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cation determined on the record. Provided, however, that the Court Court review of Appeals of the Second Circuit shall have exclusive jurisdiction to review the acts of the corporation under this section and to compel corporate action unlawfully withheld or unreasonably delayed."

in tolls formula

"SEC. 412 (b) Tolls shall be prescribed at a rate or rates cal- Mandatory ratio culated to cover, as nearly as practicable, all costs of maintaining eliminating and operating the Panama Canal, together with the facilities and "substantial appurtenances related thereto, including interest and depreciation, weight" wording and an appropriate a proportionate share of the net costs of operation of the agency known as the Canal Zone Government. In t The determination of such appropriate proportionate share, substantial weight shall be given to based on the ratio of the estimated gross revenues from tolls to the estimated total gross revenues of the said corporation exclusive of the cost of commodities resold, and exclusive of revenues arising from transactions within the said corporation between divisions of the corporation or from transactions with the Canal Zone Government.

PROPOSED "CLEAN BILL" TO SUBSTITUTE FOR: S. 2167 IN THE SENATE OF THE UNITED STATES

A BILL To make certain changes in the administration of the Panama Canal Company, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SEC. 1. That subsection (2) of section 5 of title 2 of the Canal Zone Code is amended by striking out "President or such officer of the United States as may be designated by him," and inserting in lieu thereof: "Secretary of Commerce."

SEC. 2. Section 6, title 2, Canal Zone Code is amended to read as follows:

"6.-APPOINTMENT AND TERM OF GOVERNOR TO SERVE ALSO AS ADMINISTRATOR.-The Governor of the Canal Zone shall be appointed by the President, by and with the advice and consent of the Senate, and shall serve also as Administrator of the Panama Canal Company."

SEC. 3. The last sentence of subsection (a) of section 246 of title 2 of the Canal Zone Code is amended by striking out "the PresiIdent of the United States or such officer of the United States as may be designated by him", and inserting in lieu thereof "the Secretary of Commerce".

SEC. 4. Subsection (e) of section 246 Title 2 of the Canal Zone Code is amended to read as follows:

"(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

75182-56- -3

Supervision by
Secretary of
Commerce

Governor is also
Administrator

Commerce made Secretary of representative of

United States as owner and designated stockholder

Reimbursement of Canal Zone

Government for services to

Panama

For use of
facilities by
military

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 military 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 the Panama Canal Company and the Canal Zone Government and their dependents, residing in the Canal Zone), shall be borne by the 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 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."

SEC. 5. Section 247 of title 2 of th: Canal Zone Code is amended to read as follows:

For services normally provided by other agencies

For services to nonemployees

seaway management form

"SEC. 247. MANAGEMENT OF CORPORATION.-(a) The management of the corporation shall be vested in an Administrator who shall St. Lawrence be appointed by the President of the United States, by and with the advice and consent of the Senate, and who shall receive compensation adopted at the rate of $22,500 per annum.

"(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. The 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 meet 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."

SEC. 6. Section 248 of Title 2 of the Canal Zone Code is amended to read as follows:

"SEC. 248. (a) GENERAL PURPOSE OF CORPORATION.-The corporation 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; but such additional facilities shall be operated 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

Defining purpose

and providing for self-support of nontransit activities

overhead, maintenance and operation, depreciation, interest on investment, and a proportionate share of the cost of the Canal Zone Government: Provided, however, That all goods and services supplied by the Panama Canal Company and Canal Zone Government to its employees shall be exempt from such self-support requirement. The Administrator shall, at least annually, take whatever 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, 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:

"(a) (1) Shall have a perpetual succession in its corporate name, unless dissolved by Act of Congress.

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

"(e) (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.

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

"fe (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.

"(6) May enter into contracts, leases, agreements, or other transactions.

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

"(h) (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.

