The organization which I represent is composed of 23 local unions affiliated with the American Federation of Labor and the Congress of Industrial Organizations. The membership of these unions are, with a few exceptions, citizens of the United States employed by the Panama Canal Company-Canal Zone Government that maintain and operate the Panama Canal.

Accompanying me are the following members of our organization who will assist me in answering your questions:

E. W. Hatchett, president of the organization, and instructor of mathematics in the Canal Zone Junior College. Mr. Hatchett has been employed 25 years as a teacher in the Canal Zone schools.

L. S. Damiani, first vice president of the organization. Mr. Damiani has been employed by the Commissary Division for 14 years.

Curtis Coate, employee representative on the wage and grievance boards of the Panama Canal. Mr. Coate has been employed by the Panama Canal Company for 5 years.

I would like to take this opportunity to welcome all of you gentlemen to the Canal Zone, and sincerely hope that your stay here will be both pleasant and instructive.

Our primary aim in appearing here is to oppose the exclusion of the Canal Zone from the Fair Labor Standards Act of 1938 and to recommend that it not only continue in effect but be enforced to the fullest extent.

This law has been in effect in the Canal Zone for many years but has been ignored by all concerned. This has resulted in various contracted jobs being performed at a lower cost at the direct expense of the laboring man hired to do the work. This continued neglect has now come to a head, and it now appears possible that either the Government or the contractors may be liable for pavment of unpaid wages required by the Fair Labor Standards Act. We of labor well recog nize this liability and its possible adverse effects on the financial status of the Panama Canal Company and the possible need of supplemental appropriations for the Department of Defense should a court decision be adversely rendered. We feel about this as we have on several occasions in the past when similar interpretations and application of law required our members to seek recourse to the courts or assistance from Congress to force payment of what we were entitled to by laws which the Congress of the United States had passed after long and studied deliberation.

There is at present a case before the courts bringing suit against the Panama Canal Company for over $2 million for emoluments due members of our organization which were not paid. Therefore, this type of liability being practically a regular and accepted procedure, we do not believe it has any merit in basing your decision in the case at hand-that is, exclusion of the Fair Labor Standards Act from the Canal Zone, as the past liabilities are still existent even though the Canal Zone should be excluded at this late date.

Testimony has previously been given to this committee as to the possible adverse effects a minimum-wage law will have in the Canal Zone. Included in this testimony were the following reasons for excluding the Fair Labor Standards Act:

1. Adverse effects it may have on the economy of the Republic of

Panama.

2. Increased cost of contracts.

3. Increased unemployment due to automation and more forced production.

We disagree with all these statements for the following reasons: 1. Effect on the economy of Panama: Previous official testimony indicates that there are only approximately 1,200 persons employed by contractors in the Canal Zone. Assuming that all of these were earning 40 cents per hour and were increased 60 cents, to $1 per hour, and that they all worked full time the year around, the maximum annual increase would be approximately $1,500,000.

It is true that these relatively few employees will enjoy a higher hourly rate than many of the workers of Panama, but it does not necessarily follow that the Republic's economy will be disturbed as a result of this. On the contrary, not only will an incentive be provided for these workers to learn skills and compete for these jobs, but the additional money earned by this low-paid group will all flow into Panama's commercial channels, giving the Republic's economy a needed boost, and will create additional employment there. It will also reflect to the advantage of the United States, who supplies the Republic of Panama with most of their imported products.

2. Increased cost of contracts: We agree that contract cost will be increased. However, it was the intent of Congress in enacting this legislation that cost would be increased through additional wages paid working groups. We of labor firmly believe that this legislation has been a primary factor in maintaining continued prosperity in the United States by the simple process of giving the workingman more to spend. Further evidence of this intent on the part of the Congress of the United States is evidenced by the additional 33% percent increase of minimum wages effective only a few days ago, on March 1, 1956.

3. Increased unemployment through automation and increased forced production: Testimony presented to this committee by contractors' representatives threatens increased unemployment of these employees through use of machines for labor now done manually and by more pressure being applied to increase output. This could be interpreted that the contractors are not at present working up to their maximum efficiency or that contract costs have been deliberately increased to subsidize this class of worker. From our observations of the work on various contract jobs, we have noted that as a whole the jobs are well organized, efficiently laid out, a maximum use of machinery is made, and that employees have little, if any, idle time. We are submitting statements signed by five employees of various contractors who perform work in the Canal Zone.

(Copies of the five statements are inserted at this point.) (The statements referred to are as follows:)

To whom it may concern:

ANCON, CANAL ZONE, March 15, 1956.

