at that time, although frequent and constant attempts have been made to discuss water and road problems with the Canadians and efforts have been made to get some kind of a commission for joint studies, so that these problems could be worked out. Mr. CHENOWETH. This water rises in Canada? Mr. ANDERSON. At the Taiya site, the water is in the Yukon Territory, and it was proposed to build a hydroelectric dam near Whitehorse to reverse the flow of the Yukon and drop it into Taiya Inlet near Skagway, and there is a drop there of approximately 2,000 feet. Mr. CHENOWETH. If Canada wants to use the water that rises in Canada, there is nothing we can do to prevent them using it, is there? Mr. ANDERSON. I think there is, sir. Mr. CHENOWETH. What is it? Mr. ANDERSON. I believe they must give some consideration to the rights of the downstream owners. Mr. CHENOWETH. Why do they have to? Mr. ANDERSON. Because those lands belong to us. The doctrine of riparian rights should, and I believe does, stipulate that the upstream owner may not do things without consultation which would injure the fellow downstream. Mr. CHENOWETH. The riparian doctrine is that the upstream user can use all of the water he can beneficially; is it not? Mr. ANDERSON. I don't think so, not without consultation with the downstream owners. Mr. CHENOWETH. I never heard of that consultation before. Mr. BARTLETT. Is it not true that the treaty written about 1870 covered in a general way this very subject? Mr. ANDERSON. Yes, there is a treaty. As a matter of fact, there have been several of them, including the treaty of 1911. There have been a whole series of them which dealt with this problem, and I believe the treaty of 1872 dealt with it specifically. Mr. BARTLETT. Off the record. (Discussion off the record.) Mr. CHENOWETH. Is there anything in the way of a treaty that protects you from the Canadians in the use of this water? Mr. ANDERSON. I believe that the treaty of 1872 stipulates- Mr. ANDERSON. No, I am not, sir. Mr. CHENOWETH. It has never been interpreted? Does it specifically mention water? Mr. BARTLETT. Will my colleague yield? Mr. CHENOWETH. Yes. Mr. BARTLETT. Is it true that the treaty does cover at least in a general way this subject? Mr. ANDERSON. Yes. Mr. BARTLETT. It is true it has been interpreted to the point where the State Department believes it does and has initiated conversations with the Canadian Government based on the treaty in respect to the given situation. Mr. CHENOWETH. I was going to say, in the absence of some such treaty you certainly haven't any protection that I can see. I don't see how you can criticize the Canadians for using this water in any way they want to. It is their water. Unless you have some treaty, they are not going to consider the lower stream users. Mr. ANDERSON. I don't think so, sir. Mr. CHENOWETH. It is purely an international matter? Mr. ANDERSON. It is purely an international matter. That is correct, sir. But I think that our State Department feels, and I think that most of us agree, that some protection must be afforded to the downstream owners. Mr. CHENOWETH. As a matter of right it should be, but I just wondered if it actualy exists. That is my only question. Mr. BARTLETT. Judge Chenoweth, they may have an ace in the hole, but we may have a king in the hole because we have the land outlet the Canadians will have to use. Have you finished that particular subject yet? Mr. ANDERSON. Shortly. Mr. BARTLETT. We will now recess and you return when the committee reconvenes at 1:30 o'clock. (The balance of the statement submitted by Mr. Anderson follows:) OUTLINE OF TOPICS TO BE DISCUSSED BY ALASKA RESOURCE DEVELOPMENT BOARD BEFORE O'BRIEN COMMITTEE I. Minerals (a) Release of PLO 82 with implementing legislation providing that sections 16 and 36 go to the territory (b) Revenues from coal leases (c) Changes in coal acreage limitations (d) Modification of assessment work law (e) Tin (f) Chrome (g) Accelerated mineral surveys by USGS and Bureau of Mines (h) Mining tax incentive program II. Lands (a) Release of PLO 82 with implementing legislation providing that sections 16 and 36 go to the Territory In 1943, as a wartime measure, some 48 million acres of land in Arctic Alaska were withdrawn from public entry-part of it by the Department of the Navy to establish Naval Petroleum Reserve No. 4 and the remainder by the Secretary of the Interior under Public Land Order 82. The Navy conducted extensive petroleum investigations in this area with the assistance of the United States Geological Survey and a natural gas field in the Gubik area was discovered after test wells had been put down. The United States Geological Survey estimates that sufficient natural gas is available in the Gubik field to supply the industrial needs of Fairbanks and the Railbelt area for the next 50 years. In addition to the gas discovery at Gubik, petroleum was found in attractive quantities at Umiat. Both the natural gas and petroleum are securely locked up under provisions of the order creating the reservations. We urge the committee to insist that the Secretary of the Interior make this land available for public entry so that private capital may have a chance to investigate and develop the Gubik and Umiat fields. Implementing legislation should be designed so that school sections 16 and 36 in place would belong to the Territory. In this way, the people of Alaska will have an opportunity to be relieved of some of the heavy costs of operating its schools. (b) Revenue from coal leases For some unknown reason coal leases in Alaska operate under the General Leasing Act of October 20, 1914 (38 Stat. 741-48 U. S. C. 434) and the amendments to it while oil and gas leases operate under the provisions of the General Leasing Act of 1920 (41 Stat. 437 U. S. C. sec. 191). Under provisions of this latter act, the Territory receives 37% percent of all proceeds derived from oil and gas leases operative in the Territory. Under