"I feel that I have no obligation of loyalty to a company that is not being loyal to me and is certainly not working in my best interests."

"As a mother of two elementary age school children and also as a U.S. citizen who pays my share of U.S. taxes, I am outraged that they do not see fit to give my children an American education-teaching them what it is to be an American, the outlook, the culture. I abhor the thought of a non-U.S. citizen, who has different sentiments politically than I do, teaching my impressionable children." "What next? Maybe Mr. Metcalf would like to give each graduating Latin American student a certificate of U.S. citizenship along with his or her diploma. Panamanians are Panama's responsibility. I expect and demand that the U.S. Government work only to protect the rights of U.S. citizens.”

"It is obvious that the U.S. rate employee is still needed in the Canal Zone to accomplish the obvious mission of training and to maintain the high standard of the labor force necessary to the Canal for the operation itself. The adversities over the past five years that the U.S. employee has had ot overcome make it extremely difficult to justify one's reasons for working and living under conditions those adversities have created."

RESOLUTION OF THE SUBCOMMITTEE OF THE PANAMA CANAL

Whereas the government and administration of the Canal Zone are matters under the legislative jurisdiction of the Subcommittee on the Panama Canal; and

Whereas the municipal services provided by the Canal Zone government, such as police protection, fire protection, customs service, postal service, and education, are significant protection for residents of the Canal Zone and have an intrinsic relationship to the safe operation and U.S. control of the Panama Canal; and

Whereas the rumor of imminent transfer of jurisdictional services in the Canal Zone is creating a situation deleterious to the morale of the employees in the Zone and is therefore damaging to the efficient operation of the Panama Canal; and

Whereas the transfer or abrogation or termination or modification by executive order of these jurisdictional functions constitute a contravention of the spirit of the applicable statues and regulations governing the Canal Zone and therefore would constitute an unwarranted arrogation of power by the executive branch and would result in a constitutional crisis and confrontation of great proportions; therefore, be it

Resolved, That it is the sense of the Subcommittee that no executive order, action or agreement be proposed and/or executed which would have as its effect the transfer of the control of any aspects of jurisdictional services of the Canal Zone to the government of the Republic of Panama or autonomous agencies of the government of the Republic of Panama; and be it further

Resolved, That this Subcommittee will take any and all actions necessary to stop the unwarranted arrogations of power by the executive branch should the executive branch attempt to transfer, abrogate, terminate or modify what are essentially U.S.-controlled services in the Canal Zone; and be it further Resolved, That the only means by which jurisdictional services in the Canal Zone be allowed to be transferred to the Republic of Panama or any other non-U.S. government agency be by means of treaty or legislation; and be it further

Resolved, That copies of this resolution be dispatched immediately to the President of the United States and the Secretary of State.

PREPARED STATEMENT OF FRANK A. MANSON, ASSISTANT DIRECTOR, NATIONAL SECURITY-FOREIGN RELATIONS DIVISION, THE AMERICAN LEGION

Mr. Chairman and distinguished members of the subcommittee: As recently as March 24, 1976, The American Legion National Commander Harry G. Wiles has written to President Ford expressing his concern over current efforts by certain officials of the Executive Branch to relinquish U.S. sovereignty, ownership and control of the U.S. Canal Zone.

The issue of sovereignty in 1976 transcends strictly the hemispheric relationships of the past. In this age, the pressures and influences of super-power relationships have become zeroed on this narrow waterway which serves as an open crossroad for U.S. and world-wide shipping.

The Panama Canal must remain open and available in the long term interest of the maritime nations.

The economic future of the United States heartland with its newly built McClelland-Kerr Canal joining the Mississippi to the Oklahoma-Kansas boundary, is increasingly dependent on the free and unrestricted sealanes in the Gulf of Mexico, the Caribbean and the Panama Canal. These sealanes are actually lifelines for survival on an increasingly inter-dependent planet.

The economic security of the United States is inextricably interwoven with its rivers, and seaways opening such vast resource areas as the Ohio Valley, the Tennessee Valley and the newly developing Arkansas Valley to world-wide markets. Seaborne commerce is the competitive answer to international trade. Trade is a deterrent to war, and an incentive for peace.

