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It seems very strange that the largest seaport in Alaska should not have a customs officer or at least a part-time customs officer, since several other ports in Alaska have and Seward did have in years past. We strongly urge that a customs officer be appointed to serve this port.

Mrs. Prost. Thank you very much, Reverend Malin, for a very concise statement.

Mr. Dawson, do you have any questions?

Mr. Dawson. I assume the reason for the customs officer being at Anchorage is due to the fact that they have the port at Whittier.

Reverend MALIN. No, that is a military port. The reason for the customs officer being at Anchorage is because of the international airport.

Mr. Dawson. I see.

Reverend Malin. It is sort of strange a small port such as Cordova has a part-time customs officer. Why, I don't know. Here in Seward we have got a Japanese ship in right now. About 2 weeks ago we had a Liberian ship in. All of this could be handled very easily and very competently and very cheaply to the Federal Government by the mere appointing, we will say, the United States commissioner as part-time customs officer, someone that could handle it right here.

Mr. DAWSON. In regard to the construction of the new dock, do the plans call for two warehouses?

Reverend Malin. The plans actually call for three.
Mr. Dawson. What was the reason for just giving you one?

Reverend MALIN. There was an economy move. The dock calls for 3 berths and 3 warehouses, and they cut it down to 2 berths and 1 warehouse, which might be perfectly all right stateside, but we have Alaskan weather conditions here that are a little bit different.

Mr. Dawson. Who are the engineers on this dock?

Mr. McFARLAND. Is the dock being constructed by the Alaska Railroad ?

Reverend Malin. Yes, they have put it out, but I can't think of the engineers. It is Earl & Wright.

Mr. Dawson. I am primarily interested in who has the plans and who made the request, to which committee in Congress, and the reason for turning it down.

Reverend Malin. The Railroad has it, and they made the request, and apparently, according to the head of the Railroad, the military also made a request for the second warehouse here, and when it got back before committee the Pentagon didn't particularly go along with the second warehouse, so it was not presented. The Railroad had thought it was going to be.

Dr. DEISHER. I remember-
Mrs. Prost. Please identify yourself for the record.

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DIRECTORS, CHAMBER OF COMMERCE, SEWARD, ALASKA Dr. DEISHER. Dr. Deisher, chairman of the board of directors. Mrs. Prost. Proceed, Dr. Deisher.

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Dr. DEISHER. When the thing came up before the committee, the military was asked if they considered this a necessity, to have a second warehouse, and they would not go so far as to say it was a necessity, but they thought it was advisable. We have letters in the chamber of commerce files from the military authorities in Anchorage saying it was advisable, but I guess they didn't put it strong enough.

Mr. Dawson. Which committee is this? Mr. McFARLAND. I believe, Mr. Dawson, the Interior Subcommittee of the Appropriations Committee. *Dr. DEISHER, Clair Engle's committee. Which one would that be? Mr. Dawson. He is chairman of our full committee. Dr. DEISHER. I have an idea information was directed to Mr. Engle.

Mr. MCFARLAND. I believe that is right, but it is the Appropriations Committee, Interior Subcommittee, that would have the responsibility for the appropriations to the Alaska Railroad.

Mr. DAWSON. That has nothing to do with this committee. That is the Appropriations Subcommittee on Interior of the Appropriations Committee that handles that matter.

I would suggest, Mrs. Pfost, we do as we have in other cases of this kind, take this information to the appropriate committee and see what we can do about it.

Mrs. PFOST. Thank you. Mr. Utt? Mr. U'rt. I have no questions. Mrs. PFOST. Mr. Bartlett! Mr. BARTLETT. I have no questions. Mrs. Prost. Dr. Taylor? Mr. TAYLOR. Some 16 months ago we heard there was considerable ill feeling existing in Seward between the Railroad personnel and the trucking association members over the dock facilities. Have those difficuities been ironed out or were they stronger in Washington than they were here in Alaska?

