ALASKAN AND HAWAIIAN TRANSPORTATION MONDAY, OCTOBER 26, 1959 U.S. SENATE, COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Senator BARTLETT. The committee will come to order. Let the record show that a letter has been received by the chairman from Milton H. Lichtenwalner, of Talkeetna, which will be included in the record. STATEMENT OF MILTON H. LICHTEN WALNER Hon. E. L. BARTLETT, U.S. Senate, Anchorage, Alaska. TALKEETNA, ALASKA, October 22, 1959. DEAR SENATOR BARTLETT: The following is a statement respecting Senate bill 2514, a bill to repeal the act of March 12, 1914 (30 Stat. 305) authorizing the construction and operation of a railroad in Alaska, to incorporate the Alaska Railroad Company, and for other purposes. I would like to present this statement to your committee. My name is Milton H. Lichtenwalner. I live at mile 222 along the mainline of the Alaska Railroad. My post office address is Talkeetna, Alaska. I am a settler on public domain lands in Alaska which I am developing primarily for agricultural purposes, hoping to make a profitable living from the growing and sale of agricultural products. I was an employee of the Bureau of Land Management, U.S. Department of the Interior, from 1950 to 1954, including 1 year as a trainee in the Interior Department's management training program in 1951 and 1952. During this time I made a very brief survey of traffic on the Alaska Railroad for the Chief of the Alaska Division of the Island and Territorial Possessions, and became convinced that the Alaska Railroad could perform valuable services in fostering the development of the economy of Alaska. I graduated from the University of Alaska in 1950 with a degree in economics. The Alaska Railroad was for many years administratively attached to the Alaska Division of the Office of Island and Territorial Possessions, the colonial office of the Interior Department. Some years ago the inclusion of Alaska in the Federal-aid highway program eliminated the Alaska Road Commission, which was also a part of the Alaska Division, giving Alaska a highway program of consequence for the first time. Extension of statehood to Alaska eliminated the Office of the Governor of Alaska from the Alaska Division, creating the first democratic form of government in the history of Alaska. This leaves only the Alaska Railroad as a major wing of the former Alaska Division, and it now becomes administratively necessary to "do something" about the Railroad. Except that some Interior Department administrators' administrative obligations and responsibilities and prerogatives would have been diminished somewhat by incorporation, I am sure that incorporation of the Alaska Railroad would have occurred years ago, as from time to time was recommended. My experiences with the Department of the Interior in Alaska lead me to conclude that the Alaska Railroad Company could perform its functions of aiding in the development of the State of Alaska better as an independent agency, but if incorporation even under the direction and supervision of the Secretary of the Interior gives the Alaska Railroad Company a wider latitude of authority and action then the bill should be enacted. The main lines of the Alaska Railroad are located on a right-of-way across public and private lands 200 feet wide. Section 8 of the bill (p. 12, lines 8-13) provides that there is reserved in all patents for lands taken up, entered or located in Alaska a right-of-way for the Railroad, substantially as I have just described. However section 7(a) (p. 9, lines 18-24, and p. 10, lines 1-3) provides that on the effective date of S. 2514, all right and title and interest of the Alaska Railroad including rights in real estate which would include the above-mentioned rights-of-way-whether acquired by the Alaska Railroad by withdrawal from the public domain or by purchase by the U.S. Government are conveyed to the Alaska Railroad Company. I would urge the committee to recommend in section 7(a) a proviso to the effect that nothing in section 7(a) shall be construed as a segregation of the lands within the rights-of-way of the railroad from the public domain to the extent that such rights-of-way would render a homestead or other location or entry noncontiguous by reason of being located on both sides of the railroad track and the right-of-way. For example, the Alaska Railroad crosses my homestead location in a northwesterly direction without regard to the section lines and the subdivision of the section so that my homestead lies on both sides of railroad right-of-way. if section 7(a) of this bill were construed as segregating-as passing some kind of title in land in the right-of-way to the Alaska Railroad Company, then under the highly restrictive interpretations of the public land laws, the officials of the Bureau of Land Management could construe one part of my homestead to be noncontigous from the other part on the other side of the railroad track. They would force me to give up part of my claim. As I have already improved lands on both sides of the track, this would work a severe hardship on me and on hundreds of others whose homesteads are similarly located on both sides of the railroad track. Such a provisio would not detract from the advantage of Senate 2514, for I do not believe it is intended that these rights-of-way are to be deeded in any way to the Alaska Railroad Company, to any greater extent than they were set aside for the Alaska Railroad under the act of March 12, 1914. Rather, the proviso I hereby recommend would insure the protection of hundreds of homesteaders and settlers along the railroad from attempts by the officials of the Bureau of Land Management to whittle away pieces of the entries, locations, and claims, so as to reduce the size of the entries and claims and thereby cut down on the acreage which would otherwise pass into private ownership. Senator Bartlett was quoted in the Fairbanks Daily News Miner, page 10, Wednesday, October 14, 1959, as saying congressional intent is that the railroad aid the military and assist in Alaska development "without asking for additional appropriations to meet deficits or finance future capital improvements.” Section 7, subsection (g) (p. 11, lines 11 to 18, inclusive), of the bill appears to incorporate this line of thinking, for this