The advent of containerized shipping utilizing the inter-modular mode has opened new and promising vistas of commerce. In fact, it is completely revolutionizing the shipping industry.

Few Americans realize that about 70% of the cargo moving through the Panama Canal either originates within or is destined for U.S. ports, and that U.S. container ships represent some 55% of total canal transits for that type of modern cargo ship.

Contrary to the projections of those who have spent too much effort on past trading patterns, the combination of navigable waterways and containerized shipments point to an increased use of these strategic waterways.

Militarily, these same Caribbean, Gulf and Canal waters give mobility, flexibility, versatility and economy to U.S. forces at a time when U.S. taxpayers are crying out for maximum defense at the minimum cost. The Panama Canal enables the rapid deployment of ships from Atlantic to Pacific and back again. History has repeatedly demonstrated the logic and the urgency of such a deployment capability. Heavy canal usage during the conflicts of World War II, Korea and Vietnam, both by combatants and military related traffic, bear witness to the canals military value.

Politically, we are witnessing the advent of Marxist leadership into the Panama area. This is an ominous development when considered with the latest threats against Puerto Rico, Guantanamo Bay and the Canal Zone itself. The latest intelligence indicates over 2,000 Cuban "workers" have been sent to Panama to help Gen. Omar Torrijos in his determination to liberate the U.S. Canal Zone. What use is Castro planning for his thousands of Angola veterans? Where this Marxist penetration will end is anyone's guess. But the "workers" are now on location. How does one placate the implacable-satiate the insatiable. Sometimes "no trespassing" signs will suffice.

The U.S. Canal Zone stands as a symbol of U.S. will on our 200th birthday. Panamanian citizens listening to the sounds of nearing drummers, ponder their own destiny. They see thousands of Cubans and arms arriving. Many of the enlightened Panamanians are undoubtedly asking themselves what life is like in East Europe, and in such far away places as Latvia, Lithuania and in nearby Cuba where the people have been liberated by Marxist regimes.

On the matter of sovereignty, Isthmus history has been well documented by the U.S. Congress. Suffice to say, the question of sovereignty of the U.S. Canal Zone was decided by the Hay-Bunau-Varilla Treaty of 1903 which not only gave complete sovereignty in perpetuity so that the United States citizens would be persuaded that it was sound to invest their tax dollars in such a high risk venure which thus far had been marked by the failures of other nations.

In the same Treaty of 1903, the Republic of Panama acknowledged that the

grant of sovereignty to the U.S. was to the complete exclusions of the right to exercise any sovereignty by Panama. The language is clear. The central problem is that once sovereignty goes, the risk of precipitous expropriation looms imminent.

What really would prevent an avowed Marxist General Omar Torrijos or one of his successors, from demanding further emendations of the treaty? From demanding a quickening of the pace to full Panamanian control? From ordering U.S. forces out of the ex-U.S. Canal Zone? From closing the canal to transit of our warships, or those of our allies? From raising the tolls drastically. These are the precise demands of a vocal, radical, violent minority in Panama today. They may be the government of tomorrow. These are the questions that trouble the grass roots America and The American Legion.

At a time when sovereign U.S. territory is actually being threatened by the full-load of Marxist tools-political, psychological, military, subversive elements, blackmail and the lot; when the build-up of forces and weapons is actually in progress, the time is surely near when Washington must tell both Moscow and Havana that vital United States interests are involved in the U.S. Canal Zone. Marxist leaders should be strongly encouraged that if they must continue to fish beyond their own realms of sovereignty they do so in less sensitive waters. Secretary Kissinger has said U.S.-Soviet relationships could not take another Angola. Nor could it take one U.S. Canal Zone.

Commander Wiles' letter to President Ford (attached) makes constructive recommendations on actions which would clearly demonstrate U.S. resolve and confidence on this festering issue. Also appended to this statement is The American Legion's mandate (Resolution 173) to retain U.S. sovereignty.

The PRESIDENT

The White House, Washington, D.C.

THE AMERICAN LEGION, Washington, D.C., March 24, 1976.

