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in 2010 with funding from

University of Florida, George A. Smathers Libraries



Robert J. Fleming, Jr., Governor-President
H. R. Pakfitt, Lieutenant Governor

Fbank a. Baldwin
Panama Canal Information Officer

Official Panama Canal Publication
Published quarterly at Balboa Heights, C.Z.

Printed at the Printing Plant, La Boea, C.Z.

Review articles may be reprinted in full or part without

further clearance. Credit to the Review will be appreciated.

Distributed free of charge to all Panama Canal Employees.

Subicriptions, SI a year; mail and back copies, 25 cents each.

Robert D. Kerb, Press Officer

Publications Editors

Morgan E. Goodwin and Tomas A. Cupas

Editorial Assistants

Eunice Richard, Tobi Bittel, Fannie P.

Hernandez, and Jose T. Tunon

cAbout Our Cover



THE AERIAL PHOTO shows Panama's Free Zone, a
region that seizes the interest of most people and
is of special significance to the leading businessmen of
the world.

Situated in the Caribbean coastal city of Colon, second
most populous municipality in the Republic of Panama,
the Free Zone serves as a funnel for a bewildering array
of goods. From manufacturer to vender, and ultimately
to the consumer, the merchandise flows via the Free Zone,
frequently being packed, labeled or stored here, also.

The success of the Free Zone has been spectacular and
is best illustrated by statistics noting that firms operating
here in 1965 handled 20 times the 1953 volume of goods.
Attractive, stable tax advantages and freedom from red
tape of license and permit requirements are heavy induce-
ments to corporations contemplating setting up shop in
Colon. Add its proximity to the Panama Canal and you
have a sure winner.

But the impact of the Free Zone reaches further than
the credit and loss statements of the more than 400 com-
panies operating here. It greatly influences the economv
of the entire nation by contributing toward its progress.
Turn to page 4 for a fuller view of the Free Zone.

The people of the river— rural folk living near Gatun
and Madden Lakes— are introduced in an article beginning
on page 6. These proud, industrious people accept nothing
they feel they have not earned and cling to other time-
honored ways that have gone out of fashion in some parts
of the world.

In a big operation like the Panama Canal, many very
particular skills are needed, some of them unheard of
in the average industrial area. Our cover .shows an
admeasurer, whose job at the Canal has no actual par-
allel anywhere. There are others, as our story on page
14 reveals.

Port of Mobile.

Panama's Free Zone

People of the River 6

The Crowns of Panama

SS United States Calls 12

Shipping Statistics 12

Unusual PanCanal Skills 14

Canal History 16

New Training Program 17


Carnival _



Shipping 24

February 1966

Warehouses and 29 general cargo piers form a major part of the
huge complex of the port of Mobile. Large building at top right is
grain elevator with ship-loading capacity of 50,000 bushels per hour.
Above that are cement plant, aluminum plant, and ore terminal.

Port Of Mobile
Is Old But New

THE STATE of Alabama and its seaport cit\ of Mobile boast
long and colorful histories but the port of Mobile came of age
just 30 years ago with the help of one of the builders of the
Panama Canal.

Mobile, at various times, was claimed bv the Spanish,
French, and English before it became part of the United
States. And during the 1800's when cotton was king, the city
served as a vital link that helped move the raw bales from
plantations to looms abroad.

But cotton fell sharply from prominence through the ravages
of the boll weevil and with it went the prosperity of Mobile's
onc-commodit\ port; it languished for man\' years. The port
of Mobile was wholly lacking in adequate facilities in 1919
when the U.S. rivers and harbors appropriations bill gave
the Secretary of War authority to withold funds for new
dredging projects in regions lacking sufficient terminals to
handle the traffic.

Taking the initiative, the State of Alabama launched a pro-
gram to build a new port at a .540-acre site 1 mile north of
downtown Mobile. The job of handling planning and engineer-
ing went to a native Alabamian, retired Gen. William L. Sibert,
who, as a young major, was responsible for the completion of
Gatun Locks and Gatun Dam. integral parts of the Panama
Canal setup.

His efforts resulted in the port of Mobile's elevation from
near the bottom of the heap to its present position as one of
the top ports in the Nation. Today the Alabama State Docks,
which for the exporter-importer is the port of Mobile, carr\- a
book value of some $2.5 million. And management estimates
it would cost three times that to replace the existing facilities.

