michael murphy ibew local union 520

Michael Murphy

IBEW Local Union 520

Michael Murphy

10708 Oak View Dr.

Austin, TX 78759

Tel. (512)461-9184

Fax. (512)326-9596

Anthrax Strike: The 1976 Outbreak of Labor

Militancy in the Panama Canal Zone

Senior Seminar

October 2005

2

Anthrax Strike: The 1976 Outbreak of Labor Militancy in the Panama Canal Zone

Michael Murphy

In the twenty first century the word “anthrax” conjures up visions of terrorism. But

among the US citizen employees of the Panama Canal Company/Canal Zone

Government (PCC/CZG) in the mid 1970s, “anthrax” referred to the sheep-borne illness

that caused many of them to get sick of the uncertainty, wage cuts, benefit reductions,

school integration, and lack of respect that was served to them by the canal

administration. “Gutless sheep” was what Under Secretary of the Army, Arthur “Victor”

Veysey called them, and so they called in sick—first, in small numbers and then by the

hundreds, until the Panama Canal, for the first time since 1915, was shut down.1

What was it that caused employees of the United States Government to risk their

jobs, their homes, and even their very freedom to take such a stand? An understanding of

the people and forces that drove the events of 1976 requires a general overview of the

history and environment of the Panama Canal Zone. The United States Government

entered into a treaty with the newly formed Government of Panama in 1903.2 The treaty

provided that the Republic of Panama would lease to the United States, “in perpetuity” a

strip of land 50 miles in length and 10 miles in width for the purpose of building a canal

that would connect the Pacific Ocean to the Caribbean Sea. The United States was

granted the right to act “as if it were sovereign” within the confines of this strip of land,

which came to be known as the Canal Zone.3 Acting as sovereign, the United States

1 “Canal Shut for 6 Months”, New York Times, November 19, 1915.

2 Hay-Bunau-Varilla Treaty of 1903.

3 Ibid.

3

government created, within the Zone, a slice of America, with its own Courts, Schools,

Post Office, police/fire protection, commissaries, housing developments and all of the

other things you might find in a typical American community.

One aspect of the typical American community that did not exist in the Zone was

free enterprise. All real property in the Canal Zone was owned by the Panama Canal

Company/Canal Zone Government (itself an agency of the United States Government).

All residents of the Canal Zone were either employees or dependents of the

Company/Government or another United States Government Agency, such as the

Department of Defense or the Federal Aviation Administration. As Canal Zone

Governor in 1965, Robert J. Fleming described this arrangement to US Senator, Sam

Ervin “…The Company/Government operates all the facilities of daily living and

naturally virtually all United States citizen employees and their dependents are housing

tenants, retail store customers, hospital patients, etc., of the Canal agencies.”4 Thus,

many of the problems that plague the typical American community were non-existent in

the Canal Zone. There was, for instance, no unemployment. If you were not employed

(or a dependent of an employee) you were not permitted to reside in the Canal Zone.

There was no aging population, as immediately upon retirement, all employees were

expected to vacate the Canal Zone. The Canal Zone has been described by one observer

as a “socialistic utopia.”5 The premise of Herbert and Mary Knapp‟s fine work on life in

4 Governor Robert J. Fleming to Senator Sam Ervin, January 15, 1965, RG185-50, National Archives,

College Park, Maryland, (Hereafter cited as NA).

5 Michael L. Conniff, Black Labor on a White Canal: Panama, 1904-1981, (Pittsburgh, University of

Pittsburgh Press, (1993)., pp. 55.

4

the Canal Zone is that the Zone was much like the utopia described by Edward Bellamy

in his 1887 novel, Looking Backward.6

As with all “utopias,” the Canal Zone suffered its share of problems. Key among

these problems was the control the PCC/CZG held over the life of its employees.

“Although it is not the general policy to interfere with the private lives of employees, the

nature of the Canal enterprise necessarily imposes certain restrictions on off-the-job

conduct not ordinarily found in other employer-employee relations.”7 One important

problem that would be integral to the cause of the sickout was the racial/national origin

policies practiced by the PCC/CZG.

From the very beginning of construction of the Panama Canal in 1903, Canal

authorities planted the seeds of the 1976 strike by adopting and maintaining a Jim Crow

policy toward its workforce. American workers (mostly white) were paid in gold, and

foreign workers (mostly blacks imported from Barbados) were paid in silver. This came

to be known as the Gold and Silver system. All canal facilities were segregated into Gold

and Silver facilities. This included housing and schools. The Gold and Silver system

was not as strictly enforced as Jim Crow because there were instances of blacks on the

Gold roll and whites on the Silver roll. The line of demarcation was more a matter of

national origin than color. The whites on the Silver roll were primarily immigrants from

Spain and southern Europe and the blacks on the Gold roll were, in most cases, United

States citizens. Division of the workforce along these lines accomplished the same

6 Herbert and Mary Knapp, Red, White and Blue Paradise: The American Canal Zone in Panama, (San

Diego, Harcourt, Brace and Jovanavich, 1984).

7 Fleming to Ervin, January 15, 1965, NA.

5

mission in Panama as it did in the United States—it allowed the employer to divide the

workforce against itself.8

Upon completion of the construction project in 1914, Canal workers were faced with

massive layoffs. In addition to the layoffs, George W. Goethals, Governor of the Canal

Zone,9 proposed to cut the wages of Gold roll employees. Gold roll employees, since the

beginning of construction, had been paid 50% above the wages paid to similar employees

in the United States. This premium was known as the “tropical differential” and would

become a key issue in the 1976 sickout. Goethals proposed to cut the tropical differential

down to 25% and Congress agreed to do so in the Panama Canal Act of 1914. In

response to this, the American Federation of Labor (AFL), in 1914, formed the Metal

Trades Council and consolidated the thirty blue-collar Gold roll employee unions under

its banner. It later organized the white-collar Gold roll employee unions into the Central

Labor Union.10

One of the early battles fought by the Central Labor Union-Metal Trades

Council (CLU-MTC) was the campaign against Goethals‟ 1915 attempt to bill employees

for their housing, fuel and electricity. CLU-MTC succeeded in killing the plan for Gold

roll employees but left the Silver roll employees, who were not organized into unions, to

fend for themselves. They didn‟t do well and ended up paying for their housing and

utilities, further increasing the gap between Gold and Silver employees. For the next 35

8 Conniff, Major, and McCullough all describe the Gold and Silver system at length.

9 Goethals was the last of the Chief Engineers of the Canal construction project and was appointed

Governor of the Canal Zone upon completion of construction in August, 1914. He served in that capacity

until January 10, 1917. Major, Prize Possession, pp. 382.

10

John Major, Prize Possession: The United States and the Panama Canal, 1903-1979, (New York,

Cambridge University Press, (1993), pp. 86-87; Conniff, Black Labor on a White Canal, pp. 50.

6

years the lower paid Silver roll workers paid their rent while Gold roll employees lived

rent-free.11

In 1916 Silver roll employees conducted a strike to protest their low wages and high

cost of living. American Federation of Labor had not sought to organize Silver roll

employees so the employees sought assistance from Panamanian unions after Canal

authorities announced a pay cut. Panamanian labor leaders called for a joint strike and

shut down several businesses in the Republic of Panama. An estimated 6,000 of the

21,000 Silver roll employees on the Canal workforce joined the strike.12

Governor

Chester Harding summoned the President of Panama and threatened to use the authority

granted him under Article 7 of the canal treaty to break the strike by the use of US

troops.13

The Panamanian government cracked down hard on the strikers, ending the

strike after 5 days. Because the Canal Company‟s labor policy was based on the ready

supply of cheap Silver roll workers, any attempt to ameliorate conditions of Silver

employees by pay increases would break the budget. Nevertheless, a small raise was

granted the Silver employees after they returned to work.14

In 1919 a colossal labor struggle shook the United States and Canal authorities did

not escape that struggle. In that year, an African-American employee of the Panama

Railroad named Nicolas Carter began to agitate Silver roll employees about forming an

AFL affiliated union. Answering Carter‟s call, AFL sent two Organizers from the black

11

Conniff, Black Labor on a White Canal, pp. 50.

12

Major, Prize Possession, pp. 88; Conniff, Black Labor on a White Canal, pp. 52.

13

Harding replaced Goethals on January 11, 1917 and served as Governor until March 27, 1921, see Major,

Prize Possession, pp. 382.

14

Major, Prize Possession, pp. 89.

