increased our Territorial income tax to take care of the extra burden, we would have a balance of $50 million that we could use for other purposes. Some of this money could be used as tax incentives under Commonwealth. I believe a lot of capital would be invested in Alaska if there were no income taxes to pay, and other taxes were reasonable. We have a lot of resources that have not been touched. We have a lot of waterpower yet that has not been developed, and a lot of mining that could be resumed if tax conditions were right. Someday we might strike oil up here and, of course, they would be able to compete with companies in the States if no Federal income tax would have to be paid. No doubt, our population would then double in a short time, not military population, but civilians who would help to develop the Territory. Statehood would not be utopia at this time, but I believe Commonwealth would be. Mrs. PrOST. Thank you very much, Mr. Locken, for a very concise and clear statement. Mr. Sisk? Mr. SISK. Mr. Locken, as I understand your statement, you are opposed to statehood but you favor commonwealth; is that right? Mr. LOCKEN. Correct. I am opposed to statehood now. If they could develop the country and get more people in here and more taxes, statehood, fine. Mr. SISK. But you favor commonwealth now? Mr. LOCKEN. I favor commonwealth. Mr. SISK. I believe, if I understand your statement correctly, you also stated it would cost just as much for commonwealth as it would for statehood. Mr. LOCKEN. It would. That is what I found out. Mr. SISK. Maybe I wasn't following you closely enough. Isn't your ultimate goal statehood? Mr. LOCKEN. Yes, sir. Mr. SISK. And you can finance statehood just as cheaply as you can finance commonwealth status? Mr. LOCKEN. That is right. Mr. SISK. Why do you propose commonwealth status first? Mr. LOCKEN. Because, if it is true we don't have to pay income taxes, we save $62 million a year, for instance, or maybe more now, and we could tax ourselves a little more, give the Territory part of that $62 million if we were a commonwealth. If we became a State, we would have to pay the income taxes again, would we not? Mr. SISK. That is right. You feel if you become a commonwealth, then you would not have to pay income tax, and that is the primary reason why you suggest commonwealth as preferred to statehood? Mr. LOCKEN. Correct. Mr. SISK. Do you feel there is any indication that you might ever attain the status of commonwealth on that basis? Mr. LOCKEN. It is up to you boys in Washington, D. C. Mr. SISK. I might say, Mr. Locken-and this is just my personal opinion-I could not hold out very much hope for you on that basis. As I understand, you are speaking strictly for yourself and not as a representative of any group or representative of the people of Petersburg. Is that right? Mr. LOCKEN. I haven't asked what they want. I am just saying my piece. I am the one to blame. Mr. SISK. We deeply appreciate that because we appreciate anyone who is conscientious and sincere in their statement. Do you feel that the majority of the people in the Petersburg area would vote for immediate statehood if given the opportunity to do so? Mr. LOCKEN. I never was for statehood so I never took-now-so I never took much interest to find out. Mr. SISK. What was the result of the last referendum on statehood in Petersburg? Mr. LOCKEN. I don't remember that far back. Mr. SISK. I believe that is all. Mrs. ProST. Judge Chenoweth? Mr. CHENOWETH. You feel Alaska is not ready for statehood right now and would not be able to assume full responsibilities of statehood? Mr. LOCKEN. That is right. Mr. CHENOWETH. Which would call for increasing taxes. And feel the increased taxes would mean you could no longer attract industry and capital to Alaska? you Mr. LOCKEN. That is right. Mr. CHENOWETH. And, therefore, instead of Alaska advancing and making progress you will go back. Is that your observation? Mr. LOCKEN. I believe so. Mr. CHENOWETH. How long have you been in Alaska? Mr. LOCKEN. 