The port has a .IB-foot, ■3.5-mile main channel from the
Gulf of Mexico and along the channel has numerous installa-
tions including industrial sites, military bases, repair yards
and pri\ate ocean terminals.

(See p. 13)

Massive crane equipment services ships moored at the ore terminal where minerals are loaded and unloaded at the port of Mobile. Serving
this section of the port is a loading tower for handling outbound movements of ores and minerals with a rotary rail car dumper and

a telescopic chute with trimmer.

The Panama Canal Review

Panama's Free Zone:
What Does it Mean?

AN IDEAL way to do business in Latin
America is to find an ideal location, free
from interference and redtape, with a
reliable labor suppK and a stable econ-
omy. Add to this a very special tax break
and people who make it easy for \ou
to succeed, and \ou have a perfect

To the foreign businessman, Panama's
Free Zone at Colon offers all this, and
more. Started in 1951, its rate of growth
reflects an amazing economic vitality
and its operation has contributed signif-
icantly to the economy of the Republic.

Back in 1953, Free Zone firms hand-
led $14.3 million in goods. In 1965, this
had zoomed to .$240 million, nearly 20
times the 1953 \olume. Its growth fig-
ures all follow the same pattern— giant
leaps each year. Over the past 6 vears
the rapid climb in imports and e-xports
has helped Latin merchants and Pan-
ama's economx', and indications are that
the sunniest da\s are still ahead.

Why is this? Exactly what is a Free
Zone? What's in it for a business firm
that decides to move into the Free Zone?
After all, such decisions are guided
principally by the profit factor. The
answers to these questions are found in

a close look at regulations that establish-
ed the Free Zone and in the experience
that 435 firms have had in operating

A study by Thomas E. Lvons, of the
U.S. Department of Commerce, had
recommended a Free Zone in 1946. A
decree in June of 1948 created the Colon
Free Zone, but it was not activated until
1951, when a law established small Free
Zones (Zonitas) within the citv of Colon.
As the Executi\e Secretary of Foreign
Trade Zone for the Department of Com-
merce, L\ons saw the future of a Free
Zone in Panama, and men of vision in
the Republic agreed. Their estimate of
its value has been proven bv the spiral-
ing success of the enterprise.

The benefits to a foreign firm are
many. First, there are the guarantees
of the Panamanian Government that
Free Zone businesses:

PAY 10 PERCENT of the regular
Panamanian income tax on profits earn-
ed on sales outside the Republic of Pan-
ama. This tax is computed on a 1954
formula. For instance, a U.S. companv
that made $100,000 profit on goods sent
from the Free Zone and sold in other
countries would pa\' a little under

Osvaldo Cuaragna, Promotion Director of

the Free Zone. His problems are focused

on the future as the Free Zone continues

to grow.

$1,200 in tax. And the profit is figured
as net— after all operating costs and ex-
penses have been deducted. Tax on
$100,000 corporate profit in the United
States would run closer to $40,000.

ARE FREE FROM fees, duties, con-
tributions, dues or other imposts on
goods entered, stored, handled or leav-
ing the Free Zone. There are no li-
censes or other permits to buv from anv
municipal or government agency.

ARE EXEMPT from taxes on invest-
ed capital, dividends or remittances
abroad, and there is no tax on capital
gains when property or securities sold
have been held for more than 2 years.

Firms may enter into a 20-year con-
tract, and they are guaranteed exemp-
tion from any new taxes passed during



Among the many lines of Free Zone merchandise are toys, arranged here in a display that serves buyers from over Latin America.

4 February 1966

Encyclopedias, textbooks and reference works in Spanish are published in the Free Zone by Grafica Editora, which has trained nearly

100 Panamanians in the printing trades. The plant plans an expansion soon.

their contract. This means a business-
man can count on a period of stabilitv.

There is also a large pool of skilled,
trainable labor in the Colon area. Turn-
over of help is small and the enthusiasm
of employees is high. Colon had a seri-
ous unemployment problem before the
Free Zone was established. The work
force now stands at about 2,000, includ-
ing 83 Panamanians working in actual
administration of the area. Employees
are well paid. Thev enjov a varietv of
fringe benefits from big firms such as
Pfizer, Gillette, Squibb, Peikard, Fire-
stone, Lucas, Goodvear, Motta, and
Coca Cola.

