Senator BARTLETT. Take your own agency, Steers Wholesale Agency, do you communicate your orders to this agent in Seattle? Mr. STEERS. No, my orders in most cases go to the supply houses; and then they notify the agent as to what is to be shipped for the particular trip.

Senator BARTLETT. And he has charge of the loading of cargo, and the dispatching of the vessel, and the operation of the vessel, throughout the route in a general way?

Mr. STEERS. That's right, yes.

Senator BARTLETT. Thank you. Mr. Baynton?

Mr. BAYNTON. Would you give us the tonnage of the vessels involved here? You mentioned three vessels.

Mr. STEERS. You want the gross tonnage?

Mr. BAYNTON. Yes.

Mr. STEERS. I don't know exactly what it is, but I believe they are all under 150 tons gross.

Mr. BAYNTON. That is all. Thank you.

Senator BARTLETT. Who is your Seattle agent, Mr. Steers?

Mr. STEERS. Stanley Dahl.

Senator BARTLETT. He isn't here today, is he?

Mr. STEERS. No.

Senator BARTLETT. From whom could we obtain more precise information about the ships?

Mr. STEERS. I imagine that Stanley Dahl would be the best one to get it from.

Senator BARTLETT. Is there anyone here, in Ketchikan, now who could give that information?

Mr. STEERS. No.

Senator BARTLETT. Do you have a membership list, Mr. Steers?
Mr. STEERS. I don't have it with me.

I have it at the office, if you want a copy of it.

Senator BARTLETT. Ít may be useful to submit the list for the record, if you would be good enough to do that.

Mr. STEERS. All right; I will be very glad to.

Senator BARTLETT. You might ask Mr. Dahl, if he will be so good as to send to the committee, perhaps to Mr. Barton, in Washington, detailed information about the three ships in accordance with the question put by Mr. Baynton.

Mr. STEERS. OK, but I will be very glad to do that.

Senator BARTLETT. Thank you.

The next witness will be Mr. Paul J. Wingren of Wingren's Food Stores.

STATEMENT OF PAUL J. WINGREN, WINGREN'S FOOD STORES, KETCHIKAN, ALASKA

Mr. WINGREN. I am Paul J. Wingren, president and general manager of Wingren's Food Stores, operating two retail food stores in Ketchikan. My mailing address is Box 377, Ketchikan, Alaska.

I have been in various phases of the retail food business in Ketchikan since 1929. I would like to thank the committee for holding hearings in Alaska on the several important pieces of pending legislation, and particularly thank you for including S. 2669 in your agenda.

I have recently reviewed the testimony given at the hearings before a House committee in September of 1957, and find that there is little change in the situation then and now. Legislation under consideration then and under consideration now is similar, and the need for such legislation is similarly imperative now.

The action taken, and the legislation passed by the 85th Congress was good, but it was not enough. We now need at least a 4-year extension, and more if possible, in order that charterboat service to southeastern Alaska may be continued in an orderly fashion. I would like to take the liberty of suggesting that the committee review the testimony given in 1957, as a matter of background, and note the similarity with testimony that the present Senate committee has heard and will hear. This is not a "flash in the pan" problem, but a problem of continuing importance to every person in southeastern Alaska. I am sure that the committee is aware that except for a few small airborne emergency shipments, and shipments of highly perishable merchandise, our only method of moving freight, north or south, is by water. We have no railroads. We have no trucklines. We have no ferry system. In view of our isolated position, I feel that we are entitled to special consideration, which would continue to permit service to all of southeastern Alaska, including the major towns, by charterboats, without being hamstrung by regulations which would make their operation impractical, if not impossible.

I would like to make it clear that I have no quarrel with Alaska Steamship Co., the one and only common carrier serving southeastern Alaska, with the exception of my objection to their opposing the bill now under consideration, in order that they might further their near monopoly. We use their service for a large percentage of our shipments. I would strongly oppose anything that would interfere with the service they render. However, in an area such as southeastern Alaska, where perhaps 99 percent of our foodstuffs are imported from the Seattle area, including fresh milk, fresh meat, and fresh fruits and vegetables, one carrier is not enough, for the common carrier renders only weekly service. By using Alaska Steam for Monday arrival, and Ketchikan Merchants for Thursday or Friday arrival, we can offer to the people of this area the fresher and more palatable foods to which they are entitled, particularly during the heavier, weekend shopping, and at slightly lower prices. One reason for the lower prices is that with more frequent arrivals, spoilage is reduced, and it is not necessary to add the shrinkage factor when pricing perishable merchandise. Another reason is that with more frequent arrivals, inventories need not be so high, thereby reducing investment, insurance, and taxes. These things may seem minor, but they are factors in the overall cost of doing business.

