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In one case, namely Canal Zone Code 5:836, the term “the Government of the Canal Zone” requires translation, by special amendment (sec. 27 of bill) to read “the Panama Canal Company."

In some four cases the term "Panama Canal" requires translation by special amendment to read “the Panama Canal Company"; see section 26 of bill.

ATTACHMENT B. LIST OF STATUTORY SECTIONS WHEREIN SECTION 3 OF DRAFT BILL

WOULD OPERATE TO TRANSLATE "GOVERNOR OF THE PANAMA CANAL" To READ “GOVERNOR OF THE CANAL ZONE"

CANAL ZONE CODE SECTIONS

2:6, appointment of Governor.
2:8, Army control in time of actual or imminent war.
2:12, regulation of vessels in national emergency.
2:13, as added ; disposition of useless papers.
2:15, as added; photographing in Canal Zone.
2:18, as added ; disaster relief.
2:44, as added; administration of oaths.
2:61, control by Governor of importations.
2:85, as added ; special training of employees.
2:125, injury compensation.
2:124, employees injured prior to September 7, 1916.
2:142, as added; persons returing after deportation.
2: 153, inspection of vessels.
2:157, same.
2:158, as amended; same.
2:201, keeping of domestic animals.
2:211, notaries public.
2:247, Governor as director and president of corporation.
2:261, pardons.
2:277, postal service.
2:303, revocable licenses covering lands.
2:342, regulations governing ferry at Pacific entrance.
2:351, purchase of supplies without advertising.
3:61, form of marriage licenses, etc.
3:224, licenses to foreign corporations.
3:230, same.
3:241, licenses to sell securities.
3:243, same.
3:244, same.
3:245, same.
3:512, deeds affecting lands elsewhere.
4:1701, appointment of public administrator.
4:1702, payment of claims due deceased or insane persons.
4:1763, transfer of insane patients to St. Elizabeths Hospital.
5:75, permitting habitual criminals to be at liberty.
5:76, same.
5:91, crimes by and against executive power.
5:477, permitting raffles for charity.
5:484, permitting interment of bodies.
5:506, permitting transportation of explosives.
5:566, powers re animal quarantine.
5:573, regulations for fire protection.
5:583, licensing use of marihuana.
5:606, regulating boxing exhibitions.
5:830, regulation of riding on labor train.
5:843, regulation of signs on C. Z. lands or structures.
5:845, signs warning against trespassing.
5:872, carrying of arms.
5:873, same.
5:874, same.
5:875, same.
5:876, as amended ; same.
6:522, re judgments of death,
6:523, same.
6:527, same.

6:529, same.
6:851, offering rewards for apprehension of offenders.
6:864, extradition.
6:865, same.
6:868, same.
6:870, same.
6:871, same.
6:882, same.
6:885, same.
6:904, transfer of prisoners between penal institutions.
6:906, as added ; aid to discharged prisoners.
7:38, U. S. District Attorney as adviser to Governor.
7:43, as amended; appointment of public defender.

UNITED STATES CODE SECTIONS

5: 793, administration of employees (injury compensation for Canal and Rail

road employees. 10: 1091c, selection of cadets at Military Academy. 10:1257b, transfers of property from Army. (13 : 201, census; already refers to the Governor of the Canal Zone.) 14:91, as amended 1919; duties re safety of naval vessels. 34: 551b, transfers of property from Navy. 34:1035a, recommendation re cadets at Naval Academy. 48:1372, payment of cash relief to certain employees. 50: 191, authority re anchorage and movement of vessels in national emergency. 50: 191b, same. 50:191c, same.

ACTS OF CONGRESS

October 25, 1949, ch. 705, authority re compensation of teachers, policemen and

firemen.

ATTACHMENT C. LIST OF STATUTORY SECTIONS WHEREIN SECTION 4 OF DRAFT BILL

WOULD OPERATE TO TRANSLATE “PANAMA RAILROAD COMPANY" To READ “PANAMA CANAL COMPANY”.