7

dominated United Brotherhood of Maintenance of Way Employees (BMWE) to the

Canal Zone to organize Silver roll employees, promising to raise their wages to the level

of Gold employees. Both Governor Harding and CLU-MTC demanded that AFL recall

its Organizers or they would be deported. Samuel Gompers, in the midst of an effort to

bring black workers into unions in the United States, resisted appeals to recall the

Organizers and they were successful in organizing about 80% of the Silver workers into

BMWE. In May there was a walk-off of 1,000 Silver roll employees from the docks at

Cristobal, the Atlantic terminus of the canal, when they were told that their ten hour

work-day was to be cut to eight hours without any increase in the hourly rate to

compensate them for lost earnings.15

In February 1920 11,000 of the 16,000 man Silver

roll workforce went out on a strike called by BMWE in the face of Harding‟s refusal to

budge on its demands for wage increases. Again, Harding threatened to bring in troops to

break the strike. After the first day, Governor Harding fired all workers who refused to

go back to work and evicted 300 families from their Company-owned homes in the Canal

Zone. After eight days the Local Union was broken and Silver workers remained non-

union for another twenty five years.16

Gold employees took advantage of the situation by scabbing out the jobs of the

Silver employees while they were on strike. As a result, Harding ordered that those jobs

that were necessary to the operation of the Canal would be held only by Gold

15

Conniff, Black Labor on a White Canal, pp. 52-53.

16

Ibid. pp. 54-58.

8

employees.17

By the time of the 1976 strike, these positions were called “security”

positions.

The proposal to make Gold employees pay for their housing resurfaced in 1921

when United States Secretary of War, John Weeks, sent General William Connor to the

Canal Zone to study ways to cut costs.18

Connor concluded that implementation of an

“open-shop” policy toward the workforce would free management of the control that

unions had over it. All of the Gold roll employees were unionized and the managers

remained in the union after their promotion to supervisory positions. By breaking the

“closed shop”, Silver employees could more freely move up the ranks and costs would be

cut.19

Connor proposed a wholesale “silverization” of the workforce, replacing Gold roll

employees with the cheaper Silver workers. Canal Zone Governor Jay Morrow and AFL

President Samuel Gompers teamed up to kill the silverization proposal, but this time

President Warren G. Harding accepted Connor‟s proposal to charge Gold employees for

their housing and utilities.20

CLU-MTC responded by going to the courts, and when

losing there, to the Congress.21

CLU-MTC President William Hushing told the New

York Times that silverization of the Canal workforce had already resulted in malaria

outbreaks in the Canal Zone and urged that Congress go no further down that path. He

17


18

“Weeks to Cut Down Panama Canal Costs”, New York Times, April 21, 1921. See also, “Labor Unions

Fight Canal Zone Report”, New York Times, October 7, 1921.

19


20

Morrow replaced Harding as Governor on October 16, 1924 and served until October 15, 1928. Major,


21


9

was summarily fired by the Panama Canal Company, demonstrating the control the

Company/Government exercised over the lives of employees.22

With the onset of the Depression beginning in 1929, competition between Gold and

Silver employees for the dwindling number of available jobs grew more intense. In 1931

CLU-MTC sought to eliminate the jobs of 3,800 semi-skilled Silver roll employees to

create positions for the dependents of Gold roll workers, who were now coming of age.

After much haggling, Canal Zone Governor, Harry Burgess agreed to phase Silver roll

workers out of clerical positions and replace them with young Americans.23

CLU-MTC

went over Burgess‟ head and lobbied hard for legislation requiring that all Silver

employees now be replaced by workers, hired from the United States and they would

have Gold roll wages and benefits. The labor union also lobbied for legislation requiring

that all workers hired for construction of the Third Locks, which would increase the size

of the ships that could traverse the canal, be United States citizens. The prohibitive cost

associated with replacing the Silver workforce would undermine the central plank of the

labor policy that had governed the Canal enterprise from its beginning—cheap Silver roll

labor. CLU-MTC was, however, successful in getting the Third Locks Act to include

language requiring that all skilled and supervisory positions be reserved for US citizens,

but because an attachment to the Roosevelt-Harmodio treaty of 1936 with the Republic of

Panama (the Hull letter) required equality between US and Panamanian citizens with

respect to employment on the Canal, President Roosevelt got the language in the Third

22

“Declares Epidemic Prevails at Panama”, New York Times, July 6, 1922, and “Accuses Panama

Officials”, New York Times, July 27, 1922.

23

Burgess served as Governor of the Canal Zone from October 21, 1932 until June 26, 1936, see Major,

Prize Possession, pp. 382; Ibid. pp. 203-204.

10

Locks Act changed to read that the skilled and supervisory positions were to be reserved

for “US and Panamanian citizens.” 24

In the 1940s pressure began to mount on Canal authorities to eliminate the Gold and

Silver system. In July, 1943 Mexican labor leader, Vicente Lombardo wrote a letter to

President Roosevelt complaining of “blatant racial discrimination” in the Canal Zone and

characterizing CLU-MTC as a “cabal of old timers and a labor aristocracy bent on

preserving white supremacy.”25

In May, 1944 the Panamanian delegation to the

International Labor Organization conference embarrassed the United States by presenting

Labor Secretary Francis Perkins with a tribute to the discrimination against non-US

citizen employees of the Canal Company. Also, in 1943 a pamphlet called A Forgotten

People, detailing the plight of non-US citizen employees of the Canal Company, made

the rounds at the Anglo-American Caribbean Commission in Washington. 26

In 1946

Harry Truman, fearful of Communist influence in Latin America, launched an

investigation into employment practices at the Panama Canal. To that end, he sent retired

Brigadier General Frank McSherry to the Canal Zone. McSherry issued a blistering

report in 1947, declaring that the personnel department was dominated by MTC/CLU and

needed a complete overhaul. He recommended the dismantling of the Gold and Silver

system and its replacement by a single payroll structure. Canal Zone Governor Joseph

24

The Hull letter promised “…Panama Canal…will maintain as its public policy the principle of equality of

opportunity and treatment…, consistent with the efficient operation and maintenance of the Canal…as will

assure to Panamanian citizens employed by the Canal…equality of treatment with employees who are

citizens of the United States”. , quoted from “Report to the Executive Council of the American Federation

of Labor by the Committee Appointed to Investigate Labor Conditions in the Canal Zone”, January, 1949.

Box 7, RG98.001, George Meany Memorial Archives, Silver Spring, Maryland, (Hereafter cited as

GMMA); Conniff, Black Labor on a White Canal, pp. 88.

25

Conniff, Black Labor on a White Canal, pp. 101.

26

Ibid, 102-107.

11

Mehaffey successfully resisted most of the changes proposed in the McSherry report but

scrapped the designations “Gold” and “Silver” and replaced them with “US-rate” and

“local-rate” in November, 1948.27

In 1949 another investigation of Canal employment

practices was initiated by the Department of Commerce, which sent Deputy Director

George Vietheer (who was a former employee of the Canal Company). His report

echoed McSherry‟s, calling for a plan very similar to the silverization plan that General

Connor had tried to impose on the Canal Company back in 1921.28

Representatives of US Government agencies were not the only ones investigating

disparities among Panama Canal employees. In January 1949 a committee appointed by

the American Federation of Labor and the Inter-American Federation of Workers visited

the Canal Zone and issued a report on labor conditions. According to its report,

silverization was well under way. The committee found that there were many “local

rate” employees performing skilled tasks but being paid at the unskilled local rates,

thereby displacing US workers. The committee found that continued application of the

wage disparity would end up removing US workers from all but the most highly skilled

positions. MTC/CLU recommended adoption of “equal pay for equal work” but

qualified that recommendation with a proviso that skilled work should only be performed

by those who had completed an apprenticeship program or had qualified by on-the-job

training. Clearly, the adoption of this suggestion would have resulted in the displacement

of the local rate employees who were performing skilled labor because, historically, only

US citizens had access to apprenticeship programs. The committee also looked into

27

Major, Prize Possession, pp. 219-220.

28


12

housing and educational disparities and pointed out a wide gap between amenities

available to US employees and those available to locals.29

Like most of the Government

sponsored studies before it, the Labor study produced no changes in the order of

business.30

In 1950 the Panama Canal and the Panama Railroad were consolidated into one

entity called the “Panama Canal Company.” Administrative functions were split off into

a “Canal Zone Government.” Along with consolidation came belt tightening and a call

for further silverization of the workforce. Instead of receiving appropriations from

Congress, as had historically been the case, the Canal would have to operate entirely off

of the revenues collected by tolls.31

In October 1950 those few non-US citizen

employees who were paid at US rates had their 25% tropical differential cut off. In that

same year Local 900 of the Government and Civic Employees Organizing Committee, a

labor organization of local-rate employees, was spawned after the collapse of the more

radical Local 713 of the United Public Workers of America. Much to the pleasure of

Canal authorities, local-rate employees had avoided unionization after the debacle of the

1920 strike. In the 1940s CIO organizers began busily organizing Silver roll workers.

Because of the pressures on Canal authorities to eliminate discrimination, and

Roosevelt‟s general support of the rights of workers to organize, Local 713 was allowed

to form despite the historical antipathy of the Canal organization to the unionization of

Silver employees. The post war red scare led to a rift within Local 713 between the more

29

“Report to the Executive Council of American Federation of Labor by the Committee Appointed to

Investigate Labor Conditions in the Canal Zone”, January, 1949. GMMA.

30


31

Ibid, pp. 225.

13

conservative elements within the union and its more radical leadership. Conservative

leaders within Local 713 split off to create Local 900 which was quickly recognized by

Canal authorities. Local 713 withered away shortly thereafter.