I was employed by the Pan Pacific Contracting Co. from November 1946 through August 1949 as truck and trailer driver while this firm was engaged in converting a number of hospital wards in Rosseau into living quarters; the Far Fan housing project; and the Army commissary and warehouse at Corobal. All work was done in the Canal Zone.

I was employed at $0.45 (45 cents per hour) and was terminated at $0.50 (50 cents per hour.)

During this period of employment I did not get any vacation time.

I worked an average of 111⁄2 hours per day. I was paid time and one-half for overtime. I worked 6 days a week.

Working conditions with this contracting firm were generally not as good or could not be compared with working conditions of the United States Navy where I am now employed.

Witnesses:

EDSEL A. WONG.

VICTOR M. FRANCO.

(Signed) VINCENT C. PARKER.

STATEMENT OF JOSE DE LA CRUZ JUSTAVINO, O

MARCH 15, 1956.

The undersigned Jose de la Cruz Justavino, O, age 29, citizen of the Republic of Panama certifies that he worked for the following companies or contractors performing jobs on a contract basis for the Panama Canal Company and the United States Department of Defense; at various location in the Canal Zone. (1) During 1947 through part of 1949 worked for Pan Pacific Co. as chainman at the rate of $0.50 per hour. The basic workweek was 48 hours. Time worked in excess of this was paid as overtime at time and half.

(2) For approximately 1 year during 1950 worked for Isthmian Constructors Co. as chainman at the rate of $0.50 per hour. No overtime whatsoever was paid.

(3) For approximately 2 years during 1953 and 1954 worked for Macco Pan Pacific as chainman at the rate of $0.50 per hour. Overtime at time and half was paid for work in excess of 48 hours per week.

(4) In 1955 worked for Tecon Corp. as chainman at the rate of $0.75 per hour. Overtime was paid at time and half after 48 hours per week.

None of the above jobs provided for paid vacations, sick leave, or United States social security or Panamanian Seguro social benefits. I have never worked for any Federal Government agency.

Signature witnessed:

WILLIAM H. SINCLAIR.
(Signature illegible).

(Signed) Jose de la Cruz JUSTAVINO, O.

STATEMENT OF HORACIO ANTONIO CARRASCO

MARCH 15, 1956.

My name is Horacio Antonio Carrasco, age 29, citizen of the Republic of Panama, employed by Franorco, S. A., on various construction jobs that company has performed on contract for the United States Department of Defense and the Panama Canal Company, at various locations in the Canal Zone from 1948 to the present date, exclusive of periods during which no work was in progress and I was on furlough. My rating is carpenter.

During this time my hourly rate of pay has been $0.50 per hour with a few exceptions when it rose to $0.60 per hour, and reduced to $0.50 per hour at the completion of the job.

The basic workweek for Franorco, S. A., is 45 hours, consisitng of 5 days of 8 hours each and 5 hours on Saturdays. All time in excess of 45 hours per week was paid at overtime rate of time and half. Sundays and holidays were paid at straight time when worked.

During the period I worked for Franorco, S. A., I did not earn or receive any paid vacation, sick leave, nor were provisions made for United States social security or Panamanian Seguro social benefits.

Also during periods of heavy rain during the day, all employees were checked out and when the rain stopped were checked in again. The intervening period was without pay, and an employee was subject to suspension or other disciplinary action if not present to check in and resume work when ordered.

Prior to my employment with Franorco, S. A., I was employed by the United States Navy in the capacity of helper general at the rate of $0.41 per hour with all the usual fringe benefits and privileges given local rate employees. For approximately 6 months during 1950 I was again employed by the United States

Navy in the capacity of laborer at the rate of $0.49 per hour. Both of my terminations from the United States Navy were due to reduction of force. (Signed) HORACIO ANTONIO CARRASCO.

Signature witnessed:

WILLIAM H. SINCLAIR.
(Signature illegible).

STATEMENT OF OLIMPO PINZON

MARCH 15, 1956.

The undersigned Olimpo Pinzon, age 30, citizen of the Republic of Panama, certifies that he worked for John V. Carter, subcontractor for various construction jobs for the United States Department of Defense and the Panama Canal Company from February 1952 to January 1955, in the capacity of plumber's helper, starting at the rate of $0.35 per hour which was gradually increased to $0.55 per hour.

The basic workweek for this subcontractor was 45 hours. Overtime was paid at time and a half for hours in excess of 8 per day. Sundays and holidays when worked were paid at straight time.

During the time I worked for John V. Carter I did not earn or receive any paid vacation, sick leave, nor were any provisions made for United States social security or Panamanian Seguro social benefits.

My previous working experience was

In 1944 worked for the United States Navy as laborer $0.32 per hour. From 1948 through 1951 worked for the United States Navy as general helper $0.53 per hour.

