so they will have before them and they may know the relation between the Panama Canal and the Panama Canal Railroad. As I recall, it is the old railroad that they had there before the days of the Panama Canal, but it was entirely Government-owned and is entirely Government-owned and operated now by the Government. Mr. BURDICK. The Railroad Company was originally established by an act of the Legislature of the State of New York in 1849 as a private enterprise. The French Canal Company acquired the stock of that railroad so that it could use the railroad in its attempt to build a trans-Isthmian canal. When the United States acquired the rights to the Canal Zone in 1904, they took over with those rights most all of the stock of the Panama Railroad Company. During the next year the Government acquired the remaining stock of that railroad. It operated under this charter until June 30 of last year. During the last session of the Eightieth Congress, the Company was reincorporated under Federal charter. It operates as an adjunct to the Canal. Many of the business activities that would be necessary for the Panama Canal to conduct are conducted through this corporation. The CHAIRMAN. It operates these steamers that run down Ancon and Cristobal. Mr. BURDICK. Yes, sir. It operates the railroad across the Isthmus, the harbor-terminal facilities, the telephone system, the two hotels that are maintained by the Government in the Canal Zone. The CHAIRMAN. That is the Tivoli? Mr. BURDICK. The Tivoli on the Pacific side and the Washington on the Atlantic side. It operates the commissary division which handles the food and general merchandise required by the employees and their dependents. It operates the coaling plants and a New York office and the steamship line. The CHAIRMAN. One other thing that I would try to bring out. It may have been brought to the knowledge of the committee, that frequently if you read old reports and old committee hearings, you see the constant reference to "silver employees" and "gold employees." As I understand, that separate designation has been now abolished and we no longer have the gold employees and the silver employees. I recall on my first visit to Panama, wherever there were pay windows, there was one for the silver employees and another for the gold employees. That, I understand, has been abolished. Mr. BURDICK. That has been abolished in recent years. The terms, of course, originally arose because the natives, largely of the commonlabor class, that is the natives in the Tropics, had been accustomed to being paid in silver, and for a while we continued to pay them in silver, whereas the American employees at that time were frequently paid in gold. So those terms naturally attached to the rolls there, one to the common labor and the other to the skilled and technical people. Those have all been abolished and we have one roll now, and are graded according to the duties and responsibilities of the various positions. The CHAIRMAN. I am today extending in the record an article appearing in Pacific Marine Review entitled, "A Sea Level Canal, Panama Canal," by Brig. Gen. Hans Kramer, United States Army, retired. (The article referred to appears in the Congressional Record of March 29, 1949.) The CHAIRMAN. That article deals with the proposed sea-level canal, as I recall, and Terminal Lake Canal, both arising out of the effect that the atomic bomb or anything of that kind may have upon the operation of the Panama Canal and its essentiality for defense purposes. Calling the attention of the committee to the fact that Mr. Roosevelt went there before the Panama Canal was finished and came back, and I saw a copy of a letter from him to his mother saying that everybody ought to see it because it is a miracle of the world; that the Panama Canal is equal to the Towers of Babel or the Pyramids. That is really true, as I believe my friend Mr. Miller who was there last year will testify. That is all the questions I intended to ask. Mr. BARRETT. Mr. Chairman, I would like to ask Mr. Burdick, what is the reason the Government owns and continues to operate the two respective hotels which you have just mentioned? Mr. BURDICK. It is necessary, we think, and the Government has from the very beginning, to maintain hotels within the Canal Zone that are at least adequate to accommodate all persons going down there on business with the Canal, including Government officials. There have not been adequate facilities in the Republic of Panama to provide for that service. I might say that the 1936 treaty would require us to go out of this business as adequate hotel facilities become available in the adjoining city of Panama. Mr. THOMPSON. Mr. Chairman. I wonder, Mr. Burdick, are there any private enterprises within the Canal Zone, or are they all Government-owned? Mr. BURDICK. There are none, with the exception of some cable companies and shipping companies and fuel-oil companies that are closely connected with the transiting of vessels. Other businesses that were not in there at the time this treaty was negotiated are not permitted to be established there in the future. Mr. THOMPSON. No stores, no eating places, or anything of that kind? Mr. BURDICK. No, sir; those are operated by governmental agencies. Mr. O'TOOLE. Is the administration of decedents' estates attended to by a surrogate, or is that attended to by a public administrator? Mr. BURDICK. By the public administrator and the United States District Court for the District of Canal Zone. Mr. O'TOOLE. Are there any other questions? (There was no response.) Mr. O'TOOLE. You may preceed, Mr. Burdick. Mr. BURDICK. Section 2 of the bill adds sections 181 and 182 to title 2 of the Canal Zone Code. The present law with respect to alcoholic beverages in the Canal Zone is the act of June 19, 