Local 900 President Ed Gaskin immediately demanded equality for local rate

employees, including, among other things, a single wage scale, US minimum wages for

local rate employees, equal pay for equal work, elimination of race or national origin as

qualification for certain positions, and elimination of racial segregation. Canal Zone

Governor, Francis Newcomer rejected each and every demand, pointing out that the

reorganization of the PCC/CGZ left the enterprise without the capital to pay for the

improvements that Local 900 demanded.32

In 1955 the United States negotiated a new

treaty with the Republic of Panama that proved disastrous for local rate employees.

Local rate Panamanian employees‟ wages became subject to Panamanian taxes and those

who lived outside the Canal Zone lost the privilege to shop in Canal Zone commissaries,

where prices were much lower than in the local Panamanian economy. In 1958 the US

Congress created the Canal Zone Merit System, which was designed to adopt the

principle of equal pay for equal work and to eliminate race or national origin as a factor

in employment. The actual effect of the Canal Zone Merit System was to keep the two

separate wage scales intact but to tack them end to end “to give the semblance of a single

wage ladder.”33

32


33


14

Another change affecting local rate employees living in the Canal Zone during the

1950s grew out of the US Supreme Court decision in Brown v. Board of Education.34

Schools in the Canal Zone had been segregated throughout the history of the Zone. US

citizens attended US accredited schools staffed by US trained educators. The dependents

of Silver employees who resided in the Canal Zone attended a separate, and decidedly

unequal, school system, called the “colored schools.” Since most of the Silver employees

who lived in the Canal Zone were of West Indian descent, the colored schools were

taught in English. In 1954, in order to avoid integration, Canal authorities hurriedly

changed the “colored” schools to “Latin American” schools and changed the curriculum

and the language to more closely resemble the education provided in Panamanian

schools. Canal Zone Governor, John Seybold announced that the purpose of the

conversion from “colored” to “Latin American” schools was to assimilate the students

into Panamanian, rather than American society. This, he said, was appropriate and was

demanded by Panamanian authorities.35

Integration of schools was kicked down the

road for another twenty years and would become one of the pressures that led to the 1976

sickout.

The 1960s brought some key developments that set the stage for the 1976 job action.

In 1962 President John F. Kennedy signed Executive Order 10988, titled “Employee-

Management Cooperation in the Federal Service”. The order mandated a system of union

recognition for federal agencies, depending upon the level of union support among

34

347 US 483 (1954).

35

John Seybold served as Governor of the Canal Zone from May 27, 1956 to June 30, 1960, see Major,

Prize Possession, pp. 382; For a complete analysis of the Canal Zone Schools and segregation, see Conniff,

Black Labor on a White Canal.

15

workers in a given bargaining unit. For those units in which union support was less than

10% the agency was required to grant only “informal recognition.” The agency was not

required to consult with a union that was granted informal recognition, nor was it

permitted to deduct union dues from members‟ paychecks. The only status granted to a

union under informal recognition was that it might be “heard on matters relating to

wages, hours, and working conditions.” A union that had the support of 10% or more of

the employees in a given bargaining unit was entitled to “formal recognition”, which

required the agency to “consult” with the union over terms and conditions of employment

and to deduct union dues from members‟ paychecks. Formal recognition was not

exclusive so, theoretically, there could be up to ten unions with formal recognition status

in a given bargaining unit. The third form of recognition mandated under EO 10988 was

“exclusive recognition.” Exclusive recognition was reserved for those unions that were

supported by more than 50% of employees in a given bargaining unit. A union attaining

the status of the exclusive representative was entitled to negotiate a collective bargaining

agreement with the agency that covered all employees within the unit. Once exclusive

recognition was attained by a union, all other unions within the bargaining unit would be

relegated to informal recognition status and dues check-off would be terminated.36

Executive Order 10988 allowed for exceptions for overseas agencies and Governor

William Carter quickly seized on his authority to apply one of those exceptions. Carter

refused to grant exclusive recognition to any union, instead granting only formal

36

Acting Governor of the Canal Zone, David S. Parker to Deputy Undersecretary of the Army John M.

Steadman, April 14, 1965. RG185-150, NA.

16

recognition.37

There were several reasons that Canal authorities were reluctant to grant

exclusive recognition, key among these being that, given the nationality breakdown of the

workforce, a union dominated by Panamanian employees would be likely to win any

election for exclusive representation.38

Refusal to grant exclusive recognition would

come back to haunt Governor Harold Parfitt when lack of an identifiable representative

frustrated his efforts to settle the 1976 sickout.

There was another strike initiated by local rate employees in the Terminals Division

in January 1962 when the International Longshoreman‟s (ILA) union tried to organize the

stevedores. ILA‟s objective was to get the Panama Canal Company out of the

stevedoring business so that they could negotiate directly with the steamship companies.

The workers returned on the fourth day of the strike after Governor Carter met with ILA

representatives and the Second-Vice President of the Republic of Panama. The labor

dispute did not end with the return of employees to work. ILA boycotted any cargo

passing between Panama and US seaports on the eastern seaboard and gulf coasts of the

United States. Midway through the year George Meany, President of the AFL-CIO,

convinced the ILA to abandon its efforts in the Canal Zone and allow the National

Maritime Union (NMU) to represent the local rate employees in the Terminals Division.

Canal authorities pointed to the 1962 job action, coupled with the strikes by Silver

employees in 1916 and 1920 to justify its fears of granting exclusive recognition to a

union dominated by Panamanians.39

37

William Carter served as Governor of the Canal Zone from July 1, 1960 to January 31, 1962. Major,


38

Parker to Steadman, Aril 14, 1965, NA.

39

Parker to Steadman, April 14, 1965, NA. See also Connif, Black Labor on a White Canal, pp. 142.

17

In 1964 deadly riots broke out in the Canal Zone when US students at Balboa High

School insisted on flying the United States flag at their school, an act that had been

prohibited by an order of Governor Robert Fleming40

. Fleming had designated certain

locations (which did not include the schools) in the Canal Zone where US and

Panamanian flags would fly side by side, pursuant to an agreement with the Republic of

Panama. Panama had insisted that its flag fly over the Canal Zone as a symbol of its

titular sovereignty over the Zone. Panamanian students marched on Balboa High School

and demanded that their flag be flown over the school. A scuffle broke out and 3 days of

rioting ensued, resulting in the deaths of 21 Panamanians and 3 Americans. The riots

prompted a change in the relationship between Panama and the United States, causing

President Lyndon Johnson to commit to a new round of treaty negotiations.41

Perhaps in response to critics who claimed, in the wake of the 1964 riots, that US

citizens in the Canal Zone lived in undue colonial luxury, Canal employees saw the first

change in the tropical differential since the Panama Canal Act of 1914 had reduced it

from 50% to 25%. United States Secretary of the Army, Stephen Ailes, pursuant to the

authority granted him by Executive Order 10794 over wage and employment practices in

the Canal Zone, promulgated a regulation designed to reduce the tropical differential to

15% for new US citizen employees.42

Existing US employees would see a gradual

reduction in their 25% differential until they eventually received 15%. Married women

whose husbands resided in the Canal Zone had their differential entirely eliminated.

40

Robert J. Fleming served as Governor of the Canal Zone from February 1, 1962 to January 31, 1967.


41

Knapp, Red, White and Blue Paradise, pp. 54-57 and Conniff, Black Labor on a White Canal, pp. 145.

42

Executive Order 10794 was enacted on December 12, 1958.

18

CLU-MTC and several individual employees immediately sued to prevent

implementation of the new regulation in the United States District Court for the District

of the Canal Zone and were granted an injunction by US District Judge Guthrie Crowe in

November, 1965.43

Two years later Crowe‟s ruling was overturned by the 5th

Circuit

Court of Appeals.44

The 5th

Circuit declared that it was entirely within the discretion of

the Secretary of the Army to determine whether or not to pay a tropical differential, or the

amount of that differential, to any given employee, just so long as it was not greater than

25%. The Secretary didn‟t hesitate to use that authority, and would do so repeatedly until

faced down by employees in 1976.45

Approximately140 married women sued the

Secretary, claiming gender discrimination in the 1964 regulation, and were vindicated

when the Justice Department declined to defend the suit.46

The Secretary responded to

this defeat by adjusting the tropical differential regulations in 1971 and again in 1974, on

a gender neutral basis, in order to ensure that only one of the members of a married

couple would receive the differential.47

Negotiations for a new treaty proceeded quietly until 1967 when President Johnson

announced that the outlines of a new agreement had been reached. The text of the draft

treaty was leaked to the local newspapers and both CLU-MTC and the unions dominated

by local rate employees (AFSCME Local 900 and NMU) raised the alarm bells. For the

43

Canal Zone Central Labor Union and Metal Trades Council v. Fleming 246 F. Supp. 998 (1965).

44

Leber v. Canal Zone Central Labor Union 383 F. 2d 110 (5th Cir. 1967), cert. denied sub nom. Bramlett

v. Leber, 389 U.S. 1046 (1968).

45

Hendricks v. United States, 1976 WL 4729 (Ct. Cl.).

46

Hendricks v. United States, Ct. Cl. No. 202-68.

