Senator BARTLETT. Well, what would the reaction of the passengers be to this? The overhelming number of them are bound to Honolulu. Honolulu is the place they have heard of. Would they resent this added time! Mr. CROSSLEY. Well, that would be supposition, of course, but I think that you could draw a parallel on transportation across the United States. There are many people whose destination is Chicago or New York who take a direct flight. On the other hand, if you are going to Washington, D.C., many times there are very few carriers flying direct from the west coast areas directly into Washington, D.C. You do have an intervening stop at Chicago, but I think the passengers would also be provided with direct flights into Honolulu and that that would be the major portion, but that flights with an intervening stop that would eventually get you to the island of Oahu and to Honolulu on a common fare would find great acceptance. Senator BARTLETT. That would be at the option of the passengers. Mr. CROSSLEY. That would be at the option of the passengers. Senator BARTLETT. That explains the point. Mr. Hoff, do you have any questions? Mr. HOFF. No, sir. Senator BARTLETT. Mr. Barton? Mr. BARTON. No, sir; no questions. Senator BARTLETT. Thank you very much, Senator Crossley. Mr. CROSSLEY. Now, may I just give a personal observation on the time limit, the question that was raised with Mr. Starr? Senator BARTLETT. Certainly. Mr. CROSSLEY. I sat for a number of years as a member of the public utilities commission and have some background at least in the time factors relative to public hearings. I simply wanted to state as a personal observation that I thought that 6 to 7 months is certainly an adequate time for a hearing involving rate changes with a mainland carrier. Thank you very much. Senator BARTLETT. We appreciate your cross examination on that point, Senator. Senator Long has some material to place in the record. Senator LONG. Mr. Chairman, in connection with the question raised yesterday as to the dollar value of our goods imported and also the estimated freight charges, the chamber of commerce has submitted a report signed by Leonard Withington, manger, trade department, and I should like to submit that for the record. It shows the imports in 1958 were valued at $426 million. The ocean and air freight for the above goods totaled $40,600,000. That is taken very largely from the 1959 midyear report, department of business research, Bank of Hawaii. Senator BARTLETT. The letter will be included in the record and the Bank of Hawaii report will be placed in the file. (The document referred to is as follows:) CHAMBER OF COMMERCE OF HONOLULU, Hon. OREN E. LONG, U.S. Senator from Hawaii, Honolulu, Hawaii. DEAR SENATOR LONG: You requested us to provide you with some estimates of the total annual value of imports to Hawaii from the continental United States, also the estimated freight costs involved. The business research department of the Bank of Hawaii annually publishes a midyear report, including a balance of payment statement for the State of Hawaii. According to the most recent report: Million During the calendar year 1958, Hawaii purchased from mainland goods with a total value__. $426. 0 Ocean and air freight for the above goods totaled__. 140. 6 1 The figure published in the report is $43 million, but this also included freight payments on imports from foreign areas. It should be noted that rail or truck transportation costs are not included in the above figure, which is approximately 9 percent of the value of the goods. We hope that this information will be helpful to you. Very truly yours, LEONARD WITHINGTON, Senator LONG. Mr. Chairman, another letter which was sent to me under date of October 26, 1959, from Mr. Tim Ho, superintendent of public works, the State Highway Department of Hawaii, contains information of interest. I wish to read a single paragraph and then will turn that over to the clerk. Yesterday, I referred to the fact that during the first 8 years of the National Federal Aid Road Act, Hawaii did not participate. I will read this paragraph, and then what happened following 8 years and then a lapse of 5 years because I think it gives us a precedent on which we can base a hope for considerable financial support for our roads and even a ferry system if that should be included in the National Highway Act, a real basis for expecting something. This paragraph: The provisions of the Federal Aid Road Act approved June 11, 1916 (39 Stat. 355), were extended to Hawaii by an act of Congress (43 Stat. 17) approved March 10, 1924, and Hawaii received its initial Federal-aid highway allocation of $365,625 for the 1925 fiscal year. The Congress by an act approved February 23, 1931 (46 Stat. 1415), appropriated $880,000 for Federal-aid highways in Hawaii which was the amount Hawaii would have received from 1917 to 1925 if we had been included in the original act. Now, this brief paragraph: We would have received approximately $47,985,483 in Federal-aid for interstate highway had Hawaii been included in the interstate and defense