38 years. Mr. CHENOWETH. As I understand it, you came here and started out with practically nothing and worked your way up, and now you are in charge of extensive operations? Mr. LOCKEN. Oh, I had 30 cents in my pocket the first time I came here. Mr. CHENOWETH. I heard about you before I came to Petersburg. I think that is a good example of what a man can do who works hard and is honest and diligent. Certainly as one member of the committee I want to commend you on your accomplishments. Mr. LOCKEN. I don't think I have done so very good. Mr. CHENOWETH. You have done very well. I am happy to have your observations and opinions. How long has this statehood question been an issue? I went to Congress in 1941 and never heard much about it until the last 2 or 3 years. When did it start out here? Mr. LOCKEN. We heard a lot about it for years but never paid attention to it. Mr. CHENOWETH. You are hearing more about it now than you used to? Mr. LOCKEN. Yes. Mr. CHENOWETH. Where does the agitation come from? Mr. LOCKEN. From some people that like to get a good job, I imagine. There will be a lot of good jobs, and I am too old to try to get one of them. Mr. CHENOWETH. You say you are a member of the legislature? Mr. LOCKEN. I have been for three terms. Mr. CHENOWETH. Are you a member now? Mr. LOCKEN. I am until the next election. Mr. CHENOWETH. As I understand, the legislature appropriates money for the statehood propaganda program. Mr. LOCKEN. Yes. Mr. CHENOWETH. How much did they appropriate? Mr. LOCKEN. $50,000 this year extra. Then we appropriated $300,000 for the constitutional convention. Mr. CHENOWETH. That is to promote statehood? Mr. LOCKEN. That is correct. Mr. CHENOWETH. Where do you get that money? Mr. LOCKEN. We had a little money left over after we had taken care of schools and welfare and old-age insurance. Mr. CHENOWETH. This is money that would otherwise be used for schools or welfare or roads? Mr. LOCKEN. I believe so. Mr. CHENOWETH. I think that is all. Mr. LOCKEN. May I ask Mr. Sisk a question? Mr. SISK. I might say, Mr. Locken, with the chairman's permission, normally we don't open questions up for witnesses but I will be very glad to have your question. Mrs. ProST. You may. Mr. LOCKEN. Isn't it true that Puerto Rico was voted commonwealth in 1952? Mr. SISK. Yes, I believe that is correct. Mr. LOCKEN. That is right. Mrs. ProST. Mr. Utt? Mr. UTT. I have no questions. Mrs. ProsT. Mr. Bartlett? Mr. BARTLETT. Mr. Locken, how much do you calculate taxes would increase under statehood? Mr. LOCKEN. As far as I can figure out, we will increase 100 percent. Mr. BARTLETT. But this is your estimate? Mr. LOCKEN. No, I had it from some other sources. Mr. BARTLETT. I think this is of great importance to the committee, and I wonder if you would be good enough at some later date to make a written statement as to what you believe the tax increases would be in the several categories. Mr. LOCKEN. I haven't got time. That has been figured out by a bunch up in Anchorage. Mr. UTT. If my colleague will yield, what was his reply on that? Mr. BARTLETT. He said he wouldn't have time. Mr. UTT. I have the time. It has just expired-10 minutes. (Discussion off the record.) Mr. BARTLETT. You would say, Mr. Locken, the taxes would be increased 100 percent by statehood but you don't know from where those figures come? Mr. LOCKEN. No, I do not. Mr. BARTLETT. You queried Mr. Sisk about commonwealth in Puerto Rico. Mr. LOCKEN. Yes. Mr. BARTLETT. I might say that no tax exemption whatsoever was conferred on Puerto Rico by reason of the commonwealth bill. Were you aware of that? Mr. LOCKEN. They might have been tax exempt before. Then they are a way ahead of us. Mr. BARTLETT. No further questions. Mrs. ProST. Are there any further questions? I would like to ask you, Mr. Locken, do you favor having your Governor appointed or do you prefer to have him elected? Mr. LOCKEN. I think it is good enough the way we have it now. Mrs. PFOST. You prefer then to have him appointed. Thank you very much, Mr. Locken. Off the record. (Discussion off the record.) Mrs. ProST. Mr. Schwartz, will you come forward please and identify yourself. STATEMENT OF ROBERT K. SCHWARTZ, PETERSBURG, ALASKA Mr. SCHWARTZ. Robert K. Schwartz. I first came to Alaska in 1940. Mrs. PrOST. Your occupation? Mr. SCHWARTZ. I own the local laundry, Mrs. ProST. Thank you, Mr. Schwartz. Are you going to read your prepared statement? Mr. SCHWARTZ. Yes, I am. Mrs. PrOST. You may proceed. Mr. SCHWARTZ. The subject of industrial possibilities in the Territory of Alaska is not to be discussed in 10 minutes, but has many and varied aspects that would take years to assay correctly. However, as an Alaskan's viewpoint, I give it to you for what it is worth. Possibilities in Alaska are far reaching and very probable for the near future and also distant future. These developments should be the basic industry of mining, logging, and primary wood operations, typically, sawmill, pulp products, possibly in metallurgy for the far distant future. Fishing in the past 5 years has