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(f) Duplex quarters, $41,000

It is proposed to erect one duplex family quarters for officer personnel presently housed in the Barnes Building which has been condemned for further occupancy. The estimated cost is exclusive of movable equipment. (9) Auditorium, $244,000

It is proposed to erect an auditorium of 300 seats for the use of hospital patients. The present auditorium is to be converted into kitchen and mess space. (h) Renovation of mess hall, $25,000

The existing building housing mess hall, kitchen, and auditorium is to be renovated and modernized so that the entire main floor can be used for kitchen and mess facilities. (i) Renovation of existing hospital group buildings, $313,000

For the conversion of present sisters quarters to bachelor medical officer quarters, alterations to LaGarde and Forwood Buildings and alterations to Barnes Annex for Clinics and employees' quarters. (j) Elimination of fire hazards, $80,000 For the elimination of fire hazards in all buildings.

Mr. TABER. What are the other buildings you are planning to have besides these?

Colonel CORDINER. Those are all we plan to put in now until approximately 1960. What we would put in then I am not prepared

to say.

Mr. TABER. That is, this $12,000,000 is all you plan to put in now?
Colonel CORDINER. Until 1960; yes, sir.
Mr. TABER. And the others would not come until 1960 ?
Colonel CORDINER. That is right.

PRESENT POPULATION

Mr. TABER. Your population there now is what?
Colonel CORDINER. One thousand five hundred and thirty today.
Mr. TABER. This would provide for at least three times that?
Colonel CORDINER. Yes, sir.
Mr. TABER. Out of the 1,530, how many do you have in the hospital?
Colonel CORDINER. The average in the hospital runs around 320.
Mr. TABER. Does the 1,530 include those in the hospital?
Colonel CORDINER. Yes, sir.

Mr. TABER. You have the money in the trust fund at this time to take care of it?

Colonel CORDINER. Yes, sir. We have more than enough to take care of this program.

WATER AND HEATING SYSTEMS

Mr. TABER. You have the water system and the heating system to take care of this step-up, or are you going to put in new ones?

Colonel CORDINER. We have taken care of the heating system in this estimate. Most of the underground facilities have been there for over 40 years, and they are practically all rotted out. This will take care, to a very great extent, of our future expansion.

Mr. SCRIVNER. The last time I heard any of these presentations on Soldiers' Home, you were discussing, my recollection is, quite a problem of the wiring out there. Did you finally get that taken care of?

Colonel CORDINER. Yes, sir.
Mr. SCRIVNER. So that no longer presents a hazard?

Colonel CORDINER. It is very largely taken care of.

Mr. SCRIVNER. In your contemplation of this new construction, have you reached any figures as to the additional number of personnel and the cost of operating these added facilities?

Colonel CORDINER. No, sir. There should not be any great increase initially in the cost.

Mr. SCRIVNER. Well, if you are going nearly to treble your capacity there, it is going to take more help to take care of the increase; is it not?

Colonel CORDINER. That will not occur until sometime after 1965, when we would run up to 4,500.

Mr. SCRIVNER. As I understand it, there is no reason to doubt you have sufficient funds of your own-not taxpayers' funds but funds raised through contributions by Regular Army personnel through all of these years—to do all of this work and to provide all of the necessary personnel so that there will be no reason for any request for funds out of the Public Treasury—that is, out of moneys paid by the general taxpayers.

Colonel CORDINER. As we understand matters now, there has been no taxpayers' money spent for the Soldiers' Home since 1851.

Mr. SCRIVNER. I am not talking about now; I am talking about the future.

Colonel CORDINER. We have not depleted our trust funds, and we have a project now, approved by the Secretary of the Army, which we believe will give us sufficient money to carry on indefinitely and provide all of the necessary maintenance, upkeep of the buildings, and everything else.

Mr. SCRIVNER. Without any contribution by the general public? Colonel CORDINER. Yes, sir.

