is the point we are trying to bring to you on this contracting of work by the Panama Canal Company.

If the wages are allowed to go below the minimum the United States citizen will not be able to live there, and, therefore, there will be no United States citizens on the Canal Zone.

Mr. LANDRUM. Will the gentleman yield?

Mr. ROOSEVELT. I yield.

Mr. LANDRUM. Is there any reason why they could not move on somewhere else?

Mr. MUNRO. None whatsoever.

We hope that the Congress would see the wisdom of keeping a certain number of United States citizens in that vital waterway of the Panama Canal.

Mr. ROOSEVELT. Mr. Munro, what I am trying to get at is this: is it your position, as it certainly would be mine, that a Federal corporation would certainly, in the surrounding area, represent a semiofficial position? Is it doing the correct thing in allowing the minimum wage law to be applied to other corporations such as you listed, other service corporations, but in the official service work, let us call it, done by the United States Government corporation it does not apply to them, and, therefore, we have set up two standards, one for corporations doing service work where they are protected, and another for semiofficial Government corporations where they are not protected and where they do not pay the minimum wage?

It certainly, I hope, is your position that you do not think that is a correct position.

Mr. MUNRO. We have been fighting that issue. I have been in Washington on this particular job for about 5 years, and that is one of the things I have been fighting ever since I have been up here.

Mr. ROOSEVELT. You should have come before this committee before. It seems to me that is a question that fits into this committee's jurisdiction also.

Mr. GRAHAM. Mr. Roosevelt, under the act, employees of the hotel would not be covered whether they were in the Government or out of the Government, because that is an exemption.

Mr. CHUDOFF. The hotel people are exempt from the minimum-wage law.

Mr. GRAHAM. Yes. So far as that example is concerned, they would not be covered regardless.

Mr. ROOSEVELT. I deplore that, Mr. Graham.

Mr. CHUDOFF. Mr. Munro, then it is your thought that everybody in the Panama Canal Zone should be under the minimum wage law? Mr. MUNRO. Yes; they should have that protection.

Mr. CHUDOFF. Do you think the Panama Canal Company Act should be amended to provide that everybody working for the Panama Canal Company should be under the minimum wage law?

Mr. MUNRO. We do, sir.

Mr. CHUDOFF. So that there would not be two standards, and everybody in the Panama Canal would be under the Fair Labor Standards Act, and you would not have any problem.

Mr. MUNRO. That is correct. We are fearful that the legislation which is going to supplement the treaty will bring out a single wage

schedule which might be on a Panamanian base instead of a United States base.

Mr. CHUDOFF. So you are on very safe ground as far as the situation is concerned, and you have to carry your case to-what is it, the Merchant Marine and Fisheries Committee?

Mr. MUNRO. That is correct.

Mr. CHUDOFF. To ask them to take that portion of the act out, or eliminate it from the act, and to allow the minimum wage law to apply to everybody in Panama.

Mr. MUNRO. That is right.

Mr. CHUDOFF. Have you done anything about that? Has your organization tried to do something about that?

Mr. MUNRO. We have had hearings going before that committee since the first session of the 83d Congress, and they are still working on it. They had hearings on the Canal Zone on December 7, 8, and 9 of last year.

Mr. CHUDOFF. So that this committee would have no power at all over the Panama Canal Company?

Mr. MUNRO. Well, I don't know. I could not answer that question. Mr. CHUDOFF. In what business are they engaged other than in operating the hotel down there?

Mr. MUNRO. The Panama Canal Company?

Mr. CHUDOFF. Yes.

Mr. MUNRO. They do everything that you find in a normal city.
Mr. CHUDOFF. Supply the utilities?

Mr. MUNRO. Supply the utilities, the water, the streets, and, through the Canal Zone Government, they supply the police protection, fire protection, the schools, the health facilities, and, back to the Company again, they supply what they call the commissary which is a general store. They do the slaughtering of meat; they have their own dairy. It is a self-contained Government organization.

Mr. CHUDOFF. Does not the Secretary of the Interior have jurisdiction over that?

Mr. MUNRO. The President of the United States has the authority to appoint whom he desires, and it has always been in the Department of the Army.

