Panama Canal Company.

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Vol. 4, No. 6


5 cents

Playground- To-Be

THESE THREE Morgan Avenue cottages and three other nearby buildings mil be torn down this
year to make room for a new playground which will be built near the Balboa Elementary School. The
photograph was taken from a window of the school building.

Congress To Consider Legislation

Affecting Zonians In This Session

Many matters of direct concern to
employees in the Canal organization will
be subject to consideration and possible
legislative action during the second ses-
sion of the 83d Congress which convenes
next Monday.

In many respects the coming session of
the Congress will be one of the most
important in years for Canal employees.

For the U. S.-rate employees perhaps
the most important topic for Congres-
sional consideration is the report of the
consultants on the 25 percent differential
and fringe benefits, together with recom-
mendations of the Board of Directors on
the report. These were requested by
Congress at the first session and were to
be submitted by January 1 to the Legisla-
tive and Appropriations Committees.
Cash Relief Increase

Of primary concern to the local-rate
employees and a large number of retired
local-rate employees is the legislation
raising the cash relief payments from $1
to $1.50 a month for each year of service
with a maximum monthly payment of
$45 instead of the present $25 a month

Identical bills providing for the in-
creased cash relief payments were intro-
duced at the first session of the 83d
Congress. They were approved by the
Senate and House Committees to which
the bills were referred, but failed passage

by either House during the closing days
of the session.

Governor Seybold announced immedi-
ately after the adjournment of Congress
that the Canal administration would seek
early enactment of the legislation when
it reconvenes this month. The legislation
has the endorsement of various labor

This legislation is considered by the
Canal administration as something of a
stop-gap measure until a permanent type
of retirement plan can be adopted for
local-rate employees. Action on all
retirement legislation is (Seepages)

Board Of Directors Meet
In Canal Zone This Month

The Board of Directors of the
Panama Canal Company will meet
this month in the Canal Zone. The
date for the meeting has been set
for January 19.

It is not yet known how many of
the Directors will be able to attend
this meeting.

Special committees from the Board
met in the Canal Zone on several
occasions this past year. The Janu-
ary meeting, however, will be the
first in the Canal Zone for the full
board since 1952.


Construction of a new play-
ground area adjacent to the
Balboa Grade School as part
of the development of the Flats
area in Balboa has been ap-
proved by Gov. John S. Seybold.

The project will entail the demolition
of six buildings in that area, one of which
is the Junior College Dormitory for boys,
and the relocation of a part of Morgan
Avenue which runs by the south side of
the school building.

Other houses to be demolished are
four one-family cottages located on the
east side of Morgan Avenue and one
cottage off the east side of the road
which was once occupied by the custodian
of the former Canal Zone Orchid Gardens.

The area will be approximately two and
one half acres in size and will provide
more adequate facilities for the 1,000
children now enrolled in the Balboa
school from kindergarten to grade six.
Asked To Move

Construction of the new playground
will be completed during the school
vacation period between the months of
June and September of 1954. Residents
of the quarters to be demolished have,
been asked to vacate as soon as possible
but not later than May 1, 1954. It is
expected that the houses will be demol-
ished shortly afterwards.

The Morgan Avenue houses are old
landmarks in the Balboa area having
been built in 1917 about the time that
the townsite was first constructed. The
Junior College Dormitory was built in
1921 and was first used as a YWCA
building. Later it was taken over by the
Schools Division and the lower floor has
been utilized as a Little Theatre and band
practice rooms. The upper floor has been
used for a Junior College dormitory since
the construction of the Canal Zone
Junior College in 1934.

The new playground area will more
than replace the area which was taken
over for the site of the new Goethals
Memorial. In addition it will provide a
playground completely free of the traffic
hazard which now exists on Morgan Ave-
nue. The only part of the new recreation
space bordering a road, on Carr Street,
will be enclosed by a low wire fence.

The ground itself will be graded and
prepared with a base of rock dust which
has been used on the playground space
for other schools in the Canal Zone and
will keep the area much drier during the
rainy season.

