leveled off in that year was because we had no power to sell. You will note that in 1955 when Eklutna came on the line, and we made a rate reduction, the use curve became steeper. We believe our forecasts for the future are quite conservative.

No matter how we make the calculations we always come up with the same answer; that by 1947 the city of Anchorage will have used up its commitment of power from the Eklutna project. If there is plenty of water available, we might be able to obtain our full power requirements from Eklutna until 1958. The question is where do we obtain power after 1957 or 1958? There are several projects in the Greater Anchorage area or that affect the Greater Anchorage area which have been mentioned for possible development. Although they have been listed many times, I will repeat them here.

There are several sites on the Kenai Peninsula, one of which is currently being investigated by the Central Alaska Power Association, a rural electric co-op, as a potential source of power for their member agencies, a second project at Crescent Lake is being investigated by the city of Seward for a power supply for that city. We believe that the power developed from both of these projects will be needed on the Kenai Peninsula. At the present time both Homer and Seward are generating their expensive power by diesel engine driven generators. The Bureau of Reclamation has made preliminary studies on several other sites in the Kenai area. However, there is at present no active interest in the immediate construction of a power project except the two mentioned above.

The next most likely looking site for development appears to be on Caribou Creek about 55 miles from Palmer, close to the Glenn Highway. The Bureau of Reclamation is presently making a study of this site and perhaps this year, because of the financial assistance given to them by the Matanuska Electric Association and the city of Anchorage, they will be able to complete all field work so that the preliminary report can be written this winter. If the Congress appropriates money for its construction at the next session of Congress, and construction is started immediately thereafter, the city of Anchorage will have been ready for power from the plant long before it could be completed. The development of power generation at this site is what is needed most at the present time. Its rapid completion is sorely needed by the community. Any help this committee can give in expediting the construction of the plant by the Bureau of Reclamation will be appreciated.

The development of the Susitna River power potential has been considered by Alaskans for quite some time. In the past it has been a dream into the far distant future; today the need of this project or at least the initial development is just around the corner. If our present rate of growth continues, which we must presume that it will, or that it will even exceed past experience, by the time Devils Canyon will be ready to come on the line with the first unit, the capacity of Caribou will be completely used up. Devils Canyon requires considerable stream gaging and investigation, all of which takes time; time is running out. We presumed that when Eklutna came on the line, we would be pretty well fixed for power supply for many years to come, now we see that we will be out of power by 1957 and Eklutna has not yet been in service a year. We must keep ahead, we must have a firm supply of cheap power available for at least the future 10-year period before we can coax industry to come to Alaska.

There are many other sites in Alaska that should be developed. However, they do not concern the immediate Anchorage area, only insofar as their output should be tied to the rail belt transmission grid by high voltage transmission lines. The two largest sites are Woods Canyon and the Rampart site on the Yukon River.

Perhaps the next question to be answered is who is to develop these various projects? There are three Government agencies or Government-financed agencies, capable of developing hydro plants, operating in the Territory at the present time, and in our opinion each of these are logical agencies to develop certain projects. The REA financed cooperatives should develop the projects in the Kenai which would be of the most benefit to their member cooperatives. The Bureau of Reclamation should develop Caribou, Susitna, in fact all other sites that are single purpose power projects. The point that we must put across to Congress is that the Bureau of Reclamation operating in Alaska is not competing with private enterprise. Private enterprise in the power business in Alaska is an insignificant percentage of the total. A vast majority of the power distribution and generation is either municipal or REA financed.

The Corps of Engineers is the logical agency to develop any multipurpose dams such as the possible flood control of the Knik River by the Lake George ice dam project. A permanent dam to hold back the waters of Lake George

and control the discharge of the lake would be of great benefit to this community in the control of the floodwaters of the Knik River, and would also develop a substantial amount of power close to the city of Anchorage. An additional benefit in the control of Lake George would be the possibility of the establishment of a low-head powerplant on the proposed Knik Arm causeway when such is built. The Corps of Engineers would be the likely agency to construct the causeway and companion power facilities.

We believe that some attention should be given to a possible longer period of financing being_allowed by the Congress for projects in Alaska which are built either by the Bureau of Reclamation or the Corps of Engineers. To use an example, if the amortization period for the Eklutna project were increased sufficiently, it would enable us to obtain truly low-cost power from the project.

The city of Anchorage is behind the Bureau of Reclamation to the limit as the agency to develop and furnish power to the city of Anchorage and to operate the power grid and the power pool. We have demonstrated our cooperative attitude toward the Bureau by contributing funds to assist in the investigation of the Caribou site. The city of Anchorage has no desire to be in the generation business. We would much prefer to buy at wholesale from the Bureau of Reclamation. We believe that all efforts should be made to make such authority and financing as are necessary to develop hydro power in Alaska available to the Bureau of Reclamation so that they can proceed in the development of power. The Bureau has given us the lowest cost power to date. They are in business at Eklutna, and they have the administrative organization set up. We believe that they should continue in business and be the major power generation and wholesaling agency in the Territory. Any hydro plants constructed by the Corps of Engineers should be turned over to the Bureau for operation.

