ADDITIONAL FACILITIES FOR PANAMA CANAL ZONE

THURSDAY, JULY 20, 1939

UNITED STATES SENATE,

COMMITTEE ON INTEROCEANIC CANALS,

Washington, D. C.

The committee met, pursuant to call, in the committee room, Capitol, at 11:30 a. m., Senator Bennett Champ Clark (chairman) presiding.

Present: Senators Clark (chairman), Hayden, Pepper, Ellender, Downey, Stewart, Bridges, and Lodge.

The committee had under consideration S. 2229, a bill authorizing and providing for the construction of additional facilities on the Canal Zone for the purposes of more adequately providing for the defense of the Panama Canal and for increasing its capacity for the future needs of interoceanic shipping.

S. 2229 is here printed in full, as follows:

[S. 2229, 76th Cong., 1st sess.]

A BILL Authorizing and providing for the construction of additional facilities on the Canal Zone for the purposes of more adequately providing for the defense of the Panama Canal and for increasing its capacity for the future needs of interoceanic shipping

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the improvement and enlargement of the capacity of the Panama Canal in the interests of defense and interoceanic commerce is hereby authorized to be prosecuted by the Governor of the Panama Canal under the supervision of the Secretary of War, substantially in accordance with the plans set forth and recommended in the report of the Governor of the Panama Canal, dated February 24, 1939, and published as House Document Numbered 210 and including such appurtenant structures, works, and facilities, and enlargements or improvements of existing channels, structures, works, and facilities as may be deemed necessary at a total cost not to exceed $277,000,000, which is hereby authorized to be appropriated for the purpose: Provided, That the initial appropriation for the fiscal year 1940 shall not exceed $15,000,000. For the purposes aforesaid, the Governor of the Panama Canal is authorized to employ such persons as he may deem necessary and to fix their compensation without regard to any other law affecting such compensation, to authorize the making of any contracts, continuing or otherwise, in advance of actual appropriations, aggregating not more than the total cost authorized herein, as may be deemed necessary for the prosecution of the work herein authorized, to provide for the establishment and operation of such auxiliary plants and facilities in connection with the work as may be necessary or desirable, to utilize any of the facilities or services of the Panama Railroad Company upon such terms and conditions as may be approved by the Secretary of War, and in general to do all things proper and necessary to insure the prompt and efficient completion of the work herein authorized.

The CHAIRMAN. We will now take up the bill for the construction of additional locks for the Panama Canal. This bill has been before the committee, was reported and taken up in the Senate, and was

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recommitted on two grounds: One that Senator McCarran had a certain amendment that he desired to offer having to do with the employment of aliens in the work; and the other was that the authority granted the Governor of the Canal Zone by the act was too broad. I do not know which was the controlling reason for recommitting the bill.

I think the question involved in the McCarran amendment is extremely important. I have here a communication from the War Department on that subject, reading as follows:

The Honorable BENNETT CHAMP CLARK,

United States Senate, Washington, D. C.

WAR DEPARTMENT, Washington, June 20, 1939.

MY DEAR SENATOR CLARK: The Governor of the Panama Canal has called my attention to a statement prepared by Mr. W. C. Hushing, which was read to the Senate on May 31, 1939, during the debate on S. 2229 to provide additional locks for the Panama Canal, and has furnished me with a statement in regard thereto which I feel will be of interest to you. The Governor states as follows:

"As the statement by Mr. Hushing referred to makes rather definite charges against the Canal administration, I consider it my duty to offer you an explanation of the matter referred to therein, and, in view of the circumstances under which the statement was submitted, I feel that you will welcome the explanation, especially since the statement contains charges that are incorrect and unfounded and other matters which, if unexplained, would leave an erroneous impression.

"Although Mr. Hushing states that the Governor and his department heads have almost unlimited power, the fact is that this authority is definitely prescribed by Congress and by Executive orders of the President and is very definitely limited in scope. There is no basis whatever for the statement and it is not correct that the Governor resents laws passed by Congress limiting his authority regarding wages and hours of labor. The authority of the Governor has always been limited by law and, of course, it is realized that it will always continue to be limited as it should be.

"Mr. Hushing states that the Governor in past years has permitted the representative of the employees to go to the United States 'providing he and those he represented agreed to present to Congress only such matters as were approved by the Governor.' The fact is that the labor representatives have been advised and know that the Governor has no intention or desire to restrict representation in Washington on behalf of the Canal employees on legislative matters pertaining to pay, hours of work, working conditions, leave, and retirement benefits. In this connection it is important to note that the so-called 'representative of the employees' represents only a minority of the employees on the Canal and railroad. With respect to legislative matters other than those mentioned above it must be borne in mind that the Panama Canal is an important highway for world shipping and an important element in our national defense for which the Governor is responsible to the President, to Congress, and to the American people. I cannot therefore favor, foster, or encourage efforts on the part of employees to secure legislation affecting matters of important policy that I know would be detrimental to the best interests of the Canal and the United States. The only matter of this character that has come up since I have been Governor is the proposal to replace the native tropical workers employed on the Panama Canal with citizens from the United States. This proposition is not only positively detrimental to the best interests of the Panama Canal and the United States but also positively detrimental to the present American employees and their children.

"Mr. Hushing states that the Canal and railroad officials have abused their authority. Since these officials exercise authority under direct and close supervision of the Governor I cannot conceive that they could abuse their authority without the knowledge of the Governor. So far as I know such a charge is entirely unwarranted and without foundation.

"Mr. Hushing states that this year the Governor would not permit the representative of local unions affiliated with the Metal Trades Council to go to