47

Hendricks v. United States, 1976 WL 4729 (Ct. Cl.).

19

first time in the history of labor on the Panama Canal, CLU-MTC worked in cooperation

with the local-rate unions. One detail of the treaty that particularly alarmed Local 900

was the Panamanian proposal to apply Panamanian wage rates and labor laws. Local 900

President Saturnin Mauge pressed Governor Walter Leber to assure that US Civil Service

rules would remain in effect for local rate employees and that housing for those local rate

employees residing in the Canal Zone would be secure.48

Employees were granted a

reprieve when negotiations were suspended pending the 1968 elections in both countries.

The suspension was extended when General Omar Torrijos overthrew the elected

government of Panama in a coup d’etat in October. The election of Richard Nixon also

delayed resumption of treaty negotiations, as he was somewhat less eager to turn over the

Panama Canal than was President Johnson.49

Torrijos did not like the draft treaty any more than Nixon, but liked it even less

when Nixon backed away from some of Johnson‟s commitments after negotiations

resumed in 1971. Panama broke off negotiations in 1972 and started an international

political campaign to pressure the United States to offer more favorable terms. In March

1973 Panama hosted a meeting of the United Nations National Security Council and

embarrassed the United States by introducing a resolution calling on the United States to

grant Panama true sovereignty over its territory in the Canal Zone. All nations present

voted in favor of the resolution, forcing a US veto. Nixon, having been chastised over

US intransigence in the treaty talks, appointed Ambassador Ellsworth Bunker to restart

the negotiation process. Bunker quickly moved the negotiations forward, allowing Henry

48

Walter Leber served as Governor of the Canal Zone from February 21, 1967 to February 3, 1971, see

Major, Prize Possession, pp. 382; Conniff, Black Labor on a White Canal, pp. 148.

49

Major, Prize Possession, pp. 340-341.

20

Kissinger to go to Panama and sign a framework agreement for a new treaty in February

1974.50

Kissinger‟s visit to the Canal Zone was met with trepidation by US citizen

employees and their families. Anti-Kissinger graffiti began to appear around the Zone.

One anonymous spray painter painted “DON‟T GIVE „EM NOTHING, HENRY!” on a

prominent building on the Atlantic side of the Isthmus while another anonymous writer

responded to a “KISSINGER, REMEMBER VIETNAM!” sign with “TORRIJOS,

REMEMBER HIROSHIMA!” The New York Times quoted several US citizen residents

of the Canal Zone: “Kissinger always gives something away and with these people, the

more you give, the more they want” and “I hope Kissinger doesn‟t give it all away

because I want to stay here. Look at the dirt in Panama City. They‟d make the Zone

look like the city.”51

In the meanwhile, Canal administrators commissioned Peter Pestillo, a labor

consultant, to examine and analyze labor relations in the Canal Zone after an August

1973 job action initiated by the Panama Canal Pilots Association. The Pilots were the

highly skilled seamen that guided vessels through the canal. They were the aristocracy of

the labor force. Housing in the Canal Zone was assigned based on seniority and Pilots

insisted, due to their indispensable skills, that they be awarded an extra five years

seniority for purposes of housing assignments. When Governor David S. Parker refused

their demand they responded by transiting ships “by the book.” Parker, accepting the

advice of his inexperienced labor relations staff, fired five of the Pilots. The remaining

50

Ibid, pp. 341-342.

51

“Canal Zone Americans Debate Change”, New York Times, February 9, 1974.

21

Pilots walked off the job and were followed by a spattering of the workforce. Parker was

ordered by Secretary of the Army Alexander to immediately do “whatever it takes” to get

the Pilots back to work. Parker reinstated the Pilots and Canal operations resumed at full

capacity.52

In July 1974 Pestillo issued his report to Under Secretary of the Army, Victor

Veysey. Pestillo concluded that PCC/CZG tended to ignore brewing labor issues until

they rose to the level of a crisis. He suggested that this practice tended to make every

labor problem a crisis because union leaders knew that that was the only way problems

were solved.53

Pestillo included some choice comments on the character of some of the

leaders of CLU-MTC affiliated local unions. He called William Drummond, President of

the Police Union, and Lou Fattorosi of the American Federation of Teachers, two of the

stupidest union leaders on the Zone.54

The report was leaked to Al Graham, President of

CLU-MTC, and made its way to the Panamanian press. Pestillo‟s report torpedoed any

goodwill that may have existed between CLU-MTC and Parker‟s administration.55

AFSCME Local 900 President William Sinclair had been pressuring the Canal Zone

Government to desegregate housing.56

In response, Governor Parker formed an Ad Hoc

Committee on Housing. In January 1975 Al Graham warned that any move on housing

in the existing climate would exacerbate the growing fears of US citizen employees who

52

Alfred Graham, telephone interview by author, March 16, 2006.

53

Knapp, Red, White and Blue Paradise, pp. 86.

54

Graham, interview, March 16, 2006.

55

Harold R. Parfitt, “Labor Problems in the Canal Zone”, Minutes of Meeting of Panama Canal Company

Board of Directors, March 4, 1976, RG185-98, NA.

56


22

were already contending with treaty negotiations and pending wage and benefit

reductions.57

AFSCME Local 900 and NMU, with the support of the Panamanian Labor

Confederation, were also pushing for leave parity between local-rate employees and US

rate employees. US citizens, going back to the Gold roll days, had always enjoyed much

more in the way of leave benefits than the local-rate employees and pressure was growing

to change that. On February 10, 1975 PCC/CZG sent a letter to all Canal Zone unions to

begin the so-called “consultation” process due formally recognized unions pursuant to

Executive Order 10988 on the Company‟s “leave parity” proposal. There is a substantial

difference between “consultation” and the “bargaining” that would be due to a formally

recognized union. Bargaining is a give and take process while “consultation” has been

described as: “the employee gives and the employer takes.” A CLU-MTC official

described it as “Consultation—that meant they did what they wanted and then called you

in and told you.”58

The letter set off a rift between CLU-MTC affiliated unions and local

rate unions (AFSCME Local 900 and NMU). CLU-MTC feared that any effort to grant

leave parity to local rate employees would come at the reduction of US rate leave

benefits, and they were right.

None of labor organizations found satisfaction when the Governor on March 7

announced his decision on leave parity. The decision reduced the leave benefits for US-

rate employees and improved benefits for the local-rates, although local-rate employees

were not to be accorded equal benefits. Locally hired US citizens would no longer

57

Parfitt, “Labor Problems,” March 4, 1976, NA.

58


23

receive “Home Leave.” Home leave was a benefit granted to US citizens so that they

could visit their relatives in the United States. Traditionally, home leave was granted

even to those US citizen employees who were second or third generation Zonians and,

therefore, had no relatives to visit back in the United States. Now they were to be cut off

from this benefit if hired after July 5, 1975.59

PCC/CZG Personnel Director Gordon

Frick cited a provision of the 1955 treaty to justify the company‟s decision to continue to

provide greater benefits to US-rate employees than those that would be provided to local-

rate employees even under the new leave system.60

In the absence of reports coming from the US treaty negotiating team, rumors ran

rampant on the Zone. A story appeared in the March 22, 1975 edition of the Star &

Herald claiming that Omar Torrijos had promised to abolish the Canal Zone Police as the

first order of business upon activation of the new treaty. No statement was issued by US

negotiators in response, so employees and residents of the Canal Zone assumed the

Torrijos proclamation to be true. There was nothing US Canal Zone residents feared

more than being subject to the authority of the Panamanian Government and a sense of

panic swept the Zone.61

The Canal Zone Lieutenant Governor was dispatched to quell

the fears stoked by rumors that policeman, teachers, firemen and postal workers were to

be terminated on May 2, 1975. Another source of fear for Zonians were the claims by

both US and Panamanian Government officials that failure to negotiate a treaty on terms

59

“Questions Answered on New Leave System”, Panama Canal Spillway, March 14, 1975.

60

Panama Canal Company/Canal Zone Government Personnel Director, Gordon M. Frick to AFSCME

Local 900 President, Saturnin Mauge, March 7, 1975, Box 7, RG18-010, GMMA.

61

“US Residents of Canal Zone are Jittery,” New York Times, October 10, 1975.

24

favorable to Panama would result in violent actions against the Canal Zone.62

American

Federation of Government Employees Local 14 (AFGE) President James O‟Donnell fired

off a cable to George Meany upon hearing rumors that the treaty was substantially

complete with no labor guarantees included. AFL-CIO officials quickly shot a telegram

back to O‟Donnell, assuring him that the treaty was no where near complete and that

AFL-CIO would ensure that any new treaty included a labor annex.63

Ellsworth Bunker

met with unions and Civic Councils on September 15, 1975 but, because of the secrecy of

the negotiations did not tell the residents anything that assuaged their fears.64

A Government Accounting Office report on Canal employment conditions was

released on May 28 that contributed to the employees‟ sense of siege. The report raised

the possibility of further rollbacks of wages and benefits and hinted at the probability of

lowering the employee grade level that separated US-rates from local-rates. By now

PCC/CZG had changed the designation that began as “Silver” once more, from “local

rate” to “Canal Zone Wage Base”. The line that separated “Canal Zone Wage Base”

(called the “cutoff”) from “US Wage Base” was, for non manual employees, grade NM-4

and for manual grade employees, grade MG-10. In other words, all white collar

employees below grade NM-4 were paid the Canal Zone Wage Base and those

employees in grades NM-4 and up would be paid the US Wage Base. Similarly, for blue

collar employees, grades below MG-10 were paid the Canal Zone Wage Base and grades

62

Parfitt, “Labor Problems” March 4, 1976, NA.

