Schedule I-II

Panama Canal Company and Other Government Passengers
Transported via Panama Line

EXHIBIT K

PANAMA CANAL COMPANY EMPLOYEE ORGANIZATION STATEMENTS

This Exhibit contains letters from the various employee and citizen groups

in the Canal Zone.

These letters express the views of Canal Company organizations relative

to the Panama Line, documenting a series of interviews held at Balboa, Panama Canal Zone, on 17 June 1959.

LODGE NO. 14

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

Affiliated with the AFL-CIO The Grandaddy of Canal Zone Lodges

Serving Federal Employees at the Cross Roads of the World

CHARTERED OCTOBER 9. 1932

Box 173, Balboa Heights, Canal Zone
June 29, 1959

BOX 1703

BALBOA, CANAL ZONE

Mr. Robert M. Sutton of

Drake, Startzman, Sheahan, and Barclay Consultants
c/o Mr. Richard K. Erbe

Balboa Heights, Canal Zone

Dear Mr. Sutton:

Thank you for inviting the organization I represent to discuss with you the question of either continuing or discontinuing operation of the Panama Line of steamships between New York and Cristobal.

I think it worthy of note that there appeared an
article in a prominent New York newspaper on June 17, the
day after our meeting, alleging that the Panama Line "drains
the Federal treasury and did so last year to the extent of
$111,000. I would like to remind those responsible for
this article that according to information which I have
reason to be is reliable, I and millions of other taxpayers
subsidized the private shipping lines concerned in this
dispute to the tune of about $12,000,000 last year.

There is little that I can add here to what Mr. Kelleher and I said to you during our meeting on June 16. For example: It is the steadfast position of this union that the Panama Line is (1) an inducement to get needed personnel to accept and remain in the employment of the Company-Government, (2) definitely one of their valuable fringe benefits, and (3) an important morale factor among the United States citizen employees of this agenoy. In our opinion the loss in morale among the 3,500 United States oitizen employees of the Company-Government, not to mention the inoreased cost because of turn-over among key personnel would more than offset the $111,000 deficit in fiscal 1958.

We think the bookkeeping loss incurred in fiscal 1958
was caused principally by factors over which the Company
had no control, and that if these unfavorable conditions
had not existed the figure would have very likely he been
in the opposite direction. Though this may appear to be a
matter of conjecture, we submit that the morale effect of
knowing that they have a Panama Line operating between New

We do in unity that which is impossible in disunity

York and Cristobal is well worth the $32.00 a year it
cost for each of this group of 3,500 skilled, technical,
and professional United States citizen employees of the
Company-Government on the Canal Zone. We believe, "too,
that given more favorable conditions in this and future
years, the Panama Line will return a modest net profit to
its owners - the people of the United States.

We would like to remind your committee although I am sure you have already been so reminded that competent medical authorities advise recuperative vacations in the temperate climates once each two years. Such vacations are extremely important to the health of employees here, particularly those in their 40's and 50's and who have spent a substantial part of their life in the tropics. Many of these employees have seen their children through school and are now financially able to go to the States once a year for short recuperative vacations if they can do so at modest cost for their transportation. However, under present conditions, they cannot do this except by Panama Line.

We think the point made next above is a valid one, but more important is the fact that most of these long-time employees have attained key positions in the organization to the extent that their loss before beaching the compulsory retirement age of 62 for Company-Government employees would be far more costly in efficiency of operations here than might be involved in continuing the Panama Line, without which these valuable employees would be more constrained to leave this service at age 55 or as soon thereafter as possible. Mr. Kelleher and I explained to you the spontaneous reaction of the people here in about 1946 when it became doubtful that we would have our Panama Line ships, the SS Ancon, SS Cristobal, and SS Panama returned to us. We told you how the employees and their families arose as if one and fought with their money and their letters to members of Congress for the return of "our ships". Though there has since been enacted the "Home Leave" Act (Public Law 737, 83d Congress), the sentiment for retention of the Panama Line is almost as unanimous among us as it was in 1946. We think our reasons for feeling this way are as compelling now as then. It is our hope that your committee agrees with our position in this important matter.

Again our thanks for the opportunity of presenting our side of the case.

Lovelady

R.M. LOVELADY
President