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to be penalized for living there, neither should they expect to be placed in a position of advantage over their stateside counterparts with respect to living cost. I understand there is already a 25 percent differential in salary to canal employees, as well as certain homę leave transportation privileges, both benefits being designed to compensate them for living in this area, just as there are similar benefits for Government employees in other overseas territories or foreign countries.

I am informed by industry representatives who framed this language that it has been discussed fully with representatives of canal employees and with the Bureau of Labor Statistics, and seems to meet the needs of all concerned. Such representatives will testify before this committee and will be in a position to answer detailed questions as to this proposal. I believe these witnesses will want to clarify in some detail just what is sought to be accomplished by the BLS pricing formula at the canal.

This concludes my comments on three of the major proposals in the bill. Other major proposals include a requirement that other Government agencies reimburse the Canal Zone Government for services performed by it which are the normal function of other agencies; a provision for mandatory tolls prescription and one for court review of tolls decisions. These will be commented on by other industry witnesses, which will follow me if that fits the committee's schedule.

Industry witnesses will be pleased to answer questions that committee members may have, in any order that the committee desires. However, if convenient to the committee, we suggest that it might like to hear the full proposal of the industry from all of its witnesses before questioning, since the full recitation of our proposals will answer many questions that may occur to you and might permit of a more coordinated examination of these legislative suggestions.

I request permission to submit at this time for the record the exhibit aforementioned, as well as the clean bill and comparative print.

The CHAIRMAN. We will put those in the record, and I will have a committee print made of the changes.

"Comparative Print,” March 8, 1956

CANAL ZONE CODE

COMPARATIVE PRINT OF CERTAIN SECTIONS AS THEY Would READ AFTER

AMENDMENT BY S. 2167, WITH ADDITIONAL PROPOSED CHANGES “5. ESTABLISHMENT, ADMINISTRATION, AND FUNCTIONS

OF CANAL ZONE GOVERNMENT.—The independent agency of the United States heretofore known as the Panama Canal shall hereafter

“(1) be known as the Canal Zone Government;

(2) be administered, under the supervision of the President or Supervision by such officer of the United States as may be designated by him Secretary of

Commerce Secretary of Commerce by a Governor of the Canal Zone; and

“(3) be charged, except as otherwise provided by law, with the performance of the various duties connected with the civil government, including health, sanitation and protection, of the Canal Zone.

"6. APPOINTMENT, TERM AND SALARY OF GOVERNOR. The Governor of the Panama Canal shall be appointed by the President, by and with the advice and consent of the Senate, commissioned for a term of four years and until his successor is appointed and qualified. He shall receive a salary of $10,000 a year. (Aug. 24, 1912, eh. 390, see: 4, 27 Stat. 561 (U. S. Code, title 48, see. 1305).)

"6. APPOINTMENT AND TERM OF GOVERNOR TO SERVE ALSO

AS ADMINISTRATOR.-The Governor of the Canal Zone shall be Governor serves appointed by the President, by and with the advice and consent of Administrator the Senate, and shall serve also as Administrator of the Panama Canal Company."

"246. INVESTMENT OF THE UNITED STATES.-(a) As of the beginning of business July 1, 1948, the corporation shall issue to the United States, and deliver to the Secretary of the Treasury, a receipt for $1 acknowledging the transfer to the corporation, under the provisions of section 251 of this title, of the net assets of the Panama Railroad Company, hereinafter referred to as the 'New York company,' a corporation created by an Act of the Legislature of the State of New York passed on April 7, 1849, aз amended by an Act of that legislature passed on April 12, 1855, and which is wholly owned by the United States, and such receipt shall be evidence of the ownership of the corporation by the United States of America. In its capacity as owner of the corporation, the United States shall be represented by the Presi- Secretary of dent of the United States or such other officer of the United States as may be designated bu him Secretary of Commerce, hereinafter referred to as the 'stockholder'.

