(The material referred to follows:)

DATA COMPILED FROM TIME SHEETS

The contractors' apparent working conditions as indicated on the photostats of time sheets indicate:

United States citizens work an 8-hour day, 40-hour week, at straight time, all other at time and one half.

Non-United States citizens work an 8-hour day, 48-hour week, and in 1 case a 56-hour week at straight time. Hours over 8 in 1 day appear to be paid at time and one-half.

(The photostated payrolls from which the above information was obtained are not printed, but were filed with the committee, and are available for reference.)

Mr. ELLIOTT. Mr. Kennedy Ward, counsel for the committee, wants to ask you a question.

Mr. WARD. Is it not your position that you are hoping that the Supreme Court will apply the minimum wage to the subcontractors from the Canal Company and thereby, raising their minimum wage to a dollar, it will more or less help insure you directly to be able to compete, so to speak, while you are down there? Is that not your whole contention in being here?

Mr. MUNRO. That is the whole thing in a nutshell.

Mr. GRAHAM. To maintain the differential.

Mr. MUNRO. That is correct.

Mr. ELLIOTT. Is there any litigation pending that might have the result of bringing you under the Vermilya-Brown decision?

Mr. MUNRO. Not to my knowledge.

Mr. ELLIOTT. Mr. Graham, did you have another question?

Mr. GRAHAM. No. sir.

Mr. ELLIOTT. Mr. Derrickson?

Mr. DERRICKSON. No.

Mr. MUNRO. Mr. Fitzgerald of the Government and Civic Organizing Committee in the Canal Zone, representing the noncitizens, I believe, has a statement, if he could make it at this time.

Mr. ELLIOTT. Mr. Fitzgerald, could you come back at 10 o'clock in the morning?

Mr. FITZGERALD. Yes, indeed, sir.

Mr. ELLIOTT. We will hear from you at 10 o'clock then.

It is only about 5 minutes from now until the House goes in session, and we would not be able to finish with you. We do not have permission to sit when the House is in session. So the hearings will go over until 10 o'clock tomorrow morning, at which time Mr. Fitzgerald will be first.

And let me say to the representatives of the State Department I am very sorry we did not get to you. You will be second tomorrow after Mr. Fitzgerald.

(Whereupon, at 11:55 a. m., the committee was recessed, to be reconvened at 10 a. m., Thursday, March 8, 1956.)

MINIMUM WAGES IN CERTAIN TERRITORIES, POSSESSIONS, AND OVERSEA AREAS OF THE UNITED STATES

THURSDAY, MARCH 8, 1956

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE OF THE COMMITTEE ON

EDUCATION AND LABOR,
Washington, D. C.

The subcommittee met at 10 a. m., pursuant to recess, in room 429, House Office Building, Hon. Carl Elliott (chairman of the subcommittee) presiding.

Present: Representatives Elliott, Landrum, Roosevelt, Holt, and Coon.

Present also: Fred G. Hussey, chief clerk; John O. Graham, minority clerk; Kennedy W. Ward, assistant general counsel; and Russell C. Derrickson, chief investigator.

Mr. ELLIOTT. The subcommittee will be in order.

I announced yesterday as we adjourned that this morning we would first hear from Mr. Fitzgerald of the AFL-CIO, and, second, from the State Department, and, third, from Mr. Ala'ilima.

Mr. Fitzgerald, we have a written statement here from you, I believe, and, if you care to read it or however you would like to proceed, you may.

STATEMENT OF GERALD FITZGERALD, LEGISLATIVE REPRESENTATIVE, GOVERNMENT AND CIVIC EMPLOYEES ORGANIZING COMMITTEE, AFL-CIO

Mr. FITZGERALD. If I may, I would like to interpose a few remarks along with the testimony as we go along.

Mr. ELLIOTT. Yes, sir.

Mr. FITZGERALD. Mr. Chairman and members of the committee, my coappearance with Mr. Munro is highly indicative of the mutual concern and apprehension with which two employee groups of the United States Government view inclusion of their area in the issue before this committee.

I frankly admit my appearance at this late moment is also embarrassing because I was not aware of the situation developing in this committee. And when we first encountered the situation I was in much the same position as Mr. Munro and Mr. Mason before him, that we had not anticipated this type of legislation coming up here. So, in my presentation I am primarily concerned with Panama, but at the same time I want it distinctly understood that we are wholly in accord with the testimony Mr. Mason gave the other day.

73588-56-pt. 1-20

Mr. Munro has informed you that he represents United States citizens exclusively. I, on the other hand, represent non-United States citizens primarily of Panamanian citizenship who are members of two unions in the area.

One union is composed of employees of the Panama Canal Company and the Canal Zone Government; the other of employees of the various branches of the Armed Forces. Both, however, are inextricably bound by one wage scale through wage-board procedures and the fact that the Panama Canal Company sets the pattern by virtue of being the largest employer.

