Senator BARTLETT. Well, everything rises, and I was just wondering as to the comparative rate of rise, and you wouldn't be expected to know that.

Mr. KINNAIRD. No; I am not

Senator BARTLETT (continuing). Without some research.
Mr. KINNAIRD (continuing). I am not an economist.

Senator BARTLETT. Off the record, when I first went down to Washington, when I appeared as a witness before a committee, on any one of my bills someone would always ask me how many inches of snow fell each year at Dry Gulch. And I wouldn't know, and would so state, and he would be very unhappy, and so would I. Well, I got next to myself, and when they asked me that, whoever he might be, I said "27 inches," and everyone was happy. [Laughter.]

We aren't economists, either, and you could have said almost anything. [Laughter.]

Thank you, Mr. Kinnaird, for a very excellent statement.

Senator BARTLETT. Mr. Perley?

Mr. PERLEY. Mr. Chairman, I would like to ask Mr. Kinnaird: On page 6, in the paragraph speaking on S. 1507, you make the statement that this bill would superficially, at least, seem to provide mechanics by which through single-factor rates could be maintained.

Mr. KINNAIRD. Yes.

Mr. PERLEY. But you go on, with the next paragraph, discussing the particular situation of Garrison Fast Freight; but I don't believe I throughly understand why that is only a superficial concern.

Mr. KINNAIRD. All right. Mr. Perley, if the ICC had jurisdiction over the entire transportation picture between Alaska and the other 48 States, as is set forth in that bill; in other words, if they had the exclusive jurisdiction that they desire, it would include the common carriers by water; the Alaska Steam, for example, would come under ICC jurisdiction.

Mr. PERLEY. And then it is our opinion that since both of us are under the jurisdiction of a single regulatory body, that that would obviate most of the difficulties of entering into a single-factor through rate.

The present difficulty lies in arises from the fact that the statehood bill kept jurisdiction in the Federal Maritime Board. Normally, it would with the other States, it would have gone to the ICC; but as it stands now, you have two regulatory bodies, the FMB and ICC. Now, if S. 1507 were enacted, into law, the ICC would have complete jurisdiction. That would include the Alaska Steam, as I have stated, and therefore, we would be able to enter into a joint rate relationship with them through the ICC, as a common carrier.

Mr. KINNAIRD. As a common carrier.

Mr. PERLEY. By motor vehicle?

Mr. KINNAIRD. Right. But the point that worries us is that we are of the opinion that the language in 1507, where it discusses common carriers by water nonvessel

Mr. PERLEY. Um hmm.

Mr. KINNAIRD. Would put our Garrison operation in the mold of a freight forwarder, and as such, under the decisions of the Commission

Mr. PERLEY. Uh huh.

Mr. KINNAIRD. We would be precluded from entering into joint rate relationships with other modes; you see, freight forwarders do not publish joint rates with the other modes.

Mr. PERLEY. Well, that's not permitted under the present law. Mr. KINNAIRD. No. And that does that answer your question? Mr. PERLEY. I am not sure that it does, and perhaps my difficulty is that I haven't read all of the statement-there was some that you skipped, and perhaps there was something on the nature of the operation of Garrison Freight that makes a difference here, that I don't understand, but I don't want to take a lot of time on this, because I really should try to do some thinking about my question, first, before I try to engage in a discussion.

Mr. KINNAIRD. Well, it is a cinch that 1507 would bring the water carriers under ICC jurisdiction; therefore, we would all be under the same jurisdiction.

Mr. PERLEY. Sure.

Mr. KINNAIRD. And we would be able to have joint rates.

Now, that is one solution to the problem. If Mr. Walrath and Mr. Tuggle and them just wouldn't put us

Mr. PERLEY. Um hmm.

Mr. KINNAIRD. In the mold of a freight forwarder, he may have some remarks later on that, I don't know.

Senator BARTLETT. Mr. Barton?

Mr. BARTON. I just have one question, Senator.

Mr. KINNAIRD. In your statement you spoke of proportional rates and the pressure they bring on the local rates.

Would you explain for the record what a proportional rate is, and how such rates bring pressure on the local rate structure?

Mr. KINNAIRD. Yes.

Proportional rates, as I understand them, Mr. Barton, are rates where we would quote a specific rate, for a specific shipper, due to a certain movement and all

Mr. BARTON. That has a condition attached to it?

