Congressman RIVERS. Yes, Mr. Chairman.

Is this fish in these carloads in bulk, or is it packaged?

Senator ENGSTROM. Practically all of it, as I said, is packaged. We ship some large halibut, 60 to 80 pounds, and over 80 pounds, loose, and they are fleshed down in Los Angeles. We have sold some to Booth, and they are taking some loose to Seattle. They are all of the big-sized fish.

Congressman RIVERS. Did you use the word "fleshed"?
Senator ENGSTROM. Fleshed, yes.

Congressman RIVERS. Do these boats haul much in bulk for you?
Senator ENGSTROM. Well, they haul what we do ship.

Congressman RIVERS. I see, and then, are the rates reasonable? Senator ENGSTROM. Are the what?

Congressman RIVERS. Are the rates reasonable are the freight rates reasonable?

Senator ENGSTROM. We share in the cost of the trip, and whatever it is, our companies pay whatever the assessment is.

Congressman RIVERS. Does the Alaska Steam stop at Prince Rupert?

Senator ENGSTROM. I don't think that they have stopped at Rupert for several years; that is only a surmise. I believe when they had the Lucidor and the Palisana there, several years ago, they did stop in Prince Rupert. I don't think they have made any calls at Prince Rupert now for several years.

Seantor BARTLETT. Any further questions?

Mr. BARTON. You say that you're a commission buyer. How are the transportation arrangements made with the Charter Association? Senator ENGSTROM. What is that?

Mr. BARTON. I believe you stated you are a commission buyer; is that right?

Senator ENGSTROM. That is right.

Mr. BARTON. How are the arrangements made for transportation? How do you pay for it? Who makes the arrangements to pay for it? Senator ENGSTROM. I don't pay for it at all. It is paid through the companies as they get the fish, they pay all the freight and like charges.

Mr. BARTON. Well, please explain to me, sir, do you buy for the companies?

Senator ENGSTROM. Yes. I am on a commission basis, just like you buy a stock of grain or something that you buy on commission. It has nothing to do with the storage charges on the fish, or the freight, but it does apply to all labor on that fish and it does apply for the containers that we put the fish in. That is the commission that I get.

Congressman RIVERS. I see. And the members of the Ketchikan Charter Merchants Association then pay for prorata for the use of the vessel?

Senator ENGSTROM. That is what I understand, sir.
Mr. BARTON. That is all.

Senator BARTLETT. Thank you, Elton.

Senator ENGSTROM. Thank you, Gentlemen.

Senator BARTLETT. Our next witness is Marshall Erwin.

STATEMENT OF MARSHALL ERWIN, OF JUNEAU, ALASKA

Mr. ERWIN. Senator Bartlett, Congressman Rivers, members of the committee, and gentlemen, my name is Marshall Erwin, address box 662, Juneau, Alaska. I am in the retail grocery business. I have been in that business for over 22 years. I formerly worked in the mine and coming from that and starting in the grocery business, 22 years ago.

We have probably worked as much with the charter boats as anybody in southeastern Alaska, having had an experience of over 12 years. It has been necessary for us to use the service of these boats for that time to get our-to provide a service that we felt was necessary to the operation of our business.

I want to ask for an extension of this Public Law 85-739, allowing for the charter boats to operate until we can get on another service to complete, along with the one that now exists, which we feel would be adequate to our needs.

This is a big area, and the needs of our new State in water transportation are very important. Southeastern Alaska is being inadequately served by one existing carrier. It is true they give Juneau and some of the larger towns weekly service; some of them don't get that. But even a weekly service, we do not feel is adequate for our needs, and we are willing to spend our money, and go to tremendous amount of expense and trouble to provide an additional service into Juneau, and into the other towns that we-that our boat calls upon. Now, I don't want to confuse you by representing that we ship most of our stuff on these charter boats. I don't. I ship most of my stuff on the Alaska Steamship Co., or at least, half of it; but we do not feel that we-if we shipped all of our stuff, or cargo, on this one line, that there that it would be adequate to our needs.