Commerce made stockholder

"246 (e) The corporation is further obligated to pay into the Treasury as miscellaneous receipts amounts sufficient to reimburse the Treasury, as nearly as possible, (1) for the annuity payments under article XIV of the convention of November 18, 1903, between the United States of America and the Republic of Panama, as modified by article VII of the treaty of March 2, 1936, between the said Governments, and (2) for the net costs of operation of the agency known as the Canal Zone Government. The net costs of operation of the Canal Zone Government, which are deemed to form an integral part of the costs of operation of the Panama Canal enterprise as a whole, shall not include interest but shall include depreciation and the reimbursement of other Government agencies for expenditures made on behalf of the Canal Zone Government: The payments into the Treasury, referred to in this paragraph shall be made annually to the extent earned, and if not earned shall be made from subsequent earnings unless the Congress shall otherwise direet. Provided, That the cost of providing immigration and custom service for the Republic of Panama and the cost of rendering goods and services which would otherwise normally be borne by other departments of the United States Government in its overseas trust territories and Government reservations, and such portion of the cost of operating and maintaining roads, highways, sewers, and other such facilities and services, as is represented by the use of military personnel and their families (such portion to be determined by the ratio that mili- of facilities tary personnel and their dependents, together with civilian employees of the military and other governmental agencies and their dependents, residing in the Canal Zone bear to civilian United States citizens in the Canal Zone and citizens of the Republic of Panama employed by

Reimburse Canal Zone Government Panama

for services to

For military use

the Panama Canal Company and the Canal Zone Government and For services of their dependents, residing in the Canal Zone), shall be borne by the other agencies respective Government agencies that would normally provide such services, and such agencies shall reimburse the Canal Zone Government annually for the services rendered on their behalf. In the event, however, that such reimbursement is not made as hereinabove set out, or is delayed beyond the end of the fiscal year, then for the purposes defined in section 412 (b) such cost shall not be included in determining the net cost of operating the Canal Zone Government: Provided further, That the Canal Zone Government shall require payment on a full cost basis for goods and services provided to individuals or their dependents, when such individuals are not employed by the Canal Zone

For services to

certain nonemployees

Government or the Panama Canal Company. The payments into the Treasury referred to in this paragraph shall be made annually to the extent earned and, if not earned, shall be made from subsequent earnings unless the Congress shall otherwise direct."

"247., BOARD OF DIRECTons. The management of the corperation shall be vested in a board of directors consisting of not less than nine nor more than thirteen persons who shall be appointed by and hold office at the pleasure of the stockholder, or if he se eleets, consisting of the stockholder and eight to twelve other persons: Provided, That the Governor of the Panama Canal shall be a director and president of the corporation. Before entering upon his duties, each of the directors so appointed shall take an oath faithfully to discharge the duties of his office. The directers shall receive no salary for their services on the board, but under regulations and in amounts prescribed by the Board of directors, with the approval of the stockholder, may be paid by the corporation a reasonable per diem allowance in lieu of subsistence expense in connection with attendance at meetings of the board or in conneetion with the time spent on special service of the corporation, and their traveling expenses to and from meetings or when upon such special service, without regard to the Subsistence Expense Aet of 1926, as amended, or the Standardized Government Travel Regulations. Nothing contained in this article or in any other Aet shall be construed to prevent the appointment and service, as a director, officer, or employee of the corporation, of any officer or employee of the United States. The directors, of whom a majority shall constitute a quorum for the transaction of business, shall meet for organization purposes when and where called by the stockholder, and for subsequent meetings as provided by the bylaws: SEC. 247. MANAGEMENT OF CORPORATION. (a) The management of the corporation shall be vested in an Administrator who shall be appointed by the President of the United States, by and with the advice and consent of the Senate, and who shall receive compensation at the rate of $22,500 per annum.

The

"(b) To assist the Administrator of the corporation in the _execution of the functions vested in the corporation, there shall be a Deputy Administrator who shall be appointed by the President of the United States, by and with the advice and consent of the Senate, and who shall receive compensation at the rate of $20,000 per annum. Deputy Administrator shall perform such duties as the Administrator may from time to time designate and shall be acting Administrator and perform the functions of the Administrator during the absence or disability of the Administrator or in the event of a vacancy in the office of the Administrator.

