General SCHLEY. Yes, sir.

Senator THOMAS. Have you any other suggestions to make regarding the provision of the bill?

General SCHLEY. I have nothing else. I think we have covered the field.

Senator THOMAS. Then if you furnish the data requested for the record sometime in the next few days, we will appreciate it, gentlemen. I thank you for your appearance before the committee.

The committee will be recessed until 10:30 tomorrow, at which time we will resume with other witnesses. We will try to include tomorrow and Thursday, if possible, but if we cannot get through on Thursday, we will set up another date for winding up the hearings. (Whereupon, at 11:45 a. m., the committee took a recess, to meet again at 10:30 a. m., Wednesday, March 20, 1940).

WAR DEPARTMENT CIVIL FUNCTIONS APPROPRIATION

BILL, 1941

WEDNESDAY, MARCH 20, 1940

UNITED STATES SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, D. C. The subcommittee met, pursuant to call, at 10:30 a. m., in the hearing room, Capitol, Hon. Elmer Thomas (chairman) presiding. Present: Senators Thomas (chairman), Hayden, Chavez, Adams, Bridges, and Austin.

Also present: Senators McCarran and Neely.

The subcommittee had under consideration the bill (H. R. 8668) making appropriations for the fiscal year ending June 30, 1941, for civil functions administered by the War Department, and for other purposes.

Senator THOMAS. The committee will be in order.

STATEMENT OF WILLIAM C. HUSHING, CHAIRMAN, NATIONAL LEGISLATIVE COMMITTEE OF THE AMERICAN FEDERATION OF LABOR

AMERICAN CITIZENSHIP REQUIREMENT FOR CERTAIN EMPLOYEES

IN CANAL ZONE

Senator THOMAS: Have you given your full name to the reporter? Mr. HUSHING. My name is W. C. Hushing, Chairman of the National Legislative Committee of the American Federation of Labor. Senator THOMAS. How long have you occupied that position? Mr. HUSHING. Since the 22d of last August, but I have been legislative representative for about 12 years.

Senator THOMAS. What item have you that you wish to discuss? Mr. HUSHING. I wish to speak in regard to section 2, as the bill came over from the House. I have no prepared statement. I am a little handicapped, because I am endeavoring to run our office and watch the legislation on both sides of the Capitol, so I will have to speak from a few notes that I jotted down since I came over here.

Senator THOMAS. Section 2 places a limitation on funds appropriate to this act for the payment of civilian employees in the Canal Zone. That is what you are on?

Mr. HUSHING. That is the amendment.

Senator THOMAS. Are you opposed to that section or favorable to it? Mr. HUSHING. I favor it.

THIRD LOCKS ACT

Senator THOMAS. I wish to place in the record at this point a copy of Public Law No. 391, 76th Congress, first session, authorizing and providing for the construction of additional facilities on the Canal

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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.

(The act referred to follows:)

[PUBLIC NO. 391-76тH CONGRESS]

[CHAPTER 694-1ST SESSION]

[H. R. 5129]

AN ACT Authorizing and providing for the construction of additional facilities on the Canal Zone for the puposes 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, however, That all new personnel in such construction work occupying skilled, technical, clerical, administrative, and supervisory positions shall be citizens of the United States: Provided further, 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 (a) to employ such persons as he may deem necessary and to fix their compensation: Provided, That the compensation of such persons shall not be lower than the compensation paid for the same or similar services to other employees of the Panama Canal: Provided further, That rates of compensation in excess of those authorized by law for other employees of the Panama Canal shall not be paid without the approval of the Secretary of War: And provided further, That the Governor of the Panama Canal with the approval of the Secretary of War is authorized to engage under agreement when deemed necessary expert assistance in the various arts and sciences upon terms and rates of compensation for services and incidental expenses in excess of the maximum compensation provided by law for employees of the Panama Canal; (b) to authorize the making of contracts without the advertisement hereinafter prescribed, with architectural or engineering corporations, firms, or individuals for the production and delivery of designs, plans, drawings, and specifications; (c) to authorize the making of any and all contracts necessary for the prosecution of the work herein authorized; (d) to provide for the establishment and operation of such auxiliary plants and facilities in connection with the work as may be necessary or desirable; (e) 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 (f) in general to do all things proper and necessary to insure the prompt and efficient completion of the work herein authorized.

Notwithstanding any other provision of law, and except as otherwise provided in this Act, all purchases and contracts for supplies or for services, except for personal services, shall be made by the Panama Canal after advertising, in such manner and at such times, sufficiently in advance of opening bids, as the Governor or his duly authorized representative in the United States shall determine to be adequate to insure notice and opportunity for competition. Such advertisement shall not be required, however, when (a) an emergency requires immediate delivery of the supplies or performance of the services; or (b) repair parts, accessorics, supplemental equipment, or services are required for supplies or services previously furnished or contracted for; or (c) the aggregate amount involved in any purchase of supplies or procurement of services does not exceed $500; in which cases such purchases of supplies or procurement of services may be made in the open market in the manner common among businessmen. In comparing bids and in making awards the Governor or his duly authorized representative in the United States may consider such factors as relative quality and adaptability of supplies or services, the bidder's financial responsibility, skill, experience, record of integrity in dealing, and ability to furnish repairs and maintenance

services, the time of delivery or performance offered, and whether the bidder has complied with the specifications.

Approved, August 11, 1939.

Senator THOMAS. You may proceed, Mr. Hushing. First, have you seen a copy of the testimony that was submitted by the representative of the Canal Zone and representatives of the War Department and the Navy Department?

Mr. HUSHING. No, I have not.

Senator THOMAS. I think perhaps it would have been advantageous to you to have seen that. The testimony of the officials who represent the Panama Canal Zone, the Army, the Navy, and the State Department is to the effect that they oppose section 2 for several reasons; first, they claim it will be an abridgment or a violation of a treaty between the United States and the Panamanian Government, and, second, the Panama Canal officials, the Army and Navy that representatives claim that the inclusion of this section will cost the United States a very large sum of money over and above what it would cost to employ the labor that is there.

I just make those two suggestions so you will have them in mind as you proceed.

Mr. HUSHING. That is an additional handicap, I will admit, but I have been appearing before congressional committees for so many years on this subject that I am fairly familiar with the objections that are raised by the Government officials from the Canal Zone, the War Department, and others.

I have been interested in this subject for 23 years. I first went to the Canal in June 1916, immediately became interested, and practically every year since that time I have appeared before committees of both Houses in an endeavor to do something in regard to this alien situation. During all this time, I and other representatives of the labor organizations affiliated with the American Federation of Labor have endeavored-in fact, we plead with the officials of the Government to settle this question by negotiation and we could get absolutely no consideration. When the Governor came up last year to appear on the Budget, I had a heart-to-heart talk with him about the matter and I told him that we felt that we could not delay any longer and that we would have to endeavor to secure some legislation.

I appeared before the House committee, and I understand that the committee inserted this amendment, section 2, in the bill and sent the bill to the Printing Office but that the President interposed objections and the bill was called back and the amendment stricken. So I conferred with Representative Lanham, of Texas, and he offered it on the floor, and it was adopted by a 3 to 1 vote. I don't know whether everyone on the committee is familiar with the set-up on the Canal Zone

Senator THOMAS (interposing). I think it would be well for you to make any statement that you deem proper in giving your version of the set-up.

Mr. HUSHING. Well, in the first place, we have the operation and maintenance of the Panama Canal. That will be separate from the construction of the new set of locks. We also have the Panama Railroad and the Panama Railroad Steamship Line, Governmentowned corporation; we have the Army functioning there with all its buildings and fortification work, and the Navy likewise. All