And, another thing, that I want to impress upon this committee, is that this charter association, which is, or was recently incorporated, last month in fact, is a temporary thing, existing, so far as I am concerned, and I am sure as far as the other members of the corporation are concerned, that it is only existing until we get adequate service into this country. I am not interested in getting into the steamship business, or into the boat business; I am interested in running a grocery store. But we have found it necessary, because the service was not adequate. Our little cooperative boat service does not haul freight for hire. It is used solely by its members. It calls at Juneau, Ketchikan, Wrangell, Banks Island, Tokeen, Klawock, Craig, Metlakatla, Tangass Harbor, and Yes Bay.

We started my business, and my store, and several others started 12 years ago, chartering small boats-not the Ketchikan Merchants Association, but a different group of boats, the Robert Eugene and some other boats that we had, at that time.

And the reason that we did that was because we did not like the service that we were receiving from the one existing carrier at that time. Since that time, and since our boats have been in operation, most particularly since the Ketchikan Merchants Charter Association has been in operation, this service has been very much improved. In the last 2 years, it has been especially improved.

But we do not believe that if our charter company went out of existence, and was forced to disband, that that service would continue. I do not-I believe that the human factor would prevent it. I do not believe, if I owned the only grocery store in Juneau, that my service would continue as good as it is now, either. And I think that all of you men will agree with us.

Previous to the existence of our charter boats, the one existing carrier was on an irregular schedule. It called here once a week, usually, but it didn't keep a regular schedule. If it was convenient for a cannery dock, or some other place, to cause them to reverse the order of their operation, they would do so, and we would be setting there with a highly perishable cargo on board, and it would arrive 4 days' late, while we were waiting for the stuff to come in, nothing to sell in our stores of that nature and, a few days later, we would get another shipment from another boat and it came in and pile on top of it, and then we would have an oversupply; and such things as that is what prompted the creation of these little boats.

If it was inconvenient-and it was often inconvenient to bring everything that we had ordered-they would leave it behind and then let another boat pick it up a week or so later. Now, in the grocery business, that is very inconvenient, especially when you are handling perishable stuff-and especially when you are handling fresh milk, needed by people to-for their children and for their families. The one lone dairy here does not suffice for our needs. It is true, now, we can get fresh milk on the one existing carrier. I do not believe that it would be continued to be carried if the services of our boats went out of operation, because I think that they are probably handling it at a loss, the way it is being handled, and I think that it is very inconvenient. They have repeatedly told me so.

We have had the greatest difficulty in getting claims from the one existing carrier previous to the operation, that we now have, of our small boats. If they were either refused, or made so difficult that it was not worth getting them after they were the trouble of going to get the claims, that we would apply for them. Because the trouble was worth more than the claim itself, in many cases. That is not true now. The last 2 years, we can get any claim in a matter of minutes, or days, plus 10 percent, in many cases, but I do not believe that that would exist, if there was not any other carrier coming into this area.

Now, I want and I am not trying to attack that company; I am saying that it is just a human quality of such things, of one single monopoly like that that would exist if our boats, and the small boats in this area, were to cease operations.

I believe that it is a human thing for such things as that to come about. I am not attacking that company, because I would support that company just as quickly as I would support our little boats, because we most assuredly don't want to lose this Alaska Steamship Co., or any other carrier coming in here. We need all of the services into southeastern Alaska, and all of Alaska, to develop this State. We don't have anywhere near enough service. Certainly, we are not trying to lose any.

But, if we lose the service which we are providing, we don't think that we will have the things which now exist, and that they are trying

so desperately to provide, in order to show that the our little charter boats are unnecessary.

I believe that the assertion that has been made about our boats of being an unfair practice by not coming up to Coast Guard inspection, and not to the equal that a ship has to, to ship, over 150 gross tons has to meet with, Coast Guard regulations, to come into-to be as a common carrier, I believe that charge that we are unfair is not true. I believe a condition which would force merchants and business people living in the country, to go out of their way and form an unprofitable, nonprofit line of boats to haul their own goods i nhere, is not unfair, no matter what the circumstances might be, especially when the company that the common carrier has seen fit to lower some of their rates in the last year. Now, they have changed the rate on quite a few items that I use, paper goods; they have changed the rates on a case of toilet paper from something over $5 down to 77 cents-they have changed the rate of it. It was, from coming cubic, they changed it to a weight basis, and it made that much difference in our rate into Juneau. They have changed the rate on eggs, from something around 10 cents and I am talking about wharfage and handling included in the ocean freight which used to cost us around 10 cents a dozen, now costs something less than 4 cents a dozen; and if our little boat lines were hurting those companies this company, seriously, financially, I don't believe they would be lowering the rates on these items.