Morgan Avenue will by-pass the school
by joining Carr Street some distance
west. The few houses left without access
to Morgan Avenue will be served by a
short access road.


January 1 , 1954

Clubhouse, Police,
And Rent Changes
Told To Conferees

News of considerable importance was
announced to U. S.-rate Civic Council
representatives at the last "shirtsleeve
conference" of the calendar year.

The police stations at Margarita and
Gamboa are to be closed; Gatun police
station will be utilized primarily for the
lake patrol launches, and the name of the
Pedro Miguel station will be changed to
the "Canal Zone Prison for Women and
Juveniles." Pedro Miguel will continue as
a police station for its community. The
date of the change was not announced.

Effective March 1, the Ancon Club-
house will be closed and all of its activi-
ties transferred or discontinued. The
school luncheon which is served at the
clubhouse daily to about 25 grade school
children will be transferred to the Tivoli
Guest House. The closing hour of the
Cristobal Clubhouse will become 8:30
p. m., as far as its restaurant and sales
services are concerned. The present
movie schedule, however, will becontinued.

Rent Reduction

The other major announcement was
the reduction of rents on the new two-
family, two-story concrete houses. The
new rents will become effective as soon as
possible, probably with the next pay
period and will affect all houses of this
type. Rents for the three-bedroom type
336 house, now $19.80 weekly or $85.80
monthly, will become $17.90 weekly or
$77.57 monthly. Rent for the four-bed-
room type 339 house, now $22.65 weekly
or $98.15 monthly, will become $21.50
weekly or $93.10 monthly.

Police Protection

Expanding on each of these three major
subjects, the Governor said that police
officials are convinced that Gamboa can
be adequately covered by radio patrol
cars. The change, the conferees were
told, means no reduction in police protec-
tion; the main change in Gamboa is the
inactivation of the police station as such.
Both Margarita and Gatun can be covered
by radio patrol cars working from the
central Atlantic side station. The changes
in the police stations, the Governor said,
are the result of many months study.

Closing of the Ancon Clubhouse and
the reduction of hours at Cristobal are
simply an economy move, the Governor
pointed out.

Family Night

Several plans to benefit customers of
the clubhouses are now being studied.
One of these is a projected "family night"
supper which will be offered at the Tivoli
Guest House and the Balboa and Marga-
rita Clubhouses. Dinners will be offered
on this night at an especially attractive
price. The night of the week on which
this "family special" would be given, with
the exception of Saturday, Sunday, or
Monday, would be chosen by the Civic
Councils, according to present plans.

The reduction in rents on the two-
family houses, Governor Seybold told the
conference, is the result of the low bid
received for construction of the 33 new-
houses of this type. This contract, in

Governor Holds First Meeting
With Local-Rate Civic Councils

ANOTHER FIRST was chalked up fur the Canal administration and Canal communities last month.
Representatives of the newly-organized Local-Rate Civic Councils met for the first time with Governor
J. S. Seybold. Attending the conference were representatives of councils in La Boca, Santa Cruz, Paraiso,
and Rainbow City, and from the temporary General Committee, an over-all group.

Regular conferences between the Gov-
ernor-President and representatives of
local-rate communities on topics of com-
munity interest were inaugurated last
month when 12 representatives of the
newly-formed Local-Rate Civic Councils
and Temporary General Committee met
with Gov. J. S. Seybold at Balboa

Patterned after similar conferences
between the Governor and U. S.-rate
Civic Council representatives, the meet-
ings will be held monthly, or as conditions

Accompanying the Governor were
Edward A. Doolan, Personnel Director,
and Norman Johnson, Employee and
Labor Relations Officer.

Local-rate conferees for the Temporary
General Committee included Harold W.
Williams, president, and Ernest Williams,
Arthur W. Crooks, Zachariah Williams,
and Gladstone Grant. Civic Council
conferees were: Mrs. Louise Walker and
Richard Burns, Santa Cruz; Marcus

effect, had lowered construction costs for
houses of this type. Rents are set up by
house types.