highway program. Which, I believe, became effective in 1954 or 1952, and a table is attached here showing the distribution of that amount which would have been ours had we been included under the act originally. Thank you. Senator BARTLETT. Senator Long, the committee will be glad to accept the letter and the attached report and they both will be printed in the record. (The document referred to is as follows:) HAWAII STATE HIGHWAY DEPARTMENT, Hon. OREN E. LONG, Honolulu, Hawaii. DEAR SENATOR LONG: I regret that a previous commitment on Maui prevented me from accompanying you and Mr. Stewart Fern to Waipahu last Wednesday. We do appreciate your endeavors toward securing participation for Hawaii in the interstate highway program and we are optimistic that we will soon receive recognition of our critical highway needs. houses of the 30th Legislature of the Territory of Hawaii in April, 1959. Because of the importance of this question of joint through fares between the west coast and each island within the State of Hawaii, Hawaiian Airlines wishes to place before this committee information which it has developed to demonstrate the advantages of such a fare structure, both with respect to a combination of sea and air service, as well as service via air exclusively. This information has been summarized in a brief study which we wish at this time to place before the committee for its consideration, and, Mr. Chairman, I refer to a study which sets forth what we have found to be the advantages that flow to the State of Hawaii, to the carriers involved, to the Federal taxpayer through the potential reduction in Federal subsidy paid to the interisland carriers through adoption of a common fare or a joint through passenger fare which will bring more tourists to the neighbor islands than are presently going to the neighbor islands. Senator BARTLETT. Do you have before you, Mr. Cooke, a table in this connection? Mr. COOKE. Yes, this is part of the study, and I would like, if I may, to take a few moments to merely summarize the key advantages of the common fare. Senator BARTLETT. That may be filed and the document, itself, will be made a part of your remarks in the printed record. Mr. COOKE. Thank you. (The document referred to is as follows :) SUMMARY STUDY OF BENEFITS TO FEDERAL TAXPAYER, TRAVELING PUBLIC, ECONOMY OF THE STATE OF HAWAII, AND THE INTERISLAND AIR CARRIERS TO BE DERIVED FROM THE ESTABLISHMENT OF COMMON OR JOINT THROUGH FARES BETWEEN POINTS ON THE WEST COAST OF CONTINENTAL UNITED STATES AND EACH ISLAND OF THE STATE OF HAWAII EXPLANATION OF PRESENT FARE STRUCTURE APPLICABLE TO TRANSPORTATION BETWEEN THE WEST COAST AND EACH ISLAND OF HAWAII The following table sets forth the existing air routings and fares applicable to transportation between points on the west coast and each island of the State of Hawaii: Routing from any gateway on west coast to airport and island Honolulu, Oahu. Lihue, Kauai. Hoolehua, Molokai.. Lanai City, Lanai. Kahului, Maui.. Hana, Maui. Upolu Point, Hawaii. Kamuela, Hawaii. Kona, Hawaii.. Hilo, Hawaii. 1 Not available. 1-way air fare, all gateways on west coast to Honolulu, Hawaii 1st class $178 Tourist 178 $133 178 178 178 178 178 133 178 133 178 133 11111 The fares for sea/air travel between west coast gateways and the neighbor islands are constructed in the same manner as above, a combination of the respective local fares of each carrier involved. 5170961-33 It is significant to note that under the existing fare structure, a common fare exists between each gateway on the west coast and Honolulu, in spite of substantial differences in the mileages involved. Thus, the principle of the common fare has already been applied to the major segment of Hawaii/west coast transportation. The remaining inequity would be eliminated if a common fare were established between any gateway on the west coast of the United States and any island within the State of Hawaii. BENEFIT TO THE STATE OF HAWAII In spite of improvement in recent years in the general economy of the State of Hawaii as a whole, the economy of the islands other than the Island of Oahu has seen no progress over the past 10 years. There has, in fact, been a decline in population on the neighbor islands (see appendix A) and a lag in the per capita income of neighbor island residents as against residents of Oahu (see appendix B). This serious problem is well summarized in appendix B, an article published recently in the Honolulu Advertiser, discussing the economic plight of the neighbor islands. Opportunities for establishment of additional industry on the neighbor islands are seriously limited because of shipping costs, etc. The one strongest prospect for improvement in the economy of the neighbor islands is the tourist industry. No single step could be taken at this time that would have a greater stimulating effect on neighbor island tourist industry development than establishment of a common fare between west coast points and each island in Hawaii. A high percentage of mainland visitors limit their Hawaii visit to the Island of Oahu because of their