63

Telegram from AFL-CIO Public Employees Dept. to American Federation of Government Employees

President, James O‟Donnell, July 18, 1975, Box 7, RG18-010, GMMA.

64

Civic Councils were created by Governor Ridley in 1937 to allow residents to elect representatives to

deal with the Canal Zone Government on their behalf “to further promote democratic processes in the

absence of official local self government,” see Knapp, Red, White and Blue Paradise, pp. 84; Parfitt,

“Labor Problems,” March 4, 1976, NA.

25

MG-10 and up were paid the US Wage Base. The GAO report forecast a potential

raising of the “cutoff” for both non-manual and manual employees, threatening to push

US-rate employees down into the local-rates. At this point “the atmosphere [was] highly

charged.”65

On September 19, 1975 Governor Harold Parfitt informed the unions that there was

a budget crunch and more belt-tightening measures could be expected. On November 10

Parfitt announced a 3-point proposal to integrate the schools and housing communities

and to reduce by half those positions designated “security positions,” including police

and firefighter posts. This would open up positions that had been reserved for US

citizens to Panamanians. CLU-MTC immediately recognized these proposals as the

revival of General Connors‟ 1921 silverization plan, and the pressure cooker started

smoking. AFSCME Area Director, Sinclaire reported “strong, almost violent opposition”

from CLU-MTC.66

Of course, this proposal, once more, set the US unions and the local

rate unions against one another.

The unique “socialist” structure of the Canal Zone took these changes beyond the

realm of a labor dispute and ignited a revolution in the community at large. Unions

formed a coalition with the Civic Councils and named it “The Ad Hoc Committee of

Organized Labor and Civic Councils”. The Ad Hoc Committee issued its manifesto in an

open letter to US citizens in the Canal Zone:

We Americans are slow to act, but our patience is not infinite. Year

after year we have suffered adverse reaction: reduction in the tropical

differential, reduction in security positions, reduction in community

services….There is no use in deluding ourselves. Unless we stand

65


66

Sinclaire to McClellan, November 12, 1975, GMMA.

26

united, we may soon have nothing worth saving. If we do not make a

stand on the issue that confronts us now, when shall we make a stand?

Shall we wait until our leave system is further curtailed and our tropical

differential eliminated?....This is no time for weakness and apathy. The

time to act is now.67

The manifesto came with a poll attached, asking US citizens to vote on the Governor‟s

proposals and concluded by asking citizens to indicate “the strongest action to which I

would commit myself…in the event [our demands] are ignored.”68

At the Coco Solo

meeting where this manifesto was created, Al Graham was asked by one of the members

of the Civic Council “what if we only get back 50 responses to the poll?” He replied by

saying that they would report the result by percentages of the responses and not by the

number, i.e., if 40 out of the 50 respondents voted against the Company‟s position they

would report that 80% were opposed rather than 40 people were opposed. The woman

who directed the question shot back “Jimmy Hoffa lives! He‟s standing right there at the

podium!”69

The manifesto attempted to inoculate its signatories to charges of racism by

noting that the American Federation of Teachers had endorsed the position of the Ad Hoc

Committee at its National Convention with no dissenting votes, despite the fact that the

Convention was attended by “hundreds of black…delegates.”70

On February 6, 1976 Governor Parfitt announced that the 3-point proposal regarding

schools, housing and security positions was going to be implemented despite the protests

of the US community. Parfitt added fuel to the growing fire by informing unions that

further changes to employment conditions could be expected in the short term. During

67

“US Groups to Fight Zone Integration”, Star & Herald, December 18, 1975.

68

Ibid.

69


70

“US Group to Fight Zone Integration”, Star & Herald.

27

the “consultation” period for the 3-point proposal, 300 employees had been laid off as

part of the austerity measures Parfitt had announced back on September 19 of the

previous year.71

Labor and community leaders were at the breaking point and called a

rally on the steps of the Administration Building in Balboa for the night of February 16.

At the rally, William Drummond of the Police Association called for a sickout. A rumor

circulated that Secretary Victor Veysey rejected Governor Parfitt‟s reservations about the

changes to be announced on February 17 by saying that Canal employees were “gutless

sheep” and would take whatever was coming to them.72

The day after the rally Parfitt called employees‟ bluff by proposing to change the

Canal Zone Wage Base “cutoff” to grades NM-7 and MG-11. This meant that those white

collar employees in grades NM-4 thru NM-6 and blue collar employees in grade MG-10

who had been on the US Wage Base would be dropped to the Canal Zone Wage Base.

Parfitt also proposed to eliminate the tropical differential entirely for new hires hired

locally, regardless of their grade level.73

The Ad Hoc Committee called another rally for

Monday February 23 to energize the community in response to the latest provocation by

Canal authorities. The rally would be at the Balboa Stadium which, like the

Administration Building, was located on the Pacific side of the Isthmus. Rumors of a

strike were boiling over. With the exception of William Drummond, labor leaders called

for calm at the rally. Drummond urged that now was the time to take a stand. It was

decided to go over Governor Parfitt‟s head and send a delegation to Washington.

71


72

Knapp, Red, White and Blue Paradise, pp. 260-261; Graham insists that Drummond concocted that quote

out of whole cloth, Graham, interview, March 16, 1976.

73

Sinclaire to McClellan, February 17, 1976. GMMA.

28

Workers passed the hat and raised enough money to send Al Graham. Captain Coleman

of the Masters, Mates & Pilots (Tugboat Masters), and Captain Oster of the Panama

Canal Pilot‟s Association volunteered to go at their own expense. A follow up rally was

called for Sunday March 7. Rank and file employees were primed to strike but labor

leaders knew the dangers involved in striking against the federal government and were

more cautious.74

All employees of the federal government sign an oath upon taking office declaring

that they will not strike against the government. Federal law provides that:

An individual may not accept or hold a position in the Government of

the United States…if he…participates in a strike, or asserts the right to

strike, against the Government of the United States or the government

of the District of Columbia…75

Union leaders knew that taking the stand that was being advocated by the more radical

among them carried substantial risk, for not only do employees make themselves

ineligible for continued or future employment with the federal government for striking,

they also are ineligible if they simply declare the right to strike. In addition:

Whoever violates the provision of § 7311 of Title 5 that an individual

may not accept or hold a position in the Government of the United

States…if he…participates in a strike, or asserts the right to strike,

against the Government of the United States…shall be fined not more

than $1,000 or imprisoned not more than a year and a day, or both.76

Graham, Coleman and Oster headed for Washington where they met with US

Representative, Leonor Sullivan, D-Mo, the leaders of their respective International

74


75

5 USC § 7311(3).

76

5 USC § 1918.

29

Unions and Veysey.77

Sullivan, at Graham‟s request, sent a telegram to the labor leaders

back in the Zone, imploring them not to strike: “Do not rock the boat by striking or

walking off the job or by slowdowns at this critical time. We have faith in your good

judgment. I implore you, please have faith in ours.”78

In deference to the Sullivan letter,

the rally scheduled for March 7 was rescheduled for March 12.79

The Friday, March 12 rally, also held at Balboa Stadium, was the largest rally yet.

Al Graham had been personally assured by Veysey that he never called Canal workers

gutless sheep. When his letter to that effect was read at the rally the crowd was in no

mood to hear it. Graham urged the gathered workers to think seriously before taking any

rash action and pointed out that George Meany would never, nor could he ever, sanction

an illegal strike. Graham and the other union leaders were walking a fine line, as an open

call for a strike could subject their respective unions to liability for any damages the

Canal enterprise sustained as a result of the job action. They also ran the risk of

personally being charged with criminal conspiracy. Oster walked the line and

corroborated what Graham had said. Coleman edged closer to the line and called on the

crowd to “work safely.” William Drummond leaped right over the line and cried out that

the whole thing made him “sick.” AFGE President, O‟Donnell repeated, over and over

that the workers should allow their consciences to be their guide.80

Graham left the rally

thinking that a strike had been averted for the time being.81

What Graham didn‟t account

77

“Canal Workers Call Off Rally”, Houston Post, March 7, 1976; Graham, interview, March 16, 2006.

78

“Canal Workers Call Off Rally”.

79

Ibid.

80

Knapp, Red, White and Blue Paradise, pp. 261; Graham, interview, March 16, 1976.