Rent Review

Rents will be reviewed toward the end
of each fiscal year, the Governor said.
Costs will be studied and checked against
rents. The resulting rent will then be set
for a year's period. Such rent will reflect
savings made in operation of the housing
facilities in the past year and projected
savings of the coming year, but savings
will not be made by omission of necessary

Concerning rents in general and in
answer to questions brought up at earlier
meetings, the Governor said that three
factors— depreciation, maintenance, and
interest on investment— accounted for
about 85 percent of the rent charged.
Administrative and service costs and the
vacancy factor are responsible for the
other 15 percent.

He added that he foresees no possibility
of current reductions in rents on quarters
other than the types 336 and 339 quarters.
Purchase Cards

The Governor emphatically (See page is)

Granum and Cleveland Roberts, La Boca;
Ellis L. Fawcett and Cyril Atherly,
Paraiso; and Jefferson Joseph, Rainbow

Community Problems

After opening the meeting, the Gover-
nor said that the objective of the confer-
ence would be to make possible joint
consideration by the Civic Council repre-
sentatives and officials of the Company-
Government of appropriate community
problems and means of betterment of
community life. He stressed that wages,
hours, and conditions of employment are
not the proper concern of the Civic
Councils nor are problems which concern
individuals privately proper subjects for
consideration by Civic Councils or the

Of a number of problems and questions
submitted in advance to allow time for
investigation and study, several were
cleared up by Governor Seybold, while
some others were held over for further
work by the agencies concerned, to be
reported on at the next meeting.

Representatives of Paraiso were assured
by the Governor that the pavement of
their streets would be maintained in a
satisfactory condition and that tempo-
rary steps would be taken soon after the
first of the year to alleviate the congested
condition that has developed in the
Paraiso Commissary.

Until future plans for a new Commis-
sary building in Paraiso can be brought
to reality, an expansion of sales space in
existing structures is expected to ease the
congestion, the Governor revealed. The
Commissary Division proposed to move
the shoe and housewares sections to new
quarters, possibly in the basement of
Building 131 or in part of the present
Clubhouse building.

La Boca representatives learned of
action on four of their problems. The
Governor announced that:

A street light will be installed to
illuminate a dark corner near House 939
in La Boca.

Commissary Changes

As part of the projected revision of the
entire La Boca Commissary layout
designed to improve the convenience of
shopping, the cooking oil (See page is)

January 1, 1954


Record Traffic Of Past Fiscal
Brought C anal's Income

Net Revenue Exceeded
Previous Year Figures
By Over Four Millions

Condensed financial statements giving
the results of operations of the second year
of the Canal's administration as an incor-
porated federal agency— the Panama
Canal Company— were released at Balboa
Heights before the calendar year closed.

The financial statements show that the
net income of the Company for the year
which ended last June 30 will be $5,634,906,
after the valuation adjustments now
under consideration have been made. On
a comparable basis, the net income for
the previous fiscal year. 1952, was
$2,669,208. Before giving effect to the
valuation adjustments the tentative net
income for 1953 was $7,200,963.

Property valuation policies and approx-
imate capital values have been determined
by the Company but, under the law,
must be approved by the Director of the
Bureau of the Budget. These are now in
process of being submitted to the Bureau.
The principal adjustments involved are
the accrual of depreciation on the channel,
harbors, and similar assets, heretofore
classified as non-depreciable, and the
capitalization of improvements to the
channel since 1914.

Revenue and Credits

During fiscal year 1953 the total reve-

nue and credits of the Company amounted
to $107,457,716, derived as' follows:

Canal tolls, $31,973,209; credit for tolls
on U. S. -Government vessels, $5,557,682;
sales of commodities, $28,293,601 ; sales of
services, $20,671,695; rental of quarters,
$2,157,581; service and sales to the Canal
Zone Government, $3,475,747; and credits
for intra-agency cost distributions,
$15,328,201. These latter represent serv-
ices rendered by one activity of the
Company to another and are really offsets
to charges for the services included else-
where in the statements.

For example, the power system charges
the water system for electricity used in its
operations. This is income for the power
system and expense for the water system,
but actually "puts no money into the
Company's pockets."