The Bureau of Reclamation is probably the only agency in the Territory who would be able to enter into an integration agreement with the military establishments in order to use the generation facilities of the military to maximum efficiency. I speak now of the use by the military of dump energy generated from excess stored water in Eklutna Lake during the summer months when the heat load is low on the military steam plants. In the wintertime when civilian peak demands are high and military demands for steam heat are high for heating purposes, they would be able to furnish excess power to the power pool through the Bureau of Reclamation.

To sum up in a few words how this committee can assist the greater Anchorage area in their power problems, we will list them in order.

1. Expedite the necessary legislation to finance and authorize the Bureau of Reclamation to proceed with the construction of a project as soon as the Bureau reports that a project is feasible and recommends construction. As has been pointed out, additional generation facilities will be needed just as soon as they can be installed. Speed in approval of the next project is important.

2. Recommend legislation to grant an extension of the amortization period of loans in the Territory of Alaska for power purposes so that we may obtain truly low-cost power.

3. Recommend passage of the necessary legislation to put the Bureau of Reclamation in the power generation business in Alaska on a permanent basis, not on a year-to-year basis as at present.

4. Assist in convincing the military authorities that cooperation with the Bureau of Reclamation in the interchange of energy and use of excess energy from Eklutna would be in the best interest of their economical operation.

5. Recommend legislation which would permit municipalities of Alaska to obtain Federal insurance on utility revenue bonds so that a more favorable interest rate could be secured.

6. Recommend that the Corps of Engineers investigate and construct, if feasible, flood-control works and a powerplant with transmission lines at Lake George, and the causeway and low head power facilities at Anchorage.

Mr. BARTLETT. Thank you, Mr. McKinley, for a very clarifying statement.

As Mr. O'Brien has suggested and as the committee members agreed, we will defer questioning until all the witnesses for the city have appeared. Is that agreeable?

Then we will proceed with the next witness.

Mr. SHANNON. Mr. Chairman, I wanted to point out to the committee that the Corps of Engineers has been very gracious in making

some displays available to the committee here in the auditorium, and the power project that Mr. McKinley was describing would be found on the map displayed in the rear of the room and this map here is other types of civil works projects that the Corps of Engineers is proposing in the Territory of which we have interest in 1 or 2.

Mr. BARTLETT. We had noticed those displays when we came into the room, and we were most grateful to Colonel Farrell and those associated with him for making them available. They really help us. Mr. SHANNON. Mr. Chairman, we would like next to present evidence of the serious efforts on the part of the city and it's energetic citizens to promote economic development as further illustrated in a description of the efforts and progress toward construction of a seaport to serve western Alaska. The Anchorage Chamber of Commerce will have a separate presentation on this subject later during these hearings. However, the city would like to present Mr. Fred Axford, a member of Anchorage Port Commission, to introduce the subject and acquaint the committee with the city's participation in this program. I would like to introduce Mr. Fred Axford.

Mr. BARTLETT. Mr. Axford, would you be seated and identify yourself for the sake of the record.

STATEMENT OF FRED AXFORD, MEMBER OF THE ANCHORAGE PORT COMMISSION, ANCHORAGE, ALASKA

Mr. AXFORD. I am Fred Axford, member of the Anchorage Port Commission.

Mr. BARTLETT. By way of preliminary is that a permanent position being a member of the port commission?

Mr. AXFORD. Yes, it is until we have established a deep water port probably.

Mr. BARTLETT. Are you members salaried?

Mr. AXFORD. No, we are not.

Mr. BARTLETT. You are in business here, Mr. Axford?

Mr. AXFORD. Yes, sir.

Mr. BARTLETT. And serving on the commission as a civic duty? Mr. AXFORD. Yes, sir.

Mr. BARTLETT. Proceed in your own way.

Mr. AXFORD. Mr. Chairman, Congressman O'Brien, Delegate Bartlett and members of the committee, I too would like to welcome you to Alaska and to Anchorage. I have had the opportunity of meeting some of you personally, and I do know that some of you are the hardest working of Congress, and we in Alaska do appreciate that because you have our problems and we appreciate your efforts to solve some of them. We know you spend many hours listening to testimony, some of it is not of the greatest interest and some of it is a little bit long winded. I would like very much to be able in a few minutes to talk about the rail belt transportation problem and the ports that serve the rail belt, and tell you about the various Government agencies that are involved and some of the obstacles that we must overcome if we are to develop a deep water port in Anchorage. I am very reluctant to read a statement. However, because of the complexity of the problem, I am sure it will be much more concise if I am allowed to read the short statement.

Mr. BARTLETT. Surely, Mr. Axford, proceed.

Mr. AXFORD. Again I say the subject is the Anchorage deepwater port project.