81


30

for was that Atlantic side employees who had attended the rally would have an hour long

train ride back to Gatun—an hour in close quarters where they could plot their next

move. There on the train, perhaps fueled by the free flow of malt beverages, Atlantic

employees came to a conclusion—they were sick.82

Governor Parfitt and his staff were well aware of the brewing trouble. On March 4

Parfitt warned the Panama Canal Company Board of Directors that the Company was

“now dealing with a strong emotional tide….It is essential that this serious situation be

defused immediately.”83

The Canal administration was hypervigilant for outward signs

of employee unrest when reports trickled in that some employees on the graveyard shift

immediately following the Friday night rally had called in sick. It was just a small

number of employees on the Atlantic side of the Isthmus at Gatun Locks and the

Cristobal Admeasurers office that had called in sick that first post-rally shift. Later that

morning Paul Simoneau, Special Assistant to the Governor for Labor-Management

Relations, met with Captains Dertien and Gallin, Director and Deputy Director of the

Marine Bureau, to discuss rumors of an impending sickout. At this point the number of

employees who had called in sick was small enough to leave room for doubt as to

whether a sickout was actually in progress. By Sunday afternoon‟s shift it was

undeniable that a job action was underway. All of the Control House Operators at Gatun

Locks were sick and the only thing that prevented a shut-down was the availability of

management officials to operate the mechanisms of the Locks. Admeasurer operations

82

James Murphy, telephone interview by author, March 21, 2006.

83


31

were shut down when a substantial number of Admeasurers came down with a case of

“anthrax.” 84

The epidemic spread to the Pacific side Monday morning when the graveyard shifts

at Pedro Miguel and Miraflores Locks were infected. On Monday afternoon the teachers

at the various Canal Zone schools took strike votes and the results of those votes became

apparent Tuesday morning when the plague wiped out half of the teachers. All seventeen

schools were shut down, releasing students for an unexpected spring break.

A more important vote was held that afternoon at the Rebecca Lodge in Balboa.

The Panama Canal Pilots Association was meeting there and they held the key to the

effectiveness of the strike. The Pilots were the indispensable element of the workforce--

without them no ships would transit the canal, regardless of how many managers or local

rate employees the Administration rounded up to replace the rest of the sick US-rate

employees. The craft workers were at the Balboa Knights of Columbus waiting for word

from the Pilots when Al Graham got an idea. Pilots had a well earned reputation for a

love of distilled beverages. The Rebecca Lodge forbid alcohol on its property, so

Graham and Vic Enyart of the Machinists Union bought a cold case of beer and brought

it over to the Pilots‟ meeting. Graham placed the case of beer on Oster‟s desk and said “I

hope you can join us.” Within ten minutes the entire Pilot‟s union showed up at the

Knights of Columbus and joined the craft workers for a toast to their decision—they were

sick, too.85

84

Paul Simoneau, “Labor Relations Summary March 15-19, 1976,” RG185-78, NA; Unless noted

otherwise, all of the details of the day to day events are drawn from Simoneau.

85


32

Parfitt immediately went to work trying to stem the spread of the rebellion.

Simoneau put in calls to the “responsible union leadership,” speaking with Graham,

Oster, Coleman, IBEW Local 397 President W. Muller and IBEW Local 677 Business

Manager Glen Heath. Parfitt had solicited the union‟s responses to the latest proposed

changes when they were announced on February 17 and Simoneau wanted to speed up

the consultation process in light of the growing strike. Graham pointed out that there

would be no written responses to the Company/Government‟s position because the

affected employees were making their position clear by their actions. At a meeting on

Monday night, attended by the leaders of the Boilermakers, Plumbers & Pipefitters, Fire

Fighters, Operating Engineers, Pilots, NMU, IBEW, Nurses, Police Lodge, Machinists,

AFGE, Customs, Masters, Mates & Pilots, and Graham all of the union leaders stressed

that the unions were not striking or actively encouraging their members to strike. They

pointed out that employees who were not members of any of their unions were also out

sick. Oster and Graham insisted that the only possibility they could see for ending the

walkout was through direct negotiations with Veysey.

In the meanwhile, there were some agreements among the leaders of the constituent

unions that made up CLU-MTC that, in order not to alienate the public, certain

employees or classes of employees should remain at work. Police, fire and medical

personnel would not call in sick. Three tugboats would remain on duty in case there were

any accidents in the canal that required their assistance. Graham had tried Sunday to talk

apprentices out of joining the work stoppage because they were probationary employees

and subject to termination without cause. The apprentices refused Graham‟s advice and

stuck with their journeymen. He also pointed out that those employees of the Locks

33

whose only duties were to operate the locomotives that pulled ships through, could go to

work without harming the effectiveness of the sickout because, without Tugboat Masters,

Pilots, or Control House Operators, there would be no ships to be pulled. Another group

of employees that Graham encouraged to remain on the job was the Teachers. The

American Federation of Teachers Local was a particularly militant group and there was

no way they were going to sit this job action out.86

There were several attempts by the

Canal Zone Government to reopen the schools but even when they could scrape together

enough teachers to open one, they found that many parents held their children out of

school in solidarity with the teachers87

.

The sickout continued to grow on Tuesday while Parfitt conferred with Veysey

about the unions‟ demand to negotiate directly with the Secretary. Veysey refused to

come to the Isthmus, so the Governor asked for authority to settle with the workers.

Veysey‟s position was that the Governor had all the flexibility he needed to “talk about

anything.” What Parfitt was looking for was not authority to “talk about anything” but to

make a deal that would settle the strike. The actual authority to make decisions about pay

and benefits rested, not with the Governor, but with the Canal Zone Personnel Policy

Coordinating Board which was headed by the Secretary of the Army. Veysey suggested

that the Governor might find an outside intermediary helpful and offered to contact the

Federal Mediation and Conciliation Service (FMCS) about getting one. With the

employees firm in their position that only a complete withdrawal of the February 17

86

Ibid.

87

Harold R. Parfitt, “Legal Aspects of the Strike by Panama Canal Company/Canal Zone Government

Employees”, Minutes of the Meeting of the Panama Canal Board of Directors, April 19, 1976, RG185-98,

NA.

34

proposal would end the work stoppage, and Veysey‟s refusal to come to the Canal Zone,

Parfitt began planning measures to “crackdown” on the employees.

Later that day, the Regional Director of the NMU Local, Rene Lioeanjie, asked the

Governor to read a message issued by the International Vice President of NMU, over the

Armed Forces Radio and Television Service. The statement declared that NMU was not

involved in any illegal strike activity in the Canal Zone. In addition to the claim that

NMU was not involved in the sickout, the statement called for all NMU members to

“exercise every safety precaution and pay rigorous attention to all safety regulations.”88

The Governor was not about to read the call for a “work to rule” campaign over the

Government controlled airwaves but partially obliged Lioeannjie by allowing the first

part of the message to be read on air. The NMU message shared airtime with Parfitt‟s

message stating that the strike was illegal and urging all employees to return to work.

Tuesday ended with an effort by Simoneau to convince Drummond, who everyone knew

to be an informal ringleader, to call for a return to work. Drummond was not at all

disposed to ending the sickout he had worked so diligently to bring about.

By Wednesday March 17 the story was plastered across the front pages of American

newspapers. “‟Sickout‟ Almost Shuts Panama Canal” blared the banner headline of the

Miami Herald that morning. A backlog of ships carrying cargo in international

commerce was starting to develop on both ends of the canal. The Governor‟s office

claimed that 700 of the 3,500 US citizen employees had called in sick by midday

Tuesday. The unions claimed it was “closer to 1,500 or 2,000.”89

The Panama Canal had

88

Simoneau, “Labor Relations Summary,” March 19, 1976, NA.

89

“Sickout Almost Shuts Panama Canal”, Miami Herald, March 17, 1976.

35

never been closed since the 1915 landslide and the Governor was bound to see that it

didn‟t happen on his watch either. The Company claimed that twenty one ships transited

on Monday and nineteen were scheduled for Tuesday. On a normal day thirty five to

forty ships transited the canal. The chambers of the locks on the Panama Canal are 1,000

feet long by 110 feet wide. With no tugboats available, transits were only possible for

ships with a beam of seventy five feet or less, so the larger ocean-going vessels were the

ones backed up for the news photographers to see. By Tuesday afternoon the Governor

scaled back Canal operations, which normally run 24 hours a day, to two shifts.

Enough teachers reported to work Wednesday to open two of the seventeen US

schools, but overall, the strike was growing. The Governor decided to take action against

the teachers and their union by preparing a motion for an injunction to order teachers

back to work. He also declared that anyone who did not report to work on Thursday

morning would be considered on unauthorized leave and would have their pay docked.

These measures were announced during a news conference and broadcast repeatedly

throughout the day over the Southern Command Network (SCN) TV and Radio. The

only workers whose absence would be excused would be those with written notes from

either of the two Company hospitals in the Zone, Gorgas and Coco Solo. Employees

found little trouble getting these excuses, as all Canal Zone medical personnel were

subject to the same cutbacks as the rest of the employees and, while not participating in

the sickout, expressed their solidarity in a most helpful manner—with sick excuses on

demand.90

90

Sue Stabler, e-mail to author, March 15, 2006; and Suzanne Steele, e-mail to author, March 20, 2006.

