is concerned, it is in the same form as any normal commitment between the United States and a foreign government, which the Secretary of State in his conduct of foreign relations with the United States may make. In addition, this exchange of notes has the added significance that it was before the Senate when the treaty was ratified. Senator RUSSELL. I can see the condition; that the Senate voted with its eyes open as to the construction the State Department placed on the treaty. POSITION OF PANAMA RELATIVE TO EMPLOYMENT OF PANAMANIANS ON BOTH NEW AND OLD PROJECTS Senator HAYDEN. I want to make it perfectly clear that from a technical point of view, Panamanians would have just as much right to complain about any change in the law or custom of employing labor on new construction as on old, but from a practical point of view it would be a very different picture. As a practical matter, an enlarged canal means larger business for Panama. As a practical matter, there would be large numbers of Panamanians employed in unskilled work which they otherwise would not have if we did not undertake it, and it will come to an end when the job is done and the situation will be all washed out; whereas, this situation against which they protest is a matter that is continuing and is a much graver problem, to my mind. Mr. FINLEY. I still would like to insist, Senator, that the Panamanians have already indicated their objection to these provisions that only American citizens be employed not only with respect to the present construction bill but also with respect to the retroactive feature. Senator THOMAS. It is now past 12 o'clock and without objection the committee will stand recessed until 10:30 tomorrow. time we will take up where we left off. At that (Whereupon, at 12:02 p. m., the committee adjourned to meet again at 10:30 a. m., tomorrow, Wednesday, March 13, 1940.) WAR DEPARTMENT CIVIL FUNCTIONS APPROPRIATION BILL, 1941 WEDNESDAY, MARCH 13, 1940 UNITED STATES SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, D. C. The subcommittee met, pursuant to adjournment, at 10:30 a. m., in the hearing room, Capitol, Hon. Elmer Thomas (chairman) presiding. Present: Senators Thomas, Hayden, Truman, Adams, Chavez, O'Mahoney, Townsend, and Lodge. Senator THOMAS. The committee will be in order. Is Mr. Finley present? STATEMENT OF HAROLD D. FINLEY, ASSISTANT CHIEF, DIVISION OF AMERICAN REPUBLICS, STATE DEPARTMENT-RESUMED PROPOSED AMENDMENT TO SECTION 2 Senator THOMAS. Have you some further suggestion? Senator THOMAS. Just take the chair right in front of the reporter, please. You may proceed with your statement, Mr. Finley. Mr. FINLEY. Mr. Chairman, I would like to suggest the language by which section 2 of this act might be amended so as to have it conform to what we regard as our commitment toward Panama, by adding the following: Provided, however, as an exception to this prohibition, That nothing in this Act shall operate to prevent the employment of any person entitled by reason of any international commitment of the United States to be eligible for such employ ment. I should like to add also for the record that when Panama ratified the treaty of 1936, the Panamanian Legislature had before it the notes accompanying the treaty which include the note requiring us to give equality of opportunity for employment to Panamanians. INTERPRETATION OF PROPOSED AMENDMENT Senator THOMAS. If you would interpret that amendment so that there will be no doubt as to just what it means-how does that change the text or the meaning of section 2? Mr. FINLEY. It is an addition to section 2, sir. It excepts from the operation of this section those who are entitled to equality of treatment by reason of our international commitments with Panama. 216797-40- -3 31 Senator THOMAS. Who is to pass on the persons who are to be excepted? Mr. FINLEY. I don't understand your question, sir. Senator THOMAS. You say it excepts from operation those who are entitled to equality of treatment. Who is to pass on that equality? Mr. FINLEY. We think that this language provides for the necessary equality. Senator THOMAS. That simply throws the matter wide open again; is it not true, in effect? Mr. FINLEY. I can only repeat, sir, that I think this language would amend the section so as to provide for the equality to which we are committed toward Panama. PURPOSE OF PROPOSED AMENDMENT Senator THOMAS. In other words, your amendment is intending to make it conform to the treaty then? Mr. FINLEY. To our commitment; yes, sir. Senator THOMAS. And if the amendment should be adopted, the authorities in Panama could still operate under the treaty without embarrassment to either the United