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Republic of Panama, the United States of America hereby transfers to the Republic of Panama jurisdiction over a corridor, the exact limits of which shall be agreed upon and demarcated by the two Governments pursuant to the following description:

(a) The end at Colón connects with the southern end of the east half of the Paseo del Centenario at Sixteenth Street, Colón: thence the corridor proceeds in a general southerly direction, parallel to and east of Bolivar Highway to the vicinity of the northern edge of Silver City; thence eastward near the shore line of Folks River, around the northeast corner of Silver City; thence in a general Southeasterly direction and generally parallel to the Randolph Road to a crossing of said Randolph Road, about 1,200 feet east of the East Diversion; thence in a general northeasterly direction to the eastern boundary line of the Canal Zone near the southeastern corner of the Fort Randolph Reservation, southwest of Cativá. The approximate route of the corridor is shown on the map which accompanies this Treaty, signed by the Plenipotentiaries of the two countries and marked "Exhibit A."

(b) The width of the corridor shall be as follows: 25 feet in width from the Colón end to a point east of the southern line of Silver City; thence 100 feet in width to Randolph Road, except that, at any elevated crossing which may be built over Randolph Road and the railroad, the corridor will be no wider than is necessary to include the viaduct and will not include any part of Randolph Road proper, or of the railroad right of way, and except that, in case of a grade crossing over Randolph Road and the railroad, the corridor will be interrupted by that highway and railroad; thence 200 feet in width to the boundary line of the Canal Zone.

The Government of the United States of America will extinguish any private titles existing or which may exist in and to the land included in the above-described corridor.

The stream and drainage crossings of any highway built in the corridor shall not restrict the water passage to less than the capacity of the existing streams and drainage.

No other construction will take place within the corridor than that relating to the construction of a highway and to the installation of electric power, telephone, 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.

The United States of America 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 Government of the Republic of Panama; and the Government of the United States of America 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 IX

In order that direct means of land communication, together with accommodation for the high tension power transmission lines, may be provided under jurisdiction of the United States of America from the Madden Dam to the Canal Zone, the Republic of Panama hereby transfers to the United States of America jurisdiction over a corridor, the limits of which shall be demarcated by the two Governments pursuant to the following descriptions:

A strip of land 200 feet in width, extending 62.5 feet from the center line of the Madden Road on its eastern boundary and 137.5 feet from the center line of the Madden Road on its western boundary, containing an aca of 105.8 acres or 42.81 hectares, as shown on the map which accompanies this Treaty, signed by the Plenipotentiaries of the two countries and marked "Exhibit B." ** * (The description of the land is omitted.)

The Government of the Republic of Panama will extinguish any private titles existing or which may exist in and to the land included in the above-described corridor.

The stream and drainage crossings of any highway built in the corridor shall not restrict the water passage to less than the capacity of the existing streams and drainage.

No other construction will take place within the corridor than that relating to the construction of a highway and to the installation of electric power, tele

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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]

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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

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)

Other revenues, transit divisions (repaid to appropriations).

Total

Operating expenses (charged to appropriations).

Depreciation of fixed property..

$17, 751, 958, 07 10, 470, 933. 19

28, 222, 891. 26

26, 614, 842. 45

Operating surplus..

1, 608, 048. 81

Less:

$1,500, 000. 00

Annual treaty payment to Republic of

430, 000. 00

1, 930, 000. 00 321, 951. 19

Panama__

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Net revenues, business divisions (covered into U. S.
Treasury).

Combined operations:

Revenues covered into U. S. Treasury

Revenues repaid to appropriations__

Transit divisions__

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Summary of operating expenses and revenues, fiscal year 1947—Continued

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1 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

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Less collections treated as deductions from expenditures 1.

Less surplus supplies and equipment acquired without reimbursement

treated as deductions from expenditures..

Net obligations for the year.

Obligations outstanding at start of year...

69, 707, 927

40, 794, 968

66,409, 654 38, 694, 791

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Not including net profit to be covered into Treasury: Fiscal year 1948, $951,284; fiscal year 1949, $967,336.

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