811F.504/3–1748
The Secretary of State to
the Secretary of Defense (Forrestal)
confidential
Washington, September 7,
1948.
Dear Forrestal: You will recall that, pursuant
to the interest of the President, arrangements were made by the State,
War, Navy and Labor Departments for Brigadier General Frank McSherry
(ret.) to spend four months last year in the Canal Zone studying
problems arising from United States Government labor relations. On June
1, 1947 General McSherry submitted a detailed report which offered
evidence of both official and unofficial discrimination against
Panamanians [Page 681] in the Zone. In
his report General McSherry made definite recommendations for reforms,
emphasizing that his proposals were confined to those deemed practicable
and capable of early implementation without undue shock to the
established patterns of social and economic relations.
I have been impressed by the objectivity of the McSherry report and,
through personal conversation with General McSherry, by his conviction
that continuance in the Canal Zone of outmoded labor practices is
harmful to the national interest. Moreover, I have become convinced that
Panamanian resentment over certain United States Government employment
practices in the Canal Zone is a primary cause of difficulty in this
Government’s political relations with the Republic of Panama and an
important background factor in the rejection last December by the
Panamanian Assembly of the Defense Sites Agreement signed by our two
governments.2 The
attitude of resentment and feeling of discrimination on the part of the
Panamanians concerning certain of the existing employment regulations
also have the effect of making more difficult other negotiations with
Panama, such as arrangements for adequate security control over civil
aviation and radio on the Isthmus.
Complaints on this subject presented officially by Panama at
international conferences have embarrassed this Government, and the
Panamanian Government has recently renewed its charges that the United
States Government employment practices in the Canal Zone not only admit
discrimination but are also at variance with the General Treaty of
19363
wherein the United States agreed to maintain equality of opportunity and
treatment for Panamanians in the Zone. Not only the Republic of Panama,
but all the other American republics regard United States activities on
the Isthmus of Panama as an example of our treatment of citizens of
other nationalities. The importance of the effect of our policies in the
Canal Zone on our international position in this Hemisphere and in the
United Nations should impel us to make every effort to make the Zone a
showplace of American democracy in practice.
I am enclosing with this letter a memorandum which sets forth certain
specific steps which I believe this Government can and should take
without undue delay to carry out certain of the recommendations made by
General McSherry. This action would not only reduce the basis for
hostile criticism of United States administration on the Isthmus of
Panama and contribute materially to the security of our position in
Panama but it would eliminate the validity of the unfriendly charges
made on this subject against the United States by anti-American elements
throughout the Western Hemisphere. These [Page 682] changes would also bring Canal Zone labor practices
into closer accord with our treaty commitments and with proclaimed
national policies.
Faithfully yours,
[Enclosure]
Memorandum
Subject: United States Government Labor Relations in
the Panama Canal Zone.
Action has recently been taken in the Canal Zone to improve United
States Government labor relations, principally by hourly wage
increases for alien employees—granted to more than 15,000 of the
18,200 local employees of The Panama Canal and Panama Railroad—and
the admission of Panamanian citizens to examinations for certain
civil service positions in line with United States treaty
commitments. In a sensitive area such as the Canal Zone, reforms
must of course be gradual, and progress could probably not take
place rapidly enough to satisfy the more willful critics of the
United States. However, there are certain further steps which the
United States Government should be able to take without undue delay
in a forthright program to remove the basis for hostile criticism of
United States administration on the Isthmus of Panama.
There follows a brief summary of some of the more apparent evidences
of discrimination which now exist in United States employment
practices in the Canal Zone, as discussed in the McSherry report. It
would be very desirable to have these discriminations corrected as
soon as practicable with full consideration for the possible
advisability of carrying out some of these reforms gradually.
Gold–Silver Roll. According to the McSherry
report, at present the principle of equal pay for equal work is not
used in the Zone, particularly in the organizations of The Panama
Canal and The Panama Railroad. The following comparisons of monthly
pay rates for gold and silver roll employees (practically speaking,
United States citizens and alien employees) with comparable duties
indicate relatively wide inequality.
|
Gold
|
Silver
|
Carpenter |
$300 plus |
$95 |
Painter |
300 plus |
95 |
Policeman |
300 |
80 |
Foreman |
250 |
100 |
Motion Picture Operator |
250 |
95 |
Chauffeur |
240 |
95 |
Baker |
225 |
100 |
Watchman |
210 |
75 |
Saleswoman |
175 |
75 |
Teacher |
325 |
110 |
[Page 683]
In many of these categories there appears to be little room for
differences in skill of performance. The United States is criticized
frequently and bitterly by foreign officials and individuals for
maintaining this system. Allegations are frequent that the purpose
is primarily to enable national and racial discrimination, and the
situation provides opportunity for exploitation by communist and
other anti-American elements. The Department has been informed by
the American Federation of Labor’s expert on inter-American labor
matters that the discrimination in the gold and silver roll is the
one point of criticism of our labor policies in the Canal Zone on
which the Federation has no adequate answer to communist
attacks.
General McSherry has recommended that The Panama Canal and The Panama
Railroad abolish gold and silver roll titles and establish a single
wage structure. This appears technically practicable and would
accomplish more in the way of eliminating criticism of United States
personnel practices in the Canal Zone than any other single step.
Such a change need not mean the payment of United States wages to
all silver roll employees, nor does it envisage the abrupt
elimination of segregation in a manner offensive to established
social patterns, but would merely mean that equal performance would
be rewarded with equal compensation. It would be anticipated, of
course, that due allowance would be made for the more economical
circumstances of those living at home in their own national
environment as compared with those who have gone abroad from the
United States to work in the Zone.
Leave Privileges. According to the McSherry
report, the gold roll employees receive 40½ days of leave per annum
cumulative to 90 days. Silver roll employees are credited with 24
working days of sick leave per annum. Silver roll employees are not
allowed to take rest leave until they have accumulated in excess of
30 working days, and then only to the amount of their credit above
30 days. General McSherry recommended that leave privileges of
silver roll employees be adjusted to equal those of United States
Government employees elsewhere.
Retirement. The Canal Zone Retirement Act is
somewhat more liberal than the United States Civil Service
Retirement Act, but it applies only to gold roll employees. The
McSherry report indicates that silver roll employees receive no
retirement benefits and that even those few non-United States
citizens on the gold roll are treated for retirement purposes as
silver roll employees. The latter participate in a cash relief
program which provides monthly payments of $1.00 for each year of
service with a $10 minimum and $25 maximum. General McSherry
recommended that silver roll employees be placed under the Civil
Service Retirement Act. The Act authorizes such action and the
taking of this simple step would mean that charges of discrimination
in the matter of retirement would no longer have real basis.