ALASKAN AND HAWAIIAN TRANSPORTATION

WEDNESDAY, OCTOBER 28, 1959

U.S. SENATE,

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

Valdez, Alaska.

The committee met, in the Valdez High School, at 11 a.m., Hon. E. L. Bartlett presiding.

Senator BARTLETT. The committee will be in order. This is the U.S. Senate Interstate and Foreign Commerce Committee traveling through Alaska receiving testimony on various bills having to do with Alaska transportation and other matters relating to Alaska.

Before making another statement the chairman will turn the microphone over to the mayor of Valdez, Mayor Elmer White, who has a word or two to say at this time.

Mr. WHITE. It gives me a great deal of pleasure at this time to welcome all you folks to this gathering, and at the same time to welcome all the members of this committee. Everyone here, of course, is very familiar with and very well acquainted with our Senator Bob Bartlett. I am sure he will need no further introduction. However, I will turn the meeting back to the Senator now who will in turn introduce all the members of this committee to you.

Senator BARTLETT. Thank you, Mayor White.

First, I want to announce that the committee is most happy to be in Valdez. From the outset of the arrangements we decided that it was essential that the committee come to Valdez to hear testimony on these transportation bills, particularly because the community of Valdez has such a vital interest in transportation. It is a particular pleasure for me to be here again, and this for many reasons.

I should like the previlege of introducing to the people of Valdez the persons who are traveling with me, but before doing so I should like to state that if it hadn't been for a cold bug this would be a joint meeting of the Senate Interstate and Foreign Commerce Committee and the House committee of the same name. Representative Morgan Moulder of Missouri, a member of the House committee, came to Anchorage and participated, to my great pleasure, in the hearings there, but came down with a very bad cold and thus was unable to make the present trip with us. But the House committee is represented notwithstanding in the person of the very able legislative counsel for the U.S. House of Representatives, who on this present trip to Alaska is acting as counsel for the House Interstate and Foreign Committee of which Representative Oren Harris, of Arkansas, is chairman. And I refer to Mr. Allen Perley, who is on my far right.

On my immediate right is the chief counsel of the Senate committee, Harold Baynton.

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And on my immediate left is the transportation counsel for the Senate committee, Frank Barton.

And I am going to request the next man I so introduce to take a position at the head table because he is Alaska's own commissioner of commerce, Mr. Romick.

Now, we have the great honor in having in Valdez today, and indeed on the entire Alaska trip, a member of the very important Interstate Commerce Commission of the United States, a man who was in Alaska last year, a man who was good enough to come back on this occasion because he believes these transportation matters are a real order of importance for not only Alaska, but the Nation, and I refer of course, to Commissioner Laurence Walrath.

Next to Mr. Walrath is Henry Whitehouse, attorney for the ICC. And the next man I shall mention is no stranger to Alaska because he was at the University of Alaska for 8 years in charge of the research program there, their cooperative wildlife program, a biologist, and now unhappily from his standpoint and ours, situated midway between Washington, D.C., and Baltimore, Md., and glad to be back on this trip, Dr. John Buckley.

That the transportation measures under consideration have an interest more than local in nature is proved by the fact that a vice president of the association of railroads is with us, Bill Thompson. The ICC established an Alaska office last year and the supervisor of that office, with residence in Anchorage, is William Meehan.

Fred Lorden, of Seattle, who has been in Alaska many times, has worked with the committee and with me individually in preparing some of these bills. Fred, when you get up, name your private connection; will you?

Mr. LORDEN. I represent the Western Highway Institute.

Senator BARTLETT. The bills before the committee for consideration are these: S. 1507, to make the Interstate Commerce Act applicable to transportation by water between Alaska ports and other ports of the United States.

H.R. 6244, to provide "grandfather" rights for motor carriers and freight forwarders operating within Alaska and between Alaska and other States and for water carriers operating within Alaska. To provide for Interstate Commerce regulation of the Alaska Railroad and to make the Interstate Commerce Act applicable to for-hire water carriers operating between ports of Alaska and ports of other States. S. 2451, H.R. 8521, and H.R. 8564, companion bills to establish a joint board for through routes and joint rates and to make mandatory through routes and joint rates by carriers engaged in transportation of property between the State of Alaska and the State of Hawaii and other States.

S. 2452, H.R. 8520, and H.R. 8565, all of which are companion bills to establish a Joint Board and to permit the filing of through routes and joint rates for carriers serving Alaska, Hawaii, and the other States.

S. 2514, to establish the Alaska Railroad as a Government corporation, and S. 1899, to authorize the establishment of the Arctic Wildlife Range in the State of Alaska.

From this rather lengthy list, which must be added to by mentioning S. 2702, you will recognize that the Senate committee, a busy com

mittee with jurisdiction over many essential activities in the United States, has been concerned with Alaska matters.