DEAR MR. PRESIDENT: Having just returned from a visit to the Panama Canal Zone, I am deeply concerned about the trend toward a gradual withdrawal of United States responsibility and interest in the Caribbean area, and especially the Canal Zone itself. I am likewise concerned about continuing advocacy by members of the Department of State to relinquish United States sovereignty in the Canal Zone which would symbolize a growing U.S. weakness and lack of national will to protect our vital interests.

I well understand the dilemma in which some of your predecessors and associates have placed the Presidency at this time. However, I see no alternative to facing the proposition that the Canal Zone is part and parcel of U.S. territory and cannot be given away, unless and until the people of the United States, and their representatives in Congress feel it is in their interest to do so. In the final analysis, it is the people who paid for the Canal and who have borne the burden of its construction, maintenance and protection for the past 72 years.

I strongly urge you, Mr. President, to re-evaluate the administration's policy on the Panama Canal with a view to finding a viable alternative to present attitudes and trends. One prospect is to resume the immediate major modernization of the Canal which would give employment, improve the earnings and standards of the entire area, and improve relations between Panama and the United States.

As you know, we have already spent more than $170.0 million on such a modernization program. More to the point, resumption of the modernization effort would meet the growing demands of Canal users at a time which the average size of vessels using the Canal is increasing, and this suggestion would square off with Canal pilots who strongly recommend such action. Moreover, such a modernization is authorized under existing treaty provisions and does not require negotiations or treaty changes.

Another suggestion which I believe has merit is the re-establishment of the Navy's Special Service Squadron which was home-based in the Canal Zone for two decades prior to World War II. This token naval force was most effective during those years and now it would symbolize a continuing U.S. interest in the area. Such a small force would not be provacative and yet it would reassure United States citizens living there as well as those within our

own boundaries. It would serve as a symbol of stability and strength in many ways.

Mr. President, The American Legion is mandated to retain U.S. sovereignty of the Canal Zone and Canal. It is my judgment that this mandate, representing grass roots sentiment, will not change in the foreseeable future because the sovereignty in the Canal Zone continues in our national interest. This fact is reinforced by the Soviet Union's continued efforts to penetrate the Western Hemisphere and in light of recent Soviet-Cuban collaboration in Africa.

I urge you in behalf of the 2.7 million members of The American Legion to take a firm stand on this smouldering Canal Zone situation. I believe the general public would be inspired by your initiative and give you their support. Sincerely yours,

HARRY G. WILES, National Commander.

FIFTY-SEVENTH NATIONAL CONVENTION OF THE AMERICAN LEGION HELD IN MINNEAPOLIS, MINN., AUGUST 19, 20, 21, 1975

Committee: Foreign Relations.
Subject: The Panama Canal.

Resolution No. 173

Whereas, Under the 1903 Treaty with Panama, the United States obtained the grant in perpetuity of the use, occupation and control of the Canal Zone territory with all sovereign rights, power, and authority to the entire exclusion of the exercise by Panama of any such sovereign rights, power, or authority as well as the ownership of all privately held land and property in the Zone by purchase from individual owners; and

Whereas, The United States has an overriding national security interest in maintaining undiluted control over the Canal Zone and its treaties with Great Britain and Colombia for the efficient operation of the Canal; and

Whereas, The United States Executive Branch is currently engaged in negotiations with the Government of Panama without authorization of the Congress, which would diminish, if not absolutely abrogate, the present United States treaty-based sovereignty and ownership of the Zone; and

Whereas, The American people have consistently opposed further concessions to any Panamanian Government that would further weaken United States control over either the Canal Zone or Canal. Now, therefore, be it

Resolved by The American Legion in National Convention assembled in Minneapolis, Minnesota, August 19, 20, 21, 1975 that the United States must be vigilant against all efforts to surrender any of the U.S. sovereignty or jurisdiction in the Panama Canal Zone or over the Panama Canal obtained under the 1903 Treaty with the Republic of Panama, as amended and revised in 1936 and 1955; and be it further

Resolved, That The American Legion reaffirm its opposition to new treaties or executive agreements with Panama that would in any way reduce our indispensable control over the U.S.-owned Canal or Canal Zone; and be it finally Resolved, That The American Legion urge the immediate resumption of the modernization of the present Panama Canal as provided under the current legislative measures for the Terminal Lake-Third Lock proposal.

