Senator BARTLETT. As a matter of fact, I think that you're on good grounds in saying that you're unable to answer it. I don't know that anyone could. I was greatly interested in Representative Moulder's question on that, and it's my feeling, and I can't prove it either, that this spread is a comparatively recent development. I think that the most recent figures we have available would disclose that it costs somewhere between 40 and 50 percent more to live in Fairbanks now than it does in Washington, DC., which is a very high cost city, and my belief is that during the thirties, for example, the spread wasn't more than 10 percent, but I can't prove it.

I know it wasn't anywhere near what it is today and I think if we could assign the reasons for that increasing difference between here and there, we might probe for some of the answers as to how it could be cured.

Mr. Barton?

Mr. BARTON. Thank you, Senator.

Mr. Chapados, you mentioned that the port of Seward has increased its traffic while that of the port of Valdez has substantially dropped. Is that correct?

Mr. CHAPADOS. Yes, sir. I would assume that that's the case since the tonnages have dropped off at Valdez and this type of freight would then have to move through the port of Seward or the port of Anchorage.

Mr. BARTON. I believe you stated that in your opinion this was caused by reductions in rates from Seward to the interior by the Alaska Railroad, is that correct?

Mr. CHAPADOS. I believe that that probably is one of the causes, one of the major causes.

Mr. BARTON. You mentioned that certain volume items particularly attracted the Alaska Railroad. Among others you named groceries, plumbing supplies, flour, and so on. You also said that in your opinion some of these rates were noncompensatory.

Can you give us some comparisons between the truck rates from Valdez to Fairbanks and the Alaska Railroad rates from Seward to Fairbanks?

Mr. CHAPADOS. Well, they're not going to be exact, but I can give you, in the case of groceries, I believe the rate, if you want to total these figures, the handling and wharfage charges in Seattle in most cases, and in the case of groceries, I am sure, is 1514 cents.

The cost of transportation from Seattle to the port of Valdez, to the port of Seward or Anchorage, as I have been told, is the same; in the case of group 1 groceries I believe the rate is $1.61.

Mr. BARTON. These rates are all in cents per hundred pounds?
Mr. CHAPADOS. Yes, sir.

In the port of Valdez the cost of moving that freight or unloading and delivering it to the trucker at Valdez across the Valdez dock is 372 cents, which makes a total of something over $2, I believe. Mr. BARTON. About $2.10, if I'm correct; $2.13 plus.

Mr. CHAPADOS. The railroad rates as I and the I think this is the rate is $2.85, the through rate from Seattle to Fairbanks, plus 1514 handling charge in Seattle.

Incidentally, I'm quoting carload quantities in 60,000 pound cars for the railroad. The rate through the Valdez port via the steam

ship company, as I've already given you, is an any-quantity rate, regardless of how many thousand pounds you ship.

Mr. BARTON. What do these charges all add up to, approximately? Mr. CHAPADOs. In other words, we have about $2.13, I believe you said, which I would assume is the same cost that the railroad, for instance, would have to pay to get their freight from Seattle to Seward across the dock into their boxcars.

Well, then, if you were to deduct that from the rate of $2.85 plus 1514, you would find that the groceries then are being hauled to Fairbanks for about-what is it

Mr. BARTON. About 87 cents?

Mr. CHAPADOS. About 87 cents a hundredweight. It's impossible for a trucker to haul groceries from Valdez to Fairbanks for 87 cents. Mr. BARTON. What is your rate now?

Mr. CHAPADOS. In order to operate at a fair profit-I can't quote you tariff rates right at the moment, but you'd have to have about $1.50, $1.50 per hundredweight in order to operate. That would give us, would not only cover operating costs but would provide a small profit. Mr. MOULDER. But if you didn't have to pay that docking charge you could come close to doing it today?

Mr. CHAPADOS. That's right.

Mr. MOULDER. In other words, they're absorbing that.

Mr. BARTON. In other words, the railroad has a rate of approximately 87 cents a hundred from Seward to Fairbanks, but in your opinion it would take about $1.50 for a trucker to cover his cost and provide a small profit.

You don't recall what the truck rate is at present?

Mr. CHAPADOS. Well, there are many tariffs on file with the Interstate Commerce Commission covering the cost of transportation between Valdez and Fairbanks.

Mr. BARTON. Groceries?