Historically, the advantages of Cook Inlet as a water route into the central portion of western Alaska has been recognized prior to the purchase of Alaska by the United States and has been discussed and talked of ever since. Anchorage being the largest Alaskan city and located in the upper reaches of Cook Inlet, its location is ideal for a deepwater seaport. It has taken considerable time to overcome the obstacles that have made the project one of discussion rather than action. As more knowledge has been accumulated with regard to the waters of Cook Inlet, the tides, siltation, and ice, many of the obstacles are gradually being eliminated so that the time has come for the idea to cease being a topic of discussion and now become a project of action.

The District Corps of Engineers has made considerable engineering studies on a location of a port in Anchorage, going into feasibility both as to economics and engineering. In their harbor and rivers in Alaska survey report, Interim Report No. 2, Cook Inlet and Tributaries, dated January 20, 1950, they have justified the construction of a deep water port and justified the economic feasibility of such a project. In 1955 another feasibility report was submitted by the corps to the Bureau of the Budget strengthening the feasibility in light of current conditions as making it more feasible now than appeared in 1950. The Anchorage Port Commission, the city of Anchorage, and others have endorsed this project on every available occasion. In trying to bring about its construction, there have always been new obstacles placed in the way. The Federal interest in the project has been minimized because of the military necessity of constructing two military ports that were usable year round-the port of Whittier and the port facilities at Seward. In order to provide these two facilities as military necessity, the Government has spent many millions of dollars, but they should be recognized as military expenses. The port at Seward and the port at Whittier are now serving as ports of entry for military cargo and civilian cargo but in order to transport this cargo from these two ports of entry, the shipper, whether it be the Federal Government or private enterprise, pays a considerable rail freight bill to the point of use, which in most instances is the Anchorage area. We have no complaint against these two ports that have been built on the basis of military necessity, but our complaint is that the people in the interior of western Alaska should not have to pay penalties and freight charges for civilian freight in order to justify these military expenditures. The construction of the two ports at Seward and Whittier, as military necessity, has been an obstacle to overcome to obtain Federal participation in the location of a port where it is most needed the Anchorage port. The port commission has worked diligently on this problem since the original report of the Corps of Engineers was submitted, but the obstacles that they have encountered, caused primarily by the construction of the two year-round military ports, have been extremely discouraging.

In 1952 and again in 1954 the city, in order to further evaluate the economic merits and benefits that would be derived to the local shippers if the deepwater port were located here, had two economic feasibility surveys made. Needless to say, these reports have con

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curred with the Corps of Engineers' reports. It has frequently appeared that the only solution to our port problem is to share in the cost of port construction. Therefore, in October 1954 the voters of Anchorage approved the authorization of a $2 million bond issue for an Anchorage port. This $2 million would be raised by sale of general obligation bonds, and it has been offered as a local contribution to the construction of the port facility suggested by the Corps of Engineers, which would ultimately cost $5 million. Because of the many projects which confront the Congress, the Corps of Engineers, and the impediments that have been constantly placed in the way of port development in Anchorage, it became apparent that any appropriation for the port facilities by the Federal Government would probably be 2 to 3 years distant. All feasibility studies have indicated that the time to build the port is now, and this was substantiated by the voters when they approved the $2 million bond authorization. The Corps of Engineers have indicated that constructing the port by the city alone would not hamper the corps' plans, but that it would be necessary to get the project authorized by Congress before the city started construction if additions to the port, as a Corps of Engineers civil works project, were ever to be accomplished. The city is now spending $50,000 for a preliminary engineering and performance feasibility report for the purpose of selling bonds. We are hopeful that we can start construction of this port in 1956, but before we do, we are urging that the Congress vote authorization on the Corps of Engineers Anchorage port so that any money we spend would reflect as the city's contribution to the ultimate port development by the Corps of Engineers.

Should it be the city's decision to proceed with construction in 1956, there will still be intergovernmental problems that will have to be solved. The land on which the port is to be built and the onshore area required to be made available to augment the port installation are now under the ownership and control of three Federal Government agencies; namely, the Army, the Air Force, and the Bureau of Land Management. Should present Federal regulations governing the actions of these departments of the Federal Government prohibit satisfactory leasing, transfer, or other means of long-term usage of the land involved, then we would be requesting some special legislation to permit proceeding with the construction of the port. The military departments have indicated their support of the project, and the Bureau of Land Management has stated that the tideland portion should be readily available for this purpose. Lt. Gen. J. H. Atkinson, commander in chief, Alaska Command, in a letter of March 1, 1955, addressed to the city of Anchorage, stated as follows:

I have always advocated timely expansion of community facilities in Alaska, including a port for the city of Anchorage. I feel certain that if such a facility is constructed it will greatly assist commercial enterprise and the military may also benefit therefrom. From a military standpoint, at least two year-round open water ports are required to furnish logistic support to the forces stationed in Alaska. To satisfy this requirement, the military determined several years ago that seagoing logistic support could best be provided by the use of the ports of Whittier and Seaward. Therefore, these two ports are still essential. However, the development of port, facilities in Anchorage, as well as other ports in Alaska,