On behalf of the committee, I want to express my appreciation to you and your associates for having come here to testify before the group and to thank you personally for having taken us over a section of the Alaska Railroad between Fairbanks and McKinley Park the other day. We enjoyed the trip and it sure gave the members who had not been on the road before an idea of the operation that they otherwise would not have had. Thank you very much.

Mr. WHITMAN. Thank you, Mr. Bartlett.

Mr. BARTLETT. Mr. Croul, do you want to resume? Do you want to call your next witness?

Mr. CROUL. George Jackson, Anchorage Chamber of Commerce Port Committee.

Mr. BARTLETT. Mr. Jackson, do you have a writtent statement? Mr. JACKSON. Yes, sir.

Mr. BARTLETT. Proceed.

STATEMENT OF GEORGE D. JACKSON, ANCHORAGE CHAMBER OF COMMERCE PORT COMMITTEE, ANCHORAGE, ALASKA Mr. JACKSON. My name is George D. Jackson, chairman of the Anchorage Port Committee.

Mr. DAWSON. I would like to have Mr. Whitman stay here and hear his testimony.

Mr. JACKSON. It is my understanding that the committee is very pressed for time, so I have only three short sentences.

We, referring to the chamber of commerce, agree whole-heartedly with the city of Anchorage testimony concerning the port of Anchorage.

We of the chamber of commerce believe that the Alaska Railroad should be written off as a military expense.

Give us a port for the transportation of our merchandise.

That is all I have, sir.

Mr. BARTLETT. What was the last one?

Mr. JACKSON. Give us a port for the transportation of our merchandise.

Mr. BARTLETT. That is your entire statement?

Mr. JACKSON. Yes.

Mr. DAWSON. Mr. Chairman?

Mr. BARTLETT. Mr. Dawson,

Mr. DAWSON. I simply want to commend the witness for a good short concise statement right to the point that sums the whole thing

Mr. BARTLETT. Mr. Jackson, if you would care to supplement that, you may submit a written report. We are grateful to you. (Subsequently, Mr. Jackson submitted the following report:)

Subject: Anchorage deepwater port project.
Mr. LEO W. O'BRIEN,

Chairman, Interior and Insular Affairs Committee,

ANCHORAGE, ALASKA.

House of Representatives.

DEAR MR. O'BRIEN AND MEMBERS OF THE COMMITTEE: Highest on the priority list of thing to accomplish is the development of adequate port facilities here at Anchorage. Both the Anchorage Chamber of Commerce and the Anchorage Port Commission view this project of prime economic importance. Numerous studies

have been made in the last several years and many meetings have been held in an attempt to accomplish this end. Some of the benefits that might be brought out for the purposes of this hearing are as follows:

1. A substantial savings could be realized on freight items moving directly to the port of Anchorage. This alone is a paramount consideration in the economic benefits to be derived.

2. In our opinion the development of the port program, including an adequate new dock, warehousing, and transit shed and allied facilities, is vital to the growth and development of new industries, wholesaling and distribution, and to the general benefit of both the civilian and military populations of the Anchorage area and of the rail belt.

3. The project is feasible from an engineering point of view. This has been brought out on many occasions, such as the Preliminary Report on the Port of Anchorage, Alaska, prepared by G. T. Treadwell, consulting engineer for the Anchorage Port Commission, dated July, 1952. We quote from Mr. Treadwell's report: "The installation of a deepwater port and necessary terminal facilities to serve the Greater Anchorage area is feasible from an engineering standpoint, is economically sound, and its construction is recommended subject to additional engineering studies." In addition, the Decco Corp. made studies 2 years ago and submitted a proposal for the construction of a two-berth facility, feeling that it was feasible from an engineering point of view. The Corps of Engineers have on several occasions recommended the construction of the port of Anchorage, first in their report entitled "Cook Inlet and Tributary Streams, Interim Report No. 2," dated January 20, 1950, the project was recommended as feasible. Just this past spring a second report was completed by the Corps of Engineers which was an economic feasibility study based on the reevaluation of the Anchorage port in the light of the new seatrain or trainship development. Here again, the Corps of Engineers recommended the feasibility of the port.

4. It is felt by the Anchorage Port Commission that the port could be kept open approximately 8% to 9 months a year, however, if proper ice-breaking equipment were used, either tugboats or icebreaking ships, the port could be considered a year-around operation. Two years ago the Anchorage Chamber invited the owner and operator of the Upper Columbia River Towing Co., Captain Lapellatto, who has operated tugs and barges on the upper Columbia River for over 20 years in ice and current conditions more acute than those existing in Cook Inlet during the winter months, to give a report. He pointed out that this port could be a year-around operation with the use of proper equipment and good dock facilities.

Encouraged over these favorable reports, the people of Anchorage, Alaska, went to the polls last fall and authorized a $2 million general obligation bond issue for the purpose of developing the Anchorage port. The first stage development, as recommended by the Corps of Engineers, involves a $51⁄2 million facility, including the wharf and shoreside installations. The people of Anchorage, Alaska, wish to use the $2 million toward a matching fund with Federal appropriations which we hope can be made available by Congress as part of a civil works project to be constructed by the United States Army Corps of Engineers. We therefore ask the assistance of this committee in helping the people of Anchorage to get an authorization for the Anchorage port.

