insurance and handling. But if it is consigned to one of the trucking firms here in town then they in turn are responsible for part of it and therefore they think these charges should be somwhat higher in case they are held responsible. I don't think that a differential of five times is anywhere near fair.

Senator BARTLETT. We had some testimony at Ketchikan to the effect that shipment of goods which was enumerated by kinds and by weight cost, I think, something on the order of five times more landed at Ketchikan than at Anchorage and

Mr. NICKERMAN. This sounds like my experience.

Senator BARTLETT. Mr. Barton, I guess we had better get into the expert questioning on this right away and leave me behind here.

Mr. BARTON. Can you give us the commodity and the points of origin and the destination on these items you mentioned?

Mr. NICKERMAN. Yes. This is one, and here is a copy of the other. This is the figuring of the weight basis here at $11 and some cents. Mr. BARTON. And what is the commodity?

Mr. NICKERMAN. This is a bunch of rugs and things of that nature. Senator BARTLETT. Do you have any further questions?

Mr. BARTON. No; no further questions.

Senator BARTLETT. Thank you, Mr. Nickerman. I assure you that although this perhaps isn't a matter for a legislative body, but instead is one for a regulatory body, we shall pursue an inquiry with the hope of being able to obtain information which will be helpful and to do something to get things a little bit more on the basis of parity. Now we will hear from Lawrence St. Amand, Box 146, Valdez, Alaska.

STATEMENT OF LAWRENCE ST. AMAND, OF VALDEZ, ALASKA

Mr. ST. AMAND. My name is Lawrence St. Amand, Box 146, Valdez, Alaska. I have lived in Valdez for 9 years. I used to be a truckdriver until I took over Governor Egan's store here. The railroad has got things so fouled up that I am about ready to give up as there aren't any customers left in town. That's just how tough it is with me. None of these other fellows mentioned the fact that the railroad put ads in the papers where they said they would deliver door to door for a certain rate. You can look back through the papers and see those ads if you want to. I don't think they put them in any more, do they? They have quit it now, but they covered that railroad situation pretty good, as far as I know.

Senator BARTLETT. How many grocery stores are there here?
Mr. ST. AMAND. Three.

Senator BARTLETT. How long have you been in the grocery business?
Mr. ST. AMAND. Just about 3 years.

Senator BARTLETT. Business is dwindling?

Mr. ST. AMAND. It is terrible, yes.

Senator BARTLETT. Because of the continued loss of population?
Mr. ST. AMAND. People moving out of town, yes.

Senator BARTLETT. Why are they moving out of town? Is it because

less freight is being moved through Valdez?

Mr. ST. AMAND. They can't find any work. The only other work here right now is the Standard Oil and the ACS and the BPR. That doesn't employ very many people.

Senator BARTLETT. For the record will you tell us about those initials and give the titles of the agencies?

Mr. ST. AMAND. The ACS is the Alaska Communication System and the BPR is the Bureau of Public Roads.

The BPR used to be the Alaska Road Commission.

Mr. BARTON. No questions, Senator.

Senator BARTLETT. On a personal basis, I am happy to report to you that I saw your father just the other day and he is in fine health and spirits.

Mr. ST. AMAND. Thank you.

Senator BARTLETT. Is there anyone here who desires to offer testimony on S. 2702, which is the bill mentioned previously, to convey to the State of Alaska from the Bureau of Public Roads title to certain lots in Valdez which-on which housing was previously constructed that is now intended to be used by the State of Alaska for the care of the mentally ill. I take it that no voluminous testimony is required in this connection, but we would like to hear from someone in the city as to the attitude toward this proposed institution in Valdez. I now place the bill, S. 2702, in the record.

[S. 2702, 86st Cong., 1st sess.]

A BILL To provide for the conveyance of certain lands of the State of Alaska

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Commissioner of Public Roads is authorized and directed to convey, by quitclaim deed and without consideration, to the State of Alaska, all right, title, and interest of the United States in and to lots 1 to 25, inclusive, block 100, townsite of Valdez, in the Valdez recording precinct, State of Alaska, and any buildings and improvements thereon. Senator BARTLETT. George, you have a statement on S. 2702.