36

Veysey contacted Parfitt to tell him that he had lined up two mediators from FMCS

who were ready to travel to the Canal Zone but wanted an invitation from both

management and labor. Simoneau called Graham and Oster and both of them told him,

in no uncertain terms, that they were not interested in negotiating with anyone who did

not have the authority to rescind the February 17 proposals. Graham knew that

negotiating with someone who did not have the power to grant the relief he sought would

be negotiating with himself. Since he was not prepared to offer something that he could

not deliver—a return to work—and the mediators had no authority to order a rescission of

the proposals, a meeting with them would be an exercise in futility. With that in mind, he

rounded up a few Machinists and headed for a vacation to the interior of the country. In

his absence, Jim O‟Donnell (AFGE Local 14) tried to take over CLU-MTC, telling

Simoneau that he could more effectively lead the labor organization and get some

flexibility from the workers. That did not prove to be the case and Simoneau quickly

came to doubt that he spoke for CLU-MTC.91

Simoneau was to get more bad news by

the end of the day when Lioeanjie informed him that NMU and the steamship companies

that utilized the canal would issue a joint appeal to President Ford on Thursday.

Lioeanjie also informed him that shipping companies were considering re-routing cargo

by ground transportation to avoid the back-up at the Panama Canal.

On Thursday March 18 Parfitt called in all of the union leaders to try the carrot and

stick approach. He offered a proposed settlement to the sickout combined with threats of

increasing consequences if no solution was achieved. Present were O‟Donnell for CLU-

MTC, William Sinclaire, AFSCME Area Director, Saturnin Mauge for AFSCME Local

900, Oster for the Panama Canal Pilots Association, Captain Johnson, International Vice

91

Simoneau. “Labor Relations Summary,” March 19, 1976, NA; and Graham, interview, March 16, 2006.

37

President for the Masters, Mates, and Pilots (tugboats), R. Lioeanjie for NMU, E. Gaskin

for NMU, and Captain George Coleman for Masters, Mates and Pilots Local 27. Only

one ship could be scheduled for transit that day and the backlog had grown to over 100

ships. The Atlantic Side community was merrily pouring salt into the Governor‟s

wounded pride. The ostensibly sick employees were not exactly bed-ridden. They held a

picnic right outside the gates of Gatun Locks, complete with a softball game and fun for

the kids.92

The picnic “really pissed [management] off” and Parfitt lit into the union

leaders, emphasizing the illegality of the sickout and warning that people “might be

hurt.”93

He threatened legal action against both the unions and the leaders. He also laid

down an offer. He would advocate, on behalf of the workers, to rescind the wage base

proposal provided that the employees returned to work forthwith. He stressed that he

could not commit the PCC/CZG to his offer because the authority was not his, but he

stressed that he would advocate forcefully before the Canal Zone Civilian Personnel

Policy Coordinating Board. Union leaders said they would take the proposal back to the

workers. Upon leaving the meeting, Parfitt instructed the PCC/CZG General Counsel to

immediately file, in the US District Court for the District of the Canal Zone, the motion

for preliminary injunction against the American Federation of Teachers (AFT) Local 29.

The Teachers elected to sickout another day. At the end of the day he learned that Jim

O‟Donnell was not able to deliver support from CLU-MTC and his offer had been

rejected.

Beginning early Friday morning on March 19 Parfitt ratcheted up the pressure. US

District Judge Guthrie F. Crowe had issued a temporary restraining order against AFT

92

Murphy, interview, March 20, 2006.

93


38

and Parfitt immediately moved to decertify the local union and summarily fire two of its

officers. He then ordered the General Counsel to seek restraining orders against the

Panama Canal Pilots Association and Master, Mates & Pilots Local 27. He planned to

decertify those unions as soon as the temporary restraining orders were issued. He

ordered that the same action be taken against both IBEW Locals, the Machinists, and the

Marine Engineers‟ Beneficial Association immediately following the issuance of

restraining orders against the Pilots and Tugboat Masters. The intended effect was to

give the unions the impression of growing pressure. Judge Crowe issued temporary

restraining orders against the Pilots and Tugboat Masters later that afternoon and

scheduled a hearing for a preliminary injunction on Monday March 22.94

The Defense

Department announced that thirty five ship Pilots were being dispatched to the Canal

Zone to transit ships if the Panama Canal Pilots Association did not return to work

promptly. The replacement Pilots were members of the Coast Guard, Navy and Army

Transportation Corp. This threat rang hollow to Canal Pilots who knew that taking 900

foot long ships into the narrow Lock chambers was not a job for novices.95

More

ominous was the purported plan to call to active duty those members of the Panama

Canal Pilots Association who were in the Naval Reserve.96

When Saturday morning broke union leaders were at the Rubicon. The Teachers

were under a restraining order to return to work. Two officers had been dismissed and

had narrowly beaten criminal contempt charges when they produced sick excuses

94

“Injunction Cites Unions in Panama Canal Strike,” Houston Post, March 20, 1976.

95


96

Parfitt, “Legal Aspects of the Strike,” April 19, 1976, NA.

39

provided by their good union brothers and sisters at the hospital.97

Captain Oster had

been served with a temporary restraining order Friday evening, enjoining him and his

union from further participation in the wildcat strike. Tugboat Masters had been enjoined

and the Electricians and Machinists were next. Replacement Pilots were on the way. The

Department of Defense was preparing to call Naval Reservists among the Pilots to active

duty.

Facing all of this, a variation of the proposal that Parfitt had placed on the table the

past Thursday must have taken on a new luster. Parfitt now placed on the bargaining

table the following Memorandum of Understanding:

To initiate action immediately to formulate a labor-management

committee to commence a study, with full participation of unions, of all

ramifications of application of Executive Order 11491, as amended, or

other mutually acceptable form of collective bargaining with

employees of the Panama Canal Company and Canal Zone

Government.

This is what Canal Zone unions had been seeking since President Kennedy issued

Executive Order 10988 concerning union recognition back in 1962. Governor Carter had

refused to grant collective bargaining rights and organized labor in the Zone had been

saddled with “consultation” ever since. Executive Order 11491 was an improvement

over Executive Order 10988 and provided for an agency to enforce the collective

bargaining rights of federal employees—the Federal Labor Relations Authority (FLRA).

This new sweetener, combined with the same proposal Parfitt offered the previous

Thursday, along with a promise to reinstate the fired Teachers, was enough to make the

difference. First the Tug Masters, then the Pilots, followed by the Teachers, the

97

Ibid.

40

Electricians and the Machinists voted to return to work. The sickout that started eight

days before now ended.

Anthrax was eradicated from the Canal Zone that Saturday afternoon, which is not

to say that health was restored. While the Canal Zone Wage Base “cutoff” was left

unchanged in the wake of the strike, elimination of the tropical differential to locally

hired US citizens went forth as originally proposed on February 17. Unions gained long

coveted collective bargaining rights but fast moving treaty developments rendered those

rights a nullity.98

An important gain for employees was the respect--maybe even fear--

that they earned from the Canal administration. Planned further changes in employee

leave benefits were scrapped.99

Parfitt, with approval of the Board of Directors, ruled out

any “witch hunt” to retaliate against militant employees.100

The Company/Government

even declined to implement a planned closing of the Ancon Laundry for fear of arousing

renewed employee unrest.101

Participation in the sickout was limited to US-rate employees, with only moral

support provided by the local-rates. Ironically, Governor Chester Harding‟s 1920

decision to reserve those positions necessary for the operation of the Canal to Gold roll

employees—a decision made in order to protect against Silver roll strikes--ensured that

US citizen employees could shut down the Canal unassisted by local-rates. Governor

William Carter‟s 1962 refusal to grant exclusive recognition to any Canal Zone unions—

98

Collective bargaining rights were later included in legislation implementing the Torrijos-Carter treaty in

1979.

99

Panama Canal Company Press Release, April 26, 1976, RG-185-98 NA.

100


101

Press Release, April 26, 1976, RG-185-98, NA.

41

the purpose of which was, in part, to fracture organized labor into small, controllable

factions—left Governor Parfitt with no “corpus against which management could direct a

conventional counter attack”.102

The “socialist” structure of the Canal Zone--with all

workers across the entire economy employed by a single employer-- made PCC/CZG

particularly vulnerable to a general strike, in spite of the analogous vulnerability of

workers, over whom “the Canal Zone Government has the power to fire…from his job,

which in addition loses him his commissary privileges, his home, and his right to enter

any Canal Zone facility.”103

So, what was it that caused employees of the United States Government to risk their

jobs, their homes, and even their very freedom to take a stand? It wasn‟t school

integration, or the tropical differential, or the Canal Zone Wage Base “cutoff.” It was

powerlessness and uncertainty. As first demonstrated in 1914 when CLU-MTC went to

Congress to keep their rent-free housing, Canal employees always could exercise

considerable political clout in the halls of the legislature. Powerful friends in the 1976

Congress stood in vigorous opposition to Executive Branch efforts to negotiate a treaty

that would relinquish US control over the Canal Zone. Many employees were convinced

that the relentless assault on their standard of living that began to gain steam after the

1964 riots was orchestrated by the State Department to force US citizens out of the Canal

Zone and out of the way of treaty negotiations.104

One need only look to the manifesto of

102


103


104

“Panama Canal Co. Goes to Court to Get Schools, Waterway Open”, Miami Herald, March 19, 1976.

