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phone and telegraph lines; and the only activities which will be conducted within the said corridor will be those pertaining to the construction, maintenance, and common uses of a highway, and of power and communication lines, and auxiliary works thereof.

The Republic of Panama shall enjoy at all times the right of unimpeded transit across the said corridor at any point, and of travel along the corridor, subject to such traffic regulations as may be established by the authorities of the Panama Canal; and the Government of the Republic of Panama shall have the right to such use of the corridor as would be involved in the construction of connecting or intersecting highways or railroads, overhead and underground power, telephone, telegraph and pipe lines, and additional drainage channels on condition that these structures and their use shall not interfere with the purpose of the corridor as provided hereinabove.

ARTICLE X

In case of an international conflagration or the existence of any threat of aggression which would endanger the security of the Republic of Panama or the neutrality or security of the Panama Canal, the Governments of the United States of America and the Republic of Panama will take such measures of prevention and defense as they may consider necessary for the protection of their common interests. Any measures, in safeguarding such interests, which it shall appear essential to one Government to take, and which may affect the territory under the jurisdiction of the other Government, will be the subject of consultation between the two Governments.

ARTICLE XI

The provisions of this Treaty shall not affect the rights and obligations of either of the two High Contracting Parties under the treaties now in force between the two countries, nor be considered as a limitation, definition, restriction, or restrictive interpretation of such rights and obligations, but without prejudice to the full force and effect of any provisions of this Treaty which constitute addition to, modification or abrogation of, or substitution for, the provisions of previous treaties.

ARTICLE XII

The present Treaty shall be ratified in accordance with the constitutional methods of the High Contracting Parties and shall take effect immediately on the exchange of ratifications which shall take place at Washington.

In witness whereof, the Plenipotentiaries have signed this Treaty in duplicate, in the English and Spanish languages, both texts being authentic, and have hereunto affixed their seals. Done at the city of Washington the second day of March 1936.

CORDELL HULL. (SEAL)
SUMNER WELLES. (SEAL)
R. J. ALFARO. (SEAL)

NARCISO GARAY. (SEAL) Mr. ENGEL. Was that the treaty that contained the clause giving the Panamanians equal rights of employment with American employees in the Canal Zone?

General MEHAFFEY. No, sir; that provision was not included in the treaty. It was in a note accessory to the 1936 treaty.

Mr. MAHON. I think it is very unfortunate that we have one side of the action of a government in connection with a treaty without having the other side presented in the testimony here because the matter is related indirectly to the appropriation which we are requested to make.

Are you familiar with the purpose of the treaty of 1936?

General MEHAFFEY. Only in a general way, Mr. Mahon. I was not in the Canal Zone during the negotiations, and I was not familiar with what went on at the time.

Mr. Mahon. Well, is it not the truth that we went into the construction of a canal by reason of action which we had taken in more or less forcing our way into the Canal Zone, after recognizing the independence of Panama; and is it not true that we did incur animosity

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and ill will of many people in Central and South America who began to suspect the colossus of the North, and has it not been our policy to do everything in our power to show these nations that we have no imperialistic motives; and is it not fair to presume that the treaty of 1936 was enacted for the purpose of bringing about a greater degree of amity and understanding and good will between us and Panama and indirectly between us and Central and South America?

General MEHAFFEY. It is my understanding that it was in pursuance of the so-called good-neighbor policy which had, as I understand it, the purpose of promoting better relations generally between the United States and the other countries of this Hemisphere.

Mr. MAHON. I do not know what arguments the State Department * would advance on the treaty. Of course, I do know that we have had

substantial cooperation from the people of Central and South America during the time of great emergency, and if we had not had it, it would have been most unfortunate for. us.

I am not arguing for or against that treaty because that is not the issue before the committee, but I did feel that the record should show that, in my opinion, if all of the facts were to be considered there would be two sides to the case as is usually true when any issue arises, and which is the right side perhaps history will tell.

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WEDNESDAY, JANUARY 21, 1948.

