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Secretary of Defense. If you can isolate for me just what you mean by management as such, perhaps I can answer the question a little more directly.

Mr. THOMPSON. Well, of course, we are here now because of the difficulty of sifting out the commercial operations of the Panama Canal, in all of its ramifications, from those which are strictly a matter of national defense. I hope I do not seem to be quibbling over details.

Mr. LARKIN. I did not mean to suggest you were. It was for my own enlightenment; I just did not get the aspect of it that you were addressing yourself to.

Mr. THOMPSON. And here we find the problem of trying to figure out whether that Canal is strictly a matter of national defense, or whether it should be regarded as an artery of travel for world commerce, and so forth, for which purpose it was undoubtedly originally conceived, perhaps it was assisted to its beginning and completion by the Spanish-American War, but it originally was an artery of commercial seaborne traffic.

I have only one other observation, and that is that the situation should be clarified as to just who is meant by "The Secretary of the Army." It does not say Department of the Army. It says, "Secretary," and it is interesting to note in all of these studies that there is no subordinate echelon between the Secretary and the Governor. Communications go directly from one to the other, and on the question of tolls, while the Secretary of the Army may forward communications pertaining to tolls, he has no function in his Department in connection with the fixing of tolls.

You certainly clarify your position, and for myself, personally, I appreciate it very much.

Thank you, Mr. Chairman.

Mr. O'TOOLE. Before you go, Mr. Larkin, on behalf of the committee, we would like to have you convey to the Secretary of Defense that we all know that every precaution is being taken in this crisis to guard and strengthen the Panama Canal. At the same time we would like to have you convey to him the further thought that your testimony given this morning has been more concise than we usually expect from representatives of the executive agencies.

Mr. LARKIN. It is very good of you to say so, Mr. Chairman.
Mr. O'TOOLE. Mr. Allen, do you have any questions?

Mr. ALLEN. I may have one question, Mr. Chairman.

I have had a number of people who use the Canal express the opinion that part of the investment of the United States in it should be allocated as a charge for national defense, and that the commercial tolls should be based only on the remaining part of the investment. Was that situation discussed when the bill was considered?

Mr. LARKIN. I am not familiar with the details of such discussions if they took place.

I suppose they must have been part and parcel of that original document that the President transmitted up here, but our considerations of it were more of a nature of analyzing the draft of the bill in relation to those recommendations. Now, I will be happy to search out and find out what considerations were given to them. At this minute, I am sorry I cannot answer that.

Mr. ALLEN. Do you know whether there was any proportion ever discussed, or could you find that out as well?

Mr. LARKIN. I can attempt to. I do not know that there was any. I know that this toll question has been, and rightly so, an integral part of this whole thing, and the question of the imposition of tolls and so forth is part and parcel of it. The division, however, I am not familiar with. Mr. Seidman is here and can probably answer that.

Mr. SEIDMAN. I think the question was referred to the Department of Defense, among other questions relating to the study. Back in November, we did receive some views on that from the Munitions Board, which was named by the Secretary of Defense to prepare the views of the Office of the Secretary.

Mr. ALLEN. Was any proportion discussed?

Mr. SEIDMAN. I think the view of the Munitions Board, speaking for the Office of the Secretary of Defense, was that no part of the capital investment should be written off to national defense. There was no discussion of any proportion.

Mr. O'TOOLE. Thank you, Mr. Larkin.
Mr. LARKIN. Yes, sir.


Mr. O'TOOLE. Mr. Howard Munro of the Central Labor Union and the Metal Trades Council, Panama Canal Zone.

The Chair desires to announce at this time that the House will meet today at 11 o'clock. We have applied for permission to sit during the general debate. I do not know whether it has been granted or not. If it is granted the session of the committee will continue until the last witness is heard. Mr. Munro.

Mr. MUNRO. Mr. Chairman, my name is Howard E. Munro. I am legislative representative of the Canal Zone Central Labor Union and the Metal Trades Council.

The organizations which I represent are the central bodies of 28 unions affiliated with the American Federation of Labor. The membership of these unions are the United States citizens employed by the Federal Government to operate and maintain the Panama Canal and the Panama Railroad Company on the Canal Zone.

Our members are vitally interested in the results of H. R. 8677 should it become a law in its present form. I should like to take a little time to bring to your attention the background of working conditions and compensation paid the United States citizens on the Canal Zone.