The most recent study by the United States Army Corps of Engineers shows that approximately 70 percent of the Seward freight handled by the Alaska Railroad is consigned to the Anchorage area. Studies made by William Wayer & Co. for the Office of the Chief of Transportation, Department of the Army, in early 1954 indicate approximately 80 percent of the total freight into the rail belt area moves between the months of March and October. Major savings can be accrued by the development of the port of Anchorage due to the decrease in land transportation costs in the estimated traffic diverted from Seward to Anchorage, and the decrease in hauling costs of ocean cargo presently coming in to Anchorage. It has been estimated that the present operating costs of the Alaska Railroad for the movement of freight between Seward and Anchorage are approximately 4 cents per ton-mile, with a rail distance between these 2 points of 114 miles. This, therefore, would mean that the average operating cost is $4.56 per ton for the movement of freight from Seward to Anchorage, however the savings from elimination of the land haul costs as evaluated should probably be reduced by reason of a probable greater cost of water shipment to Anchorage compared to water shipment to Seward. Considering the extra operating time and ship operating costs, the additional water transportation cost is estimated at

about $1.20 per ton. The net savings by elimination of the rail or truck haul on 125,000 tons, an estimated amount used by the Army Corps of Engineers, that could move direct to Anchorage during the ice-free season, is $4.56 per ton less $1.26, or $3.36 per ton minimum saving. On the basis of this stipulated tonnage, this would therefore indicate a total saving of $420,000 per year. It is also pointed out that savings will accrue to the present traffic moving into the Anchorage area by reason of reduced handling costs that will be realized from improved harbor facilities. These benefits are conservatively estimated at 50 cents per ton. Total annual benefits from the reduced land haul plus the improved cargo handling would be acceptably close to a half million dollars.

There are probably many reasons why the port of Anchorage has not been constructed to date, even though as far back as 1922 the Anchorage Chamber of Commerce appealed to the Secretary of Interior to keep the existing city dock in operation. The Alaska Railroad, of course, has historically opposed the development of this port facility due to the effect they feel it would have on the railroad operation. It is well to point out to your committee that the people of rail belt Alaska are, in effect, having to pay a special defense transportation tax on every ton of freight that moves into the rail belt. This has been brought about primarily because the development of the port of Whittier, the rehabilitation of the Alaska Railroad, and the new docks at Seward have been developed purely for military necessity, not because of economic feasibility. Military authorities have pointed out the need for 2 year-around deepwater port facilities from a strategic point of view. These same military authorities have indicated that the development of the port of Anchorage would have a definite military advantage but could not be considered a military necessity unless it could be considered a 12 months port. Again, Mr. Chairman, we ask the assistance of you and your committee to give us transportation facilities based on the economic feasibility for the development of our great land. There is no question in our minds and in the minds of the authorities that have made extensive investigations into the development of our port, that this facility is an economic "must." Specifically, we respectfully request the assistance of your committee in helping us get an authorization for the Anchorage port in this forthcoming session of Congress.

GEORGE D. JACKSON,

Chairman, Port Committee, Anchorage Chamber of Commerce. Mr. DAWSON. That is one of the clearest statements we have had. Mr. CROUL. Mr. Chairman, our next witness will be Ken Hinchey, causeway chairman of the Anchorage Chamber of Commerce.

Mr. HINCHEY. John, do you have anyone else to call as a witness at this time? Mr. O'Brien asked if I might be withheld until they get back, but if it is necessary, I will go on.

Mr. CROUL. Is John Asplund here?

Mr. HINCHEY. John took off for lunch.

Mr. CROUL. I have some subjects I would like to cover myself. Mr. BARTLETT. Either is all right, because we have other witnesses, not chamber of commerce witnesses, who can be brought forward. Mr. HINCHEY. Is that all right, Mr. Chairman?

Mr. BARTLETT. I think we can arrange that. Go ahead, Mr. Croul. Mr. CROUL. One of the subjects we are vitally interested in around here is the proposed trainship or seatrain operation. Way back in the fall of last year we were told that negotiations were underway between the Alaska Railroad and shipping operators that could possibly provide trainship or seatrain type of service.

Right away we began to think, "Well, what will a consideration for the Alaskan shipper be in this?" And we began to raise a number of questions in our chamber of commerce board of directors. As a result we formulated about 8 or 9 basic questions, and we asked Secretary McKay to hold a public hearing on the matter, because here was the thing that was going to change the whole basic transportation pattern as far as maritime shipping was concerned. Secretary McKay wrote back and said he didn't feel the Department of the

1

Interior had any jurisdiction in the matter, and if sea-train business was already in operation, we could appeal, if we did not like it, to the Interstate Commerce Commission or the Federal Maritime Board, and he wasn't so sure at that time whether or not either, both, or one would have jurisdiction. So it left us more or less high and dry.