CANAL ZONE CODE SECTIONS

2:83, deduction from compensation of amounts due for supplies or services. 2: 84, as added; payment for accumulated or accrued leave upon death, Article 3 heading preceding section 121. 2:121, injury compensation. 2:122, same. 2:123, same. "Chapter 12.–Panama Railroad Company; Railroads”; the chapter heading. 2: 221, annual payment by company to U. S. 2: 222, as amended; carriage of marine and fire insurance, etc. 2: 223, contracts between company and departments of Government. 2:224, hours of work for telegraph operators, etc. (2: 244, refers to the Panama Railroad as a carrier, and requires no change.) “Article 3.-Panama Railroad Company Act”; the article heading. (2:302 refers to the company; however, the conveyance authorized by the sec

tion has long since been executed.) 3:1291, nonapplicability of certain employment sections. 4:1704, claims due deceased or insane persons. 4:1747, guardianship of estates of certain persons employed by the company. 5:91, crimes by and against executive power. 5:97, officer acting for company where pecuniarily interested. 5: 601, crimes re revenues. 5:623, same. 5: 830, nonemployees riding on labor train. 5: $14, trespassing on property of company. 7:34, jurors employed by company. 7:35, same.

UNITED STATES CODE SECTIONS

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5:30a, annual leave of company employees. 5:30f, sick leave of company employees. 5: 61e, commuting leave of company employees. (6:698, civil service retirement; reference to company employees is nonprospec.

tive and therefore not changed.) 5: 715, retirement; automatic separation of company employees. (5: 736b, retirement reference to company employees is nonprospective and

therefore not changed.) (5:-736c, retirement reference to company employees is nonprospective.) 5: 740, retirement coverage of company employees. 5: 791, employees (injury) compensation; releasing liability of the company. 5: 793, injury compensation of company employees. 5:902, applicability of Pay Act provisions to vessel employees of company. 5:946, compensation of vessel employees of company. 5:1082, exemption of company from Classification Act of 1949. 8: 603, citizenship of children of employees. 10: 1091c, children of employees as cadets at Military Academy. 28: 2680 (m), as added 1949; exemption of activities of company from Federal

Tort Claims Procedure. 31:846, listing as wholly owned Government corporation in Government Cor

poration Control Act. 34: 1035a, children of employees as cadets at Naval Academy. 48: 1372, inclusion of service with company as basis for cash relief to certain

Canal employees.

Recognizing the fact that Congress may soon adjourn, and the difficulties of getting a lengthy bill through the House, on June 14 the Chair wrote to the Honorable Frank Pace, Secretary of the Army, the Honorable Frederick Lawton, Director of the Bureau of the Budget, and the Honorable Louis Johnson, the Secretary of National Defense the following letter:

JUNE 14, 1950. DEAR MR. SECRETARY: H. R. 8677, the text of which was transmitted by the Secretary of Defense to the Speaker of the House on May 25, 1950, appears to embody numerous provisions which are not specifically covered in the report of the Bureau of the Budget on Panama Canal organization.

While the codification of law covered by these provisions may be desirable, extensive consideration of them by the Subcommittee on Panama Canal and by the Congress may delay or preclude passage at this session of the provisions specifically covered by the Bureau of the Budget report and the President's recommendations.

Under these circumstances, the subcommittee may wish to consider severing these codifying provisions and devote its attention exclusively to those provisions covered specifically by the Bureau of the Budget report.

This letter is to inquire whether, if the committee is so disposed, the Defense Department and the Bureau of the Budget would have strong objection to this procedure. It is requested that reply hereto be expedited in order that the subcommittee's procedure on the subject may be promptly arranged, subcommittee hearings being tentatively planned for June 26. Very sincerely,

DONALD L. O'TOOLE,

Chairman, Subcommittee on the Panama Canal. The following report was received from the Executive Office of the President, Bureau of the Budget, under date of June 19:

DEAR MR. O'TOOLE. Your letter of June 14, 1950, with respect to H. R. 8677 is very much appreciated. As you have indicated, the bill, the text of which was transmitted by the Secertary of Defense to the Speaker of the House on May 25, 1950, contains a number of provisions which are not directly related to the President's recommendations with respect to the organization of the Panama Canal which were transmitted to the Congress January 31, 1950. These provisions have as their principal purpose the clarification and codification of existing law and are believed to be desirable.

If, however, your subcommittee believes that consideration of these codifying provisions would impede or delay action on the President's specific recommendations, they could be deleted from H. R. 8677 and presented separately. The Bureau of the Budget would have no objection, if the subcommittee desires to sever the codifying provisions from the bill now under consideration. The substance of the President's recommendations is covered by sections 1, 2, 3, 4, 5, 16, 17, 18, 19, 20, 21, 22, 24, 25, 26, 27, 28, and 29 of H. R. 8677. Sincerely yours,

F. J. LAWTON, Director. I will read the sections again, if you want to write them on the cover. These are the acceptable sections: 1, 2, 3, 4, 5, 16, 17, 18, 19, 20, 21, 22, 24, 25, 26, 27, 28, and 29.