1934— 48 U. S. C. 1314b to 1314d. The present regulations of the President under the authority of the act are contained in Executive Oder No. 6997 of March 25, 1935-35 CFR 6.1 to 6.11. At the time of the preparation of the Canal Zone Code a chapter heading, "Chapter 9. Intoxicating Liquors," and necessary space were allotted for insertion of this legislation. However, the legislation was originally passed on the same day as the code and its insertion was consequently impossible. This proposed measure would carry this legislation into the code, which is especially desirable because of the project necessary to be pursued in the future for the authorization and printing of a second edition of the Canal Zone Code, the first edition being exhausted. To that end formal changes but no substantive changes whatsoever have been made. The changes include the addition of suitable headlines for the respective sections, and in the section 182, respecting violations, minor changes have placed it in a form which has been substantially standardized. The proposed measure would omit as effectuated and temporary sections 3 and 4 of the act-48 U. S. C., 1314d and 1314e-which repealed prior laws and provided an effective date. Section 3 of the bill would amend section 303 of title 2 of the Canal Zone Code. Section 303, originally derived from an act of February 27, 1909, deals with the leasing of public lands in the Canal Zone for agricultural purposes, that is, for settlement and cultivation. The Canal Zone was thrown open to agriculture in 1921; however, no leases were ever issued under that section because of the view then current that the section had been rendered inoperative by Executive Order No. 1656 of December 5, 1912, declaring all lands necessary for Canal purposes. Instead, revocable licenses to agricultural tracts were issued. These licenses included a provision that if at any time it should become necessary for the United States to use the lands, it should have the right to do so without further compensation to the licensee than the reasonable value of the improvements made by him upon such tract, said value to be determined in such manner as the Governor might direct. In 1934 there was inaugurated, in the interests of the sanitary protection of the Canal Zone, a policy of gradual depopulation of the agricultural areas. This is the present policy, and is confirmed and made mandatory by an exchange of notes with Panama on March 2, 1936, accessory to the treaty of that date. There are today approximately 500 of these licenses outstanding, containing the indemnity provision. This section would, by its proviso, ratify and confirm these existing licenses in accordance with the terms and conditions applicable to them, including provision for compensation for improvements. It would thus enable the Canal to fulfill its commitment to these licensees. This section would also eliminate confusion and the possibility of future litigation which have arisen out of the case of Hele v. United States (103 Court of Claims 474), which is referred to in the memorandum accompanying the letter of February 23, 1949, from the Secretary of the Army to the chairman of this committee. Mr. O'TOOLE. At this point we will insert in the record the letter from Kenneth C. Royall, the Secretary of the Army, to the chairman of the Committee on Merchant Marine and Fisheries, dated February 23, 1949. (The letter referred to is as follows:) Hon. SCHUYLER OTIS BLAND, DEPARTMENT OF THE ARMY, Washington, D. C., February 23, 1949. Chairman, Committee on Merchant Marine and Fisheries, DEAR MR. BLAND: I submit herewith a draft of bill to amend the Canal Zone Code and for other purposes, which would add or amend 13 sections of the Canal Zone Code, as part of the continuing effort to revise and modernize the Canal Zone Code. The bill was prepared under the general supervision of the Governor of the Panama Canal. The purposes of the various amendments proposed are explained in the attached memorandum of the Chief of Office, The Panama Canal. I concur in the views and recommendations of the Governor of the Panama Canal as stated in that memorandum. I am advised by the Director of the Bureau of the Budget that there is no objection to the submission of this letter and its accompanying memorandum and draft of bill to the Congress for its consideration. Memorandum for the Secretary of the Army: Enclosed for submission to the Congress is draft of a proposed bill to amend the Canal Zone Code and for other purposes. The bill is composed of several varied provisions which have been discovered by experience to be desirable and necessary as a part of the continuing effort to improve the Canal Zone Code. The provisions of the bill will not involve the expenditure of any additional funds. While section 84 of title 2 of the Canal Zone Code, as proposed to be added by section 1 of the bill, will require some administrative work, the amount will be negligible and, it is believed, will be more than offset by the diminution of the work of the Public Administrator for the Canal Zone effected in the improvement by subsequent sections of the bill of the procedures for the handling of small estates of decedents. The nine sections of the bill are hereinafter severally discussed. SECTION 1 Section 1 of the bill would add section 84 to title 2 of the Canal Zone Code, to provide for the order of precedence for lump-sum payments in commutation of leave upon the death of an employee of the Panama Canal or the Panama Railroad Company on the Isthmus of Panama. The new section would make substantially the same provision for employees of the Canal and Railroad on the Isthmus of Panama as that now provided for other employees of the Government by section 2 of the act of December 21, 1944 (5 U. S. C. 61c). The only