sure that our own people availed themselves as much of their opportunity of going directly to the Governor or his assistants as probably they should have, but I am sure that they are doing so now.

Mr. DORN. Is there any method by which the union set up by your employees, who are members of your particular union and who bring grievances to the Governor-if they are not satisfied with the way in which the Governor handles them, is there any method by which they can carry the grievances further, through whatever channels. they have, to the central office here in Washington, and for the central office here in Washington, then, to act further on the grievances?

Mr. BROWNLOW. Well, yes, there would be. But I would like to add this: I presume that I would be the one who would be charged with that responsibility when it came to Washington. In other than direct congressional matters, I should be somewhat reluctant to act,. unless there were a glaring difference, by going to the proper officers, here. That, of course, would be the Secretary of the Army, and then, if necessary to the White House. The occasion has not presented itself recently, and our differences, of course, such differences as there have been, actually have not been with the administration, directly, but have been more with agencies here in Washington. They had occasion, I think, not once but several times, to go to the State Department over some of their activities, and they also on several occasions discussed certain matters with Secretary Pace, of the Armymatters affecting the employees; but it was over some action which was initiated here, rather than down there.

Mr. DORN. And, in your main testimony, sir, you mentioned various. inconveniences that the people in the Canal Zone have to endure. Do you have any recommendations, or have you given any thought to changes, so that they would not be subjected to these inconveniences? Mr. BROWNLOW. I do not think so, in view of the work they are performing, and also in view of the conditions under which they live.. As to the specific details, I could not, of course, submit recommendations, except to say that they are, or at least were compensated for somewhat by some additional wages, by commissary privileges and by a better income, as a result of paying no income tax, so that they could take it all right, for a while; and then, of course, they would have some additional funds, whereby they could use their leave, there, to come to the United States, or go up to Costa Rica and sort of rehabilitate themselves, at least, both mentally and physically, to a point where they were willing to go back again.

Now, it sums itself up. I think that the Government- and when I say "the Government", I mean the Panama Company-I presume, always, as far as hospitals, schools, housing, sanitation, and that sort of things, are concerned, is probably just about as complete as it should be; the difference being, how much should the employee be expected to pay for those services. It is the old story of premium. If you have inconveniences, there is no way of overcoming them. Certainly one cannot do anything about the climate, down there, and things of that kind. The employee, I believe, should be compensated, so that he can have at least some weeks or months, whatever the period may be, in which to overcome the effects of those things.

Mr. DORN. You mentioned as one difference, there, the fact that they pay no income tax. They do pay it, now.

Mr. BROWNLOW. They do, now. I say I do not think they should. Mr. DORN. You think they should not pay an income tax? What about the recommendation contained in the Allen report to the effect that they should not pay an income tax on the 25 percent income? Mr. BROWNLOW. That is right; I do not think they should. Mr. DORN. Would you limit it to that?

Mr. BROWNLOW. No-on their entire income. I wonder whether I may implement that by saying this, Congressman, that, to me, these people are somewhat on the outpost of our Nation. Although we do not like to use the term "colonials", after all, that is actually what they are. They are the same people, down there, who formerly used to occupy the frontier in the United States, with all of the inconveniences that go with that sort of occupation. And certainly, as suchand notice this other thing, too: they point out to the rest of both Central and South America, all of that area, the way the people of the United States are expected to work and to live; and most certainly, if anybody wanted a shining example of the standards of the United States, he could get it there. And it is scandalous-one of those things that might be termed being a little bit overanxious about pointing out to the rest of the world how we live. I think it is a good example to the South American countries, provided we do not try to bring them down to the level of the Panamanian. Anybody who has been in Panama-as I presume each member of this committee has been and has gone into the interior, I think, would be given the shock of his life. I know I was; I was dumbfounded to think that there was a country that had been in existence as long as Panama, without, you might say, an economy of its own, without a national currency. Why, they do not even have their own money-they use our money, our monetary plan. And so, certainly, the employees of the Panama Canal Zone can be set up as a democracy, rather than any other form of government.

Mr. DORN. Mr. Brownlow, there were a number of people who came to my office recently to suggest that there should be a minimum wage in the Canal Zone, fashioned somewhat on the lines of the minimum wage law in the United States. Do you care at this time to express any opinion with reference to that, or would you prefer not to do so at this time?

