500C.115 Montreal/10–1546

The Secretary of Labor (Schwellenbach) to the Secretary of State

Dear Mr. Secretary: As you are undoubtedly aware, at the American Regional Conference of the International Labor Organization held at Mexico City in April 1946 and at the International Labor Conference [Page 62] held in Montreal in September and October 1946, the Panamanian Delegation made allegations that there was discrimination against their nationals by the United States in the Canal Zone.

At the Montreal Conference the problems were fully explored by representatives of this Government and of the Panamanian Government. The discussions on the part of our Government were conducted by David A. Morse, Assistant Secretary of Labor, who gave his personal attention to this matter throughout because of its importance. He had representatives of the State Department at his conferences with the Panamanian representatives and he consulted your Department concerning those phases of the negotiations in which your Department was interested. He also kept fully advised Senator Elbert Thomas of Utah, Chairman of the Senate Committee on Military Affairs, who attended the I.L.O. Conference with Mr. Morse as the other United States Government Delegate and Lt. Colonel Thomas Lane, who attended the I.L.O. Conference as War Department Observer.

The following developments in this matter occurred at Montreal:

On September 20, Mr. Morse conferred with the representatives of the Panamanian Government (at their request) at Montreal and asked them to make a full statement of their case. They made two main allegations: (a) that there is economic discrimination between Panamanian workers and American workers who are employed in the Canal Zone in that a higher wage scale is maintained for American workers (known as “gold roll”) than for Panamanians (known as “silver roll”) who do the same work, and (b) that there is social discrimination against Panamanians which hurts their national pride in that different drinking fountains, movies, group houses, stores, etc., are established for United States citizens.
The allegations were discussed at great length. Mr. Morse assured the representatives of Panama that the United States Government is most anxious to adjust any grievances which may exist; that we had been looking into this matter, and that we were still investigating the question of possible discrimination. He informed them that our Government would conclude its investigation shortly and that we would let them know what we found and what we intended to do to correct grievances if we found that grievances existed. The Panamanians asked to have this put in writing. Mr. Morse replied that before giving them any official written statement, it would be necessary for him to consult Washington.
The attached “Confidential Memorandum”, marked “Attachment No. 1”,23 is a full summary of the foregoing conversation. I will avoid restatement in this letter of the details which are set forth in that memorandum.
After that conference Mr. Morse instructed Mr. Wiesman, a representative of your Department, to telephone the Department and request advice.
The State Department transmitted a memorandum dated September 25, a copy of which is attached as Attachment No. 2,24 outlining a “proposed statement to Panamanian labor delegation at Montreal”. This proposed statement authorized Mr. Morse to deliver to the Panamanian representatives a copy of a letter from J. C. Mehaffey, Governor of the Canal Zone, to the Honorable Frank T. Hines, American Ambassador at Panama. A copy of this letter, dated August 20, 1946, is attached as Attachment No. 3.25 This letter is in the nature of a preliminary report and covers allegations made by the Panamanian Delegation at the American Regional Conference of the I.L.O. held in Mexico City in April 1946. In addition, Mr. Morse was authorized to inform the Panamanians that other constructive action had been taken and was being taken currently as specified in the State Department communication of September 25.
Upon receipt of this State Department instruction, Mr. Morse again conferred with the representatives of Panama on September 27. He handed them a copy of the letter from Governor Mehaffey, made oral statements consistent with the State Department’s instructions of September 25, and assured the Panamanians of our desire to be constantly alert to any problems which arise in the Canal Zone which may be considered grievances. He also assured the Panamanians that we would inquire into the matter further so that a day to day consideration could be given to the problems which are alleged to exist in the Canal Zone. They were completely satisfied with this explanation and stated that as a result of these discussions they would revise speeches they had intended to make on the floor of the International Labor Conference. For your convenience, I am attaching, as Attachments Nos. 4 and 5,26 respectively, copies of Mr. Wiesman’s preliminary report to the State Department, dated September 28, and his memorandum to the State Department, dated October 1, which cover in more detail the discussions of September 27 and their impact upon the Panamanian Government delegate’s speech on this subject at the I.L.O.

This is a problem which has been giving our Government some concern for many years and which was brought to a head at the Mexico City Conference this year. At that time Mr. Zimmer, representing the Labor Department, succeeded in keeping the Panamanians from discussing the problem on the Conference floor by assuring them that the matter would be referred to the Secretary of Labor. It is clear that there are some serious political questions involved in this matter. It seems to me that we cannot permit this problem to rest in its present posture.

Mr. Morse has suggested the possibility of steps being taken to settle this problem finally. Simultaneously with transmittal of this letter, I am informing the Secretary of War of all facts relevant to this situation. [Page 64] I am requesting him to designate representatives who may consult with Mr. Morse and your representatives concerning appropriate action to be taken. If you will designate representatives for this purpose, I am sure that Mr. Morse will arrange for an early conference between the representatives of these three Departments regarding a solution to this problem.

Yours very truly,

L. B. Schwellenbach
  1. Not printed.
  2. Supra.
  3. Ante, p. 54.
  4. Neither printed.