Some of the enterprises doing busi-
ness in the Free Zone are represented
bv a corporation that combines to serve
several. Bizca\na International, for in-
stance, lists Hormel & Co., Stokely-Van
Camp, Plumrose and Gerber under its
nameplate. Others, such as Gillette,
have a separate operation. There are
58 buildings on 60 of the total 100
acres of land in a neatlv fenced and well
kept area that has been planned from
the first. About 70 percent of the firms
are U.S. firms; others are Japanese,
British, French, Italian, or Spanish.

Outlining the operation of a foreign

fiiTn in the Free Zone will show how , , „ _ „ i_ l »i.

. , A sales display room of Peikard, International, m the Free Zone. Here, buyers have ttie

(see p- H) advantage of viewing goods handled by the company.

The P.^.nam..^ Canal Review

The Proud
People of
The River

THEY CALL themselves people of
the river.

The name applies to tlie men and
women living on the shores of Gatun
and Madden Lakes who work along
the fertile banks of the Chagres,
Indio, and Pequeni rivers and who
have settled near the small creeks
in those areas.

The li\es of tliese men and women
are closely linked to the rivers.
They live in picturesque villages with
capricious names like "Little Giant,"
"Red Wine," and "Little Alligator"-
some on very small plots of land. The
rivers are their highways. Using the
cayuco they travel to market with
their harvest. On the same waters
their children tra\el to school. The
rivers are even important in their
spiritual lives; they are the frames
of their religious festivals.

The cavuco, an indispensable vehi-

.\ nook in Gatun Lake. Quay and dockyard for launches.

cle, and a riverman's most loyal
friend, is made from a hollowed-out
tree trunk. No one knows who built
the first cavuco but some believe it
originated in pre-Columbian times
and that the vessel held great reli-
gious significance for ancient Indian
tribes. It is in a water-filled cayuco
that the newborn babies receive
their first bath.

The perseverance and energy of
these people, who year after year

Zenobia Tome pounds rice on a pestle.

transform sections of jungle into
farmland, is boundless. On these
plots they grow plantain, corn, rice,
beans, and other crops which they
sell in the marketplaces of nearby
cities. Herds of cattle graze at lake-
sides and along riverbanks. In every
little house pigs and chickens scurry
about. The people of the river sell
these animals to buy the basic articles
they cannot produce— such as the
transistor radio that keeps them in
contact with the rest of the world.

These proud people like to live
well, but they neither accept nor ask
favors. Guillermo Flores, a hard
working man who arrived in this
region 20 years ago, settled on a
small piece of land on which he
planted orange trees and a variety of
fruits and vegetables. Today he reaps
the product of his orange groves. His
wife, Doiia Juana, takes pride in her
housekeeping. They live in a small,
cozv home with immaculate floors.

Communication between villages
and transportation of products to
market is by launch. But the rivers
have many shallow spots where ca-
vucos and boats have to be pushed
with palancas (oars) made from
strong palo nian'a, a Hglit, strong
wood. Rupertino Robles, a man of
prestige in this area, is the cavuco

(See p. 21)


February 1966

The town store— social center of the villages.

A moment of rest to feed the stock.

A home in the lake region.

The Panama Canal Review

Deviations In Panama's Coins
Intriguins To Numismatists

(Editor's Note; This article was
prepared and in print before
the Panama Government recently
announced that Panama coins
would be offered to collectors at
a premium. )

Panama's coat of arms as it appears on
two separate issues of coins and which
apparently escaped detection for years
are of great interest to many local

The coins, issued in 1953 and 196L
carry manv other modifications from
similar coins minted previously and sub-
sequentlv. The variances first appeared
on the 1953 balboa, referred to as the
cincuentenario because it was issued
in commemoration of the 50th anni-
versar^■ of the Republic of Panama.

The center of the shield in the coat
of arms normalh' shows the Isthmus of
Panama bounded bv two oceans and the

sk\' with the moon rising over the waves
and the sun setting behind the moun-
tains. In the cincuentenario, however,
the shield includes a canal cut through
from ocean to ocean while all earlier
coin issues-1904, 1905, 1931, 1934,
and 1947— show the Isthmus without
the Canal. Just why this Canal was
inserted and how it went unnoticed are
questions of interest to sharp-eyed

Panama's first coin not minted by the
United States, the cincuentenario, was
produced 'bv the Casa de Moneda de
Mexico, in Mexico City. The insertion
of the Canal carried over to the 10-,
25-, and 50-cent coins of the cincuen-
tenario. The Canal was apparent, too,
in Panama's 1961 coinage, also minted
bv Mexico; but it was not present in
the 1962 issue, produced bv the Royal
Mint of England. Another curious
feature of the 1953 and 1961 coins is

that the Canal is of the sea level class,
not the lock tvpe which actually exists.