Mr. KINNAIRD. That's right.

Mr. BARTON. Which provides, for instance, for movement beyond the point to which the freight originally moves if the proportional rate is to apply?

Mr. KINNAIRD. That's right, but then if we enter into these combinations of local rates into Alaska, and trying to do it through a medium of a proportional rate, then some other shipper with an entirely different problem would come along and say, "Well, look, you are doing this for this other fellow, why can't you do this for me?" Mr. BARTON. In other words, the proportional rate to Seattle might be 60 cents, we will say, whereas the local rate would be 75 cents? Mr. KINNAIRD. That is right.

Mr. BARTON. The local shipper would want the 60-cent rate, thus making the local rate match the proportional rate, which of course, is not practical from your standpoint?

Mr. KINNAIRD. That is right.

Mr. BARTON. Thank you, sir.

Senator BARTLETT. Thank you, very much.

Mr. KINNAIRD. Thank you, sir.

Senator BARTLETT. The Chair will note, or should previously have done so, that the general interest in this legislation is made evident

by the fact that an official of the Association of American Railroads is accompanying the group, Mr. William Thompson. Stand up, Bill, and let them see you.

We also have Mr. Fred Lordan, of Seattle, who has been helpful in preparing and doing other work concerning the bills; and, as doubtless all of you know, the Alaska Steamship Co. is represented by Henry W. Clark, vice president, at Washington, D.C., who is our next witness.

STATEMENT OF COL. HENRY W. CLARK, VICE PRESIDENT, ALASKA STEAMSHIP CO., WASHINGTON, D.C.

Mr. CLARK. My name is Henry W. Clark. I am vice president of the Alaska Steamship Co.; my address is 1026 17th Street NW., Washington, D.C.

Senator, I am appearing here in connection with S. 1507, S. 2451 and S. 2452.

We oppose S. 1507, and would like to refer the committee to our testimony on this bill that was given in Washington, D.C. Our principal objection is that we see no need for such a bill and that we have been under regulation of the Maritime Board for many years and that unless a real need can be shown we do not feel a change should be made. In our previous testimony we did indicate that there might be one area where Congress may want to give ICC some jurisdiction in Alaska, namely, joint through movements. Since the hearings, both Consolidated Freightways and Alaska Steamship Co. have filed a joint through tariff covering cargo from points within the United States to points within Alaska, which tariff has been rejected by both the ICC and the Federal Maritime Board.

We believe that this problem can best be solved by a joint board procedure which will permit both the carriers to file a joint tariff for such a movement.

We oppose S. 2451 which is a mandatory requirement of filing joint through rates because we know of no need for the mandatory aspect. We support S. 2452, which is designed to correct this situation by allowing the carriers to file such a tariff. It must be that after some experience under a permissive board, that Congress may want to require all carriers to enter into such arrangements, but we feel at the outset the only statute needed is the one to correct the immediate situation.

In other words, the Joint Board is necessary in any form, mandatory or permissive, but we feel the permissive Board is all that is needed now.

We would like to thank the committee for this opportunity to express our viewpoint.

Senator BARTLETT. Thank you, Colonel Clark.

Why is it that we seek any change at all in the existing law?

Colonel CLARK. We feel that this would result in a distinct service to the shipping public. It would result in a single bill of lading, and a much more simplified method of handling our freight.

We have already developed a unitized containerized operation that, in effect, means a single handling of freight from any place within the United States to any place within Alaska; and we feel that the

regulatory aspects, the paperwork, should be coordinated with the physical changes that we have in effect at the present time.

Senator BARTLETT. Do you believe, Colonel Clark, that a joint tariff would make possible lower rates?

Colonel CLARK. I believe that it would, yes.

Senator BARTLETT. Thank you, sir. Mr. Barton?

Mr. BARTON. No questions.

Senator BARTLETT. Thank you, Colonel Clark, very much.

Mr. Anderson, if you care to be accompanied to the witness table by others of the Alaska Railroad, they will be welcome.

Mr. ANDERSON. Mr. Chairman, I have attached together in the testimony that has been handed to you, the testimony of the Alaska Railroad on all of the pertinent questions that we wish to testify on here.

Now, I can testify on each one separately, in their turn, or I can testify on all of them at one time, whichever is your pleasure.