The flexibility of the charter boats is also important. Our agent recognizes that frequently our requirements change on short notice, and deadlines and sailing times can be changed accordingly, to fit the particular needs of the membership. In other words, with the charter boats we have a service tailored to the needs of the membership, rather than an inflexible service which is rigidly scheduled and allows for little if any deviation, even though the cost of shipping via charter boat or common carrier is approximately the same.

I do feel that the factor of competition has a certain tendency to keep rates from increasing more than what they have.

I cannot be too emphatic in urging passage of S. 2669.

Senator BARTLETT. Does that complete your statement, Mr. Wingren?

Mr. WINGREN. Yes, Senator.

Senator BARTLETT. Paul, which association do you ship with?
Mr. WINGREN. Ketchikan Merchants' Cooperative.

Senator BARTLETT. And this is a different association than the group named by Mr. Steers?

Mr. WINGREN. It is.

Senator BARTLETT. How many ships in the Co-op?

Mr. WINGREN. Four, I believe.

Senator BARTLETT. Do you know their sizes?

Mr. WINGREN. No, I don't. It is my opinion that they are all under 150 tons gross.

Senator BARTLETT. And they make delivery to you once a week? Mr. WINGREN. Yes, sir.

Senator BARTLETT. What if Alaska Steamship Co. would have two ships a week; would you have any need for this charter service?

Mr. WINGREN. There was a time when the Alaska Steam had boats in here, a midweek boat, or weekend boat, as you might term it; if they were to render the same service now as they have done in years past, giving us a midweek boat, I would say "no."

Senator BARTLETT. You say here, and I quote:

We use their service for a large percentage of our shipments

their being Alaska Steamship Co.?

Mr. WINGREN. Yes.

Senator BARTLETT. Now, what would be that percentage? Have you any idea? What percentage of your goods do you ship by Alaska Steamship Co., as compared with the Merchants Co-op?

Mr. WINGREN. My guess would be half.

Senator BARTLETT. What type of goods do you ship with Alaska Steam, or isn't there any breakdown between categories?

Mr. WINGREN. It is pretty well mixed; I think we ship more of what we would term "dry freight, dry groceries," nonrefrigerated by Alaska Steam than we do by the charter boats.

Senator BARTLETT. That is the point which I would like to allude to a bit more, if I may, Mr. Wingren. When I was up here 2 years ago, I believe, as a member of the House Merchant Marine and Fisheries Committee, looking into this subject, we were told repeatedly that the charter ships delivered milk, meat, and the like, in much better shape than Alaska Steam. Do you subscribe to that, which then was true, regardless of what the situation might be now?

Did the charter ships formerly deliver milk and meat in better shape than Alaska Steam?

Mr. WINGREN. That's right.

Senator BARTLETT. How about now?

Mr. WINGREN. There has been an improvement in Alaska Steam service.

Senator BARTLETT. How do you account for that improvement, if you do account for it? Would it be brought about by competition?

Mr. WINGREN. I personally think that competition brought it about. Senator BARTLETT. You say the rates are approximately the same in either case?

Mr. WINGREN. Yes.

Senator BARTLETT. Mr. Wingren, are you one of the principal users of this charter service?

Mr. WINGREN. Yes.

Senator BARTLETT. Your stores would be considered large stores, anywhere; is that right?

Mr. WINGREN. We have one store that is comparable to a supermarket, as you would be familiar with it; and then we have one smaller grocery store.

Senator BARTLETT. How long have you been in business here?

Mr. WINGREN. Since 1937.

Senator BARTLETT. In those days, you had several competing carriers, did you not?

Mr. WINGREN. That's right.