H. R. 8677 was introduced by the Honorable Edward J. Hart, chairman of the Committee on Merchant Marine and Fisheries.

As the first witness I would like to call on the Governor of the Panama Canal, the Honorable Francis K. Newcomer.

Governor Newcomer. Yes, sir.

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STATEMENT OF HON. FRANCIS K. NEWCOMER, GOVERNOR OF THE

PANAMA CANAL AND PRESIDENT OF THE PANAMA RAILWAY COMPANY

Mr. O'TOOLE. At this time, Governor, I would like to express to you, on behalf of the committee, our sincere appreciation for the courtesy and the cooperation that was shown to the committee on its visit last November to the Canal Zone. They were among the most memorable days of our lives, and we appreciate very greatly the courtesies and the cooperation shown to us. On behalf of the committee we extend to Mrs. Newcomer our best.

Governor NEWCOMER. Thank you, Mr. Chairman. It was a privilege to have you with us, and we hope that you can visit us again.

Mr. O'TOOLE. You may proceed, Governor.

Governor NEWCOMER. Mr. Chairman and members of the committee, I have prepared a general statement which is a brief explanation of the purposes of this bill which I will be glad to read if you would care to have it read. Otherwise I will file it for the record. It is about six pages in length.

Mr. O'TOOLE. You may proceed as you wish.

Governor NEWCOMER. 1. The bill, H. R. 8677, was prepared under my supervision at the request of the Secretary of the Army, who, in turn, had been requested by the President to initiate the action necessary to implement recommendations 1 and 3 contained in the report and recommendations of the Bureau of the Budget with respect to the organization and operations of the Panama Canal and Panama Railroad Company. That report, as transmitted by the President, appears, of course, in House Document No. 460.

2. The report of the Bureau of the Budget contains not only the recommendations of the Bureau, and its reasons and arguments in support of such recommendations, but also a comprehensive statement of the background and origin of the Budget Bureau study which produced the report. It would appear not to serve any useful purpose to repeat or duplicate, in this statement, material which is contained in that report.

3. Upon the completion of this bill, in draft form, it was transmitted to the Secretary of the Army by my letter of April 24, 1950. That

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letter consisted of a rather extensive statement in explanation of the provisions of the bill, particularly by way of a detailed discussion and explanation of individual sections. 'I am assuming that this committee has available copies of that letter, and I shall therefore endeavor so far as possible to avoid duplication of that material in this statement.

4. The over-all purpose of the bill is to implement recommendations 1 and 3 of the Budget Bureau report, which recommendations contemplate, in broad terms, the transfer to the Panama Railroad Company of all of the functions of the Panama Canal except those relating to government, health, and sanitation; the change of the corporation's name to Panama Canal Company; the change of the name of the agency, the Panama Canal, to Canal Zone government; and the vesting in the corporation of authority to fix the rates of tolls for the use of the Panama Canal. The sections of the bill are arranged in numerical order by title and section of the Canal Zone Code.

CATEGORIES OF PROVISIONS

5. The provisions of the bill may be said to be divisible into three main categories, namely

(1) Provisions designed to adapt the present corporate charter of the Panama Railroad Company to the altered and enlarged mission of the corporation;

(2) provisions designed to adapt the other statutes relative to the Canal and Railroad to the new distribution of functions as between the "agency" and the corporation; and

(3) provisions designed to amend existing sections respecting tolls, for the purposes of vesting in the corporation the authority to fix tolls and of prescribing the bases of, or formula for, tolls.

ADAPTATION OF PRESENT CORPORATE CHARTER

6. Creation of the corporate entity of the Panama Canal Company is to be accomplished by amendment of the existing charter of the Panama Railroad Company (Public Law 808, 80th Cong.), and changing the name to the Panama Canal Company, which will then embrace the functions of the combined organizations of what are now known as the Panama Canal and the Panama Railroad Company, except for the government and health functions. The agencies now known as the Panama Canal and the Panama Railroad Company will cease to exist and in their place will be the Panama Canal Company and the Canal Zone government under the direction of the Governor of the Canal Zone, who will also be president of the Panama Canal Company. The drafting of this legislation has required a careful study of all the statutes applicable to the Panama Canal and Canal Zone and other agencies involved. The amendments to the charter of the Panama Railroad Company consist principally of

(1) The change in the name of the corporation (sec. 17 of bill);

(2) the addition, in the statement of the purposes for which the corporation was created, of the principal new purpose of maintaining and operating the Panama Canal (sec. 17 of bill);

(3) the restatement of the charter provision which obligates the corporation to pay interest, at least annually, on the net direct investment of the Government in the corporation, in order to relax the

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