provisions of the act of 1914, which is the controlling legislation on coal, the Territory receives no revenue whatsoever. It appears to us that inclusion of coal leases under the act of 1914 was an oversight on the part of Congress and that Congress probably did not intend to deprive the Territory of its share of revenues from coal leases. This is a matter which Congress could correct and one which would certainly have the approval of the executive branch of the Government. In correcting this oversight, the least that Congress could do would be to make coal leases in Alaska subject to provisions of the 1920 statute instead of the 1914 act. Delegate Bartlett has proposed legislation which goes further than this and provides that Alaska should receive an amount from its coal, oil, and gas leases equal to the amount now given the 48 States. We urge members of this committee and their colleagues to take steps which would correct the present injustices. (c) Changes in coal acreage limitations Congress has also placed restrictive limitations on the size of coal leases in Alaska, again for reasons which are not clear to us. Under provisions of law applicable to the States, individual lease holders may operate coal leases up to 5,120 acres and Alaska lease holders are limited to 2,560 acres. discrimination works to the marked detriment of the Territory. (d) Modification of assessment work law Again, this This committee and Members of Congress are to be congratulated on the passage of Public Law 167 which defines and limits the use to which mining claims may be put. In addition to this legislation, the Territory desperately needs a change in the assessment work law which would require mining claimants to file an affidavit of annual labor. At the present time claim holders are not required to file such affidavits and mining companies examining records in the various recording districts have no way of knowing whether lands are open to mining location or not. (e) Tin Legislation is now pending in Congress which would provide for a guaranteed price for Alaska produced tin of $1.25 and $1.30 per pound. This legislation is desperately needed. Alaska's potential tin producers need some assurances of a set price for this product-a price which would enable Alaska mines to continue operation and do necessary exploration work. The only tin producing mine in Alaska has already been caught in this fluctuating price squeeze and has been compelled to terminate its operations temporarily at least. There are other tin mines in Alaska, particularly in the Seward Peninsula, which could and would operate if they were assured of a reasonable price for their product. Such legislation would not place an undue burden on the taxpayers and would, in fact, cost the people of the United States nothing if it is determined that Alaska mines cannot operate at $1.25 and $1.30 per pound. We believe that they can operate at this price. The legislation proposed would not only insure the operation of Alaska's placer tin mines but would also lead the way to additional capital investments in the Seward Peninsula which needs yearround payrolls desperately. (f) Chrome Alaska's Kenai Peninsula has some promising deposits of chrome which are now being worked, but the Executive veto of the strategic metals stockpiling bill has placed these Alaska operations in the "bite of the line." Legislation should be adopted to provide the chrome producers of Alaska and the United States with a fixed market and a guaranteed price. (g) Accelerated mineral surveys by USGS and Bureau of Mines Both the United States Geological Survey and the United States Bureau of Mines have been and are conducting extensive mineral exploration programs in the Territory. Because of the necessities of war years, most of the attention of the USGS was devoted to its petroleum exploration program in the Arctic and its mineral program suffered extensively because of this fact. The Bureau of Mines was required to devote most of its attention to coal and nonmetallics in the Railbelt and was unable to carry extensive programs in other areas. It appears to us that provisions must be made so that both the Geological Survey and the Bureau of Mines can carry out a program of accelerated mineral surveys in those areas in Alaska which best lend themselves to development. This is particularly true of the Copper River area. It is our understanding that the USGS had been compelled to wait for aerial photographs of the Copper River area from the Air Force before they could continue their work in this district. This entire area should be surveyed as a unit so that mining people will have at least some of the information that is needed in order to carry out an intelligent exploratory and development program. (h) Mining tax incentive program Alaskans are impressed by the mining activities which are going on directly across our border in British Columbia and the Yukon Territory. We are particularly impressed because of the fact that many of the dollars going into this program are American dollars. The reason that American dollars go to Canada is not based on the fact that Canadian mineral prospects are brighter than our own. One of the principal reasons why American capital has been moving into Canadian mining enterprises is that the Canadian Government grants a 3-year tax exemption during the initial operating period of each mine. We must emphasize as forcefully as possible that mines do not become revenue producers with the first car of ore. Canadian lawmakers understand this and in order to encourage the development of their own mineral resources they provide a 3-year period in which no income taxes are required. This gives Canadian mining companies an opportunity to get on their feet. The Western States have long advocated such legislation for the United States, and Alaska joins them in requesting that the mining industry be given a break so that the Territory's