That pattern for non-United States citizens has traditionally been based on levels of skills and abilities as compared to those of United States citizen employees whose wage rate, in turn, is identical, by law, with the various United States area wage rates and schedules.

Obviously the pending legislation does not affect in any degree the machinery of that operation. We submit, however, the pending legislation opens the door to nullification through the medium of contracts.

We have no quarrel with commendable efforts to economize on Government expenditures, but we must dissent vigorously when such economies set in motion a chain of job insecurity, wage cutting, even extortion as the lot of the employee and a windfall for those of the contractors who embrace unscrupulous practice.

We are not prepared at this moment with documentary evidence of the many incidents we have heard related on contracts awarded resulting in reductions in force followed by employees released obtaining contractor employment at a lesser rate on the identical job held previously. And, in fact, it is entirely possible that we could not supply such material at any future date, solely because those individuals who have been subjected to that treatment are afraid to come forward with signed statements. However, we do feel that if those individuals were assured protection against subsequent reprisal a sufficient number of workers would come forward to inform not only of the unfairness cited above but also their experiences with a vicious kickback system. It is difficult for us in the United States to realize that kickbacks are extorted from a wage of 40 or 50 cents an hour. Mr. ELLIOTT. Who extorts the kickbacks?

Mr. FITZGERALD. The subcontractors and the foremen.

Mr. ELLIOTT. You mean from the wage earner?

Mr. FITZGERALD. From the worker who is working at 40 and 50 cents an hour. And our people down there are afraid to speak up because for every man that would speak up there are 10 people right behind him ready and willing to take that job. It is a very vicious thing down there.

Mr. ELLIOTT. Do you live in Panama yourself?

Mr. FITZGERALD. No, sir. I am currently in Washington, D. C. But when I was down there I lived in the Republic. All of myMr. ELLIOTT. When did you live there, sir?

Mr. FITZGERALD. In 1954, sir, while I was representing these people. I did not live on the zone, and I purchased nothing on the zone. I had no access or I possibly might have had access to some of the commissary things, but I preferred to find out what was going on behind the scenes. I lived in a little suburb, San Francisco, just outside the city of Panama, and spent considerable time in the interior.

And when United States employees of Panama live in mud-thatched huts with mud floors and with one electric light bulb and that is all they are permitted to have by the power company, and these are people who are working for the United States

Mr. ELLIOTT. They are Panamanian citizens?

Mr. FITZGERALD. Panamanian citizens.

Mr. ELLIOTT. Who furnishes the electric power?

Mr. FITZGERALD. I can't recall the name. It is a private company, however.

Mr. ELLIOTT. A Panamanian company?

Mr. FITZGERALD. A Panamanian company. It is not a United States venture; I mean a Government venture.

Mr. ELLIOTT. We have given some consideration on this committee to holding some hearings in the Panama Canal Zone on this problem. I wonder if we did hold hearings if evidence along the lines that you just mentioned could be developed, or do you thing it would be impossible?

Mr. FITZGERALD. No, sir. If we can have any degree of assurance that those people will not suffer reprisals I think we can gather scores and scores of them together for you.

For instance, in the material that Mr. Munro introduced yesterday there is an instance on that photostat of a payroll of one individual who worked 58 hours, including Sunday, for the grand total of $25.20. And he buys things in the market that are just as high as in Washington, D. C.

I maintained my household down there in Panama, and frequented the chain stores where we see the same identical items on the shelves as we have in the Safeway or any other place, and the prices are identical or a little higher. This is what the United States emplovees down there, eight or ten thousand of them, have to contend with day in and day out. They live a life that could hardly be described unless you see it.

Mr. ELLIOTT. Mr. Coon?

Mr. Coon. Who are some of the subcontractors you are accusing of kickbacks?

Mr. FITZGERALD. I am not accusing any subcontractors because, frankly, I don't know.

Mr. COON. What did you just tell us a minute ago?

Mr. FITZGERALD. I told you the individual workers are kicking back

Mr. Coon. To the subcontractors?

Mr. FITZGERALD. To the subcontractors.

Mr. Coon. Who are the subcontractors that are getting some of the kickbacks?

Mr. FITZGERALD. That I do not know. I have a list of all the contractors.

Mr. Coon. Is it not a little irregular of you to come before a committee and say you heard this thing, and refuse to say who it is?

Mr. FITZGERALD. I don't believe so because I indicated to Mr. Elliott that, given assurance by the people or to the people down there that they can speak out without reprisal, they will gladly speak. That is what I am reporting to you.

Mr. COON. I feel if you come before a committee and accuse somebody of getting kickbacks you should be able to say—