The Secretary of State to the Ambassador in Panama (Warren)

No. 58

Sir: Reference is made to the Embassy’s despatch No. 5422 of May 3, 1944 enclosing a copy of a memorandum from the Panamanian Foreign Office dated April 29, 194464 complaining of certain practices applied to alien employees in the Canal Zone which were alleged to be discriminatory against Panamanian nationals and contrary to the policy of this Government as set forth in the exchange of notes between the two Governments dated March 2, 1936.

As explained in the Department’s instruction No. 3182 of June 5, 1944, the Secretary of War was requested to comment on the three memoranda of the Division Engineer that gave rise to the protest of the Panamanian Government. I am enclosing copies of an exchange of correspondence between this Department and the Secretary of War in this connection. A study of the letter from the Secretary of War dated July 31, 194465 reveals that the Commanding General in the Canal Zone intends to issue regulations concerning overtime pay, wage scales and leave for alien employees which will supersede those regulations complained of by the Panamanian Government and that in so doing all possible consideration will be given to the issues raised by the Foreign Office.

In the memorandum from the Panamanian Government dated April 29, 1944, the text of the note of this Government dated March 2, 1936 is quoted in an endeavor to show that the memoranda of the Division Engineer were at variance with the commitment of this Government to equality of opportunity and treatment as between United States and Panamanian nationals employed in the Canal Zone. In order that there may be no confusion over the interpretation by the Panamanian Government of this Government’s commitment in this matter, it is desired to point out that its obligation to extend equality of opportunity [Page 1452] and treatment as between United States and Panamanian citizens applies only to those Panamanian citizens employed by the Panama Canal or by the Panama Railroad Company. It does not include those Panamanians in the Zone who are employees of the War Department proper. Such employees have heretofore been considered as subject to regulations and orders issued in the United States to control employment practices within the United States proper and its territories and possessions. This is the origin of the differences which have so far existed in employment practices of the two United States Agencies operating in the Canal Zone. For this reason the Department finds the following paragraphs quoted from the letter of the Secretary of War dated July 31, 1944 of particular interest:

“I have been advised that the Commanding General, Panama Canal Department is planning to issue regulations on overtime pay, wage scales and leave for Panamanian and other alien employees. These regulations will be designed to conform to the employment practices of the Panama Canal, which have been developed and followed over a period of forty years. The practices of the Panama Canal in this regard comply with the spirit and intent of the policy of equality.

“The regulations to be issued by the Panama Canal Department will supersede any regulations of the Division Engineer in conflict therewith. You may be assured that in developing these regulations every possible consideration will be given to the issues raised by the Foreign Minister of the Republic of Panama.”

The Department suggests that before making formal reply to the Foreign Office memorandum of April 29, 1944 in the sense of this instruction you seek an early opportunity to discuss this matter with the Commanding General in order to determine what measures he contemplates taking to comply with the viewpoint expressed by the Secretary of War. You may then desire to draft a formal communication to the Panamanian Foreign Minister pointing out the fact that the obligations assumed by this Government in the accessory note of March 2, 1936 apply only to the employees of the Panama Canal and the Panama Railroad Company; that the regulations complained of by the Foreign Minister in his note dated April 29, 1944 are regulations issued by the Office of the Commanding General and that they therefore do not come within the scope of this Government’s commitments. You may point out orally that the War Department has requested the Commanding General to so revise the regulations pertaining to alien employees of the War Department in the Canal Zone as to bring them into conformity with the practice followed with regard [Page 1453] to employees of the Panama Canal and the Panama Railroad Company. You may add whatever you gather from the Commanding General that you deem appropriate.

For your confidential information the Department does not consider that with this current exchange of notes with the Panamanian Government this matter of the treatment of Panamanian employees is by any means solved. It is hoped that the Panamanian Government will continue to bring to the attention of this Government all matters involving allegations of discrimination against Panamanian employees whenever they may arise within the Zone. This Government is resolved to carry out to the fullest extent consistent with the essential operation and protection of the Canal, the commitment to afford equality of opportunity and treatment as between the United States and Panamanian employees within the Zone.

Very truly yours,

For the Secretary of State:
Edward R. Stettinius, Jr.
  1. Enclosure not printed.
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