The director of the mint in Mexico
reported the designs were received from
the Panama Government and based on
these designs modeling was made by
the mint's designer, resulting in the
interpretation shown in the coins.

Only 50,000 pieces, a relatively low
number, of the cincuentenario were
produced and it is now out of circula-
tion. In March 1965, the national
bank of Panama recalled balboas by
decree. The five earlier Panamanian
issues were minted in much greater
quantities: 1904, 1,800,000; 1905,
1,000,000; 1931, 200,000; 1934,
225,000; and 1947, 500,000. All of
these were minted at Philadelphia ex-
cept the 1934 coins, produced in San

A cincuentenario in brilliant, uncir-
culated condition sells for $9, a price

This is the famed cincuentenario of which only 50,000 were minted. Notice the cut through the Isthmus to represent the Canal, and
that there are only three fingers showing on the right hand of the standing liberty.

8 February 1966

The first of Panama's six crown-size silver coins. It became practically extinct when speculators had them melted down during the silver
crisis of 1917-20. Notice on the obverse that the Isthmus in the coat of arms is uncut from ocean to ocean as on the 1953 cincuentenario.

which some experts consider below its
actual value when compared with coins
commanding greater sums. It is closely
held out of circulation today and has
an aura of national sentiment due to
its scarcity and historic significance.

This nation's coin history dates back
to a few months after Panama declared
independence from Colombia when in
1904 the Legislative Assembly created
a monetary structure for the new nation.
The monetary unit was called a balboa
in honor of Vasco Nufiez de Balboa,
the Spaniard who discovered the
Pacific Ocean in 1513 from the heights
of the Isthmus.

The balboa is the equivalent of the
U.S. dollar and both are used inter-
changeably. Panama, however, has no
paper money so U.S. bills are used and
are officially referred to by Panamanians
as balboas.

The first two of six Panama crowns
were issued in 1904 and 1905 with a
value of 50 centesimos and they were
composed of .900 fine silver and .100
copper. The\' are not real crowns, com-
pared with the balboas as known today,
because of their low face value, but
they were of crown size.

Between World War I and 1920,
they were almost obliterated from cir-
culation when speculators had them
melted becaus? their silver bullion con-

Roberto Lewis, the Panamanian artist who

designed the reverse of the 1931 Panama

silver crown.

tent exceeded their face value. Today
they are considered by collectors as key
coins due to their scarcity and despite
the fact that quantities were held
by the National Bank of Panama's
numismatic collection.

The third Panamanian crown was
issued in 1931 after Panama's national
coinage law was amended to stipulate
that all future coins would be the same
composition, size, value and weight as

conesponding U.S. coins. The purpose
of the change in law was to allow both
to be used interchangeably in coin
machines and in general use without
mistaking the value of the coins.

Silver balboas were struck in 1934
and again in 1947, both exactly the
same design as the 1931 issue. Then,
in 1953, came the commemorative cin-
cuentenario with its fascinating devia-
tions that washed over into the 1961
issue but did not extend to the 1962

Besides the canal differences, there
are numerous other variances which set
off the cincuentenario from the earlier
coins. These differences indicate that
the 1931, 1934 and 1947 balboas were
obviously struck with a die different
from that used for the cincuentenario.

The 1953 coin utilizes modern block
capital letters as compared with roman
letters on the 1931 series of balboa.
The coat of arms for the 1953 balboa
shows a rake while a hoe is shown in
the other issues. The bust, foot, and
head size of the standing liberty figure
varies between the cincuentenario and
the earlier issues. The sticks of the
fasces are not tied at the bottom as on
the 1931 series.

On the 1953 balboa, the forearm of
the lady crosses through the first "e"

(See p. 10)

The Panama Canal Review

The 1931 Balboa was the first of the true silver crowns issued by Panama. It was struck
at the Philadelphia Mint. The Isthmus in the coat of anns follows the same design as on

the 1904 design.