Since February 1955 working for the United States Navy as laborer $0.55 per hour.

All the above rates are in addition to the usual fringe benefits and privileges given local rate employees.

Signature witnessed:

(Signed) OLIMPO PINZON.

WILLIAM H. SINCLAIR.

(Signature illegible).

STATEMENT OF JOSE O. CASTILLO

MARCH 15, 1956.

My name is Jose O. Castillo, age 36, citizen of the Republic of Panama, intermittently employed by Framorco, S. A. on various construction jobs that company has performed for the United States Department of Defense and the Panama Canal Company, at various locations in the Canal Zone, from 1950 to the present date, exclusive of periods when no work was in progress and I was on furlough without pay.

In the capacity of mason I was paid $0.65 per hour, increased to $0.75 and reduced to $0.65 at the completion of the job.

My basic workweek is 441⁄2 hours, consisting of 5 days of 8 hours each and 41⁄2 hours on Saturdays. When working with concrete the working day is 10 or 11 hours. Overtime is paid only for work in excess of 441⁄2 hours per week. Holiday work is occasionally required which is paid at straight time.

During the time I have worked for Framorco, S. A. I did not earn or receive any paid vacation, sick leave, nor were provisions made for United States social security or Panamanian Serguro social benefits.

On one occasion I was injured on the job and received as compensation onethird of my regular salary after the first 7 days had elapsed.

During periods of rain I am required to check out and when the rain ceases check in again. The intervening time is without pay and I am subject to disciplinary action if not present to check in when ordered.

Prior to working for Framorco, S. A. I worked for the United States Army as a laborer at the rate of $0.25 per hour from 1939 to 1941 and received a reduction of force. I was later employed by the United States Navy as a mason at the rate of $0.45 per hour from 1943 until 1945 when I again was given a reduction of force. Both of these jobs also allowed the usual fringe benefits and privileges given local rate employees.

(Signed) Jose O. CASTILLO.

Witnessed signature:

WILLIAM H. SINCLAIR.

(Signature illegible).

Mr. BLANEY. All but one has been previously employed by the Department of Defense or the Panama Canal Company and were terminated due to reduction in force, all with satisfactory ratings.

Their occupations were: general helper, truckdriver, mason, and carpenter, who received salaries from 50 to 60 cents per hour. Only one man, the mason, received 75 cents temporarily on one job.

Workweeks were 45 to 48 hours with overtime paid at time-and-ahalf after 45 or 48 hours. Sundays and holidays were paid at straight time. It should be noted that most of these men received no pay during periods of heavy rains when they were checked out, and were subject to disciplinary action if not available when rain stopped.

Also, with one exception, none of these employees received any fringe benefits such as paid vacations, sick leave, social-security benefits, or hospitalization.

These statements show that not only were the minimum-wage requirements of the Fair Labor Standards Act ignored by contractors, but also those provisions regarding overtime and the 40-hour workweek.

Such substandard working conditions are obviously undesirable and obnoxious to all members of organized labor, and for this reason we ask that your committee and the Congress of the United States retain Fair Labor Standards Act for the Canal Zone and if possible take necessary action to insure that it is fully enforced in the future.

My associates and I wish to thank this committee for its cooperation in giving us the opportunity to present our case.

Mr. ELLIOTT. Does that complete your statement, Mr. Blaney? Mr. BLANEY. It does, Mr. Chairman.

Mr. ELLIOTT. Thank you very much.

The people who made the five statements that are attached are not present, are they?

Mr. BLANEY. They are not; no, sir.

Mr. ELLIOTT. I'd like to ask Mr. Derrickson, a member of the committee staff, before we ask you questions, to read one of these statements either one of them-just so we'll have before us the

(Mr. Derrickson read the statement of Vincent C. Parker, dated March 15, 1956.)

Mr. ELLIOTT. I assume that this statement is representative, is it not, Mr. Blaney?

Mr. BLANEY. Yes, sir.

Mr. ELLIOTT. I want to call your attention to your statement, in which you say in the second paragraph:

There is at present a case before the courts bringing suit against the Panama Canal Company for over $2 million for emoluments due members of our organization which were not paid.

Does that refer to a suit under the Fair Labor Standards Act, or is it another suit of some kind?

Mr. BLANEY. I don't believe, so, sir, it is not based on the Fair Labor Standards Act. The employees are pilots of the Panama Canal Company, where fair labor standards do not apply.

Mr. ELLIOTT. Are there any suits that you know of pending against contractors under the Fair Labor Standards Act?

Mr. BLANEY. Not in the Canal Zone to my knowledge. I understand there are some in Panama. But