ever action is necessary to establish consumer prices in the Canal Zone on such a level as to establish a cost of goods and services in the Canal Zone equal to the current cost of equivalent goods and services in Washington, District of Columbia, as established by the Bureau of Labor Statistics." The proviso and the sentence are here discussed separately, beginning with the former. The written report and testimony on behalf of the canal agencies has already commented upon the requirement that the additional facilities be self-supporting, which underlies the subject proviso. The words "and Canal Zone Government" have, it is submitted, no proper place in the proviso since the self-support requirement related to "additional facilities" operated by the Company, and has no relation to facilities operated by the Canal Zone Government. It is noted that the self-support requirement appertains to the "additional facilities," and apparently to each facility severally, whereas the exemption contained in the proviso appertains not to the facilities but to certain classes of customers of the facilities, namely, employees of the Company and Government. It is not seen how this arrangement could be satisfactorily workable. Assuming there were to be a requirement that the "additional facilities" be self-supporting, then the canal administration would favor an appropriate exemption in favor of employees; however, it is submitted that the exemption would, in order to be workable, have to relate to facilities (or to activities) and not merely to certain classes of customers of various facilities (or activities). The exception would be directed at such activities as the commissaries, the community service centers, housing, etc., and these activities should be described as those predominantly engaged in providing goods and services for employees. Lastly, in connection with any exception of employee-service facilities or activities from a selfsupport requirement, there should necessarily be considered and resolved the question as to how any unrecovered loss from the supplying of goods and services to employees is to be borne. Referring to the sentence added by section 6 of the clean bill, a number of preliminary comments are indicated before discussing basic merits. Noting that the language of the sentence expressly contemplates that the Administrator of the Panama Canal Company would "establish consumer prices in the Canal Zone," and would "establish a cost of goods and services in the Canal Zone," it is suggested that, while the functions of the Administrator would include pricing for goods and services supplied by the Panama Canal Company, the functions, and the authority, of the Administrator would not broadly include the establishment of consumer prices in the Canal Zone or the establishment of a cost of goods and services in the Canal Zone. The Administrator would not, in other words, have authority to establish prices for goods and services supplied by others, including the Canal Zone Government, the military agencies, the nonappropriated fund instrumentalities associated with the military agencies, and the concessionaires of the various agencies. It is thus assumed that if this sentence were to be retained it would be revised in such manner as to relate only to Company prices and charges. It is understood that this provision has been viewed by some as contemplating the pricing, at Washington, D. C., levels, of a Canal Zone "market basket" of goods and services; however, if such was the intent, we think that it has not been achieved in the present draft. We interpret the present draft as referring to the pricing at Washington levels of each individual item of goods and services. Further, the present wording in its use of the unqualified word "equal" would appear to require that the price of each item should be precisely equal to the price of equivalent goods and services in Washington; a manifest impossibility except where the items happen to be identical. Under the sentence as presently worded it is not apparent, or at least not clear, who, as between the Administrator and the Bureau of Labor Statistics, would perform the important and intricate task of determining the “equivalence" of the items of goods and services. The question, broached in the above discussion of the proviso, again presents itself as to how unrecovered losses from the supplying of goods and services to individual consumers are to be borne. Neither the sentence under discussion, nor any other part of the clean bill, appears to supply the answer to this question. The sentence is believed unnecessary and highly impractical, whether it contemplates the Washington pricing of individual items or the Washington pricing of a "market basket" of goods and services, aimed at achieving the same costs, in the aggregate and for the average consumer, as prevail in Washington. The 75182-56- 12 arrangement would be completely artificial, cumbersome, and continuously controversial. It is quite obviously inappropriate as a means of pricing for sales and services supplied to employees in positions filled locally and compensated in accordance with the rates prevailing in this general area; and numbers of such employees will continue to reside in the Canal Zone and enjoy purchase and service privileges. SECTION 9 In the authorization for prescription of tolls, section 9 of the clean bill would substitute the phrase "in accordance with the provisions of the section next following" for the present phrase "subject to the provisions of the section next following." If there is any substantial difference between the two phrases, it is not apparent. The first proviso in section 411, as amended by section 9 of the clean bill, is viewed as being defective in that it deletes the original provision continuing in force the prevailing rules of measurement. The language of that proviso continuing in effect "the rates of tolls lawfully prevailing on the effective date of this amended section" would present to the Congress the issue of whether to substitute an uncertain and controversial provision for one which is clear and noncontroversial. The remaining change accomplished, by section 9 of the clean bill, in section 411, would add, following the requirement of the original bill that the tolls hearing be conducted in accordance with the Administrative Procedure Act, the clause "and any adjudication determined on the record." It is not believed that this added clause would accord with the terms or principles of the Administrative Procedure Act since, as we understand it, the approval or prescription for the future of rates constitutes "rule making" under that act, while "adjudication” refers to agency action for the formulation of an order. It is therefore considered that, if provisions of the Administrative Procedure Act were to be applied to the tolls-changing procedure, it would be the provisions of the act relative to rule making, rather than the provisions concerning adjudication. However, reference to the terms of the act relative to rule making discloses that those terms are specifically inapplicable to any matter relating to agency management or to public property; and the propositions that tolls changing relates to agency management and to public property are not believed to need elaboration. Considering the foregoing, and considering especially the fiscal control possessed and exercised by the Government over the Company, it is believed that the extension of the Administrative Procedure Act or of judicial review is unnecessary, and would be unsound and contrary to the best interests of our Government. SECTION 10 The only additional change made by (sec. 10 of) the clean bill in section 412 (b) is to delete the word "directly" from the phrase "together with the facilities and appurtenances [directly] related thereto." The theory of the deletion is not evident. EXHIBIT I Panama Line: Statement of passengers carried for fiscal year ended June 30, NOTE.-Beginning with the departure of the steamship Ancon, Feb. 3, 1953, the Panama Line reentered |