Mr. CHAPADOS. Yes. We are are required, of course, and have had to file tariffs with the Interstate Commerce Commission, and we have been restricted as to-that is, we have been under the impression that we are not able to quote anything but just single commodity rates.

Of course, we can make, we can then make exceptions to that rate and I believe that in our own tariff we have made an exception in the case of groceries. Unfortunately, I haven't the information with me and I neglected to check on that before I came to this hearing.

Mr. BARTON. Well, ordinarily grocery rates provide for mixtures of commodities. Can you furnish us your rates or some representative rates from Valdez to Fairbanks, for the record?

Mr. CHAPADOS. Yes.

Mr. BARTON. One more question, sir.

You say in your opinion these Alaska Railroad rates were published as local rates, rather than through rates from Seattle.

Do you know that to be correct? Or is it possible that they have a through rate from Seattle to Fairbanks by way of Seward, and it's impossible to tell without looking at the rate what the divisions between the various areas are?

Mr. CHAPADOS. I'm not sure that I did mention anything about local rates, but I'm sure it's common knowledge that the railroad publishes a tariff that quotes through rates from Seattle and other ports

along the west coast. But the tariff that's used by the public doesn't indicate the percentages that are allowed for the various portions of that haul.

Senator BARTLETT. I understood that this 87 cents was a local rate, for groceries.

Mr. CHAPADOS. Assuming that the railroad or any other carrier moving freight from the coast to the interior has to meet the same cost of transporting it from Seattle to the port of discharge, then I used as a basis for determining that figure the rate that it costs the Alaska trucker to move it across the dock at Valdez, and deducted that from the rate which the railroad presently quotes for that particular item, and that leaves this figure approximately of 87 cents, and that's the only way that I can see at this point to arrive at that figure.

Senator BARTLETT. These are not published as local rates so you have no way of knowing and it's possible that the water carrier in taking a smaller division might be absorbing some of that reduction, isn't it?

Mr. CHAPADOS. It's possible; I have no way of knowing otherwise.
Senator BARTLETT. Thank you, sir.

Mr. MOULDER. Mr. Chairman, I want to ask another question.
Mr. CHAPADOS. Yes, sir?

Mr. MOULDER. First I want to say that the purpose of these hearings as brought about by Senator Bartlett is for the purpose of securing the facts and information to submit to the Senate and Congress, the House of Representatives in Congress to aid them in finding the solution to the problems that are presented. What action will be taken, I don't know. It will depend upon what the facts are on the record and what is presented to Congress and what action the Congress may take.

"

But Senator Bartlett asked you a question in the beginning which interests me. He asked if the railroad, the Alaska Railroad, would be compelled to increase its rates in the event it is brought under the jurisdiction of the rules and regulations of the Interstate Commerce Commission?

I understand the law to be, of course, that no railroad in any State is required to increase it rates because being under the jurisdiction of the Interstate Commerce Commission that the railroad must initiate its own proceedings to petition and to request an increase in rates, and that no such action would be mandatory unless they themselves can present reasons and justifications to support the increase in rates.

And this same thing is true of the railroad as it now exists and is operated. It can increase its rates at any time it sees fit to do so; isn't that so?

Mr. CHAPADOS. That's true.

Mr. MOULDER. That's all Mr. Chairman.

Senator BARTLETT. Mr. Perley?

Mr. PERLEY. No questions.

Senator BARTLETT. Thank you for a very informative statement, Mr. Chapados.

Mr. CHAPADOS. Thanks very much, sir.

Senator BARTLETT. Mr. Rogge.

STATEMENT OF GENE ROGGE, OWNER, SOURDOUGH FREIGHT LINES, FAIRBANKS, ALASKA

Mr. ROGGE. My name is Gene Rogge. I am the operating owner of Sourdough Freight Lines, 1111 Gilliam Way, Fairbanks, Alaska. I have been in the trucking business in this part of the country around Fairbanks to Valdez since 1929.

I have something I want to read to you that I sketched up-what happened while I've been in this business.

I am the operating owner of Sourdough Freight Lines. I have been so engaged continuously since 1929. My principal haul has been between Valdez and Fairbanks.

In 1933 I was required to pay $150 license fee for operating on the Richardson Highway, which fee remained in effect until 1934 when the Department of the Interior imposed a 21/2-cent ton-mile toll on trucks hauling through freight from Valdez.