"(c) There is hereby established the Advisory Board of the Panama Canal Company which shall be composed of seven members appointed by the President, by and with the advice and consent of the Senate, not more than four of whom shall belong to the same political party. The Advisory Board shall meet at the call of the Administrator, who shall require it to meer not less often than once each ninety days; shall review the general policies of the corporation including its policies in connection with design and construction of facilities and the establishment of rules of measurement for vessels and rates of tolls; and shall advise the Administrator with respect thereto, and shall perform such other functions assigned to it under the provisions of this title. Members of the Advisory Board shall receive for their services as members compensation of not to exceed $50 per diem when actively engaged in the performance of their duties, together with their necessary traveling expenses while going to and from meetings.'

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Adopt
St. Lawrence
Seaway type
management

functions

"SEC. 248. (a) GENERAL PURPOSE OF CORPORATION.-The cor- Defining major poration shall have, as its major objective, the economic and efficient transiting of vessels through the Panama Canal. In effecting such major objective the corporation shall operate the Panama Canal, including the locks, channels, towing facilities, and other facilities used in actual transit and, to the extent found necessary to accomplish

such purpose, it shall also operate facilities not used in actual transit; Self-support but to the extent practicable such additional facilities shall be operated activities in a manner to be self-supporting. In determining whether or not a facility is self-supporting, the corporation shall allow as cost the items of overhead, maintenance and operation, depreciation, interest on investment, and a proportionate share of the net cost of the Canal Zone Government: Provided, however, That all goods and services supplied by the corporation and Canal Zone Government to its Apply BLS employees shall be exempt from such self-support requirement. The for all goods and Administrator shall, at least annually, take whatever action is neces- services rendered sary to establish consumer prices in the Canal Zone on such a level to employees 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, D. C., as established by the Bureau of Labor Statistics.

"(b) GENERAL POWERS OF CORPORATION.—The corporation shall have and may exercise the following general powers, in addition to those elsewhere conferred in this article:

"fat (1) Shall have a perpetual succession in its corporate name un less dissolved by Act of Congress.

"H7 (2) May adopt, alter, and use a corporate seal, which shall be judicially noticed.

"fet (3) May adopt, amend, and repeal bylaws governing the conduct of its general business, and the performance of the powers and duties granted to or imposed upon it by law.

"fety (4) May sue and be sued in its corporate name.

"fet (5) May appoint such officers, agents, attorneys, and employees as may be necessary for the conduct of the business of the corporation, define their authority and duties, fix their compensation, delegate to them such of the powers of the corporation as may be necessary, require that such of them as it may designate be bonded, and fix the penalties and pay the premium of such bonds. Persons employed by the corporation whose compensation is paid on any basis other than a per annum basis shall not be included in making computations pursuant to the provisions of section 607 of the Federal Employees Pay Act of 1945. The provisions of section 82 of this title, as amended, shall apply to the corporation and to its officers and employees.

*F#(6) May enter into contracts, leases, agreements, or other transactions.

"fet (7) Shall have, in the payment of debts out of bankrupt estates, the priority of the United States.

"Ha) (8) May determine the character of and necessity for its obligations and expenditures and the manner in which they shall be incurred, allowed, and paid, and may incur, allow, and pay the same, subject to pertinent provisions of law generally applicable to Government corporations.

"H1) (9) May purchase, lease, or otherwise acquire, and hold, own, maintain, work, develop, sell, lease, exchange, convey, mortgage, or otherwise dispose of, and deal in, lands, leaseholds, and any interest, estate, or rights in real property, and any personal or mixed property, and any franchises, concessions, rights, licenses, or privileges necessary or appropriate for any of the purposes expressed in this article."

*SEC. 249. SPECIFIC POWERS OF CORPORATION.-Subject to the provisions of the Government Corporation Control Act, and insofar as consistent with the provisions of section 248(a), the cor- Limiting powers poration shall have and may exercise the following specific powers, to carry out

to those necessary in addition to those elsewhere conferred in this article:

purpose defined “(a) May maintain and operate the Panama Canal.

in sec. 248 (a) “(b) May construct, maintain, and operate a railroad across the Isthmus of Panama.