These companies this company, I understand, is given the privilege of getting these ships for something around a dollar a year, made available to them, which is not made available to our boats. We have to go out and charter them by the month, or by the day, at a high rate-it is terribly expensive to get, and procure boats; they are hard to find, and it is hard to furnish them, and we have to pay a full price. We get nothing from anybody, in the way of a subsidy or anything, and to furnish our own goods up here, and it is not cheap, and certainly it is not an economy measure that we use to justify the existence of this small-boat operation. It is the service that we want; actually, it costs us more than it would be cheaper for us to ship on a common carrier, than it does now, but we feel that it is justified, because we need this service, and I can assure you that it will only go until such time as there is some other service comes into this community.

Now, why there isn't another steamship company serving southeastern Alaska, I don't know.

I do know that there have been a number of them, and they have gone out of business, presumably because it was uneconomic to operate. I believe that the last time that one went out of business, it was purchased by the existing carrier, which reduced it down to one. The other line-some years ago, we had three steamship companies coming into Juneau, and presumably the other-the first one went out of business because it was unprofitable; the second one went out, it was purchased by the other one and a merger some sort of a merger was made. I don't know the details of that.

But I do know that we do not have a good enough service. One service a week is not adequate to a country like this, not if it can be provided more than that. And one only company serving a community is not adequate. I do not believe that it would be good business for

the United States to be served by one political party. I think that you gentlemen will agree with that. We have a shining example across the Pacific Ocean over here of that now. It should be more efficient for one political party to serve the United States than it would be for two, because they could cut a lot of costs, and they could effect a bunch of economies that should be practicable; but the human element enters into that, and it isn't practicable.

And dictatorships are not in the best interests of the people, and for that reason, I believe that monopolies are not in the best interests of the people, either. And I do not believe that our Government will permit this large "country" newly started, and organized into a State, to be at the mercy of a monopoly in the steamship business; and I am not attacking that company; I am not-don't mean anything mean; I just mean the plain facts that I don't believe that it would be good business for any company to have a monopoly on the steamship business serving this country. It just isn't commonsense; and certainly, it would not be to the best interests of the people here.

And I certainly implore you men, and our Government, to allow this extension of our little boat company to run to be extended until such time as someone will create another service into this country, and help give us an adequate and competitive and I emphasize the word "competitive"-service.

Alaska is rapidly expanding, and in just a very few years there will be a big change in the economy. We are going to have pulp mills here, we are going to have power developments in this country, possibly many types of mining will be opened up; many natural resources will be developed. It will bring tens of thousands of people into this country; and in such time, it will bring an economic opportunity for adequate service.

That is all that I have to say. I thank you, gentlemen.

Senator BARTLETT. Mr. Erwin, did you say that you ship half or more of your goods by Alaska Steam?

Mr. ERWIN. I do.

Senator BARTLETT. Do you do that because the charter rates are a bit higher?

Mr. ERWIN. Well, I do it because it is a better service in a proportion of our goods. We ship some of our perishables and things of that nature, if we want quick service, and some of it is better suited to the small boats and some of it is better suited to the ships. We divide it up.

Senator BARTLETT. Which type of goods is best, is better suited to each class of service?

Mr. ERWIN. We ship nearly all of our perishables on the small boats.

Senator BARTLETT. Why?

Mr. ERWIN. I ship some fresh meat on the van which the Alaska Steamship Co. is providing; and I say, in all truthfulness, that that service of fresh meat is not too satisfactory, as I have found, because it doesn't arrive in a good enough condition. We have had claims on it for the last 2 or 3 weeks, we have had some bad claims, and serious losses on that. The claims have been paid for, but it is not a satisfactory arrangement. We get better service, and better handling, on the small boats, for perishable items. We ship all of our