Reverend MALIN. I think to a large extent they have been taken care of and ironed out. The new warehouse will definitely be suitable to both. The overhead doors will adequately handle the trucking. It is my understanding that the Railroad definitely wants to play ball with the truckers and actually carry vans piggy-back and so forth in bad weather when the roads are rough. I believe that the Railroad and the trucking group have pretty well ironed it out.

Mrs. PFOST. Mr. McFarland?
Mr. McFARLAND. No questions.
Mrs. Prost. Thank you very much, Reverend.
Reverend Malin. Thank you.
Mr. BARTLETT. The next witness is Mr. Hardinge, city manager.
Will you identify yourself for the record ?

Mr. HARDINGE. Harry Hardinge, city manager, city of Seward.
Mr. BARTLETT. Would you proceed in your own way?

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Mr. HARDINGE. Our big problem right now, as you know, Mr. Bartlett, is our hydroelectric project. We have had considerable opposition from Chugach Electric Association, and the latest that has come upwe have a little plant here at Moose Pass which lies between the city of Seward and our proposed hydro project, which is being purchased by Stuart & Associates. We wish to object to that very strongly because that is over 100 miles from any of the CEA lines, and it is right in the middle of our project.

From the correspondence in my file--as you gentlemen know, I haven't been here from the beginning of this, but from correspondence in the files of the city of Seward the city has tried to deal with Co-op 17 2 or 3 years ago, and after Co-op 17 failed the city went in and spent considerable tax money in putting in their own plant. It seemed like we got all kind of opposition from CEA and some of the boys upthere. It is not directly through CEA but through certain people in CEA who are bypassing regulations by getting out of CEA and doing it individually.

Mr. Utr. This matter has been brought to our attention outside of committee, and day before yesterday I questioned Mr. Stewart quite at length on the purchase of the Moose Pass powerplant from Estes Bros., and he said on the stand under very diligent questioning that the city of Seward had never made any effort to purchase it, were not in the market for it, and they were the only ones to whom the Estes Bros. could sell.

Mr. HARDINGE. That is right; the only ones Estes Bros. could sell, but Stewart had an option on the plant that did not expire until the 22d of this month. He has carried an option on it. I have tried to deal with Estes Bros. and they said, “We can't deal unless they let their option run out."

Mr. Urt. Did you make any attempt to acquire it before they gave an option to Stewart?

Mr. IIARDINGE. I wasn't here.
Mr. UTT. Of your knowledge, did the city make such an overture?

Mr. IIARDINGE. As I understand, the engineers talked to Estes

Mr. Urt. How long has Stewart had an option on it?
Mr. ILARDINGE. That I couldn't say.

Mr. UTT. You would consider it a conflict of interest in the REA setup for an employee of an REA to go into a private utility himself!

Mr. IIARDINGE. Absolutely. I would say it was just like if I was selling automobiles for you and I saw a chance on a good buy on the side, I bought it myself and sold it and made the profit, I wouldn't be doing you justice.

Mr. UTT. That was my opinion, and that was why we covered that.. Mr. HARDINGE. It is absolutely against the principles of REA as I know them, and I worked with Lyndon Johnson back in the thirties in the REA before he was up as high as he is now. I knew Lyndon when he was in college. I happen to be from Texas, and I know in 1939 we had 98-percent electrification in the tricounties there. I

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have worked with REA considerably, and I just object to the methods that are being used by CEA.

Mr. BARTLETT. How will the acquisition of Moose Pass hurt the city of Seward?

Mr. HARDINGE. It is taking our load. In order to justify any project you must show the necessary load, and how it is going to benefit them I don't know. The only thing that came to me is we do not as yet have our Forest Service permit for our lines to mile 57 and it lies in between, but I have been assured since, just the other day, from Juneau that it will not interfere, that the Forest Service will go ahead and grant us our permit through Moose Pass regardless.

Mr. BARTLEIT. Do you know how many customers Moose Pass has now? Mr. HARDINGE. There is a potential of about 80. There are 56, I

. believe, hooked up at the present time.

Mr. BARTLETT. Proceed, if you please.

Mr. HARDINGE. I have the full detail all put together for you gentlemen on the whole thing so that I won't take the time. The whole project is there.