During the constructions days of the Canal it was found difficult to man the positions. As a result, Canal Zone officials found it necessary to pay high rates of pay in order to induce workmen to accept positions there. Some wages and salaries paid were more than 100 percent in excess of rates of pay for similar services in the United States.

Anticipating the conclusion of construction work on the Canal, and being desirous of reducing the wages and salaries to be paid those chosen to remain for the purpose of operating and maintaining the Canal, General Goethals, the then Governor, prevailed upon the Con

gress to enact the Panama Canal Act (37 Sta. 560, 569), which was approved August 24, 1912. This act, in addition to placing the operation, maintenance, and control on the Canal Zone entirely in the hands of the President, contains the following:

All other persons necessary for the completion, care, management, maintenance, sanitation, government, operation, and protection of the Panama Canal and Canal Zone shall be appointed by the President, or by his authority, removable at his pleasure, and the compensation of such persons shall be fixed by the President, or by his authority, until such time as Congress may by law regulate the same, but salaries or compensation fixed hereunder by the President shall in no instance exceed by more than 25 per centum the salary or compensation paid for the same or similar services to persons employed by the Government in continental United States.

The effect of this act, now section 81, chapter 6, title 2, of the Canal Zone Code, remained unchanged until June 29, 1948, when Public Law 808, Eightieth Congress, was approved.

Public Law 808, Eightieth Congress, transferred a number of employees from section 81, title 2, to a new section, section 248, title 2, and I quote the new section 245:

CREATION, PURPOSE, OFFICES, AND RESIDENCE OF PANAMA RAILROAD COMPANY.For the purpose of conducting business operations incident to the care, maintenance, sanitation, operation, improvement, government, and protection of the Panama Canal and the Canal Zone, there is hereby created, as an agency and instrumentality of the United States

* * *

That transferred some of these employees who were under section 81 to the corporation.

These business operations are defined in the new section 249 (c) and I quote:

May construct or acquire, establish, maintain, and operate docks, wharves, piers, harbor terminal facilities, shops, yards, marine railways, salvage and towing facilities, fuel-handling facilities, motor-transportation facilities, power systems, water systems, a telephone system, construction facilities, living quarters and other buildings, warehouses, hotels, a printing plant, commissaries and manufacturing, processing or service facilities in connection therewith, laundries, dairy facilities, restaurants, amusement and recreational facilities, and other business enterprises, facilities, and appurtenances necessary or appropriate for the accomplishment of the purposes of this article.

Part of the employees, working in these services, has been transferred, by these sections, from section 81, title 2, to a new section, section 248 (e), title 2, and again I quote:

May appoint such officers, agents, attorneys, and employees as may be necessary for the conduct of the business of the corporation, define their authority and duties, fix their compensation, delegate to them such of the powers of the corporation as may be necessary, require that such of them as it may designate be bonded, and fix the penalties and pay the premiums of such bonds.

Section 15 of H. R. 8677, the bill under discussion, changes section 81, title 2, to read:

81. CONDITIONS OF EMPLOYMENT IN SERVICE OF CANAL ZONE GOVERNMENT.-All persons, other than the Governor of the Canal Zone, necessary for the civil government of the Canal Zone shall- * * *

It omits all of those other people.

Section 17 of this bill changes section 245, title 2, to read:

245. CREATION, PURPOSES, OFFICES, AND RESIDENCE OF PANAMA CANAL COMPANY. For the purposes of maintaining and operating the Panama Canal


Section 21 of this bill adds to section 249 of title 2 a new section: (a) May maintain and operate the Panama Canal.

Sections 15. 17. and 21 of this bill transfer another group of employees from section 81 to section 248 of title 2 of the Canal Zone Code. The transfer of employees proposed by this bill and the transfer made by Public Law 808, Eightieth Congress, will place by far the greater number of employees under section 248 of title 2.

Although the towns on the Canal Zone are now well sanitated, the Zone is far from being a health resort and residents are officially warned to remain within sanitated areas after nightfall.

Under all Presidents and Governors it has been the policy to pay the full 25 percent above States' rates of pay without question as it is realized that the Tropics are not the natural habitat of the white race. Without frequent vacations, in a temperate climate, those of the white race deteriorate physically and mentally.

The Public Health Service, the Army, and the Navy all recognize the deleterious effects of the Tropics on the white race and, therefore, limit the tour of duty of military and naval personnel there.