S. 2702, which I mentioned by number, but did not explain, is a bill to direct the U.S. Commissioner of Public Roads to convey by quitclaim deed title to certain property in Valdez, and this in connection with the mental hospital facilities.

The chairman would like to convey to the residents of Valdez the greetings of Governor Egan, with whom I talked by telephone from Cordova only this morning. The Governor wanted to be remembered to all his fellow citizens of Valdez. As we drove around town here a while ago it occurred to me that Valdez has somewhat of a record in having among its residents so many notable citizens of Alaska. The first man that comes to my mind is Anthony J. Diamond, than whom Alaska has never had a more high-minded, devoted, and able public servant.

And then there is Bill Egan, the first elected Governor of the State of Alaska.

And then there is Tony's son John, a member of the first State supreme court, and this is quite a record. Of course, Valdez has an emotional spot in my heart because I was married here many years ago. I can recall my father telling the story of how he was down in Seattle on a contract and how he went broke and returned to Alaska. He came to Valdez and organized the stage business between here and Fairbanks. He rented an office and put up a sign and that exhausted his entire capital so he waited until customers came in and paid him the fares to Fairbanks. With this money he then went out and bought some horses and double-enders and got to Fairbanks that way.

Now, the committee will stay in session in Valdez for whatever time is required to hear the testimony of those who want to appear before the committee, and at this time I shall ask Mayor White, Do you have a list of witnesses or does anyone else in the group? Let's have a showing of hands then on the part of those who want to testify and we will take the names down and get on with the show. Our first witness will be Mr. George Gilson.

STATEMENT OF GEORGE GILSON, PRESIDENT, VALDEZ CHAMBER OF COMMERCE, VALDEZ, ALASKA

Mr. GILSON. My name is George Gilson of Valdez, Alaska. I am currently president of the Valdez Chamber of Commerce. I am glad to lead off this testimony. My role is primarily to take a few minutes to sketch for the record the situation of Valdez right now and a little bit of the past history. I shall not be long, but I think it is important a transportation hearing in Valdez should know a little of our past, of Valdez background, and the transportation picture. You guests are now in almost the oldest town in Alaska north of the gulf. Kodiak is older and I suspect Nome is about the same age as Valdez. The reason Valdez was first established was that the gold seekers of 1898 wanted to travel by water to the point nearest to their goal, which was the interior of Alaska. So, Valdez's geographical location was important and led to the establishment of Valdez as the port of entry for central Alaska before any other port in this area.

In the period from 1898 to, say, 1910, Valdez was the largest town in this section of the country and witnessed thousands of people traveling through. We still have geography on our side as far as Valdez is concerned.

Starting at about 1910 there were numerous efforts on the part of people to capitalize on Valdez's strategic location and establish a railroad from Valdez. Our hardheaded people who tried to start this local railroad succeeded in diverting the Guggenheim interest to Cordova and the Government interest to the westward to Seward, Anchorage, and Fairbanks. So a group of people frustrated the proper transportation picture through Valdez back in those early years and we have been frustrated ever since. We have been outflanked on two sides and we feel that geographically speaking we are on a firm foundation but we haven't really come thorugh in the role we think we should have in transportation.

After the period of about1915 the Alaska Railroad was completed and transportation through here withered and died to practically nothing in the 1930's. After the Second World War the desperation for the flow of materials to central Alaska led to the revival of shipping through Valdez and we had a large surge of transportation through here of vital war materials. Immediately after World War II the trucking companies who had trucked through Valdez during World War II grasped an opportunity and from about 1949 to 1952 we had considerable trucking through here with independent operators, Alaska freight lines, and others.

In approximately 1952-53 we find that the majority of our freight business moved over to the Alaska Railroad and we found that the local truckers by and large were not competitive with the freight rates on the Alaska Railroad. As a result our trucking industry is hard hit and there are not too many truckers present to give testimony for the simple reason there aren't too many left here. They have withered and died and can't compete with the Alaska Railroad rate structure. My testimony doesn't go into the details of the competitive picture, But I want to say the impact on the community, because of the lack of trucking business through this port; I know this from the point of view of an officer of the bank-our bank business has declined 40 percent since 1952. I know of this decline as an operator of a grocery establishment who supplies grocery items to roadhouses up the highway from Valdez that business has dropped off about 40 percent in that direction during the same period of time. I do know that the sales tax receipts of the town of Valdez have declined 40 percent in the last 5 years. So, therefore, my part of the testimony is just to let you know the impact on a favorable transportation site by what Valdez people consider unfair competition on the part of the Alaska Railroad. We feel that they are in a position to alter rates at will and we feel that our local truckers have been driven to the wall. I think there will be some specific instances brought out at this hearing before it is concluded, but by my own knowledge I can only state the impact through the loss of trucking business through this port in the last 5 years. This is since the Alaska Railroad embarked on their modernization plan and to justify that modernization plan they gather all the freight they can, and we suspect over here that the rates are set to gather the entire volume. My part of the testimony is to show the impact of that matter on this community.