Mr. BARTLETT. Do you have a written statement here?
Mr. HARDINGE. It is a written statement, with six copies.

Mr. BARTLETT. Without objection, the statement will be included in the record and the accompanying material will be incorporated in the file. (The statement referred to follows:)


Seward, Alaska, September 23, 1975. To: Congressional committee, Seward, Alaska, September 24. 1955. Re City of Seward Hydroelectric Federal power project No. 2171

GENTLEMEN : It is common knowledge the Chugach Electric Co-op, an REAsponsored organization has and is yet doing everything possible to obstruct this city's project and all other power developments in this area. They have grand visions of a monopoly.

Since I worked with Lyndon Johnson on the beginning of REA years ago, I have always supported it for the purpose for which it was created; however, of recent years, certain people have deemed it considerably profitable to use the REA for monopolistic purposes.

It was not the intention of the original REA to drive municipal power from the field, and I do not believe it is the present wishes of the Government to do so, therefore I humbly request you gentlemen to thoroughly investigate or cause to be investigated, the structure and reason for the actions of the Chugach Electric Co-op, and that they be ordered to cease and desist from the expenditure of public monies to interfere with and obstruct a public project such as ours.

We have spent considerable tax money on developing this project and are about to begin construction of our distribution system, and the latest development is that they are trying to purchase a small plant at Moose Pass which is directly between our hydrosite and the city, and ove 100 miles from their closest line, and could be for no other purpose than to block our distribution line from the hydroplant to the city. They cannot do this legally as a co-op, but are doing it through one of their directors.

Any consideration you can give this matter will be greatly appreciated by the citizens of Seward whose tax money is invested in this project. Yours very truly,


City Manager.

SEPTEMBER 9, 1955.
Administrator, Rural Electrification Administration,

Washington, D.C.
GENTLEMEN : At an adjourned meeting to the city council at 7 p. m., September
8, I was instructed to protest directly to you the use of public money in direct
conflict with municipal projects.

The city of Seward was issued a permit by the Federal Power Commission on May 9, 1955, for project No. 2171, a hydroproject on Crescent Lake, 32 miles from Seward, on which engineering is almost complete and all the plans for location of 69 kilovolt-amperes transmission and distribution line are in the hands of the Forest Service for their approval.

Now it has been brought to the attention of the council that the Chugach Electrical Co-op of Anchorage has purchased the small light plant at Moose Pass, directly between our project and the city of Seward, and over 100 miles from their nearest lines, and directly inside our project.

If you will contact Senator Lyndon Johnson, one of the fathers of REA, you will find that I personally have always supported the work of your agency, but I cannot ethically or otherwise approve of such action as taken by Chugach Electric, and would appreciate hearing from you at your earliest convenience. Yours very truly,


City Manager.

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Washington 25, D. C., September 19, 1955.
City Manager, City of Scward,

Seward, Alaska.
DEAR MR. HARDINGE: We have no knowledge of the purchase of the small
light plant at Moose Pass by the Chugach- Electric Association of Anchorage,
about which you wrote us on September 9. No loan funds were advanced by
this Administration for such purpose and if the purchase was made, it was
made with the association's general and operating funds over which we exercise
no direct control.

We shall request further information from the Chugach Electric Association
about this purchase and will write you again.
Sincerely yours,

(For Ancher Nelsen, Administrator).

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SEPTEMBER 23, 1955.
Administrator, Rural Electrification Administration,

Washington 25, D. C.
DEAR MR. NELSEN: Re my letter of September 9 and yours of September 19,
I am enclosing a clipping from the Anchorage Daily Times of September 20,
which clearly shows some of the subterfuge used here to bypass certain REA
regulations as to acquisition.

We are certainly not interested in interfering with CEA operations in their territory, and resent very much their encroachment in our project. Respectfully,


City Manager. Mr. Dawson, Mr. Chairman, I just make a suggestion that this statement that has been made ought to be pretty well publicized down in the Anchorage area. I don't recall anything being said down there about Seward having any interest in this Moose Pass power deal at the time it came up.

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