Mr. BROWNLOW. I think that the local rate paid employees who are Panamanians should not be less than the prevailing rate for like work in the United States. I am speaking of the local rate for employees of the Canal Company, exclusive of the 25 percent increment of the United States citizen. The establishment of a minimum rate similar to what we have in the United States, it occurs to me, would have the effect, eventually, of establishing a flat rate for all employees. I would, however, prefer to see a rate comparable to that paid in the United States for the same type of work, plus the earned increment, where that is a 25 percent income for United States people, than any other flat, minimum rate. I would rather see that come up and not be limited to the minimum rate, as in the United States.

Mr. DORN. How about the wages of the members of your union down in the zone forgetting, for the moment, any fringe benefits, and forgetting, for the moment, this 25 percent? Are the wages paid

to the members of your union in the Canal Zone on a par with similar wages paid to members of your union here in the United States?

Mr. BROWNLOW. In the United States navy yards, yes. That is what it is predicated upon, on a general average of a certain number of navy yard rates, and then the increase of 25 percent. The navy yard rate is determined-it goes back to a law passed by the United States Congress in 1862, providing that a rate shall be paid to navy yard workers comparable to rates paid in private industry for similar work. That is not the exact language, but that is the meaning. So, consequently, if the principle, up here, is correct for the establishment of navy yard rates, than they get the same rate down there, plus the 25 percent; and I could not quarrel over that too much.

Mr. ALLEN. Thank you, very much.

Mrs. Sullivan, have you some questions?

Mrs. SULLIVAN. Yes; I should like to ask the gentleman a few questions.

Perhaps, Mr. Brownlow, you can answer this question: Of the 3,900, more or less, unemployed employees, who were laid off within. the past several years, from the Canal Zone, can you tell me how difficult it was for any of them to find employment when they came back to the States?

Mr. BROWNLOW. Well, we must bear in mind that, during the period when they came back to the United States, almost anyone could obtain employment in the United States, here. It was during the time that we were looking for anybody, even part-time workers. However, if they were to come back, today, I question very much, for instance, that the machinist would be able to get a job as a machinist, or a pipefitter, a job as a pipefitter, or an electrician, a job as an electrician, of the same caliber that he had down there. And then the other thing, Mrs. Sullivan is that, for these men, the going is a little bit difficult. It is difficult for an engineer, for instance and I am speaking, now, of a manual operating engineer, who has been operating the equipment that would operate the locks-to come up here and say, for instance, to the administration having to do with the Capital buildings, "I want to go into your engineroom and operate one of those engines." He has just lost sight of that, too; he hasn't any conception of what it is, any more. He would have to go through another period of training.

Mrs. SULLIVAN. It would be difficult to find comparable work up here?

Mr. BROWNLOW. That is right-unless there is a great deal of unemployment, such as there was, here in the United States, from 1940 through 1945-46.

Mrs. SULLIVAN. One other question. Have you any idea as to what percentage of the sons of the Canal Zone workers follow.in their father's footsteps, or try to obtain employment?

Mr. BROWNLOW. I asked that question, not only of the sons but also of the daughters, and I was unhappy. I wonder if I could put the feminine side of it, first. I felt badly about an expression that was made to me by some of the women down there, about their daughters coming up into the United States and attempting to go into anything. Now, this was not general, but some instances occurred, where they just gave it up and decided that they had to go back there. They had been brought up here, and they found it

difficult to adjust themselves to the conditions here. Now, the chances are that it was mostly a matter of homesickness. That is, they were separated from their families. And the men-I do not know the actual percentage. Perhaps I had better not even guess. But I did talk with some whose fathers had been on the zone, and they had succeeded their fathers.

Mrs. SULLIVAN. That is a very natural thing for them to do.

Mr. BROWNLOW. They have no other "out." I repeat, they have no other "out." They cannot go to work in Panama. That is, I do not know what they would do, if they were to do that. So they come to the United States. They have to tear themselves away from home and come to the United States.

Mrs. SULLIVAN. Thank you very much, Mr. Allen.

Mr. ALLEN. Mr. Mumma, have you a question?

Mr. MUMMA. Mr. Brownlow, you were speaking about engineers. Were you speaking about powerplant engineers, or operating engineers?

Mr. BROWNLOw. Operating or powerplant engineers.

