The Panamanian Legation to the Department of State



Under date of September 22 last, the Legation of Panama had the honor to propose to the Department of State that in the treaty which the governments of Panama and the United States intend to conclude for the purpose of regulating the relations created by the construction of the interoceanic canal, a clause be inserted which would stipulate in substance the following:

“The United States agrees that Panamanian citizens shall be eligible to positions on the Panama Canal or with the Panama Railway Company, both in the class of the so-called ‘gold roll’ and in those of the so-called ‘silver roll’ on a footing of equality with American citizens, in regard to pay, promotions, vacations, retirement, protection against accidents in line of duty, and other facilities and guarantees granted to employees in their capacity as such; that preference shall be given to Panamanian citizens over foreigners in positions of the said classes and in cases of reduction in personnel.”

With regard to the eligibility of Panamanian citizens to “gold roll” positions and “silver roll” positions on the Panama Canal and with the Railroad Company and with respect to the present status of Panamanian citizens who now hold those positions, the situation is that specified by the following paragraphs:

1. Eligibility of Panamanian Citizens to Positions on the Canal and the Railroad

There is at present no restriction on account of nationality in regard to eligibility to positions on the silver roll. Eligibility of Panamanians to positions on the gold roll is established by Executive Orders of December 23, 1908, February 2, 1914, February 20, 1920, and February [September] 14, 1927.20 (See also Paragraph 4, 1 Personnel Regulations. The Panama Canal).

2. Pay

There are at present no differences with respect to pay by reason of nationality (Ibid. 32.1 et seq.)

3. Promotions

United States citizens shall have preference as to promotions, over Panamanians and foreigners even though the latter have been longer in the service. (Personnel Regulations, Par. 10.1).

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4. Vacations

All American employees shall be entitled to vacations, whatever their pay and class may be, Panamanian and foreign employees shall be entitled thereto when they draw wages or salaries of more than $80 a month ($960 a year) or of 40 cents (centavos) an hour. (Executive Order of February 20, 1920—Personnel Regulations, Par. 49 et seq.).

5. Retirement

Only employees of the Canal (not of the Railway) who are American citizens shall be entitled to retirement. (Federal Retirement Act of July 3, 1926,21 Personnel Regulations, Par. 61.1). The pension plan of the Railway Company, established on January 1, 1924, is also restricted to citizens of the United States holding permanent positions paying $600.00 per annum or more. The pension fund of the Railroad shall be established by withholding from employees 2 percent of their pay (Ibid. Par. 62.1, 62.3).

6. Protection Against Accidents in Line of Duty

There shall be no difference by reason of nationality in regard to protection against accidents in line of duty. All employees shall be protected by the provisions of the United States Employees’ Compensation Act of September 7, 1916.22 (Personnel Regulations, Par. 56.1 et seq.)

7.General Conditions as to Employment

There shall be no difference between employees by reason of nationality with regard to general employment conditions not included in the paragraphs enumerated above, such as lodging, commissary privileges, medical and hospital treatment, passes, special rates, etc. An exception is made in the transportation to the United States, of American citizens who have completed three years’ service, which shall be paid by the Canal up to the amount of $40.00 (Article 15, Executive order of February 2, 1914).

8. Reduction of Personnel

The preference of Panamanians over foreigners in case of reduction of personnel is established by Executive Orders of 1908, 1914, 1920, and 1927, enumerated in Paragraph 1. The standards for releasing employees in case of reduction of personnel are as follows: nationality, efficiency, preference in favor of veterans and seniority. By reason of nationality, preference is given to American citizens over Panamanians, unless the latter are more efficient. (Personnel Regulations, Par. 16.1 a.) Preference between American citizens is determined by the veteran’s status (Ibid. c) and it is determined by seniority, other conditions being equal (Ibid. d).

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From the foregoing data it may be noted that at present there is no restriction on the ground of nationality with reference to eligibility, pay, protection against accidents in line of duty, and general working conditions.

There are differences as to promotions, vacations for the employees on the silver roll, retirement and reduction of personnel.