Coat of Arms
Change Noted

(Continued from p. 9)
of the word beneficio in the motto,
whereas the forearm on the 1931 series
crosses bet\veen the "e" and the "n."
The size of the date on the 1953 coin
is reduced. The right hand of the stand-
ing figure on the 1953 has only a thumb
and three fingers showing and the oak
branch she holds varies considerably
in detail from the 1953 series balboas.
The lettering size of the fineness and
weight designation varies between both
series of issues. The feet of the ladv on
the 19.53 series stand further apart than
on the 1931 series. The scroll work in
Balboa's helmet is finer on the 1931
series than on the 1953 crown. The
rifle showTi on the 1931, 1934, and 1947
crowns is of an older type than the one
on the cincuentenario.

Above is the obverse of the 1953, 1961, and 1962 half-crowns of Panama. Note that the 1953 and 1961, both minted by Mexico, show
the sea level type canal across the Isthmus, whereas the 1962, struck in England, appears without a canal and conforms to the true

version of Panama's coat of arms, which was designed in 1904.


Febru.'^by 1966

Future Bright
For Free Zone

(Continued from p. 5)
it benefits. To begin with, a financial
plan can be drawn up easily; Panama's
Balboa is on a par with the U.S. dollar,
and it's stable. There are several first
rate banks, foreign and domestic, in
Colon to handle transactions. If a corn-
pan)' wants to start in a small way, the
Free Zone itself will store goods in pub-
lic warehousing and reship them as di-
rected. Or, a management firm will take
the company's goods, handle, label,
pack, repack, and ship them. This wav,
the company rents no space, but has all
the service it requires. But it mav want
to rent space in a Free Zone building.
Rental is by the square meter on a
monthly basis. This is the principal in-
come the Free Zone enjoys, money with
which it puts up new buildings. Space
in these may be rented, or the Free
Zone will plan, finance, build, and lease
entire buildings to one firm, buildings
designed particularly for the operation
of that firm.

Operating from the Free Zone, a
company finds its delivery time to the
Latin markets cut by weeks, even
months. This means added profits. It
can hold a stock of goods in the Free
Zone, which means the local merchant
in, say. La Paz or Buenos Aires, is able
to carry a smaller number of each item.
This merchant saves the capital he
would have to tie up in stocking a com-
plete line of merchandise. He knows
he can have an item from Panama bv
air in a day or two, b\' ship in a week
or so. Ordering from the factory in the
United States meant weeks of waiting,
lost sales and tremendous service prob-
lems. He finds the Panama manager of
the firm will drop in to see him from
time to time, a practice nearly impos-
sible with a U.S. base of operation. In
some countries, a merchant must make
an advance cash deposit of 150 percent,
or more, for the goods he imports. And
his money is tied up during delivery
time. So from the point of view of the
man selling goods in Latin America, the
Free Zone has been a real factor in cut-
ting costs, boosting sales and profits.

And the firm's manager in the Free

yy^ f '..~^.

Canon America Latina runs an assembly operation in the Free Zone. This worker is assem-
bling a camera; he also is a qualified repairman in the service department of the camera firm.

Zone finds that he can control his Latin
sales more closely. He can stock bulk
material, label it according to the re-
quirements of each country, offer a
greater variety of merchandise, and ship
it quickly to a Latin market 225 million
strong, a market in which rising imports
now run more than SIO billion a year.

But why Panama? Couldn't a Free
Zone succeed elsewhere with equal
ease? Probably not. Panama has the im-
mense advantage of the Panama Canal.
With more than 13,000 ships a year
converging on the Canal, no other coun-
try can match the shipping service. And
there is handy access to both coasts of
Latin America. Tocumen airport has
risen to the top ten in the world in
volume of airfreight handled, a devel-

opment brought about by Free Zone

Panama has a reliable dollar, avail-
able financing, ready credit, and for the
manufacturers— now being courted by
Free Zone officials— there is the advan-
tage of duty-free import of machinery'
and raw materials. Less than 3,000 feet
from the Free Zone are the piers at the
port of Cristobal. The U.S. Government
provides efficient freight handling here,
and facilities are modem and absolutely
reliable. Shipping time is cut drastically.

It is doubtful any other Latin country
can put together the set of economic
benefits that Panama is able to offer
through its Free Zone. Panamanian
merchants also use the Free Zone. Thev

(See p. 21)

The Panama Canal Review


SS United States
Pays Fourth Visit
To Cristobal

called at Cristobal February 12 on a
West Indies cruise, is not only one

1 3

Online LibraryPanama Canal CompanyThe Panama Canal review (Volume 16, February) → online text (page 1 of 3)