potential producers might become active mining companies. Our geologists know that the mineral resources of this North country do not stop at the Canadian border. In order to overcome some of the handicaps faced by the Alaska mining industry, the Federal Government should establish a taxincentive program-even as the Territory does-a program similar to the one that is working so successfully in Canada. (a) Territorial title to tidelands II. LANDS Under provisions of law, the 48 States have title to their tidelands which extend to the 3-mile limit. Several bills have been introduced in Congress which would give the Territory some kind of title to its own tidelands. These coastal lands of Alaska-including islands, bays, and inlets-are more than 30,000 miles in length. Delegate Bartlett has introduced legislation which would give the Territory the right to lease its tidelands. The Territory, as a matter of right, should not only have title to its tidelands but should also have the authority to dispose of these lands either by sale or lease. It appears to us that the least Congress could do would be to give the Territory title to those lands between low and high tide. Alaska is now in the ridiculous position of being compelled to go before Congress in order to secure title to lands upon which a new industry might wish to construct its facilities. In one case Congress did act promptly upon the request of Pacific Northern Timber Co. to secure title to certain properties near Wrangell, Alaska, but we have no assurance that this will always be the case. With new industrial developments in the offing, Alaska cannot afford to wait for Congress to take action on individual applications. Substantial portions of the towns of coastal Alaska are built on tide flats. This includes our own municipal building and much of the property in Juneau. At the present time, these lands are held in trust for the future State of Alaska and they exist in no man's land where it is impossible to secure title without congressional action. The Territory should be permitted to sell or lease these lands. The Territorial Department of Lands would be able to work out satisfactory arrangements with each municipal government so that municipal and private properties now located on tidelands could be transferred to present occupants in an orderly fashion which would also protect the interest of upland owners. Lands outside of the towns could be disposed of by the Territorial Department of Lands without Alaskans being compelled to go to Washington. The fact that the Territory has no ownership of tidelands is seriously hampering the exploratory program of one of the major oil companies interested in Alaska. Therefore, Congress should take immediate steps to transfer ownership of the tidelands of Alaska to the Territory regardless of whether it becomes a State or not. (b) Immediate grants of Federal lands to Alaska All of the statehood bills provide for substantial grants of federally owned lands to the Territory. If Congress is willing to grant these lands to the State of Alaska, it should also be willing to make substantial grants to the Territory of Alaska so that it would be possible for the Territory to make lands available for industrial develoment. This would create new sources of revenue for the Territory so that it would be in a better position to assume the obligations of statehood. (c) Restoration of lands to public domain We have previously pointed out that some 97 million acres of federally owned land have been withdrawn from all types of appropriation so that it is impossible for the citizens of Alaska to use these lands for any purpose. While steps have been taken by the Department of the Interior to restore some of these lands to public domain, every effort should be made to see that the Department of the Interior, the military, and others restore those lands to public entry immediately which are not needed for other legitimate purposes. (d) School lands It has been estimated that about four one-thousandths of the Territory has been covered by rectangular surveys. Failure of the Federal Government to provide adequate land surveys has deprived the Territorial school system of a lucrative source of revenue which is open to most of the 48 States. Under provisions of law, sections 16 and 36 in each township are set aside so that revenues derived from these sections may be used for school purposes. Because of lack of rectangular surveys, the Territory's schools are deprived of thousands of dollars of revenue each year. Even those sections which are available to the Territory are so hemmed in by restrictions that it is impossible for the Territory to lease these lands to those who might wish to use them. At the present time, the Territory may lease school lands for a period of 10 years only. Legislation has been introduced in Congress which would permit the Territory to lease school lands for 55 years. This seems to us an intelligent provision which should be immediately enacted so that the Territory's school system could realize some revenue from these lands. Without such a provision the Territory will get little or no use from its school sections. (e) Birch timber cruise The forests of interior Alaska have been under the control of the Bureau of Land Management for more than 30 years. Appropriations for the control and management of these forest lands have been so minute that the Forestry Division of the Bureau of Land Management has been able to do little with them. Some of the most valuable of these lands are covered with fine stands of Alaska white birch in the rail-belt area near Anchorage. During the entire history of the management of the Talkeetna and Knik birch stands, no adequate inventory and timber cruise has ever been made. Not until this year have the foresters of BLM been able to make even a preliminary reconnaissance timber cruise of the Talkeetna and Knik birch stands. These foresters inform |