PREPARED STATEMENT OF THE AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES

The American Federation of State, County and Municipal Employees is pleased to submit its views to the Merchant Marine and Fisheries Subcommittee on the Panama Canal specifically on behalf of its 6,000 members in the Canal Zone and on behalf of their 750,000 fellow AFSCME members across the country. Our statement will follow up and expand upon the comments delivered orally to the Subcommittee by Saturnin Mauge, International Vice President for the Caribbean District and President of Local 900, during the April 5-7 hearings.

Although the hearings were originally scheduled to discuss the current financial situation of the Panama Canal, we would like to comment only briefly on that issue and then follow the lead of the hearings and devote the balance of this statement to the issue of labor-management relations in the Panama Canal Zone. AFSCME representatives in the Canal Zone have suggested to the Canal Administration that in consideration of formulae to increase tolls, they seek an escalator clause which would authorize the Panama Canal Company Board of Directors to increase tolls based on the increased cost of operations. If tolls are to be increased, AFSCME believes they should be increased gradually, instead of following the 1974 pattern of an increase of almost twenty percent after no increase in many years.

During the hearings, Governor Harold Parfitt, in response to a question by Subcommittee Chairman Ralph Metcalfe, outlined a series of actions he believed necessary to develop good labor-management relations in the Zone. The Governor suggested that the consultation process now in use be improved. AFSCME strongly agrees that the present consultation process is woefully inadequate and supports the institution of true collective bargaining for workers in the Canal Zone. If there had been a collective bargaining procedure in effect, the recent sickout could have been averted, for provision would have been made for joint discussions and mutually agreed upon solutions to the problems of the dual wage base rate and tropical differential.

The Governor has been dealing wit hthe Canal Zone employees in good faith, agreeing in a March 20 Memorandum of Understanding to "initiate action immediately to commence a study, with full participation of unions of all ramifications of application of E. O. 11491, as amended, or other mutually acceptable form of collective bargaining with employees of the Panama Canal Company and Canal Zone Government" and urging that the needs of the employees be considered.

AFSCME urges that the Collective Bargaining Study Committee outlined in the above Memorandum be given as much latitude as possible to develop a meaningful and equitable form of collective bargaining for all employees in the Canal Zone.

We are troubled by a colloquy between Assistant Secretary of the Army Veysey and Representative Gene Snyder which took place on the first day of the hearings concerning the status of the February 17 proposals modifying the base rate of pay and tropical differential systems. While Governor Parfitt and Lieutenant General McAuliffe, Commander in Chief of the U.S. Southern Command, both agree on the need of modification of the February 17 proposals and agree on certain modifications, Assistant Secretary Veysey is not currently prepared to accept their recommendations. AFSCME is troubled that Veysey, the one member of the Canal Zone Civilian Personnel Policy Coordinating Board not directly involved in the day to day operations of the Zone, both chairs the Board and has veto power over the recommendations of both Governor Parfitt and Lieutenant General McAuliffe, the other two members of the Board.

AFSCME is pleased to note that Assistant Secretary Veysey believes that the Panama Canal Company and Canal Zone Government should be operated as a "show-case" of what America is like. AFSCME has always supported and continues to support equality for all in the Canal Zone. We supported the integration of schools, and housing and the declassification of security positions to provide equality for both U.S. citizen and Panamanian citzen employees of the Company/Government.

To reiterate what Vice President Mauge stated in his testimony, AFSCME believes that all workers in the Canal Zone should be paid on a single wage base. If all workers must meet one set of requirements to get a job and keep it, then all workers should be paid on one wage scale. Since the job requirements are based on U.S. Civil Service, rates of pay should be U.S. rates of pay. The American Federation of State, County and Municipal Employees urges the Subcommittee to continue its investigations into the personnel practices of the Panama Canal Company and Canal Zone Government. The interest shown by the Subcommittee in the problems of workers in the Zone and the information brought out at these hearings have been most helpful and timely in the movement toward equality for all workers and meaningful collective bargaining for Canal Zone workers.