Costs and Expenses

Adjusted costs and expenses totalled
$101,822,810. In addition to operating
costs such as salaries and wages, accrual
for locks overhaul, cost of goods sold and
transferred, and general and administra-
tive expenses, this figure included adjusted
depreciation of $7,469,788, reimbursement
to the Treasury for the $430,000 annuity
to the Republic of Panama, the net cost
of the Canal Zone Government which in
fiscal year 1953 amounted to $11,319,656,
and interest, as adjusted, of $5,485,127.
Without the valuation adjustments, de-
preciation would be $4,719,963, and
interest would be $6,668,895.

The substantially improved operating


To New High

results for 1953, as compared to the
Company's first year, are attributable to
the increased volume of traffic through
the Canal which was handled without
a corresponding increase in operating

The level of all other operations of the
Company as a whole was approximately
that of the previous year. Tolls and tolls
credits in fiscal year 1953 were $7,121,392
higher than for the preceding year— an
increase of 23 percent — and set an
all-time record.

Much of the traffic, especially the tolls
credit for Government ships, was due to
the Korean war. A considerable drop in
both traffic and tolls is expected for the
present fiscal year. The downward trend
in shipping, particularly in the tolls-credit
vessels, began in September of this year
and is still continuing.

Capital expenditures of the Company
for the year amounted to $9,112,063, of
which about $2,000,000 was related to
improvements and replacements for the
Canal itself, and roughly $5,900,000 was
for the employee housing program.

On June 30, 1953, before the revaluation
adjustments, the fixed assets of the
Panama Canal Company — such as the
waterway itself, the locks, harbors, dams,
breakwaters, spillways, buildings, and
other structures — together with lands and
treaty rights, but excluding defense facili-
ties — are reported in the statements in the
amount of $540,820,985. With allow-
ances for depreciation and obsolescence,
this sum is reduced to $420,841,981.



WILLIAM G. AREY, Jr., who has served as
Public Affairs Officer for the United States Informa-
tion Service in Panama for the past two and a half
years, has been appointed to the newly-created posi-
tion of Director of Public Relations for the Panama
Canal Company. He will take over his new duties
next Monday.

A native of Shelby, N. C, Mr. Arey worked for
two years on the editorial staff of the Shelby Daily
Star and for seven years was President and General
Manager of a commercial printing plant and pub-
lishing house in Shelby.

In 1948 he was appointed to the U. S. Foreign
Service of the State Department and was stationed
in Bogota until he came to Panama in 1951.

Congress To Consider Legislation

Affecting Zonians In This Session

(Continued frcm page l) being held tem-

porarily in abeyance pending a report of
a special Congressional Committee which
is making a study of all Federal retire-
ment systems. This committee has until
next July in which to submit its report.
Compensation Study

The report of Booz, Allen, and Hamil-
ton, management consultant firm engaged
to conduct the compensation study, was
presented to the Canal Company Decem-
ber 1 and was considered by the Board of
Directors at a special meeting held
December 14. Since the report and
Board's recommendations on the findings
of the consultants were requested by
Congress, no announcement has been
made concerning their contents.

It is not presently known whether the
findings or recommendations will require
any legislative action by the Congress.

Aside from these matters of major
concern to Canal employees, a large
number of employees will be directly
concerned by any action taken by Con-
gress on pay increases for classified and
postal employees during the coming ses-
sion. Many different proposals for pay
increases were introduced during the first
session and the matter will be under con-
sideration by several different committees.
Close observers of affairs in Washington
have predicted that legislation granting
pay increases will be passed.

In addition to these questions which
will be before Congress for consideration,

several other minor bills pertaining to
administrative matters are presently
before Congress. Among these is a bill
providing for the payment of commuted
leave directly to surviving beneficiaries
under the same plan now in effect for
other Federal agencies.

Although not a matter of direct concern
to employees, a report on Panama Canal
tolls is to be submitted to Congress
during the coming session. The tolls
study has been in progress for several
months and the results of the study have
been requested by the Congress during
this session.

Personnel Changes Made
In Army Secretary's Office

Three major changes in the office of the
Secretary of the Army is Washington
were announced during December.