States or the Panamanian Government? Mr. FINLEY. That is correct, sir. Senator THOMAS. It would be a matter of discretion in the hands of its executive department as to who would be employed and who would not be employed. You could employ such persons as you thought would tend to establish the equality of the principle? Mr. FINLEY. We are committed to the principle of equality of opportunity for the Panamanians. That is all I have. Senator THOMAS. The committee, of course, will give consideration to your amendment. Mr. FINLEY. I thank you, sir. STATEMENT OF REAR ADMIRAL A. H. VAN KEUREN, CHIEF OF BUREAU OF CONSTRUCTION AND REPAIR, NAVY DEPARTMENT PROVISION IN NAVAL BILL IDENTICAL WITH SECTION 2 OF CIVIL FUNCTIONS BILL Senator THOMAS. Who represents the Navy Department? Senator THOMAS. It is a fact, is it not, that the House, in enacting the Navy appropriation bill, included either an exact copy of section 2 in this bill or a section similar to it which has the same effect? Admiral VAN KEUREN. Yes, sir. Senator THOMAS. What is your attitude toward the section in the appropriation bill which is the same attitude toward the section in this act? POSITION OF NAVY DEPARTMENT RELATIVE TO PROVISION Admiral VAN KEUREN. The attitude of the Navy Department is expressed in a letter which was signed, I believe, yesterday by the Secretary of the Navy, to the chairman of the Subcommittee on Naval Appropriations of the Committee on Appropriations of the United States Senate, Hon. J. F. Byrnes, and the information which I give will be taken largely from that letter. [Reading:] The naval appropriation bill, H. R. 8438, which was passed by the House of Representatives on February 16, 1940, and referred by the Senate to the Committee on Appropriations on February 19, 1940, provides in section 7, as follows: I won't read it, because I believe it is identical with the section under discussion. [Continues reading:] NUMBER OF POSITIONS IN FIFTEENTH NAVAL DISTRICT AFFECTED There are in the fifteenth naval district (Canal Zone) 273 positions of the character specified in section 7, which are now occupied by aliens. To replace those alien employees with American citizens would increase the cost of labor because the schedule of wages for American citizen employees is much higher than that for alien employees. The Commandant of the fifteenth naval district, Balboa, Canal Zone, has submitted the following estimate of the additional amounts which will be required annually under such appropriation now charged with the pay of the positions in question. ADDITIONAL ANNUAL COST PROVISION WOULD OCCASION These amounts are summarized under various headings of the bureaus of the Navy Department, and the grand total of them is $269,341. That is the additional annual cost which would be incurred by this section [continues reading:] The foregoing estimates take no account of the increased costs of new construction under the appropriation, Public Works, Bureau of Yards and Docks. There will be an appreciable increase in the cost of performing all work, including such new construction, on the assumption that the proposed restriction would apply to contractors' employees as well as to employees of the Government. On this part dealing with public works, Admiral Moreell, of the Bureau of Yards and Docks, is present and he is prepared to elaborate on any remarks that I make, so I want to come down to a very pertinent section of this letter as regards the operation of the Navy itself [continues reading:] QUESTION AS TO AUTHORITY UNDER PROVISION TO REIMBURSE PANAMA CANAL FOR REPAIR OF SHIPS In consideration of the wording of section 7, there is serious doubt as to whether the Navy Department would be authorized to reimburse the Panama Canal for the repair of ships if the Panama Canal employs alien artisans and semiskilled artisans (helpers) in making such repairs. That means that any emergency which might arise in the operation of ships in the Canal Zone or waters adjacent thereto could not be taken care of by the drydock and the shops at Panama Canal if this section 7 goes into effect, because we employ the facilities of that drydock and shops for making those repairs and it is done at frequent intervals some are emergency repairs; some are routine repairs-to obviate the cost of sending the ships back to the United States. We spend on an average of $50,000 to $100,000 a year. Those figures may not be correct, but I was so informed this morning for that class of work. And it saves the long haul to the Mare Island Navy Yard on the west coast or to one of the navy yards on the east coast if we do the work down there, besides obviating the necessity for taking these |