STATEMENT OF GEORGE GILSON, OF VALDEZ, ALASKA

Mr. GILSON. My name is George Gilson of Valdez, Alaska. I mentioned earlier in my testimony that in the cessation of freight traveling through here we are looking to other ways to keep alive. I mentioned tourism and I mentioned the fishing business. I neglected to mention that in 1949 and 1950 there was considerable road construction here in this area. The FHA insured a loan for Harborview or Bradyville, as it is locally known, on a 48-unit housing development in Valdez. With the dwindling of the population that housing development was in trouble and the FHA offered it for sale. A group of 10 local people bought the 48-unit apartments. The thinking of the 10 people was that we wanted local people to have control of the property and see if we couldn't generate something that would add to our economy. The idea was brought forth that the State needed mental health facilities in Alaska. You gentlemen have seen the hospital that was built here in happier times when we thought we could afford it. It is now not in use. We have a fine hospital to offer plus this 48-unit apartment, and the combination of the two would make an excellent mental health center at relatively little cost to the State. So, we have been endeavoring to promote the State's use of this combination hospital and 48-unit development. We have been successful in that the last legislature voted, practically unanimously, to accept our offer of these facilities and make a mental health facility

at Valdez. The only thing holding this up is the question of the title to the lands involved. I think there is practically unanimous agreement in the community that we need this facility and it will help our sagging economy, and perhaps more important we will be able to afford a doctor. Right now we have no doctor in Valdez. The hospital is not being used so all of us who have medical problems must travel to Glennallen and consult the doctor there 100 miles away.

A lot of the popular feeling about this mental health facility here is a means of insuring medical care for a community that can't afford it without this mental health facility. This bill is necessary in order for the State to go ahead and implement the program.

Senator, have I said what you wanted me to say on that?
Senator BARTLETT. Yes. Who introduced that bill?

Mr. GILSON. Probably Senator Bartlett.

Senator BARTLETT. Yes; you said what I wanted you to say. The bill provides that the conveyance will be all right, title and interest to the United States in and to lots 1 to 25, inclusive, block 100, townsite of Valdez. Now, we have here dated today a memorandum statement from Mr. R. W. Kendall, business manager, clerk, treasurer and assessor of Valdez stating the valuation of the real property in this transaction to be $16,236. The valuation of the improvements $374,482, a total assessed valuation, as of January 1, 1958, of $390,718. Just to make the record clear Mr. Gilson, will you inform the committee again if the improvements valued at $374,482 are now the property of the U.S. Government?

Mr. GILSON. No, sir. They are the property of Harborview Corp. who have offered it to the State government and the State hasn't concluded the transaction until the title to the land is cleared up.

Senator BARTLETT. And the land itself is worth slightly more than $16,000, is that right?

Mr. GILSON. Yes, sir; that is the figure.

Senator BARTLETT. How is it, and I never have been informed properly about this, that there is a doubt about the title. How did the FHA ever insure the buildings with the title not being clear?

Mr. GILSON. At no time was the title in question as the FHA insured the improvements on the basis of a 75-year lease.

Senator BARTLETT. From whom?

Mr. GILSON. The Alaska Road Commission entered into an agreement for the Government with the Arco Corp. who built the improvements on the property.

Senator BARTLETT. It has been Federal land throughout then, subject to this lease provision?

Mr. GILSON. No, sir. The city owned the property and they deeded it over to the Alaska Road Commission at that time for the Government.

Senator BARTLETT. At the time of the construction of the Harborview project?

Mr. GILSON. Yes, sir.

Senator BARTLETT. So if S. 2702 were to be enacted into law it would not have to do with the circumstance where the Federal Government was giving to the State of Alaska property which it had long held, but on the contrary, this property had been deeded over by the

city for a specific housing project in the very recent past? Is that a statement of fact?

Mr. GILSON. Yes, sir. That is as I understand it.

Senator BARTLETT. Why did the city have to deed it over to the Alaska Road Commission; was it so some Federal housing loans could be made? I persist in this because these questions are going to be asked. Bills of this character are extremely hard to put through Congress for a very special reason.

Mr. GILSON. Senator, at that time the city owned this unimproved property. It had been a municipal airport and there was no longer any need for a municipal airport. The city owned the property. This building group came to us and said that if we would deed the land to the Alaska Road Commission they would enter into a contract with the Alaska Road Commission to build this 48-unit development. In fact, I was on the council at the time. It seemed to us like the thing to do to get housing, which was badly needed at that time, so we willingly deeded this empty airstrip over to the Alaska Road Commission in order that they in turn would provide 48 units of housing.