This toll was collected by cash at Big Delta, and amounted to $9.27 per ton between Valdez and Fairbanks, which nearly finished all of the truckers. It took a lot of us. It broke me, but I've come back in again.

This toll did not apply, however, to any other trucking except through hauls between Valdez and Fairbanks, the only route into interior Alaska besides the railroad.

Added to this burden, the railroad adopted another handicap to truckers by reducing its summer rates to considerably below its winter rates when the Valdez Road was closed.

The summer rate began June 1 and was effective until October 1, and this policy continued until 1942, when war changed matters and the Army bridged the Tanana River and the toll ended. We never learned on what authority it ended. The Department of Interior has always seemed to do just as it wished.

I believe, Senator, that you were in that country at that time?

Senator BARTLETT. No, I was back in Washington working for Tony Diamond when the fracas developed at the ferry. I heard about it, though. In your opinion, Gene, has the Alaska Railroad always sought to erect barriers or to hinder the operation of the truckers? Mr. ROGGE. That's my belief, yes.

Senator BARTLETT. Do you have any evidence that rates are lower seasonally by the railroad as a weapon against the truckers?

Mr. ROGGE. Well, not any more. That fell by the wayside. Senator BARTLETT. The lowering in the summer and increasing in the winter is a thing of the past?

Mr. ROGGE. That's right.

Senator BARTLETT. How many trucks do you operate?

Mr. ROGGE. Right now I'm operating one. I have operated as high as 10, 12, and at one time during the war years we had 168 trucks going up here.

Senator BARTLETT. Things are getting tougher?

Mr. ROGGE. Things are getting tougher; that's right.

Senator BARTLETT. Well, do you haul for a number of people in Fairbanks, or principally for small numbers, or even one?

Mr. ROGGE. No, I haul for quite a few different people in Fairbanks. The reason that is, I have to go for the higher classed freights. In

other words, I can't compete with some of the low rates on complete carloads of groceries. On the big carloads of groceries I can't compete.

Senator BARTLETT. Do you operate the year around?

Mr. ROGGE. Yes, I do.

Senator BARTLETT. Thank you, Gene, for appearing before the committee and giving your statement.

Before asking Representative Moulder if he has any questions, the chairman will say in his own behalf that before the first morning session is concluded he generally gets around to introducing everyone in the party.

He skips a few at first, and right now there is in my focus another valued member of the group, who has given us much assistance, especially in the bills relating to economic regulation, and I refer to Fred Lorden, of the Western Highway Institute.

Stand up, Fred, so they can see you.
Representative Moulder?

Mr. MOULDER. Mr. Chairman, I have no questions to ask.
Senator BARTLETT. Mr. Barton?

Mr. BARTON. Thank you, sir.

Mr. Rogge, you stated that these restrictive practices, as you term them, of the Alaska Railroad against the truckers, are no longer in existence, is that correct?

Mr. ROGGE. That lowering of the rates in the summer, yes, that's

true.

Mr. BARTON. Are there any current practices that you considerMr. ROGGE. Well, there is one statement I would like to add to Mr. Chapados' statement.

I don't think he pointed out quite clearly the rate between Valdez and Fairbanks for most of the truckers now on group 1 groceries is $1.30 a hundred. That's what we get out of it.

If the railroad were compelled to pay wharfage and handling charges in Seward, our rates would be right with theirs, or very close, a few cents a hundred, if they were compelled to pay that wharfage and handling in Seward.

Mr. BARTON. Do you agree that this $1.30 rate is not a compensatory rate? Or can you get by on it and make any money?

Mr. ROGGE. Yes, $1.30, yes, I can operate on $1.30, that is, with some of the higher tariff freight that we haul.

Mr. BARTON. What do you think of this $1.50 rate Mr. Chapados mentioned? Of course, that would be desirable, wouldn't it-it would be a little more cushion, a little more profit?

Mr. ROGGE. Well, yes, you could operate like you should be able to operate.

Mr. BARTON. You think then it would be well to have some regulatory body that would have jurisdiction over the level of these rates rather than having yours subject to regulation and the Alaska Railroad's free to be adjusted as the management sees fit?

Mr. ROGGE. Well, the way I look at it, if the Interstate Commerce Commission comes up here and intends to regulate the truckers, they're certainly going to have to do something with the railroad, or the truckers are not going to be regulated either, they won't stand still for it.