Many conditions have been changed since the approval of the Panama Canal Act of 1912. There is even one air-conditioned office building, the new Civil Affairs Building, in use. Some new houses have been built and more planned. But with all the changes made, the Canal Zone is still in the Tropics. To better understand what the Tropics means to the United States citizen working on the Canal Zone I submit two articles. Appendix A-Temperature Dominance Over Human Life. by Clarence A. Mills, of the Laboratory for Experimental Medicine, University of Cincinnati; and Appendix Ba copy of a newspaper clipping from the Panama American dated March 29, 1950, White Man Against Tropics Gets Balboa PTA Dis


They are too long to bother the committee with at this time, and are submitted at the end of the brief for future study.

The cost of necessary vacations in a temperate climate for employees and members of their families more than offsets the additional 25 percent paid for services on the Zone.

While conditions on the Canal Zone as far as housing is concerned have improved, it is also true that the employee now has to pay rent for the house, rent for the furniture, electricity, and other services which used to be furnished free or at a slight charge.

When the conditions first arose and the 25 percent was originally given, the employee received numerous benefits as part of his salary, such as free rent, a nominal charge for health service, and products sold by the commissaries were transported at cost or below. This has been changed as time has passed, by this committee or by the Congress. Now all of the expenses of the Commissary Division and all of these extra charges that have been put on the employees on the Canal Zone have, in fact, been a reduction in pay.

In order to offset these rising charges and compensate the United States citizen for working in the Tropics it would be appreciated if your committee would consider adding a section to this bill which would provide compensation at least 25 percent above similar positions in Government service in the United States for all United States citizens on the Canal Zone

In regard to these other charges that the employee has been made to pay, at the present time there is under consideration a bill to apply income tax to the American citizen employed on the Canal Zone, and it is anticipated if that bill becomes law there will be another reduction to the employee who has to pay this income tax. The suggestion made in some of the testimony given the day before yesterday and yesterday in regard to the civil government expenses being charged to the Commissary Division and the Public Utility Divisions will in fact be another reduction in pay, as the employees are the only customers of these divisions. In other words, any civil government expense charged to the Commissary and Public Utility Divisions will be passed on to the employee as an increase in price. We believe that these extra charges will be a serious reduction in our pay.

Gentlemen, I want to thank you for giving me this opportunity to appear before you at this time, and I want to assure you that careful consideration of this matter will be appreciated by all United States citizens employed on the Canal Zone.

Mr. O'TOOLE. The appendix to Mr. Munro's statement will be placed in the record at this point.

(The matter referred to is as follows:)



Temperature bears an importance to man far beyond the mere matter of his hour-to-hour comfort. In some places it lays a heavy, stagnating hand over his life and holds him to a vegetative existence; in others, it generates an energy and progressiveness which drives him forward with irresistable impetus. Its effects begin even before he is conceived, for the metabolic vigor of parental germ cells at the time of their union exerts a potent influence over the entire course of the new life. Without favorable temperatures, neither individual nor nation can develop innate potentialities to the full.

The hand of temperature is being felt over the world today, much as Ellsworth Huntington so ably pictured its course through past centuries. We are now caught in one of the long cycles of climatic change that alter the courses of nations and of world trends. Man thus has urgent need to understand the mechanism of this temperature dominance over him as an individual and over mankind as a whole. The answer lies in a close study of human dynamics.

The human body is essetnially a combustion machine that functions only as its cells release energy by burning the foodstuffs taken in. True, this combustion in the cells is a very complicated affair, carried on at low temperatures and in numerous independent steps through the aid of special catalysts. Although it is far less violent than the gasoline explosions in an automobile motor, its over-all efficiency is no greater, and it is even more dependent upon rapid dissipation of its waste heat. The working efficiency of men, horses, and dogs ranges between 20 and 25 percent, but the Diesel engine designed by present-day engineers performs at over 40-percent efficiency.

For every unit of combustion energy transformed into work output by our bodies, three or four similar uits must be dissipated as waste heat. Failure of such dissipation to keep pace with heat production in the body may mean heatstroke and death within a few hours. The waste heat of combustion thus becomes one of the body's most important excretory products.

Sudden changes in external temperatures, or in the rate of heat production within the body, are quickly countered by the movement of more blood into, or away from, the skin and by the activity of the sweat glands. The body can thus meet short-term emergencies with only slight changes in its internal temperature or behavior characteristics. External heat or cold, prolonged through many weeks or months, however, induces basic and important changes in the body economy.

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