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Fairbanks, independent school districts, and Alaskans find themselves in a position of what can we do about it.

The people in Seward certainly are not going to start screaming for payments in lieu of taxes after they have worked for years to obtain tbe rehabilitation of the Alaska Railroad link to Seward. very complicated situation which we hope will be recognized.

Mr. UTT. Mr. Chairman. I direct your attention to testimony this morning to the effect that the city of Anchorage does not levy a solvent-credit tax. Are there any cities, members of your league, who levy a solvent-credit tax?

Mr. FISCHER. None to my knowledge.
Mr. UTT. And can you give me the reason for not doing that?

Mr. FISCHER. I think I am no expert on this particular subject. I have heard some discussions of it, and it appears that the problem would be one that if you tax those on the same basis as other property, and it would have to be probably equally taxed, you would just make it prohibitive for people to keep bonds and stocks, deposits of money.

Mr. Utt. It would be prohibitive. Why are you stuck with 1 millage tax? Our tax is one mill on solvent credits and 65 mills on property taxes.

Mr. FISCHER. Delegate Bartlett might correct me, but I believe the organic act has specific provisions in it for equal taxation of all classes of property. So possibly in this case it might be it is easier to ignore it than discriminate.

Mr. UTT. Well, that organic act could be changed. I could sit here with a million dollars worth of stocks and bonds and pay no taxes, and you have a house and pay a considerable amount of taxes.

Mr. FISCHER. That is right.

Mr. Utt. I would hazard a guess that your solvent credits in the Anchorage area alone will equal the assessed valuation of all of your property, and it would be a source of revenue of probably $100,000 in this community.

Mr. FISCHER. That certainly would be a substantial amount.

Mr.UTT. And if it does take a change in the organic act, we should look into that and not penalize them with the same millage rate as you have on real property.

Mr. FISCHER. We will certainly look into this further at your suggestion.

Mr. BARTLETT. Thank you, Mr. Fischer. And you have left the resolutions adopted at the last meeting for the reporter?

Mr. FISCHER. Yes, I have.
Mr. ABBOTT. Mr. Owen, or Senator Owen.



Mr. OWEN. Mr. Chairman, my name is Alfred A. Owen, Jr., a member of the Alaska Senate, Third Division, Post Office Box 307, Anchorage, Alaska.

I should like to speak briefly on a number of subjects, the firs: one, however, being the elective governor bill which has been introduced over a series of congressional sessions, sometimes by our Delegates, sometimes by the very distinguished Senator Butler.

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I wish to speak in opposition to that bill very emphatically because it is my opinion that as long as Alaska is a Territory it needs as much direct representation in the Federal Government as it can possibly get. It is my opinion and I believe that Delegate Bartlett will confirm this--that without a vote he is not able to represent Alaska as well as he should.

It is my considered belief that if we have an elective governor he would have less effect on the National Government and the Congress of the United States, which has so very much to do with Alaska, than the Delegate in Congress. I think we would be put into a retrograde position.

By contrast, as long as we are a Territory we have a governor who is appointed by the administration in power. And whether we feel that that governor is good, or something less, the fact still remains that he is the direct representative of the Federal Government in Alaska at that given time, and for that reason, when we feel that we need redress or help with our problems, I am convinced that the governor has access, first, to the Interior Department, secondly, to the Congress of the United States, and thirdly, to the Executive, the President and his staff, where an elective governor would not. And I have seen evidence in years gone by of the Secretary of the Interior failing to follow through on the wishes of the people of Alaska as voiced by the governor, and the governor took it to the White House or he took it to various committees of Congress involved, and I think we need that type of representation and would not settle for an elective governor bill until such a time as we have statehood, at which time we certainly shall elect our own governor.

Now if you have questions along that line, Mr. Chairman, before I proceed. Mr. BARTLETT. Mr. Utt. (Discussion of the record.)

Mr. BARTLETT. Mr. Owen, would you agree with me that the present system, which has always been in effect, whereby the Federal Governor of a Territory not only always reports directly to the Secretary of the Interior and is more or less considered an employee of the Department of the Interior, is basically wrong?

Mr. OWEN. Yes; that is basically wrong. I feel that he should submit bis report either to the Congress, and more specifically to this committee here, or he should submit it to the President.