As to retirement, a situation exists concerning which the Governor of the Canal Zone says the following in his report for the year 1932, after stating the conditions under which the retirement of the American employees is effected:

Foreign Employees:

“The Panama Canal is still without arrangements enabling it to give due assistance to its foreign employees who, by reason of advanced age or other physical incapacity, can no longer perform their duties properly and must be separated from the working personnel.

“To such employees of the Railway Company pensions varying from $7 to $30 a month are given, but there is no authority for doing the same for the employees of the Panama Canal. The only thing that can be done for them at present is to offer them quarters in the Corozal Hospital, where there are no accommodations for their families, or to keep them on the pay roll at reduced wages, at pay varying from $15 to $35 a month, in order that they may do such work as they can. It would be much better to pension them once for all and thus permit them to be separated from the active work of the Canal.

“In order to obtain some relief, the sum of $10,000 was included in the 1933 estimates, for the payment in cash of remunerations not exceeding $30 per month to incapacitated foreign employees, under the rules that the President may issue. This was rejected by the Bureau of the Budget, because it constituted new legislation. It is hoped that a separate bill on the matter will be introduced. The need for aid in this regard is urgent, not only as a question of humane treatment of the employees who have reached an advanced age, but also as a measure of efficiency in the work.

“The cost of assistance to these employees, on the basis of an average pension of $20 per month, has been estimated by the Bureau of Efficiency as $12,000 for the first year, with a gradual increase up to a maximum of $121,000 per annum for the twentieth year and each of the following years.” (Annual Report of the Governor of the Panama Canal, 1932, p. 82).

With reference to this proposed legislation, the same Governor, in his report for the year ending June 30, 1933, expressed himself as follows:

“This cost is not high, considering the number of employees affected, and the assistance that is recommended is considered not only humane but as one more step in the direction of the efficient working of the Canal, through the elimination of those who are already incapacitated for service and because each of those who are on the active labor roll [Page 606] may thus be obliged to perform in a normal way the daily work which he does.” (Annual Report of the Governor of the Panama Canal, 1933, p. 81).

In the same report for 1933, the Governor, referring again to the problem in question, says the following, under the heading “Foreign Employees of Advanced Age”:

“The foreign employees of the Panama Railway Company who are no longer capable of rendering efficient service in any post are removed from the pay roll and are given a lump sum, plus travel expenses to their homes, or a small annuity. Since June 1, 1928, lump sums of from $25 to $500 have been paid to 14 of those employees, and to 134 employees, pensions of from $7 to $25 a month were granted. Of the 134 employees pensioned, 17 had died by the end of the fiscal year of 1933 and one pension was cancelled, 116 thus remaining on the pension roll at the end of the year. The average of the payments made up to that time was $12.94 per month.

“The foregoing applies solely to the foreign employees of the Panama Railway [who are]23 of advanced age. There is no provision for the payment of pensions to foreign employees of the Panama Canal [who are]23 of advanced age. To aid a little in the settlement of that problem, arrangements have been made to give lodging to foreign employees of advanced age at the Corozal Insane Asylum, but few employees wish to stay there, and in any event the facilities available do not permit of lodging a considerable number of employees, some of whom have one or more persons dependent on them. Besides, the per capita costs of lodging granted in this way is higher than the sum that it would cost to grant a small pension and permit the employee to live his normal life among the people of his race.

“The remedy for this situation lies in Congress’ voting the necessary items.” (Ibid, page 78).

As can be seen from the preceding quotations, the Canal Administration itself agrees that, with respect to retirement pay, there should be a plan which provides it not only for the Panamanian citizens employed on the Canal, but also for all foreign employees. The Panamanian proposal therefore is based on justice, humanity and also the benefits to the work of the Canal.

With respect to the establishment of the same conditions for American and Panamanian citizens with respect to promotions and vacations, it may be observed that, aside from the fact that it appears indicated by the spirit of justice and the feeling of solidarity that inspired the Executive Order of December 23, 1908, and the subsequent orders, the establishment of such equality would not actually make any great difference, because of the very small number of Panamanian employees of the Canal.