Senator BARTLETT. Mr. Wingren, when this bill, which is now a law, was under consideration, it is my recollection that the committee was told that if this extension was granted, it would give ample opportunity for those using the charter ships to comply with the Coast Guard requirements, as to manning, and as to safety. Why is it, if you know, that this hasn't been done, and that instead, an extension of the law is requested?

Mr. WINGREN. I couldn't—I couldn't answer that.

Senator BARTLETT. Probably we will be able to procure that testimony from some other witness.

Mr. WINGREN. I think that this will come into the testimony later, but I do know that by expanding the size of the crew, it would not only substantially increase payrolls, but it also would reduce the capacity of these small ships substantially, if you had to make quarters for another three or four, or eight men, as the case may be.

Senator BARTLETT. How do you account for the fact that the freight rates on the charter ships compare with Alaska Steam's, in view of the fact that their manning requirements are not the same, and that construction work, to meet safety, does not have to be performed on these ships?

Mr. WINGREN. Well, that is rather a technical question. I think I will leave that one for somebody else.

Senator BARTLETT. All right.

Mr. Barton?

Mr. BARTON. I would just like to ask Mr. Wingren: What would be the increase in cost, if you had to meet the Coast Guard requirements? What would it be in relation to your present costs?

Mr. WINGREN. I don't know that, either.

Mr. BARTON. Could you give us the size of this organization.

Mr. WINGREN. I think that a later witness could give it to you

more accurately, sir.

Senator BARTLETT. Thank you, Paul, for your testimony.

The next witness will be Mr. Lloyd W. Rollog. We are glad to have you here, Mr. Rollog.

51709-61-5

STATEMENT OF LLOYD W. ROLLOG, KETCHIKAN, ALASKA

Mr. ROLLOG. My address is 611 Mission Street, Federal Market, Ketchikan, Alaska.

Gentlemen, as a substantial and consistent shipper of both dry cargo, as well as perishables, ever since its conception, we find the Ketchikan Merchant's charter service indispensible. The flexibility of this service in handling most any type of cargo destined for this port means for a smooth operation of our own particular business and at one instance meant the difference of whether or not we continued in business. This I can go into a little later.

In spite of the fact that the Ketchikan Merchant's Charter Association has operated at a deficit and that serious problems have risen from time to time, the loyalty of the shippers have been unprecedented. We feel this service must continue that the line will eventually be solvent. The service rendered by the Ketchikan Merchant's charter has been unfailing and competitive. It has been instrumental in a bettered service from competing companies at one time our only monopolistic link with the continental United States.

We request that Ketchikan Merchant's charter be granted through legislation, an opportunity to continue to operate as they have in the past for the betterment and the prosperity of our isolated community. Senator BARTLETT. Thank you, Mr. Rollog.

Two questions occurred to me: You referred to the flexibility of the service.

Mr. ROLLOG. That is correct.

Senator BARTLETT. What did you mean by that?

Mr. ROLLOG. Well, flexibility, is being able to move a ship from one dock to another for a minimum amount of cargo that has to be either discharged or picked up.

Senator BARTLETT. Are you talking about the different docks in Ketchikan ?

Mr. ROLLOG. That is correct. There are some docks that do not have deep water and probably their shipments are small. Previously, their cargo had to be trucked to a larger dock. The ship could not profitably be moved, and that is understandable with the larger ships. The smaller ships could, with a smaller crew and smaller operating expenses. We could pull in to a smaller dock and pick up, and/or discharge smaller shipments of cargo.

Senator BARTLETT. If you, for example, had a dock a mile away from the waterfront here, and the ship had 20 tons aboard for you, it would pull in to that dock?

Mr. ROLLOG. Oh, definitely. There was a time here, when Ketchikan Merchants used to run over to Hollis, Alaska, with 10 tons. Presently, they ship direct from the States without using our facilities. But we have pulled in there with as low as 10 tons.

With a larger ship it would have been impossible because of the depth of the water, the docking facilities, and the small cargo.

Senator BARTLETT. If your warehouse is at this dock, a mile away from here, and you ship by Alaska Steam, your freight is unloaded on the principal dock here, and then you truck it to your warehouse? Mr. ROLLOG. That is correct.