INCREASE IN NUMBER OF INMATES IN SOLDIERS' HOME Mr. KERR. Colonel, is there an increase now in the number of inmates in the Soldiers' Home; is it building up?

Colonel CORDINER. No. We have as many as we can take care of properly right now. Our total capacity now runs around 1,540, and normally it runs 1,530.

Mr. KERR. How many do you have on the waiting list ?

Colonel CORDINER. We have had as many as 500 on the waiting list. Today there are only 375.

Mr. KERR. So your waiting list really is not being lessened?

Colonel CORDINER. It is not being materially lessened. That is because a great many of our applicants have recently been commissioned on the retired list, and we do not take commissioned officers at the Soldiers' Home as members. As soon as that adjusts itself, our waiting list will again increase very rapidly, I anticipate.

Mr. KERR. Are there any further questions!
If not, Colonel, we thank you very much.
Is there anyone else who wishes to be heard ?
Do
you

want any of your associates to be heard ? Colonel CORDINER. No; unless General McDonald wishes to say something

General McDONALD. I have nothing in particular to add. I think the only reason we do not have more applicants for admission at this

time is because it takes so long to get in after the application is submitted and they are discouraged and go away and do not come back.

Mr. KERR. Why does it take so long to determine whether they are eligible or not?

General McDONALD. Not whether they are eligible, but to get priority because of this waiting list of 375. It takes probably from 6 to 8 months to get in after the application is submitted.

Mr. KERR. In other words, if you get a new applicant, you have to go clean through the list?

General MCDONALD. Some of them die before they get in.
Colonel CORDINER. General Walsh, do you care to say anything?
General WALSH. No.
Mr. KERR. Colonel, we are glad to have you come before us.
Colonel CORDINER. It is always a pleasure.

ORIGINAL COST OF LAND

Mr. RABAUT. How much did they pay originally for the land out there?

Colonel CORDINER. The whole thing only cost around $300,000.
Mr. RABAUT. How many acres do you have?
Colonel CORDINER. Five hundred acres.
Mr. RABAUT. What is its value today?

Colonel CORDINER. General Services is evaluating it right now, but I am sure it won't be less than $20,000 an acre.

We are selling 148 acres to the Government.
Mr. RABAUT. You are selling 148 acres of that land?
Colonel CORDINER. Yes, sir.
Mr. RABAUT. To whom?

Colonel CORDINER. To the Government to the General Services Administration.

Mr. RABAUT. What are they going to do with it?

Colonel CORDINER. They plan to put a veterans' hospital out there, a Veterans' Administration building, and a district hospital group.

Mr. RABAUT. They are going to use it for public purposes?
Colonel CORDINER. Yes, sir.
Mr. KERR. Thank you, Colonel.

MONDAY, JULY 17, 1950,

PANAMA CANAL

WITNESSES

BRIG. GEN. F. K. NEWCOMER, UNITED STATES ARMY (RETIRED),

GOVERNOR OF THE PANAMA CANAL
B. F. BURDICK, CHIEF OF OFFICE, THE PANAMA CANAL

HOUSING CONSTRUCTION FOR AMERICAN CITIZENS

CITIZENS AND ALIEN EMPLOYEES IN THE CANAL ZONE

Mr. KERR. General Newcomer, you are here to discuss with us the matter of improving things down in the Panama Canal area. We will be glad to hear from you.

Do you have a general statement for us? If so, we will be glad to listen to you, or you may put it in the record.

General NEWCOMER. I have a rather brief statement which I would like to read.

GENERAL STATEMENT

*

As originally submitted to the Bureau of the Budget last fall, the estimates of the Panama Canal for 1951 included an item for the commencement of a comprehensive housing-construction program for American citizens and alien employees in the Canal Zone. The Director of the Bureau of the Budget and the President approved the program in principle subject to further consideration with the view of securing firm information as to the most economical accomplishment of the program, either by force account or by contract, the annual financial increment required for the entire program, the revision of the building codes and regulations of the Canal Zone, and the measures to be adopted in the procurement and warehousing of building materials. Pending that clarification, the items were temporarily removed from the estimates. However, in the Budget of the United States for 1951, transmitted by the President to the Congress on January 3, 1950, it is stated on page 688 thereof that,

It is proposed to submit a supplemental estimate of $4,000,000 in 1951 to initiate an intensive housing program.