subsection appears to authorize appropriations of such amounts as may be shown in the annual budget program of the Company as necessary to cover actual losses of prior years sustained in the conduct of its activities. Settlers along the railroad will have to rely largely on the railroad for inshipment and export of goods. I feel that the policy of hoping the railroad can operate without additional funds, however meritorious, is premature, and certainly is not a condition to be reached merely by changing the name to the Alaska Railroad Company and making a few other administratively overdue corrections. Unless I have overlooked some other provisions of the bill which authorize the Company to obtain substantial amounts of capital for expansion, then the Company is limited to surpluses of revenue out of which to finance expansions. This could likely mean substantially higher freight rates for all shippers, or no, or very, very modest capital expansions, either course being detrimental to the purposes for which the Alaska Railroad Company is to be created (p. 1, lines 3 and 4). Unlike most agencies of the Department of the Interior the Alaska Railroad actively assists and encourages development of public lands in Alaska. This is to be expected for the railroad must rely in part on development of public domain resources for traffic. Its position is much like that of the settlers who. unlike the hordes of empire building administrative officials of other agencies of the Interior Department in comfortable tax-supported bureaucratic bunkers, must either develop the land for a living or leave the land and leave the railroad with less traffic. For example in advising me that the railroad would redeliver a small quantity of freight which was put off at the wrong spot some distance away from my homestead, the manager of the Alaska Railroad stated by letter dated October 8, 1959. "We deeply regret the inconvenience caused you and hope conditions such as this can be corrected in the near future. The Alaska Railroad is eager to assist in every way possible within our means the homesteaders and others who are helping to develop Alaska." No other agency chief in my memory in the Interior Department in Alaska has ever made such an encouraging statement to a resident citizen of Alaska who is trying to develop the resources of Alaska. Recently, the Alaska Railroad rescheduled its passenger trains to accommodate the desires of the settlers who hoped a change in the schedule would help them in their projects. It is an occasion of deep regret and dismay that the Congress proposes to assist the Alaska Railroad Company assist us, the citizens of Alaska, in developing our resources by refusing additional appropriations to the railroad for capital improvements that could help all of us. What is even worse, the agencies of the Interior Department that have adopted a public be damned attitude toward citizens in Alaska get huge appropriations every year. The Bureau of Land Management for example has adopted policies and practices that harass, discourage, and delay development of resources throughout Alaska to the extent that an attorney in Los Angeles, Calif., Mr. Edgar Paul Boyko, wrote to Senator Gruening in connection with S. 1670, a bill to provide for granting mineral rights in certain homestead lands in the State of Alaska: "In every case involving mineral rights of homesteaders on the Kenai Peninsula which has come to my attention-and there have been many-the homesteader is threatened with the loss of these valuable rights, not because of the ordinary course of operation of the applicable land laws, but because of mistake, delay, neglect, or even dereliction of duty on the part of the land office. This ranges from undue delay in the processing of patent applications to administrative errors, misinformation, and misrepresentations relied on to the detriment of the homesteader. Nor are these isolated instances, but rather the result of substandard practices and administrative weaknesses which had to be recognized eventually by the Interior Department and led to personnel changes designed to strengthen the administration of the public land laws in the Anchorage district." This letter which expands this idea in two further paragraphs is found on page 11 of a hearing before the Subcommittee on Public Lands of the Committee on Interior and Insular Affairs, U.S. Senate, 86th Congress, 1st session, on S. 1670. For the Alaska Railroad Company which desires to assist the homesteaders and others who are helping to develop Alaska, the Congress proposes to appropriate no money. For the Bureau of Land Management which relies on misinformation and misrepresentation to the detriment of the homesteader, the Congress in fiscal 1960 appropriated the sum of $3,358,700. (Newsletter dated Sept. 3, 1959, by Senator Bartlett.) I suggest that if you appropriated $1 million each fiscal year to the Alaska Railroad for capital improvements to assist in the development of lands in the State of Alaska, and appropriated $1 million less each year to the Bureau of Land Management both agencies would provide better services to the taxpayers. Suppose for example a large acreage of good agricultural land were developed in the big triangle bounded on the north by a line running west from Talkeetna, on the southwest by the Skwentna and on the southeast by the Susitna Rivers, the other side of the river from the Alaska Railroad, but close to the main line. Railroads and agricultural enterprises are complementary enterprises. Now, just how would the Alaska Railroad Company, without a sizable slice of capital, pay for a branch line into this area, which may also have substantial mineral deposits? If the Alaska Railroad Company were located in settled and fully developed country, such as the State of Iowa, the failure to include as a provision of the bill of incorporation the authority to raise additional capital money would be understandable, because it might not be so necessary. But in Alaska, where settlement and development and transportation have lagged and dragged for many years, failure to provide means for appropriations for expansions of all forms of transportation is to work a disservice to all the taxpayers. The economics of transportation are such that the high costs of operation