been on a decided decline and there seems to be no letup as to its being put into first-class condition until drastic changes occur in management of fishing practices and control. However, the main feature of possibilities in this area as well as all of Alaska is its waterpower potentials. There is no doubt in my mind that hydroelectric power in Alaska is slightly more expensive to build and maintain than elsewhere, but as the requirements of our country and other countries throughout the world need new and basic elements, the waterpower of Alaska is coming into its own. Industrialization of Alaska will never occur until adequate power districts are developed and assisted by the Federal Government so as to give Alaska the boost over the failing fishing industry and to stabilize her economy by more than just seasonable working conditions. This speaker feels that it is going to be private industry and capital, state government and local town government to accomplish this end. Thus statehood for Alaska gives the opportunity for this Territory to accept the responsibility of the need and is on the spot to assist in its development. Limited moratorium of taxation, Federal as well as Territorial or town government, is a necessity to invite and tempt men to invest in the great frontier. Adequate roads to this island peninsula, such as the Stikine Highway, would develop Petersburg as a point of seagoing embarkation of basic industries, also of Canadian basic industries to the east of the mountains. To quote from harbor and rivers report in Alaska, Interim Report No. 1, Southeast Alaska, February 15, 1952, 19th line of paragraph 56: And Stikine River has deposited sufficient material at its mouth to nearly connect Mitkof Island to the mainland at low tide. Port possibilities show that Petersburg had as trips by vessel of various drafts a fraction less than half of Ketchikan's 13,614 vessel trips and Petersburg has a population of one-third that of Ketchikan. Being solely a fishing community, we need assistance to help in bringing industry to Petersburg, Alaska, either development by a broad program of roads, and power development by Federal action or by statehood in which we can help ourselves, by being a part of the Federal Government rather than a dependent of that Federal Govern ment. To stimulate industry for southeastern Alaska is the necessity of cheap power. In this area power development is at hand and will attract industry of all kinds because of incentives that can be offered by Federal, State, and city governments, with the possibility of this adequate cheap power. To give you an example, quoting again from the harbor and river report on Alaska, Interim Report No. 1, Southeastern Alaska, February 15, 1952, paragraphs 389 and 390, Petersburg-Wrangell area: One of the locations proposed for a pulp mill site is located on the mainland near Thomas Bay about 10 miles north of Petersburg. Alternate locations at Petersburg or Wrangell are under consideration. The timbered area considered as tributary to Petersburg and Wrangell includes the mainland area from Endicott Arm drainage on the north to and including the Bradfield Canal drainage on the south, and the following major islands: Kupreanof, Kuiu, Mitkof, Wrangell, Zarembo, and Etekin. Paragraph 390: Two streams, Scenery Creek and Cascade Creek, afford excellent possibilities for power development within a feasible transmission distance of the three pulp sites. The report goes on to state that the cost of power at the plant would be 8.8 mills per kilowatt-hour. The transmission line, to Petersburg, Wrangell, and possibly Kake, would give the electrical district a chance to stimulate industry of all kinds rather than just the pulpwood industry. With the new types of freighters to lower freight costs and lower costs of handling that are tentatively due in January or February of 1957 it seems that the Federal Government should be interested in development of these resources in the next 2 years. However, it is felt that had we representation, under statehood, we could bring to the Federal Government and receive adequate consideration for getting these basic problems accomplished. We must admit that the 87 years under Federal jurisdiction have not brought much to Alaska industrialwise, nor freight communicationwise other than the military and its component parts. Through all my research I have yet to find that a State has been retarded industrially or socially because the people have been under statehood rather than Federal dependency. |