Meanwhile the matter has been clarified to the satisfaction of the Director of the Bureau of the Budget, who in turn has included the items totaling $4,000,000 in the pending supplemental estimates for the fiscal year 1951.

The committee has already been furnished with a detailed written justification of our housing program. Adequate and satisfactory housing is an extremely important problem with the Panama Canal and there is an urgent need to replace presently deteriorated and unsatisfactory living quarters for employees. The need for housing has been brought to the attention of Congress in hearings in connecttion with prior years' appropriations, not only by the Governor but by employee organizations. The existing unsatisfatcory housing situation is due to the fact that a great number of units were built for camp purposes under the pressure of rapid completion during the original construction period and in connection with the defenses of the Panama Canal preceding and during World War II. Obsolescence and the ravages of insects and climate are factors contributing to high maintenance costs; and the low standard of housing resulting has had a serious effect upon employee morale.

The amount requested in this supplemental estimate is for the beginning of a program presently estimated to cost $70,882,000 over a period of 8 to 10 years. The entire program involves the construction of 6,110 new housing units and remodeling and enlarging existing buildings to provide 867 units, or a total of 6,977 units. Of the total cost of the program, it is estimated that $16,640,000 will be supplied by the Panama Railroad Company and from available replacement funds of the Panama Canal, leaving $54,242,000 required by appropriations. It is proposed to accomplish the bulk of new construction (about 70 percent of the entire program) by contracts with build

ing constructors, of which it is considered that a sufficient qualified number are available on the Isthmus.

While recognizing the very proper and sound desire of the Congress to reduce the Federal expenditures in all possible ways, I would like to point out that the Panama Canal is one of the few Government agencies from which the taxpayers of the country have received an appreciable return on their investment. From the time of the opening of the Canal in 1914 through the fiscal year 1949, the total net appropriation expense for the operation of the Canal was $357,000,000. During the same period, the revenues returned to the Treasury amounted to $631,000,000—a surplus of $274,000,000 over operating costs. This surplus, if considered as interest on the capital investment, presently recorded as $534,000,000, would amount to approximately 1.8 percent.

If the Canal is to continue to function efficiently, the increasingly urgent need of its employees for reasonably satisfactory quarters must be recognized. The additional investment sought today will not be wasted. It will pay dividends in better morale, better living conditions, and increased efficiency on the job, and will be amortized during the life of the buildings that will be constructed.

This concludes my general statement, and I shall be glad to furnish such additional information as the committee desires.

EXPENDITURES TO DATE FOR IMPROVING BUILDINGS

Mr. KERR. General, how much money have you used down there for the purpose of improving the buildings and getting rid of those horrible places that were there for so long a time?

General NEWCOMER. We have used very little.

Mr. KERR. Some of us have been down there and seen the situation around there, and we have been appropriating a considerable amount of money in recent years.

General NEWCOMER. No, sir; not very much. For instance, last year you appropriated $200,000 for what we call the United States rate employees' housing and $600,000 for the local rate employee's housing. That is merely a drop in the bucket compared with what the situation really requires. Those small appropriations were made pending the development of a real over-all program to tackle the entire problem, which is what we have done now, and this appropriation is the first one, really, under that proposed program.

Mr. KERR. Who prepared this estimate!

General NEWCOMER. It was prepared by the Canal authorities. The principles of the program have been reviewed by representatives of the Federal Housing Administration and by a consulting firm that we employed for that purpose this last winter.

Mr. KERR. Can you get the homes at that cost?
General NEWCOMER. Yes, sir.
Mr. KERR. How do you know? ?

General NEWCOMER. Well, we have been building them. Practically speaking, they are individual houses. This program is intended to build on a large scale the same type of buildings.

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