In the book recently published by Professor Marshall E. Dimock, Special Commissioner of the Secretary of War in the Canal Zone, [Page 607] entitled Government Operated Enterprises in the Panama Canal Zone, the following is stated:

“In January, 1934, there were 11,526 employees on the Panama Canal and the Panama Railroad Company on the Isthmus, and of them 2,853 were American citizens, while 8,673 were foreigners. The foreign employees are, as has been said, in the majority, natives of the British Antilles, coming from Jamaica or Barbados. Comparatively few of the foreign employees are from Panama or other countries of Central and South America.”

The number of the Panamanian employees on the gold roll at present is, according to data submitted to the Government of the Republic, so low that it will not even amount to a hundred. There cannot, therefore, be any reason whatever for refusing to these employees, the majority of whom earn small salaries, the same rights and facilities as are granted to American citizens in the matters in which inequalities exist today.

With respect to employees on the silver roll and the laborers, the total number on June 21, 1933, was 9,575. The Legation does not have exact numerical data regarding the number of such employees who were Panamanian citizens, but according to data for the year 1932, the situation was as follows:

On the silver roll the total number of employees was 9,120
Of these only 1,948

were Panamanians, that is, the proportion was hardly 20 percent, or, of every five employees or workers on the silver roll, who, as has been said, are almost all West Indians, only one is a Panamanian.

This want of proportion has, apparently, not undergone any noticeable change. The Panamanian Commission considers that the most elementary sense of justice requires that after the great sacrifices made by Panama for the work of the Canal, Panamanian citizens may be able to obtain a larger proportion of the benefits furnished by the opportunity to work on the Canal works; and it would therefore be very desirable that by establishing firmly and effectively the preference of Panamanian citizens over foreigners with respect to eligibility, promotion and reduction of force, the distressing situation which Panamanian artisans and day workers are now experiencing with respect to the work offered by the Canal and the Railway may be corrected.

A very clear idea of this situation is given by the following words of the Governor of the Canal Zone, in his report for the year 1932:

“The Canal Zone and the adjoining cities of Panama and Colon, in Panama, face a condition of permanent unemployment. The construction of the Canal occasioned the coming of thousands of West Indians, as well as numerous Europeans and Orientals. Upon the completion of the construction work, the United States offered repatriation [Page 608] to all discharged employees, or former employees. Many did not accept repatriation and many who went home returned later to the Isthmus. For a time increased business in Panama absorbed many of them, but business has slumped sharply, throwing many out of work. Meanwhile the termination of the highways from the capital to the interior has resulted in a movement from the country to the city rather than from the city to the land. A further factor has been the natural growth of population in a prolific people, without control and without the losses from disease which occurred prior to the era of American sanitation. Similarly, but to a less extent numerically, the American population in the Canal Zone has increased, and many young men and women of the Canal families are approaching maturity without employment. The search for work is sharp and there is an increasing competition between Americans and aliens for work that may be performed almost equally well by either.

“This situation has become acute with the general slump in business, the falling off in Canal traffic and related activities and the diminished appropriations for new construction and replacements. It is not practicable to care for any number of these people by allowing them to settle on land in the Canal Zone. Many could not make a living for the moment, and the increases of malarial infection that have resulted in the Canal towns from the presence of these settlers have led us to the decision to license no more settlers. The most obvious form of relief is an increase in public works.”

Although the situation is perhaps not as acute today as two years ago, it continues to be bad enough so that the Panamanian Commission, in view of the foregoing considerations, most strongly urges upon the American negotiators the favorable consideration of the clause of the new treaty through which they hope to improve the condition of the Panamanian citizens who work or are qualified to work for the Canal or for the Railways,.

  1. Executive Orders Relating to The Panama Canal (March 8.1904, to December 81, 1921), Annotated 1921 (Mount Hope, Canal Zone, 1922), pp. 86, 158–161, 266; and Supplement No. 14, p. 410.
  2. 44 Stat. 904.
  3. 39 Stat. 742.
  4. Brackets appear in the file translation.
  5. Brackets appear in the file translation.