JUSTIFICATION DATA ON ESTIMATES FOR 1949

Mr. ENGEL. We will now take up the individual justifications of the Panama Canal and will place in the record the tables appearing on pages 5, 6, 9, 11, 12, 15, 16, 17, 18, and 19.

(The tables referred to follow :)

Transits, tolls, and tonnages In connection with the primary mission of transiting vessels through the Canal, there is shown below a table of transits, tolls, and tonnages for the years 1939 to 1947 and estimates for 1948 and 1949, inclusive:

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Summary of operating expenses and revenues, fiscal year 1947
Operations, transit divisions:

Revenues from tolls, fees, fines, etc. (covered into U. S.
Treasury)--

$17, 751, 958 07 Other revenues, transit divisions (repaid to appropriations). 10, 470, 933. 19 Total.

28, 222, 891, 26 Operating expenses (charged to appropriations)

26, 614, 842. 45

1, 608, 048 81

Operating surplus.---
Less:

Depreciation of fixed property---
Annual treaty payment to Republic of

Panama

$1, 500, 000.00

430, 000. 00

1, 930, 000.00

321, 951, 19

Deficit, transit divisions..
Operations, business divisions:

Business revenues.
Business expenses.
Net revenues, business divisions (covered into U. S.

Treasury)

35, 623, 168 93 34, 480, 827. 91

1, 142, 341. 02

Combined operations:

Revenues covered into U. S. Treasury-
Revenues repaid to appropriations--

Transit divisions.

17, 751, 958 07 46, 094, 102, 12

$10, 470, 933. 19

Summary of operating expenses and revenues, fiscal year 1947—Continued Combined operations-Continued Revenues repaid to appropriations-Continued Business divisions.

$35, 623, 168. 93

Total revenues
Total expenses -

Transit divisions.
Business divisions.

$63, 846, 060. 19 63, 025, 670. 36

$28, 544, 842. 45
34, 480, 827. 91

Net surplus---

1820, 389.83 Compared to a surplus of $722,196.87 for fiscal year 1946, and a deficit of $4,974,915.75 for fiscal year 1945.

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Obligational authority related to obligations and expenditures (relating to general and

special accounts)

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Current appropriations:

Presently available.

Recommended..
Cnohlisated balances available:

Reserve for leave, repairs, and replacements.
Unreserved balances

Net profit to be covered into Treasury.
Reimbursements and advances from other agencies
Payments available from non-Federal sources.

Total available for obligations.
Less unobligated balances at end of year:
To be carried forward in continuing accounts:

Reserve for leave, repairs, and replacements.
Unreserved balances..

Net profit to be covered into Treasury
To lapse upon closing of accounts: Net profit covered into Treasury.

Obligations incurred.
Surplus supplies and equipment acquired without reimbursement.

Total obligations incurred.
Less collections treated as deductions from expenditures 1
Les surplus supplies and equipment acquired without reimbursement
treated as deductions from expenditures.

Net obligations for the year.
Obligations outstanding at start of year.

Net obligations to be accounted for. Less obligations outstanding at end of year.

Net expenditures, general and special accounts.

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Not including net profit to be covered into Treasury: Fiscal year 1948, $951,284; fiscal year 1919, $967,336.

Comparative summary of appropriations and appropriation estimates (relating to

general and special accounts)

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Comparative detail estimate for appropriation 1949, maintenance and operation,

Panama Canal Following is a statement of estimated net requirement under this appropriation item, by activity for 1949, as compared with net requirements for 1948 and for 1947.

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Total, Canal utilities and services.

2,327, 975
Total, current operations, net appropriation or estimate-10, 493, 845
36. Improvements and betterments:
(9) Special protective works.

817, 764
(b) Quarters for American employees
(c) Quarters for native employees.
(d) Improvements to Gorgas Hospital
(+) Rebuild east and west slips, Thatcher Ferry
a) Renew crane track, Balboa shops.
(9) Road and street replacements
(h) Design of over-all coordinated sewage-collection and sew.

age-iisposal facilities.
(i) Fire-protection system, Palo Seco leprosarium

41.000 2.00 1,400,00

5. 0110 433, 010

100 m 53.10

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