change in existing practices effected by the section would be that payments in commutation of leave due a deceased employee would be made to a beneficiary designated by the employee instead of falling into the employee's estate for administration with his other property. SECTION 2 Section 2 of the bill, adding sections 181 and 182 of title 2 of the Canal Zone Code, would carry into the code existing provisions of law contained in the act of June 19, 1934, authorizing the President to make regulations governing the manufacture, sale, and importation or exportation of alcoholic beverages in the Canal Zone. At the time of the preparation of the Canal Zone Code, a chapter heading was included for the insertion of this legislation but, since the act was passed on the same day the code was adopted, its insertion into the code as originally adopted was impossible. SECTION 3 Section 3 of the bill would amend section 303 of title 2, authorizing the leasing of public lands in the Canal Zone, so as to authorize issuance of revocable licenses covering the use of lands situated outside of town sites in the Canal Zone and ratify licenses heretofore issued by the Governor. This amendment is necessary because of a holding of the Court of Claims in Hele v. United States (100 Ct. Cls. 289) to the effect that revocable licenses heretofore issued covering the use of land in the Canal Zone must be regarded as leases under section 303 of title 2 of the Canal Zone Code and that special provisions in such revocable licenses concerning the payment of compensation to licensees on termination of such licenses must give way to other provisions for determining the amount of com pensation payable on termination of a lease under section 303 when the lease is canceled prior to the expiration of the term. Revocable licenses, containing special provisions in regard to the payment of compensation to the licensee on termination of the license, have been issued over a long period of years and to disregard such provisions on the theory that the licenses must be treated as leases under the terms of section 303 would be inequitable both to the Government and to the licensees. SECTION 4 Section 4 of the bill would amend section 225 of title 3 of the Canal Zone Code so as to require foreign corporations licensed to do business in the Canal Zone to keep current the designation of a process agent and to maintain continuing compliance with other provisions of the code applicable to foreign corporations, in order to continue to do business in the Canal Zone. Under existing provisions of law there is no requirement for the designation of a new process agent in the event a process agent originally designated has died or removed from the Canal Zone, and after the original qualification of the corporation, there is no requirement of any further act on the part of the corporation, other than the payment of an annual license fee, as a condition to the continued doing of business in the Canal Zone. SECTION 5 Section 5 of the bill would amend title 4 of the Canal Zone Code by inserting a new chapter embracing sections 1470a to 1470f, the chapter being entitled "Disposition of Estates Without Administration." The new chapter is a substitute for sections 1467 and 1468 of title 4, which sections would be repealed by section 9 of the bill. Sections 1467 and 1468, relating to the administration of small estates, were originally derived from sections 1469 and 1470 of the California Code of Civil Procedure. In California these two sections have been superseded by sections 640 to 646 of the California Probate Code, and the new sections proposed by section 5 of the bill are derived from the present California law. The proposed sections would authorize an application to set aside for the family of a decedent an estate of $1,000 or less concurrently with the original petition for probate or for letters of administration. Under the present law, proceedings for setting aside small estates may be commenced only after a return of inventory of the estate, following the hearing on the original petition for probate or administration, thus requiring two petitions, two notices, and two hearings before a small estate may be set aside. The proposed legislation would also permit the setting aside of a small estate in all cases where a decedent leaves a surviving spouse or minor child without being limited, as at the present time to cases of the death of a husband leaving a wife or a minor child or the death of a widow leaving a minor child. SECTION 6 Section 6 of the bill would amend section 1703 of title of the Canal Zone Code so as to authorize the Public Administrator to pay over to the person entitled thereto without regular administration the assets of an estate less than $250 in value. The present law authorizes such procedure in cases where the estate is less than $150 in value. This section would also prescribe the order of distribution of the estate so as to accord with the plan provided by sections 1470a to 1470f of title 4, which would be added by section 5 of the bill. SECTION 7 Section 7 of the bill would add section 573 of title 5 of the Canal Zone Code, authorizing the Governor of the Panama Canal to make regulations for prevention of and protection against fires in the Canal Zone and would make it a misdemeanor to violate any such regulations. Heretofore, regulations for the prevention of and protection against fires issued by the Governor have not had the force and effect of law and practically have been unenforceable in any satisfactory manner. SECTION 8 Section 8 of the bill would add a new section 812 in title 5 of the Canal Zone Code, making it a misdemeanor to commit any of the enumerated acts involving injury to or tampering with a motor vehicle, motorboat, launches, or aircraft. |