The term of office of the present Governor, who is the main official in the Canal Zone, expires, I believe, in May. And I have been informed this morning that the President has appointed a General Potter of the Army engineers to succeed him. So the Army engineers are the leading light as far as the Panama Canal is concerned.

Mr. CHUDOFF. In other words, the Panama Canal Zone is operated the same way as the Virgin Islands used to be under the Navy until they had their own organic act and their own legislature?

Mr. MUNRO. We have nothing in the Canal Zone except the Governor, who has complete authority, by the Canal Zone Code, who is appointed by the President and confirmed by the Senate. His word is law.

Mr. CHUDOFF. That is all, Mr. Chairman.

Mr. ELLIOTT. Mr. Holt?

Mr. HOLT. What do you do, Mr. Munro?

Mr. MUNRO. When I am working for the Panama Canal Company I work as a power dispatcher. I come up to Washington at the begin

ning of every session to represent the people on the Canal Zone. When
I come up here I am on leave without pay from the Company.
Mr. HOLT. Compensated by your union?

Mr. MUNRO. By the union, that is correct.
Mr. HOLT. Are you civil service?

Mr. MUNRO. No; we are not. The civil service status does not apply to all of the positions on the Canal Zone. There is a list which applies, mostly clerical and scientific. The bulk of the people on the Ĉanaĺ Zone are not under civil service.

Mr. CHUDOFF. What are these unions? You say there are 23 unions that you represent.

Mr. MUNRO. The International Brotherhood of Electrical Workers, the Operating Engineers, the Masters, Mates and Pilots.

I had better get a list if you want them all.

Mr. HOLT. I want an idea.

Are some of your people the ones who operates the canal itself? Mr. MUNRO. We operate, maintain, and protect the canal. That covers all phases. We have the fire department, the teachers, the mechanical trades, plumbers, pipefitters, etc.

Mr. HOLT. Is it true that most of those employees are American citizens?

Mr. MUNRO. We represent only the American citizens.

Mr. HOLT. That is not what I asked. I asked aren't most of them American citizens.

Mr. MUNRO. In the skilled crafts; yes, sir.

Mr. HOLT. In the operation of the canal itself?

Mr. MUNRO. In the skilled trades of journeymen level, the pilots, police, firemen, teachers, and the hospital staff are United States citizens. There are, however, in the noncitizen group, which amounts to 10,147, people of the artisan classification.

Mr. HOLT. You said 10,000 are of an alien group. How many are in the American citizen group?

Mr. MUNRO. 3,726.

Mr. HOLT. And how do you negotiate for wages now?

Mr. MUNRO. At the present time for the Company or the Government, the wages for the crafts are taken by adding the 9 navy yards in the United States and averaging that rate, and adding 25 percent. The floating equipment is taken from the Army engineer districts and averaged. Those in the power system are taken from Federal power corporations and averaged. The police, teachers and fire use the Washington rates of pay. The clerical worker in the Government uses the Classification Act by law. In the Company they use it administratively.

Mr. HOLT. That is all I have, Mr. Chairman.

Mr. ELLIOTT. Mr. Fjare?

Mr. FJARE. As I understand it, you oppose an amendment excluding the Canal Zone from the law.

Mr. MUNRO. That is right.

Mr. FJARE. Should that be in the bill and become law, exactly how will it affect you as a member of a labor union and an employee of the Canal Zone?

Mr. MUNRO. A contractor may then figure a contract using United States labor. He may then deduct a sufficient amount of money to get the contract. He then goes into the Republic of Panama unemploy

ment labor pool and gets his labor for whatever he has to pay for it, and he, in turn, gets the difference.

Mr. FJARE. Is that going to affect you personally?

Mr. MUNRO. It will mean that the Panama Canal Company will no longer do the work. Therefore the United States citizens will lose their positions. In the Canal Zone it is required that 30 days after you lose your employment on the Canal Zone you must return to the United States. Therefore, you lose your position because the Company has farmed out the work, and 30 days after that you are back in the United States.

Mr. FJARE. They are going to fire you, you mean?

Mr. MUNRO. That is right. If there is no work there is nothing to do.

Mr. LANDRUM. Will you yield, Mr. Fjare?

Mr. FJARE. Yes.

Mr. LANDRUM. Now what you have just detailed to us there actually can take place now without the amendment that you are apprehensive about, can it not?