Senator BARTLETT. Well, I should think Mr. Anderson, that so far as you are concerned, that it would perhaps be preferable for you to take up all matters in this one appearance.

STATEMENT OF ROBERT H. ANDERSON, GENERAL MANAGER, ALASKA RAILROAD, ANCHORAGE, ALASKA

Mr. ANDERSON. Very well, sir.

Mr. Chairman, and committee, my name is Robert H. Anderson, and I am the present General Manager of the Alaska Railroad, Anchorage, Alaska. I am deeply appreciative of the opportunity to speak briefly before your committee on S. 2451 and S. 2452.

I am sure that your committee has a crowded schedule, and I will make every effort to make my testimony as brief as possible.

It is the position of the Alaska Railroad that S. 2451 and S. 2452 primarily concerns carriers other than the Alaska Railroad. We feel that it would be more appropriate for the carriers directly affected by the provisions of these two bills to offer detailed comment to your committee.

At the same time, we are enthusiastically in favor of any reasonable measures which will promote the use of through tariffs in the Alaska trade.

In this connection, we would like to suggest that appropriate wording, somewhat as follows, be added to the language of either, or the two bills in question:

Nothing in this Act shall be interpreted to prohibit common carriers subject to regulation hereunder from entering into agreements with the Alaska Railroad for joint transportation of passengers or property, or from joining in through routes and joint rates, under the provisions of the Act of March 1914, the Alaska Railroad Enabling Act.

In S. 2451, this wording could well comprise a new section 10. In S. 2452, the foregoing proposed revision could be designated as "h", and the present "h" would become "i".

This provision would enable carriers subject to the proposed act to enter into, or continue, joint through tariff and substitute service arrangements with the Alaska Railroad, should such carriers desire.

In the absence of such provision, many Alaskan shippers would be

required to use a combination of local rates, and forgo the advantages of joint through rates.

I will be happy to attempt to answer any questions regarding the foregoing, which the chairman may have for me.

Senator BARTLETT. I do not have too many questions, in this particular instance, Mr. Anderson.

First, although you state that the two bills which you mention, by number, do not directly affect the Alaska Railroad, you stated an enthusiasm for any appropriate measures that will provide for the establishment of through tariffs.

However, I know that you do have an interest in making contribution to any plan that would bring lower rates to Alaska. So, my question is this:

Do you believe that the setting up of a situation whereby joint rates would have to be filed, or might be filed, would result in the lowering of freight rates?

Mr. ANDERSON. Yes, sir, I feel that it would, Senator Bartlett. I think that anything, as the two witnesses before me stated, anything that will lend itself to a through handling—and of course, one of the costs of a through handling, is the paperwork involved; and a through bill, of necessity, does away with the many intermediates or local billing arrangements that each carrier would have to make.

That, in itself would be something that woul dindicate a reduction in costs to the carriers involved, which, in turn, would be passed on to the consignee or consignor.

Senator BARTLETT. Thank you, sir.

Now, your suggestion as to the addition of language to either or both of these bills, relates, I presume, to a situation whereby the ICC would not have any jurisdictional authority over the railroad? Mr. ANDERSON. Yes, sir, that is my presumption. Senator BARTLETT. Now on S. 1508, Mr. Anderson.

Mr. ANDERSON. Mr. Chairman, the Alaska Railroad is opposed to the enactment of S. 1508. I feel that the railroad is not dogmatic in its opposition. We are genuinely convinced that the bill is based on the assumption that it is possible to solve some of Alaska's tranportation problems by applying the same rules of regulation to the Alaska Railroad as are applied to private railroads in the other States. We do not believe this assumption is correct, and we are fearful that, if S. 1508 is enacted because of such assumption, it may have dangerous consequences for the people of Alaska.

The Alaska Railroad has no quarrel with a statutory direction that its tariff rates should be just and reasonable and, therefore, nondiscriminatory. This is what the Interstate Commerce Act requires and this is also what is required of the Alaska Railroad by the act of March 12, 1914, the Alaska Railroad Enabling Act. However, under part 1 of the Interstate Commerce Act, precedent-creating rules and decisions of the Interstate Commerce Commission have made the question of a reasonable return on investment an important factor in judging the reasonableness of rates. True, its application has varied with circumstances.

In the past, Congress has not required the Alaska Railroad to earn a return on its capital investment. However, because of past decisions of the Interstate Commerce Commission, the passage of S. 1508