Mr. MUMMA. Down there, they still have "cats," "internationals," "link-bolts," and "Lorains," do they not?

Mr. BROWNLOW. That is not the type of engineer I am asked about.

Mr. MUMMA. That is the reason I asked you the question.

Mr. BROWNLOw. I would say that most of those who are out of work, Congressman, have worked on construction projects, down there.

Mr. MUMMA. Surely. That is why I asked the question. They operate the locks. They have a panel for it.

Mr. BROWNLOW. Yes. But somebody has to do this work.

Mr. MUMMA. Yes, but in operating a shovel, or something like that, it is a matter of a quick decision: you press your foot, there, and your hand, here.

Mr. BROWNLOW. I would say this, Congressman, that the men who are operating those dredges and I spent half a day with one of the chief engineers, down there, and engaging in the type of employment that you are talking about could get a job anywhere in the world. Mr. MUMMA. That is my point.

Mr. BROWNLOw. They are of the highest type.

Mr. MUMMA. But the point that you mentioned was that they were lost. They could come up here and get a job in a building, or something.

Mr. BROWNLOW. Oh, of course the type you mention could go anywhere.

It

Mr. SHELLEY. Well, this is a parallel, really, to what I think Mr. Brownlow is talking about, though he has not said it in words. is that they are generally in the classification of operating engineers— two distinct divisions. There is the hoisting engineer, and there is the stationary operating engineer.

Mr. BROWNLOW. That is right.

Mr. SHELLEY. What he means is probably the stationary operating engineer, who has used the type of machinery they have down there, who finds it hard to get a job up here and keep it, with some of the new installations, here; whereas the hoisting engineer would probably be able to get a job, there or here.

Mr. MUMMA. That is my point.

Mr. SHELLEY. Is that correct?

Mr. BROWNLOW. Yes, that is correct. (Discussion off the record.)

Mr. ALLEN. Thank you, sir.

Mr. BROWNLOW. Thank you.

Mr. ALLEN. Governor Seybold, would you resume the chair, please?
Mr. ALLEN. Are there further questions of Governor Seybold?
Mr. MUMMA. Governor Seybold, is recruiting a problem, down

there?

General SEYBOLD. Recruiting is a problem for a number of professional requirements, particularly requirements in the medical profession; that is, our "medics" classes; and we do have some difficulty in getting professional services and druggists; but, outside of that, I would say no.

Mr. MUMMA. Are there a lot of Panamanian doctors?

General SEYBOLD. No, sir. We have about 140 Panamanian employees in the category of what is commonly, presently known as the United States rate group. They are mainly professional people, too-surveyors, engineers, some doctors, and persons of that sort. Mr. MUMMA. My particular point was, are there many Panamanians who are graduate doctors, practicing doctors, doctors of medicine? General SEYBOLD. Oh. Well

Mr. MUMMA. The reason I raise that point is that I have noticed, down in that country, that most of the boys who have been sent away to school either become doctors or lawyers-especially the men, I think, take a graduate at Johns Hopkins, or Pennsylvania. I wonder if that fills your requirements.

General SEYBOLD. No, not entirely. We utilize some in the medical profession; but, of course, the needs of the Republic, itself, are never met by this production. They are extremely, woefully short; and, as the witness who preceded me said, one of the problems of getting medical treatment back into-as we say "the interior," is that they are not available.

Mr. MUMMA. That was all. I just wondered, from the way the words were spoken. I thought people had to be coaxed to go down there.

General SEYBOLD. We can compete fairly well with the average requirements. We do badly in those areas of which I have spoken. Mr. MUMMA. Thank you.

Mr. ALLEN. Mr. Garmatz.

Mr. GARMATZ. I have one question. On page 8, Governor, you

say:

To insure the continuance of the efficient operation of the enterprise, however, one of the dangers to which the Congress should be alert is the dilution of the corporate form by unwarranted encroachments on the authority of the Board of Directors and management of the corporation by those without responsibility under the law for the results of the operation.

General SEYBOLD. Mr. Congressman, I admit it appears to me to be a severe statement. We do feel, at times and maybe rightly or wrongly-but I can assure you this is our concept, that there are directives in the management field which do somewhat encroach on the objectives and responsibilities of the Board of Directors of the Company, in their handling of the Company as a business board of