Mr. MUNRO. It can happen.

Mr. LANDRUM. You said in your statement that it is happening. Mr. MUNRO. It is happening; that is correct. It can and is happening.

Mr. LANDRUM. So you could not be concerned about this amendment for that reason if it is happening now.

Mr. MUNRO. If the Vermilya-Brown decision, which I just heard about for the first time, requires that the dollar minimum apply to contracts in the Canal Zone, then the contractor will have to pay the minimum of $1 per hour instead of such figures as low as 40 cents or even lower, on which I do not have the substantiating data.

Mr. LANDRUM. Mr. Munro, I believe I understand that. But the thing that appears confusing to me is that in your statement you say that such as you have detailed here is happening, and you show what the results would be. And then you base your opposition to this amendment that you are apprehensive about on the fact that the amendment will permit that to happen. And I do not see the connection.

Mr. MUNRO. I might add here what I think will clarify it.

Had we known that the contract work applied under the Fair Labor Standards Act we would have taken steps to apply it to the contractors down there. We did not know it until I sat in these hearings and it was called to my attention. We hope to take steps to remedy that. But while we are taking steps we want to persuade the committee to at least look into the situation.

Mr. LANDRUM. That is exactly what I am trying to do for myself now, in view of your statement.

Mr. MUNRO. And see if it is legitimate to take away the dollar minimum, which, in turn, will force the American citizen off of the zone, in our opinion.

Mr. LANDRUM. Thank you.

Mr. FJARE. That is all I have.

Mr. CHUDOFF. I just have one more question, Mr. Chairman, that I think ought to be in the record.

How does the cost of living in Panama compare to the cost of living in the United States?

Mr. MUNRO. The cost of living in Panama, I am not qualified to state, but perhaps Mr. Fitzgerald can supply that.

The cost of living in the Canal Zone, which is a controlled economy, is higher than it is in the United States.

Mr. CHUDOFF. Is there any difference between the cost of living in the Canal Zone as compared with the cost of living in Panama itself?

Mr. MUNRO. Yes, there is. From my personal observation, it is higher in the Republic of Panama than it is in the Canal Zone, for American standards of living.

Mr. CHUDOFF. So that that is the reason why they give you the 25 percent differential, to make it attractive for you to go down there? Mr. MUNRO. That is one of the reasons.

Mr. CHUDOFF. Thank you, Mr. Munro.

That is all, Mr. Chairman.

Mr. ELLIOTT. That is all you have, Mr. Munro?

Mr. MUNRO. Yes.

Mr. ELLIOTT. Mr. Graham.

Mr. GRAHAM. Would you say that the contractors that started in operation under this type of arrangement during the past 2 years would have a good-faith defense in regard to any retroactive claims? Mr. MUNRO. I have not looked into that. I cannot very well answer that. I don't know.

As I say, I have not checked into the situation other than

Mr. GRAHAM. There is a possibility, though, of some retroactive claims arising?

Mr. MUNRO. That must be why the Defense Department brought the subject up.

Mr. GRAHAM. That is all.

Mr. HOLT. What are the wages down there now for Americans? Are any American citizens getting lower than the minimum wage? Mr. MUNRO. No. The wages for the Government company start at 41 cents an hour. Up to the 75-cent minimum, there are 6,761 employees. They are all non-United States citizens. There are a few United States citizens working under what we call the local rate rules down there. I do not know whether they are in that particular group or not.

Mr. HOLT. Are you also interested in raising the noncitizen wages?
Mr. MUNRO. We are indirectly, and Mr. Fitzgerald is directly.
Mr. HOLT. Why are you indirectly interested?

Mr. MUNRO. We have to live with them.

Mr. HOLT. What is the minimum wage in Panama? Do they have one?

Mr. MUNRO. As far as I can find out, they have no minimum. I believe Mr. Fitzgerald can go into that problem.

Mr. HOLT. That is all.

Mr. ELLIOTT. Thank you, Mr. Munro, for the information you have brought to the committee.

I wonder if at this time you do not wish to put into the record the wage statements that you have alluded to in your testimony there. Mr. MUNRO. I can supply that, yes, sir.

Mr. ELLIOTT. Without objection, the statements referred to by Mr. Munro will become a part of the record at this point.