"(c) May construct or acquire vessels, and operate the same for transportation of passengers or freight, and for other purposes.

"(d) May construct or acquire, establish, maintain, and operate docks, wharves, piers, harbor terminal facilities, shops, yards, marine railways, salvage and towing facilities, fuel-handling facilities, motor-transportation facilities, power systems, water sys

tems, a telephone system, construction facilities, living quarters and other buildings, warehouses, storehouses, hotels, a printing plant, commissaries and manufacturing, processing, or service facilities in connection therewith, laundries, dairy facilities, restaurants, amusement and recreational facilities, and other business enterprises, facilities, and appurtenances necessary or appropriate for the accomplishment of the purposes of this article.

"(e) May make or furnish sales, services, equipment, supplies, and materials, as contemplated by this article, to vessels, to agencies of the Government of the United States, to employees of the Government of the United States, and to any other governments, agencies, persons, corporations, or associations eligible to make or receive such purchases, services, supplies, or materials under the laws prevailing at the time and the policies heretofore or hereafter adopted consistently with such laws.

"(f) May use the United States mails in the same manner and under the same conditions as the executive departments of the Federal Government.

"(g) May take such actions as may be necessary or appropriate to carry out the powers in this article or hereafter specifically conferred upon it: Provided, That the corporation shall undertake no new types of activities not included in the annual budget program prescribed by section 102 of the Government Corporation Control Act (except those which may be transferred to it under the provisions of section 246 (b) of this title): And provided further, That in the event an emergency is declared to exist by the Board of Directors Advisory Board during a period when the Congress is not in session (or by the Governor of the Canal Zone, acting in his capacity as President of the Corporation Administrator with the concurrence of as many of the Directors Advisory Board members as may be consulted without loss of time unreasonable in the circumstances), recommended appropriate action within the scope of this article may be undertaken. A report on such emergency activity shall be presented promptly to the Congress, when it reconvenes, for its approval and such action as it may deem necessary or desirable with respect to reimbursement through supplemental appropriation of funds to cover costs or losses arising from such emergency."

"SEC. 253. PAYMENT OF EXCESS FUNDS INTO THE TREASURY.The Board of Directors Administrator shall have the power and duty to appraise, at least annually, its the Corporation's necessary working capital requirements, together with reasonable foreseeable requirements for authorized plant replacement and expansion for not more than one fiscal year following such appraisal, and to pay into the Treasury as dividends the amount of funds in excess thereof. Such dividends shall be treated by the Treasury as miscellaneous receipts, but shall be treated on the books of the corporation as applicable to reduction of past or future direct Government capital contributions (as provided in section 246 (d) of this title) in determining the base for interest payments required under section 246 (c).'

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Limit reserve fund

"SEC. 411. AUTHORITY TO PRESCRIBE MEASUREMENT RULES AND TOLLS.-The Panama Canal Company is authorized to prescribe and from time to time change (1) the rules for the measurement of vessels for the Panama Canal, and (2) subject to in accordance with the provisions of the section next following, the tolls that shall be levied for the use of the Panama Canal: Provided, however, that the rules of measurement temporarily and unti prescribed and changed as provided in this section, the rates of tolls lawfully prevailing on the effective date of this Amended section shall continue in effect until changed as provided in this section: Provided, further, however, That the said corporation shall give six months' notice, by publication in the Federal Register, of any and all proposed changes in basic rules of measurement and of or any and all proposed changes in rates of tolls; proposed to be prescribed, during which period a public hearing shall be conducted: and provided, further, That changes in basie rules of measurement and changes in rates of tolls shall be subject to, and shall take effect upon, the approval of the President of the United States, whose aetion in such matter shall be final and conclusive.” in accordance with the Administrative Procedure Act, and an adjudi

Prevailing lawful rate to remain temporarily

Tolls hearing

in accord with Administrative

Procedure Act

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