Letter Drafted in the Department of State for the Signature of the President5


During the past several years the Government of Panamá has charged that United States employment practices in the Canal Zone are discriminatory. Panamá also maintains that these practices are at [Page 964] variance with the General Treaty of 1936 between the United States and Panamá, wherein this Government agreed to maintain in the Zone opportunity and treatment for Panamanians equal to that accorded American citizens. These complaints are detrimental to our general relations with Panamá and have come to be a source of embarrassment at various international conferences, where our employment practices on the Isthmus have been openly criticized. Of late, criticism has been more frequent and has been utilized by elements in the other American republics hostile to the United States in campaigns against our national interest.

A detailed investigation of United States labor practices in the Canal Zone was completed recently by Brigadier General Frank J. McSherry (ret.) on special assignment as advisor on labor relations to the Governor of The Panama Canal. General McSherry reported that there is substantial truth in allegations of discrimination in Canal Zone labor practices. His study revealed that there is considerable variation in the laws, executive orders and departmental regulations applicable to Panamanian employees of the several departments and agencies operating in the Zone. General McSherry found further that there is confusion and difference of opinion as to our national policy with respect to the employment of Panamanians in the Canal Zone by Federal agencies.

It is essential that the United States abide by the obligations of the General Treaty of 1936 with Panamá and the notes attached thereto regarding equality of opportunity and treatment for Panamanians in the Canal Zone. The extension of such employment opportunities must, of course, as provided in the Treaty notes, be consistent with the efficient operation and effective protection of the Canal.

In order to ensure a proper understanding of United States policy and to encourage uniformity of legislation and regulations concerning personnel practices in the Canal Zone, it is my desire that an interdepartmental committee be established. This committe shall consist of representatives of the State, Defense and Labor Departments, the Civil Service Commission and The Panama Canal. In order that the committee may function properly, your representative thereon should have the rank of an Assistant Secretary or a Commisioner, or, in the case of The Panama Canal, should be the ranking official present in Washington.

The committee shall concern itself solely with matters of broad policy with a view to the coordination of legislation governing the operations of the several Federal departments and agencies active in the Canal Zone. The committee shall not be concerned with the administration of the Canal Zone, which is the responsibility of the Governor of The Panama Canal.

It shall be the responsibility of the Department of State to proceed [Page 965] at once with the organization of the committee. The committee should meet at the earliest practicable date and from time to time submit to me a report of its progress.

  1. To be addressed to the Secretaries of State, Defense, and Labor, the President of the Civil Service Commission, and the Chief of Office, The Panama Canal. The letter was not approved and signed by the President. The draft was attached to a communication from the Secretary of State to the Secretary of Labor (Schwellenbach), September 24, 1947.