yards, marine railways, salvage and towing facilities, dredging facilities, construction facilities, fuel-handling facilities, motor-transportation facilities, civil air terminals, power systems, water and sewer systems, warehouses, storehouses, hotel, a printing plant, living quarters and other buildings, and any other necessary facilities and appurtenances, for the purpose of providing, at reasonable prices, fuel, electric power, water, equipment, supplies and materials generally, repairs, labor, transportation, quarters, space in buildings, wharf and like services, hotel services, and services generally, and for the purpose of assembling, assorting, storing, repairing, and selling scrap and other byproducts of manufacturing and shop operations, and materials, supplies, and equipment purchased or acquired for the construction, improvement, operation, maintenance, sanitation, or civil government of the Panama Canal or Canal Zone and which are obsolete, unserviceable, or no longer needed. The sales, services, equipment, supplies, and materials hereinbefore referred to may be made or furnished to vessels, to agencies of the Government of the United States, to the Panama Railroad Company, to employees of the Government of the United States or of the Panama Railroad Company, and to any other governments, agencies, persons, corporations, conpanies, or associations eligible to make or receive such purchases, services, supplies, or materials under the laws prevailing at the time and the policies heretofore or hereafter adopted consistently with such laws.

“(b) In the event the President has heretofore elected, or shall at any time hereafter elect, to maintain and operate through the Panama Railroad Company any of the facilities and appurtenances referred to in this section or section 52 of this title, theretofore maintained and operated by the Panama Canal, the President is authorized to transfer to the Panama Railroad Company all of the personnel, property, records, funds, assets, contracts, obligations, and liabilities of or appertaining to the said facility and its appurtenances, and such transfer shall be deemed to have been accepted and assumed by the Panama Railroad Company without the necessity of any act or acts on the part of the said corporation except as otherwise stipulated in provisions of law applicable to the said corporation.

"52. ORGANIZATION AND CONDUCT OF ANY SUCH FACILITIES BY PANAMA CANAL AS 'BUSINESS OPERATIONS'.--The President may cause any of the facilities and appurtenances referred to in paragraph (a) of section 51 of this title to be organized and conducted by the Panama Canal as 'business operations', and in such case any net profit accruing from the conduct of such business operations shall annually be covered into the Treasury of the United States,

"53. RECEIPTS FROM Such OPERATIONS, SALES, AND SERVICES ; EXPENDITURE AND REINVESTMENT; REPORTS.—The moneys received by the Panama Canal from the operations authorized by sections 51 and 52 of this title, and from pilotage, quarantine, immigration, and like services, from rentals, from damage claims, and from any and all other sales made and services rendered, but not including tolls, taxes, court fees, or fines, may be expended or reinvested under the several heads of appropriation for the Panama Canal, without being covered into the Treasury of the United States except as provided in section 52 of this title; but, except as otherwise provided in this section, such funds shall be subject to the provisions of law relating to public funds of the United States. Monthly reports of such receipts and expenditures shall be made to the President and annual reports shall be made to the Congress.

"54. EXCEPTION OF CANAL ZONE POSTAL SERVICE AND PANAMA CANAL CLUBHOUSE OPERATIONS; AUTHORIZATION FOR CONDUCTING CLUBHOUSE OPERATIONS THROUGH PANAMA RAILROAD COMPANY.—The provisions of sections 51 to 53 of this title shall have no application to operations of the Canal Zone Postal Service or to the operation of Panama Canal clubhouse: Provided, however, That the President may at any time elect to maintain and operate through the Panama Railroad Company any or all of the facilities and appurtenances now maintained and operated through Panama Canal clubhouses; and in the event of such election the President is authorized to transfer to the Panama Railroad Company all of the personnel, property, records, funds, assets, contracts, obligations, and liabilities of or appertaining to the affected facility and its appurtenances, and such transfer shall be deemed to have been accepted and assumed by the Panama Railroad Company without the necessity of any act or acts on the part of the said corporation except as otherwise stipulated in provisions of law applicable to the said corporation."

SEC. 3. Title 2 of the Canal Zone Code is amended by adding in article 1 of chapter 6 thereof a new section numbered 85 and reading as follows:

"85. SPECIAL TRAINING OF EMPLOYEES.—The Governor of the Panama Canal is authorized, 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 will be of benefit to the work of the Panama Canal. During the period of such special training the employee may be paid his regular compensation and his travel expenses in accordance with the Standardized Government Travel Regulations and the Subsistence Expense Act of 1926, as amended.”

SEC. 4. Title 2 of the Canal Zone Code is amended by adding in article 3 of chapter 6 thereof a new section numbered 124 and reading as follows:

“124. EMPLOYEES INJURED PRIOR TO SEPTEMBER 7, 1916; APPLIANCES; LUMPSUM PAYMENTS.—The Governor of the Panama Canal is authorized to purchase artificial limbs or other appliances for persons who were injured in the service of the Isthmian Canal Commission or of the Panama Canal prior to September 7, 1916, and to make payments in lump sums not exceeding the amounts authorized by the Act of September 7, 1916, as amended (U. S. C., title 5, ch. 15), to alien cripples who are now a charge upon the Panama Canal by reason of injuries sustained while employed in the construction of the Panama Canal.”

Sec. 5. Title 6 of the Canal Zone Code is amended by adding in chapter 27 thereof a new section numbered 906 and reading as follows:

"906. CLOTHING AND MONEY FOR DISCHARGED PRISONERS.—On the discharge of a prisoner from any penal institution in the Canal Zone such prisoner may, in the discretion of the Governor of the Panama Canal, be furnished with such suitable clothing as may be authorized by the Governor, and an amount of money not exceeding $20.”

Senator MORSE. The chairman will mark for purposes of identification, and receive in the record as exhibit 1 in this hearing, a letter dated January 14, 1948, addressed to Hon. Chan Gurney, chairman of the Senate Armed Services Committee of the United States Senate, and signed by Kenneth C. Royall, Secretary of the Army. The letter will speak for itself. (Exhibit 1 is as follows:)

DEPARTMENT OF THE ARMY,

Washington, D. C., January 14, 1948. Hon. CHAN GURNEY, Committee on Armed Services,

United States Senate, Washington, D. C. DEAR SENATOR GURNEY: I submit herewith draft of bill to amend the Canal Zone Code, and for other purposes, designed to supply authority in substantive legislation to support Panama Canal appropriations and prepared pursuant to Bureau of the Budget Bulletin No. 1946–47:26, dated February 24, 1947. The following explanatory statement has been made by the Governor of the ?ma Canal under whose supervision the draft of bill was prepared.

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