Mr. BARTLETT. Don't you think be ought to be the direct representative of the President within the area of which he is Governor?

Mr. OWEN. Yes; and in a sense I think he is, because, let us bear in mind that the original appointment is made by the President and confirmed by the Senate. Now, in that case, I think he becomes the joint voice or responsibility of at least the Upper House of Congress and the administration.

Mr. BARTLETT. But have not you and I and also other Alaskans seen situations over the years where there would be departmental wrangling and the governor would be considered as a representative of the Department of the Interior instead of the President's emissary more or less over all departments in a Territory?

Mr. OWEN. Well, let me say that Governor Gruening had the intestinal fortitude to take the point of view that he was representing the Federal Government in its entirety and, as you perhaps recollect, he

went over the head of Secretary Krug, Secretary Chapman at various times, and went to the White House or to Congress.

Mr. BARTLETT. I have vivid recollection and agree that Alaska was so benefited by his doing just that. But when he was serving, was not the attitude of the other departments on occasion that he was there in the capacity not as governor of all of Alaska but as the Interior Department's special representative and did not that hurt the administrative process?

Mr. OWEN. I am positive that it did, and I feel that the Secretary of the Interior as an intermediary, for instance, is not good.

Mr. BARTLETT. Mr. Owen, do you believe that the election of a governor of Alaska instead of his appointment as is now the case would delay statehood?

Mr. OWEN. Oh, definitely. I don't need to tell you gentlemen that you have a tremendous workload, and I want to tie to that the suggestion that Mr. O'Brien, I believe, offered yesterday about an omnibus bill to extend piecemeal several privileges to Alaska. I am very certain that the Congress is busy to the point that if that particular little bit is accomplished, then I am going to be a very old man before you ever get around to taking any action on the statehood bill.

Mr. ABBOTT. Senator, you disagree with those witnesses who appeared and said you should take it on that basis?

Mr. OWEN. Yes, I definitely disagree.
Mr. ABBOTT. Of course-

Mr. OWEN. With all of this baloney about Alaska being immature, not quite financially responsible; statehood is good but let's wait á little while. That is strictly facetious. We have reached as great a mental maturity as we are apt to reach in a long time, and I think it is on a par with any

of the citizens of the 48 States. There is no reason why we should settle for anything less than Statehood.

Another thing. I wish to repeat very briefly a portion of testimony I gave before this committee when the distinguished Fred Crawford was chairman in 1947. It was along this line: That the United States, the 48 States, needs Alaska in the family of States to a greater extent than we need the other 48 States as such.

Mr. BARTLETT. Senator Owen, are you aware of the fact that there had been introduced in the Senate of the United States a bill providing for election of a governor of Alaska?

Mr. OWEN. Yes, I am aware of it and opposed to it.

Mr. BARTLETT. Do you know whether or not the administration, acting in this case through the Interior Department, has made a report on that bill?

Mr. OWEN. I am not aware as to whether or not they have made a report.

Mr. BARTLETT. The fact is that the Interior Department has not reported.

Are you aware of the fact that when the late Senator Hugh Butler of Nebraska came to Alaska in 1953 as chairman of a subcommittee investigating statehood and other matters, principally statehood, he publicly declared at the opening session at Ketchikan that whereas he had always been a leading advocate of legislation to provide for election of the Governor of Alaska, he was not then for it because he believed that Governor Heintzleman ought to have an opportunity


to put his beliefs in government in effect, he ought to be allowed to serve out his term?

Now I suggest that merely as a preliminary to a question.

On the coldly partisan political basis, do you not believe there would be much difficulty in securing the enactment of any such legislation, because when the Republicans are in they are not likely to want to take a chance on losing an appointed governor in favor of a Democrat, and when the Democrats are in they likely would be hesitant about such legislation for precisely the same reason?

Mr. OWEN. No, Mr. Bartlett, I think not. You know statehood has not been entirely a partisan thing by any means. We have had opposition from both parties as well as tremendous support from both parties, and it is I feel that I wouldn't want to accuse the Congress, the Members of the Congress of lacking the intellectual integrity to put the welfare of the people of Alaska ahead of a job that pays only recently $18,000 a year.