42

the Ad Hoc Committee of Organized Labor and Civic Councils to see that, for Zonians,

“The time to act [was] now!”105

The American labor movement has often found itself in a position analogous to that

of Panama Canal employees in the mid 1970s. Government has often used laws and

injunctions to compel workers to remain on their jobs despite a collective decision to

withhold their labor. Labor‟s greatest victories (and defeats) have come when workers

have defied these governmental commands. Defiance comes with great risk, as American

history is replete with examples of workers being beaten and imprisoned for having the

audacity to exercise their fundamental right to withhold labor. Panama Canal employees

rose up in defiance of a federal statute forbidding collective refusals to work and in doing

so, faced down fines, imprisonment and loss of their livelihood. They join ranks with the

courageous workers who defied criminal trespass statutes and occupied auto factories in

the great “sit down” strikes of the 1930s. Defiance of the law is not always a winning

strategy, as demonstrated most recently by the air traffic controllers, who just five years

after the sickout, were summarily fired for doing essentially what Canal workers had

done. There comes a time when workers have to make the hard choice between

powerlessly accepting intolerable conditions and taking a stand that risks everything.

Panama Canal employees took that risk and earned a respect that landed them favorable

terms in the eventual enactment of legislation implementing the Torrijos-Carter treaty.

Air traffic controllers took that risk and were decimated by the results. Federal

employees today are under the relentless assault of the Bush administration‟s campaign to

strip them of collective bargaining rights. While struggling with the decision as to

105

See footnote 67.

43

whether to take a stand or come to terms with their powerlessness, the story of the

Anthrax strike may be inspirational.

44

Bibliography

The idea to write this paper occurred to me when, applying to the Bachelor‟s Degree

program at the National Labor College, I was asked about my first impression of

organized labor. While contemplating the question, I reached back into the recesses of

my memory and recalled, from my youth in the Panama Canal Zone where I lived in the

town of Gatun from 1967 to 1982, something I had not thought about in many years—the

1976 sickout that closed not only the Panama Canal, but more importantly to me at the

time, my high school. To refresh my memory and to ascertain its accuracy I searched the

internet for references to the sickout and, surprisingly, found absolutely nothing. With

the exception of a small reference in Herbert and Mary Knapp‟s 1984 work, Red, White

and Blue Paradise: The American Canal Zone in Panama, nothing has been published on

what, to me, was a momentous event. 106

In this paper I will set out to answer the

question I posed at the beginning of this paragraph.

My search for that answer began with a query to Suzanne Fleming (Steele), a

classmate of mine at Cristobal High School, Coco Solo, Canal Zone. Suzanne provided

me with some newspaper clippings from the Miami Herald and the Star & Herald (an

English language daily published in Panama). Next, I contacted Chuck Hummer at the

Panama Canal Museum in Seminole, Florida. Chuck sent me some clippings from The

Panama Canal Spillway (an official weekly publication of the PCC/CZG) and some

relevant minutes to Panama Canal Company Board of Directors meetings. I reviewed

published literature on the Panama Canal Zone and found that, while there is a wealth of

literature on the general subject of the Panama Canal Company and the Canal Zone, there

106

Herbert and Mary Knapp, Red, White and Blue Paradise: The American Canal Zone in Panama (San

Diego, Harcourt, Brace and Jovanavich, 1984).

45

is very little literature on the subject of Canal labor relations. There is one book by

Michael L. Conniff that focuses on the labor relations of employees of West Indian

descent.107

There is also an excellent work by John Majorthat describes the structure and

function of the Canal Zone Government.108

For the definitive piece on life in the Canal

Zone there is Herbert and Mary Knapp‟s work, referenced above, and for construction of

the Canal, the definitive work is by David McCullough.109

It became clear, after the

literature review, that the bulk of the information I would need to answer my question

would be found in primary sources.

I began my search of primary sources at the George Meany Memorial Archives

(GMMA) in Silver Spring, Maryland. The GMMA contained a series of letters between

William Sinclair of the American Federation of State, County and Municipal Employees

(AFSCME) Local 900, and Andrew C. McClellan, Inter-American Representative, AFL-

CIO, wherein Sinclair updated McClellan on the events leading up to, during, and

following the sickout.110

Included in the correspondence was discussion of the

substantive issues that precipitated the job action and developments that resulted from it.

From there, I went to the National Archives in College Park, Maryland. The National

Archives contains some 20,000 linear feet of records on the Panama Canal, from

construction of the Canal right up until the turnover of the enterprise to the Government

107

Michael L. Conniff, Black Labor on a White Canal: Panama, 1904-1981, (Pittsburgh, University of

Pittsburgh Press, 1985).

108

John Major, Prize Possession: The United States and the Panama Canal, 1903-1979, (New York,

Cambridge University Press, (1993).

109

David McCullough, The Path Between the Seas: The Creation of the Panama Canal, 1870-1914, (New

York, Simon & Shuster, 1978).

110

William Sinclaire, AFSCME Area Director to Andrew C. McClellan, AFL-CIO Inter-American

Representative, Box 7, RG18-010, George Meany Memorial Archives, Silver Spring, Maryland (Hereafter

cited as GMMA).

46

of Panama on December 31, 1999. During a one day search of the archives I was able to

find a good number of relevant documents including, most importantly, a detailed

account of the strike prepared for Canal Zone Governor, Harold Parfitt by Labor

Relations Director, Paul Simoneau.111

The Simoneau report contained the names of the key labor leaders and, with the help

of then President of the Fire Officers Union, Roy Gelbhaus, I was able to find Alfred

Graham, President of the Canal Zone Central Labor Union-Metal Trades Council (CLU-

MTC). Graham has been particularly helpful in understanding the facts that led

employees to conduct an illegal wildcat strike. Other primary witnesses have been Sue

Stabler, a teacher in the Canal Zone Schools at the time of the events, and Jim Murphy,

my father and a welder at Gatun Locks. Some of this work is also drawn from my own

knowledge of the Canal Zone. Because the majority of the witnesses I have contacted

were employed on the Atlantic end of the Canal, Atlantic side events may be

overrepresented in this work.

Sources

Conniff, Michael. Black Labor on a White Canal: Panama, 1904-1981. Pittsburgh:

Pittsburgh University Press, 1985.

Egolf, Kathy. Personal e-mail communications, October 2005.

Forbath, William. Law and the Shaping of the American Labor Movement. Cambridge,

Massachusetts: Cambidge University Press, 1989.

Franck, Harry. Zone Policeman 88. New York: The Century Co., 1913.

Gelbhaus, Roy. Personal e-mail communications, October 2005-March 2006.

111

Parfitt served as Governor of the Canal Zone from March 24, 1975 to October 1,1979; Paul Simoneau,

“Labor Relations Summary March 15-19, 1976”, RG185-78, National Archives, College Park, Maryland,

(Hereafter cited as NA).

47

George Meany Memorial Archives, Record Group 18-010, “International Affairs

Department, Country Files.”

Gompers, Samuel. “Conditions of Life and Labor on the Panama Canal Zone.” The

American Federationist, 31 (1924): 209.

Greene, Julie. “Spaniards on the Silver Roll: Labor Troubles and Liminality in the

Panama Canal Zone, 1904-1914.” International Labor and Working Class

History Journal 66 (2004): 78.

Graham, Alfred. Telephone interview, March 16, 2006.

Houston Post, March 13,-March 22, 1976.

Hummer, Chuck. Personal e-mail communications, December 2005-March 2006.

Jorden, William J. Panama Odyssey. Austin: University of Texas Press, 1984.

Knapp, Herbert and Mary. Red, White and Blue Paradise: The American Canal Zone in

Panama. San Diego: Harcourt, Brace, & Jovanavich, 1984.

Major, John. Prize Possession: The United States and the Panama Canal, 1903-1979.

New York: Cambridge University Press, 1993.

Maloney, Gerardo. “El Canal de Panama y los Trabajadores Antillanos: Panama 1920:

Cronologia de una Lucha,” Biblioteca Nacional de Panama, 1988.

McCullough, David. The Path Between the Seas: The Creation of the Panama Canal,

1870-1914. New York: Simon & Shuster, 1978.

Miami Herald, March 13-March 22, 1976.

Murphy, James. Telephone interview, March 20, 2006.

National Archives, Record Group 185.8 “Records of the Canal Zone Government and

Panama Canal Company, 1908-1984.”

New York Times, 1903-1977 (all entries under the heading “Canal Zone”, “Panama

Canal”).

Panama Canal Spillway, January 1976-April 1976.

Pope, James Gray. “The Thirteenth Amendment Versus the Commerce Clause: Labor

and the Shaping of American Constitutional Law, 1921-1957.” Columbia Law

Review 102, no.1 (2002): 1.

48

Star & Herald, January 1975-April 1976.

Stabler, Sue. Personal e-mail communications, March 2006.

Steele, Suzanne. Personal e-mail communications, December 2004-March 2006.

michael murphy ibew local union 520

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