"(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. 7. Section 249 of Title 2 the Canal Zone Code is amended to read as follows:

"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 corporation shall have and may exercise the following specific powers, in addition to those elsewhere conferred in this article: "(a) May maintain and operate the Panama Canal. "(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 systems, a telephone system, construction facilities, living quarters and other buildings, warehouses, storehouses, hotels, a printing plant,

Applies BLS formula to price for all goods and services rendered by Company to employees of Company or Zone

Limiting powers to those necessary

to carry out purpose defined in sec. 248 (a)

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 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 Administrator with the concurrence of as many of the 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. 8. Section 253 of Title 2 of the Canal Zone Code is hereby amended to read as follows:

Limiting reserve

"SEC. 253. PAYMENT OF EXCESS FUNDS INTO THE TREASURY.The Administrator shall have the power and duty to appraise, at least annually, the Corporation's necessary working capital requirements, together with reasonable foreseeable requirements for authorized plant replacement and expansion for not more than one fund fiscal year following such appraisal, and to pay into the Treasury as dividends the amounts 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)." SEC. 9. Section 411 of Title 2 of the Canal Code is hereby amended to read as follows:

"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) 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, temporarily and until prescribed and changed as provided in this section, the rates of tolls laufully prevailing on the effective date of this Amended section shall continue in effect: Provided, 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: in accordance with the Administrative Procedure Act, and any adjudication determined on the record. Provided, however, that the Court of Appeals of the Second Circuit shall have exclusive jurisdiction to review the acts of the

Tolls hearing in
accord with
Administrative

Procedure Act

Court review

P

corporation under this section and to compel corporate action unlawfully withheld or unreasonably delayed.'

SEC. 10. Subsection (b) of Title 2 of section 412 of the Canal Zone Code is hereby amended to read as follows:

"(b) Tolls shall be prescribed at a rate or rates calculated to cover, as nearly as practicable, all costs of maintaining and operating the Panama Canal, together with the facilities and appurtenances related thereto, including interest and depreciation, and an appropriate a proportionate share of the net costs of operation of the agency known as the Canal Zone Government. In The determination of such appropriate proportionate share, substantial Mandatory ratio weight shall be given to based on the ratio of the estimated gross eliminating revenues from tolls to the estimated total gross revenues of the "substantial said corporation exclusive of the cost of commodities resold, and weight" wording exclusive of revenues arising from transactions within the said corporation between divisions of the corporation or from transactions with the Canal Zone Government-,

SEC. 11. The amendments made by this Act shall be effective after ninety days after the date of enactment of this Act.

in tolls formula

Mr. MAYER. If agreeable to the committee, I will go ahead with my statement at this time.

The CHAIRMAN. Very well.

STATEMENT OF ROBERT E. MAYER, PRESIDENT, PACIFIC
AMERICAN STEAMSHIP ASSOCIATION

Mr. MAYER. For the purpose of the record, my name is Robert E. Mayer. I am president of the Pacific American Steamship Association, a trade association representing most of the major American flag steamshiplines operating on the Pacific Coast of the United States. I have been authorized to speak not only for the Pacific American Steamship Association, but also for the American Merchant Marine Institute, Inc., and the Association of American Shipowners on this subject.

A substantially greater portion of the waterborne commerce of the Pacific coast must transit the canal than does that of the Atlantic and gulf coasts. The Atlantic and gulf coasts, of course, send larger totals of commerce through the canal. It just happens that of the total of our smaller overall, we have a larger proportion going through the canal.

We offer this as a possible reason for the fact that the fiscal policies of the canal have been the subject of active consideration by port and terminal authorities, chambers of commerce, various commodity groups and maritime labor unions along the Pacific coast for some time.

A brief bit of background on S. 2167. Since the canal was completed in the early nineteen hundreds, there have been many proposals for changes in its operations and policies. The first major changes came about with the enactment of Public Law 841, which became effective on July 1, 1951. The major objective sought in that law was a division of the business and governmental activities at the canal. The law established two entities, a Panama Canal Company to handle the transit and other business activities; and the Canal Zone Government to handle governmental activities. This provided a more clear division of costs and expenditures between the two general types of activities.

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