Mr. BARTLETT. Well, Senator Owen, I want to make it clear that my criticism is going to the executive branch of the Government, and it goes with the Republican administration at the moment or the Democratic administration as it was before. But on the political basis, I see that there would be some difficulty in those in charge of administration giving away a sure thing for a possibility.

Mr. UTT. Pardon me. Did not the present administration appoint a Democrat as governor?

Mr. BARTLETT. In Alaska? Mr. UTT. Yes. Mr. BARTLETT. No; it is not understanding-Governor Heintzleman?

Mr. UTT. Yes.

Mr. BARTLETT. No; I believe Governor Heintzleman is a registered Republican.

Mr. UTT. Off the record.
(Discussion off the record.)

Mr. ABBOTT. For the record, Senator, are you elected on a basis of running on a party ticket in Alaska?

Mr. OWEN. Yes.
Mr. ABBOTT. And a recognized party?
Mr. OWEN. A Democrat.
Mr. ABBOTT. I did not know that you had stated that.

Mr. OWEN. Along the political line, I am personally of the opinion that Alaska and Hawaii will both become part of the family of States simultaneously. I don't think either would step down for the other.

Mr. ABBOTT. You are aware, Senator, that in very contemporary history statehood had been considered when there was a Democratic President and a Republic Congress, the 80th?

Mr.OWEN. Right.

Mr. ABBOTT. When there was a Democratic President and a Democratic Congress?

Mr. OWEN. Right.

Mr. ABBOTT. And a Republican President and a Republican Congress. Now there is the only possible fourth combination that exists is a Republican President and a Democratic Congress. So that that is borne out-arguments were made to that effect—that if you search for pure partisanship, it somehow escapes a logical pursuit along that line.

Mr. Owen. I agree with you. I think, though, very likely the two Territories will become States simultaneously. I think that that is one place an omnibus bill might fit.

Mr. ABBOTT. Do you have some other points?
Mr. OWEN. Yes, I do, Mr. Abbott.

Some references were made-I am not sure whether it was by Mr. Dawson or Mr. Utt-yesterday to the financial precariousness that the Alaska Railroad might face in the event that there are two things happening, one, port construction in Anchorage, which is imminent, and loss of a lot of its revenue to the pipeline.

I would like to point out that the Interior Department asked a very prominent economist in Washington, D. C. part of the world, I believe Mr. Ocono(?) to prepare them quite a study here some years ago. I am not sure the thing was ever released to your committee.

Among the recommendations made at that time was that the southern portion of the Alaska Railroad be abandoned and that Whittier be made the principal port. Subsequently, the military requested that the southern portion of the Railroad to Seward be rehabilitated as a defense measure. And I think none of us have any quarrel with that. I think no civilian in Alaska is qualified to enter into the logistics of the Strategic Command. But in the event that the Alaska Railroad should be put in a position of operating in a deficit, I think that the committee should well consider that any such moneys appropriated by Congress for that purpose are part of a legitimate defense expenditure.

Now I just wish to present that to you.

Mr. ABBOTT. If you abandon the southern portion, I assume you mean that portion which lies south of Anchorage.

Mr. OWEN. Lies south of Portage.

Mr. ABBOTT. But what would happen to the town of Seward and its economy if you abandon that Railroad?

Mr. Owen. The economist's report suggested that trucks be used to transport any material that might come in through the port of Seward.

Now the port of Seward—let me put it this way: Cities have a habit of surviving in the case of dire disaster, and I would point to an Alaskan city, Cordova, which in 1938 apparently had its economic base jerked out from under it when the Kennecott copper mines we closed down and the railroad ceased to function. And yet Cordova has retrenched. It relies largely on the fishing industry. It is the one area in Alaska which has exploited the fishing industry to a greater degree than any other area immediately around here, and which I think is pretty much a going concern today. So we have no reason to think that Seward is going to fold up and fly away or disintegrate. I think you will find Seward 10 years bence will be a stronger city, more populous, and more going on than there is today. And one of the things that is going to make that possible is a cheap public power developed in that area.

Mr. ABBOTT. If it was asserted by a responsible individual that Anchorage over all would benefit tremendously from complete abandonment of the Alaska Railroad, would you subscribe to that assertion?

Mr. OWEN. I think that you can't make blanket statements. I think there are qualifying statements to be made in each instance. I think that Anchorage would become the wholesale distribution point for the rail belt area in the event we put a port in here. I don't think

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