of one carrier come over a period of time to be shared by the patrons of all the carriers. Therefore, starving the Alaska Railroad Company for additional capiital will eventually result in higher costs for the competing and substituting highways. The relationship is obscure but nonetheless real. Traffic densities on the Alaska Railroad have always been light, compared to the capabilities of the line. It seems to be a legislative oversight to restrict-by failing to provide for capital for new branches or other improvements-the railroad to a lighter traffic density when it could have greater traffic densities, which in turn would reduce the fixed costs per ton of freight moved, a profit that could be shared by all forms of transportation. In conclusion then, outside of the fact that the Secretary of the Interior will still have his finger in the Alaska Railroad, probably a mistake; despite the fact that the grant of real estate may give the Bureau of Land Management an opportunity to throw additional roadblocks in the paths of settlement, and even though the ability of the railroad to obtain capital by additional appropriation is severely circumscribed, I hope this bill passes, but I hope you will amend it to overcome these shortcomings first. Thank you for your time and your consideration, MILTON H. LICHTEN WALNER. Additionally, the Chairman is most pleased to announce that commencing about 1 hour from now, this will indeed be a joint hearing, because Congressman Morgan Moulder, of Missouri, a member of the House Interstate and Foreign Commerce Committee, has arrived in Anchorage arrived at a very extraordinary hour this morning-and will be here soon to join with us, and to participate in the remainder of the hearing. Mr. I believe the Chair may have failed to mention, at the outset, that which they should have; namely, to have noted the presence here of Commissioner Romick of the State department of commerce. Romick has been with us since Ketchikan, and has been in faithful attendence at each of these hearings. The matters that we have under consideration, of course, affect particularly, perhaps, the department of the State government over which he has charge, and we look forward, at a later date, to hearing testimony from Mr. Romick. If you will indulge me, Mr. Hilliard, I will ask you to defer a moment while I welcome the member of the committee from the House of Representatives, Congressman Moulder. Morgan, how are you? Glad to have you here. Come on in. (Congressman Moulder, after introductions, is seated at the head table, next to Mr. Bartlett.) Senator BARTLETT. There is going to be recess for 5 minutes. (A short recess was had, 10:30 a.m.) AFTER RECESS Senator BARTLETT. The committee will come to order. The chairman on the Senate side is more than happy to welcome Representative Morgan Moulder, of Missouri, distinguished, longtime Member of the U.S. House of Representatives, who attained an interest in the transportation bills last fall, when hearings were held on the House side, and who was good enough to give assurances then that he would come to Alaska and participate in such of the hearings as he was able to, so that the information given in Alaska would be available to the House group at the same time as to the Senate committee. I am mighty happy that you came here to be with us from now until we conclude our hearings at Fairbanks. Congressman MOULDER. Thank you, Mr. Chairman. I will say that it is my honor and privilege to participate in the hearings. As you stated, as you will recall, I served as the subcommittee chairman on the Transportation Committee when the bill concerning the Alaska Railroad was up for consideration. I want to congratulate and commend you for your great work that you are doing in the Senate, and the interest that you are taking here on this legislation, and I always want to commend you for being responsible for making the great State of Alaska a State, you being more responsible than anyone else. That is all that I have to say at this time, Mr. Chairman. Senator BARTLETT. Thank you, Congressman Moulder. From this moment on, this is a joint hearing, and there are two chairmen. Two Members, too. Congressman MOULDER. And, Mr. Chairman, I would like to add this statement at that point in the record when you first so courteously and considerately recognized me by saying that it is most unusual for a congressional committee, on the Senate side, or on the House side, to go into States to hold hearings-in that connection, I want to commend Senator Bartlett for his work in that regard, in being responsible for the joint committee hearings being held in Alaska. I know that that is not accorded to other States, and it is most unusual; and it demonstrates his ability, and the Alaska delegation, their ability, in bringing about this hearing; and also it shows the keen interest that the people have in the affairs of Alaska. Senator BARTLETT. We will turn now and consider transportation bills. Certain representatives of the trucking industry are here to testify, and the committee will be glad to hear their testimony on any of the subjects now under consideration. The chairman will state now, and should long since have stated that Mr. William Meehan, who is district supervisor for Alaska of the Interstate Commerce Commission has been good enough to be with the committee since Juneau, and he is going to be with us during the hearings. We appreciate your attendance, Mr. Meehan, and know that in this effort, as previously, you will make a real contribution. Our first witness is Howard Iiams. STATEMENT OF HOWARD IIAMS, TRAFFIC MANAGER OF WEAVER BROS., INC., AND INLAND RIVERWAYS, INC., ANCHORAGE, ALASKA Mr. IIAMS. Senator Bartlett, and distinguished members of the committee, my name is Howard Iiams, Post Office Box 252, Anchorage, Alaska. I am the traffic manager of Weaver Bros., Inc., and Inland Riverways, Inc. Weaver Bros., Inc., is an Alaska domiciled motor carrier engaged in transporting general commodities to from and within Alaska. Inland Riverways, Inc., is a tug and barge company engaged in the transportation of general commodities on the inland waterways of Alaska. I am appearing before the committee today not only in behalf of my employer, but also in behalf of the Alaska Carriers Association. |