Senator BARTLETT. Why did the Alaska Road Commission get mixed up in this at all?

Mr. GILSON. Well, the building people had to, in order to justify an FHA loan to building people, had to have some assurance that the dwelling was economically feasible.

Senator BARTLETT. Why wouldn't the builders simply get a lease from the city of the land?

Mr. GILSON. The builders wanted to have the arrangement in the nature of a contract with the Alaska Road Commission.

Senator BARTLETT. The Alaska Road Commission employees were to have first choice of the housing?

Mr. GILSON. Yes, sir. It was an arrangement of the nature. The FHA wouldn't proceed unless the builder had assurance of the use of the housing. The builder then went to the Alaska Road Commission and they assured him that they would utilize the housing. They wanted it in the form of a contract, so we had to deed the land over to the Alaska Road Commission to make the deal go, as we understood it.

Senator BARTLETT. The Alaska Road Commission, as well as the builder, wanted this land as a prerequisite?

Mr. GILSON. Well, it was felt that the Alaska Road Commission should have a lease on this or own the land so they could enter into a lease arrangement-a 75-year lease arrangement-with the builder. Senator BARTLETT. When was this?

Mr. GILSON. 1950 and 1951.

Senator BARTLETT. What is the arrangement for the State to acquire the 48 units. Has the State legislature passed a bill for the purchase of those units?

Mr. GILSON. Yes, sir. The State legislature authorized an expenditure not to exceed $150,000 for the purchase of the units. Since that time the price has been negotiated downward to $90,000.

Senator BARTLETT. And those improvements have a value, as stated by Mr. Kendall, of $374,000 as of now?

Mr. GILSON. Yes, sir; that is correct.

51709-61-20

Senator BARTLETT. One further line of questioning, if you will permit, Mr. Gilson, because it may come up in view of what you have said.

You stated, as I recall, that it was virtually a unanimous opinion here that the facility should be operated for the care of the mentally ill as it would be helpful to the economy of the community and also, thereby, a doctor would come to Valdez. I understand that you now have no doctor and, too, the hospital would be activated. Now, this won't satisfy some people. They would say that those who are mentally ill ought not to be put in a particular location for any such reasons at all, that they should go to a community where services can best be provided and where medical skills are present. Would you care to comment on that?

Mr. GILSON. My statement as to the two reasons why we were eager to see the mental health facility here were from the point of view of those living in Valdez. I feel that from a financial point of view the State is getting a real bargain and, for example, they propose to take care of 165 patients in Valdez. They would acquire facilities to care for 165 people in Valdez at a cost of $90,000 plus the estimated cost of a quarter of a million, but at any rate they would be in business in Valdez for the care of 165 mentally ill patients for less than a half a million dollars.

In Anchorage, for example, they propose to spend $611⁄2 million to take care of the other group, a little larger in number than the 165 contemplated here, so from a financial point of view it is a good deal for the State.

Senator BARTLETT. Well, it is a fact, is it not, Mr. Gilson, that the State proposes to bring to Valdez not those who require care in a hospital especially designed for this purpose, but rather those who probably cannot be aided by psychiatric or allied treatments, but who nevertheless must be kept in an institution of one kind or another? You believe that there is no purpose whatsoever in putting these people in a hospital where the care would be so expensive when actually all that is needed is an adequate place of lodgment for them, with good surroundings and with proper care. Is that a statement of fact?

Mr. GILSON. Yes, sir, that is quite correct, and I think you have answered the question better than I.

Senator BARTLETT. And you feel that the housing project here would serve adequately for that purpose?

Mr. GILSON. It is my feeling, without any expert knowledge, but my feeling as a layman that it would be very adequate for the purpose intended.

Senator BARTLETT. I suppose you state that partly because it is your knowledge and mine, the knowledge of all Alaskans who have inquired into this situation. We know that at Morningside Hospital in Portland where Alaska's mentally ill have been kept since near the start of the century, there are many such persons who are in that hospital when there is no pressing need for hospital care. They are there simply because there is nowhere else to take them, that somewhere else would be provided by the Valdez facility.

Mr. GILSON. Yes, sir, that is correct.

Senator BARTLETT. Could you give us, Mr. Gilson, if your memory can serve you this well, and I wouldn't blame you if it couldn't, the