reluctance to spend the additional amount necessary to fly to a neighbor island. If the common fare were instituted, not only would the low load factors of neighbor island hotels be improved, but also new hotel construction would be an immediate result. BENEFIT TO THE TRAVELING PUBLIC The common fare would also be of great benefit to the neighbor island residents. As indicated in appendix B, residents of neighbor islands, because of their lower per capita income, are less able to bear the cost of air transportation between their island and the United States than are Oahu residents. Yet, solely because of the absence of direct nonstop transportation between neighbor islands and the west coast of Hawaii, neighbor island residents are required to pay a higher fare in order to travel to the continental United States. Establishment of the common fare would thus enable neighbor island residents to make trips to the continental United States at lower cost than at present, resulting in the generation of additional business for the carriers involved. BENEFIT TO THE FEDERAL TAXPAYER AND INTERLAND AIR CARRIERS Appendix C sets forth the basic problem which has caused the two interisland carriers to suffer operating losses over the past 10 years and has made them both dependent on Federal subsidy payments aggregating $3,295,000. As this table shows, the interisland air carriers have realized an annual rate of growth in their business of 3 to 9 percent in the past 10 years, while mainland carriers have enjoyed an annual growth rate ranging between 15 and 30 percent. Two factors have caused this lag in growth for interisland carriers. One is the declining population on the neighbor islands of the State of Hawaii. As a result, there has been no growth in island resident travel (see appendix F). It will be noted from this table that the total resident passengers traveling in the years 1952 and 1953 were 427,000 and 431,000, respectively, while in 1957 430,000 were carried. In 1958, because of a severe depression in the neighbor islands' economies caused by a 5-month sugar strike, interisland resident travel dropped to 388,000. Although there has since been some improvement, there is no indication that resident travel between the islands will materially increase over the next several years. The forecasts have island economists predict a continuing de cline in neighbor island civilian population. The second factor causing the slow rate of growth of interisland travel is the absence of surface transportation carriers from whom traffic can be diverted. A large part of the growth in mainland air travel has come from diversion of passengers from the automobile, rail, and bus. Since the two interisland air carriers provide the only means of travel between the islands by passengers, there is no surface means of travel from which to draw additional business. houses of the 30th Legislature of the Territory of Hawaii in April, 1959. Because of the importance of this question of joint through fares between the west coast and each island within the State of Hawaii, Hawaiian Airlines wishes to place before this committee information which it has developed to demonstrate the advantages of such a fare structure, both with respect to a combination of sea and air service, as well as service via air exclusively. This information has been summarized in a brief study which we wish at this time to place before the committee for its consideration, and, Mr. Chairman, I refer to a study which sets forth what we have found to be the advantages that flow to the State of Hawaii, to the carriers involved, to the Federal taxpayer through the potential reduction in Federal subsidy paid to the interisland carriers through adoption of a common fare or a joint through passenger fare which will bring more tourists to the neighbor islands than are presently going to the neighbor islands. Senator BARTLETT. Do you have before you, Mr. Cooke, a table in this connection? Mr. COOKE. Yes, this is part of the study, and I would like, if I may, to take a few moments to merely summarize the key advantages of the common fare. Senator BARTLETT. That may be filed and the document, itself, will be made a part of your remarks in the printed record. Mr. CookE. Thank you. (The document referred to is as follows:) SUMMARY STUDY OF BENEFITS TO FEDERAL TAXPAYER, TRAVELING PUBLIC, ECONOMY OF THE STATE OF HAWAII, AND THE INTERISLAND AIR CARRIERS TO BE DERIVED FROM THE ESTABLISHMENT OF COMMON OR JOINT THROUGH FARES BETWEEN POINTS ON THE WEST COAST OF CONTINENTAL UNITED STATES AND EACH ISLAND OF THE STATE OF HAWAII EXPLANATION OF PRESENT FARÉ STRUCTURE APPLICABLE TO TRANSPORTATION BETWEEN THE WEST COAST AND EACH ISLAND OF HAWAII The following table sets forth the existing air routings and fares applicable to transportation between points on the west coast and each island of the State of Hawaii: The fares for sea/air travel between west coast gateways and the neighbor islands are constructed in the same manner as above, a combination of the respective local fares of each carrier involved. 5170961--33 |