We were asked to meet with Mr. Kalbaugh, who was then the general manager of the Alaska Railroad. Mr. Kalbaugh held a very pleasant session with us where we asked our questions, and when we walked out we hardly knew anything more than when we walked in. We met some time after that with the Seward Chamber of Commerce in a joint session. At that time we still felt the need for some type of public hearing in the matter before the sea-train or train-ship matter was signed, sealed and delivered, and so we decided to contact Senator Warren Magnuson in Washington State as chairman of the Interstate and Foreign Commerce Committee of the Senate, and asked him to hold hearings in the matter. He finally came back and said he would hold hearings on it and one of the subjects he would look into would be the matter of sea trains.

By and large, we think the sea-train thing is a good idea. From what we know about it we think it is going to help the Alaskan shipper and eliminate a lot of breakage and pilferage.

We

We would like to get some commitments from the steamship operator that is going to handle the sea-train business and also some commitments from the Alaska Railroad in the same manner. want to know, first, if the Federal Government is underwriting the mortgage for the construction of these train ships for the Alaska Steamship Co., does this in effect constitute a chosen instrument policy for maritime shipping in Alaska?

Now the Federal Maritime Board has authorized, as we understand it, a $20 million loan. We hope that it does not mean that this is going to be set up as a chosen instrument policy and that in the future if a second carrier can get into the picture, that they will be given the same consideration.

Mr. BARTLETT. You hope they will be given the same consideration? Mr. CROUL. Yes, if a second carrier comes in. We have learned that competition in transportation is a very desirable thing up here. With special reference to our air transportation, as soon as we got competition in air transportation the service was improved greatly, and we would like to see competition in our maritime shipping.

Secondly, it has been announced that two ports have been selected for the sea-train operation. It will be a roll-on roll-off. One will be at Ames in Seattle, and the second will be the port of Whittier.

We asked the Alaska Steamship Co. representatives approximately 2 weeks ago what they would do in case of emergencies, did they have any alternative ports; and the answer was that they did not have any alternate ports today. We view this with some alarm.

We are also concerned over the fact that if, as was spelled out in the Wyre report, which was made for the Army Transportation Corps, that if the large truck vans are placed on those train ships and rolled off at Whittier, the larger type van will not clear the tunnel. We wonder what effect this will have on the trucking industry.

Now, in addition, we raise the question, What is going to happen to the service we now enjoy in other Pacific coast points? And we wonder if the same consideration could be given to shipments out of

other Pacific coast points, such as Portland, Seattle, Los Angeles, San Francisco?

Mr. BARTLETT. Why do you emphasize that?

Mr. CROUL. Because we have the coastwise line which does serve those points now, and we are interested in seeing that service continue, and we just wonder what the effect will be.

Mr. BARTLETT. Is it possible that you fear there would be a forcing of a channeling of trade through Seattle almost exclusively?

Mr. CROUL. Yes, sir.

Mr. BARTLETT. And you believe that there ought to be competitive ports?

Mr. CROUL. Yes, sir.

Now we also would like to have selected soon the agency that will have jurisdiction over the setting of the rates and service for this. I understand that this is not clear to date on who will have the jurisdiction over the trainship operation, whether the Interstate Commerce Commission or the Federal Maritime Board. We think that should be cleared up at an early date.

Now, briefly, those are the questions we raised on trainships and seatrains. We think they are mighty important and, as I say, we do favor the idea of the use of trainships, but we would like to have these questions answered by the shipping operator and also by the Alaska Railroad people.

Mr. DAWSON. I was going to say that is something that is out of the jurisdiction of this committee. We have nothing whatever to do with that. All we can do with it is make notes of it and have it referred to the appropriate committee when we get back. I believe that is the procedure we have adopted on other matters of this type.

Mr. CROUL. I might just say, in closing, it appears after all this wrangling and tumult of asking for public hearings, it looks like the deal was signed, sealed, and delivered without benefit of public hearing, and I would like to have that in the record.

Mr. BARTLETT. I have one question at least. Do you understand the inauguration of this new service will result in a reduction of rates? Mr. CROUL. When we talked to a representative of Alaska Steamship Co. about 2 weeks ago he was not sure what the rate structure would be.

Mr. BARTLETT. I suppose they are making studies on that yet. Mr. CROUL. It is going to depend on the kind of contract that they can negotiated with the unions.

Mr. BARTLETT. Was any hope held out to you that there will be a measurable reduction?

Mr. CROUL. We were led to believe that there may not be any tremendous reductions.

Mr. BARTLETT. Dr. Taylor?

Mr. TAYLOR. What passenger facilities are there from the west coast up to Alaska at the present time, water transportation? Mr. CROUL. Only the Canadian buses that are running.

Mr. TAYLOR. Any tramp steamers that carry any passengers at all?

Mr. CROUL. No, sir.

Mr. BARTLETT. Do the Alaska steam freighters carry a limited number of passengers or not?

Mr. CROUL. No, sir. Now there is one other matter that disturbed us greatly, too. In the union contract which was negotiated for