Earl D. Johnson, Under Secretary of
the Army since early 1953, resigned from
this post effective January 25.

Mr. Johnson is to be succeeded as
Under Secretary by John Slezak, Assist-
ant Secretary. Mr. Slezak comes from
Chicago. Czechoslovakian born, he is a
naturalized U. S. citizen, a veteran of
both World Wars, and a graduate engi-
neer from the University of Wisconsin.

Edward A. Bacon, who has been a
special consultant to the Secretary of the
Army, has been appointed Assistant to
the Secretary. He will be assigned to
Panama Canal affairs. He spent about
a week here last September.


January 1, 1954

New Chapter Begins In History
Of 40-Year-Old Hotel Washington

AX AVEN l"E OF PALMS leads to the Hotel Washington in Colon which is today under new manage-
ment. After over 40 years of operation by the United States Government or its agencies the hotel has
been leased to the firm of Inversiones Motta, S. A., and will be operated by them.

The transfer today of operations of the
40-year-old Hotel Washington in Colon
to the firm of Inversiones Motta, S. A.,
begins another chapter in the history of
the stately-looking, palm-surrounded big
building facing the Caribbean. It has
been a social center for Atlantic siders,
a hostelry for distinguished guests, an
overnight shelter for Canal pilots, and
a weekend resort for Pacific siders for
many years.

On December 22 Arturo Motta,
representing the five-brother company,
signed a lease for the hotel and a contract
for its management. Governor Seybold,
in his capacity as president of the Panama
Canal Company, signed for the company.

In a statement issued at the time Mr.
Motta expressed the hope that the
Atlantic side community would use the
hotel's facilities and make it their own
center to an even greater extent than
they have in the past.

The name of the hotel will not be
changed; local humorists, however, have
already dubbed it the "Motel Washing-
ton," which is as bad a pun as anyone
ever heard.

Although no Canal Zone hotel has
ever before been operated under contract,
contract management is not new in Canal
history. During construction days the
clubhouses were operated by the YMCA;
employees paid regular dues and were

given certain privileges, like reduced rates
at movies, on their membership. For a
number of years restaurants in the Canal
Zone were operated under contract by
Carl Strom. The present Ancon club-
house and the Balboa police station were
both restaurants under Strom manage-

Early History

The early history of the Hotel Wash-
ington is well known. The original hotel
was built about 1870 as a residence for
employees of the Panama Railroad Com-
pany. It was a two-story frame build-
ing located on the present hotel site. In
1905, when construction of the Canal
swelled American forces in the Canal Zone,
a third floor was added to the hotel and
in 1908 it was taken over by the Isthmian
Canal Commission.

In May 1910, the Washington began
to take transient visitors and the load
soon became so heavy that the adjacent
Bennington House was also turned into
an inn for overnight guests, or those
staying longer.

President William H. Taft, a frequent
visitor here during construction days, was
convinced of the need for a good Atlantic
side hotel — although his favorite local
stopping place was the residence of Col.
George W. Goethals— and in 1910 he
authorized construction of the new Hotel
Washington. He decided on its archi-



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VINCENT ASTOR was the first guest

fcecture, selected the architects, and set
the sum of $500,000 as the top limit for
its cost.

The old hotel was moved, the seawall
reinforced, and work begun on the new-
building. On March 13, 1913, the Wash-
ington — as we know it today — housed its
first guest, a well-known American named
Vincent Astor. Ten days later it was
opened formally to the public.

War Years

During World War II the Washington
was an eerie place. Signs in the corridors
and the elevator advised guests of the
whereabouts of air raid shelters. The
roof, a vantage spot for sightseers, was off
limits. An anti-aircraft battery was
located next door, on the swimming pool
side, and from time to time guests were
notified, in advance, that there would be
firing practice. They could then find
urgent business elsewhere or stuff their
ears with cotton.

None of the halls were lighted, except
by low-burning lanterns set on the floor,
and blackout restrictions were stringently
enforced. With submarines lurking so
close outside that at least one ship was
torpedoed only three hours after it sailed

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