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Senator BARTLETT. You also said, Mr. Rollog, that in one case you wouldn't have been able to stay in business, if this service had not been available. Will you explain that?

Mr. ROLLOG. That goes back to a time when we had quite a long dragged-out strike here, and our shelves were getting low, believe me. There was just nothing-we had no way of getting merchandise in, except by air, and, of course, that was prohibitive, as far as freight was concerned. The people just couldn't pay, and wouldn't pay those prices. It was just through fortune that the seed of this business was started. I got wind, or heard of a small boat that was in Seattle, lying at the dock there; the boat, the Coral Sea; it was a private fish boat. I got the owner by telephone, and asked him if he would be interested in bringing up a load of cargo for our store. He said “yes, we'd be very happy to." I then contacted my various wholesalers, gave them a tentative order, and where to contact the ship owner. We loaded aboard about 14 to 16 tons of freight at the store for our particular store. Our store was quite a bit smaller then than it is now; that goes back about 7 years; but I had the local wholesale house fill in the balance of his hold with canned milk. There wasn't a can of milk in town here—no fresh milk, either.

That was the original charter setup. We got the boat going, got in our freight. It looked so good, we sent the boat back for another load. By that time, two or three other merchants became interested. Then we decided to keep this vessel going. We made quite a number of trips, before the strike was eventually settled, and the bigger ships were back on the run. It was around 60 days, or 70 days duration before the strike was settled. That's how we got started.

Senator BARTLETT. What advantage do you believe, Mr. Rollog, the charter service confers upon you now?

Mr. ROLLOG. The privileges, or the benefits?
Senator BARTLETT. Yes, both.

Mr. ROLLOG. Well, they have consistently, without fail, given us weekly service.

Setting up a competitive service in town has bettered our competing line. Now they are giving us better service. There have been occasions, when we had only one line in town, that our freight was left, whether purposely, or what, I don't know, but left on the dock in Seattle for a long period of time. I would receive, not only my statement for the merchandise, but some "Please remits” and yet the merchandise was still laying on the dock in Seattle. On one occasion, I eventually received it, along with a demurrage bill. That freight had been stacked up there for about 60 days, on the dock in Seattle. Apparently, it had been pushed back in the corner, other merchandise piled in front of it. I didn't get the details. The wholesaler didn't know where it was; it seemed like nobody knew; and we eventually found it, but it was in bad shape.

There are other instances, on perishables, and I can quote from a letter that I have on file, which I should have brought down, from Swift & Co.; they apologized for not getting my meat aboard the vessel; they said that they had brought the truck down to the ship, and it was refused because it was getting too close to sailing time. I understand that they have a schedule to maintain. So it was

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brought back to the wholesale house, and consequently, my meat cases were empty, for a week, until the next boat. Now, and the charter service boats have been held, delayed—the sailing has been delayed for several hours, knowing there was a shipment coming down lato there is where your flexibility comes in.

Senator BARTLETT. Do you ship at all now with Alaska Steam?

Mr. ROLLOG. Oh, yes; we do. I have, like Mr. Wingren stated, I have no ax to grind whatsoever there. We ship quite a bit of merchandise with Alaska Steam.

Senator BARTLETT. Would you think that you do as he does, ship as much as half?

Mr. Rollog. Yes, it runs about 50 percent. It usually is of a type of merchandise, “dry” cargo in cribs, and our small boats can carry only a certain maximum amount of cribs; and if there is an overflow, they have to go on the Alaska Steamship Co. I am very grateful for their service, believe me.

Senator BARTLETT. Do you ship most of your fresh foodstuffs on the charter ships?

Mr. Rollog. Yes, sir, that is correct.
Senator BARTLETT. Including milk?

Mr. ROLLOG. The milk doesn't come through us; it comes through the local jobbers. We don't ship any fresh milk.

Senator BARTLETT. I see. Meat?
Mr. ROLLOG. Meats and produce, and frozen foods.
Senator BARTLETT. Mr. Barton

Mr. BARTON. Mr. Rollog says here "We feel that our service must continue; that the line will eventually be solvent."

Mr. ROLLOG. That is correct.
Mr. BARTON. What is the condition of the line?

Mr. ROLLOG. Our Ketchikan Merchants’ Charter, we are in debt; there is no question about it. Some of it was through prior mismanagement, but our present manager has done a marvelous job. We still have a long ways to go to pull it out. I think we will as the merchants here have grouped together and we are attempting to solve our financial problems, and get

the charter on its feet. Mr. BARTON. Who is your manager? Mr. ROLLOG. Mr. Hoage, Mr. Irving Hoage, of Seattle.

Mr. BARTON. I take it that you are willing to incur this deficit in order to have flexible, reliable service?

Mr. ROLLOG. Definitely.

Mr. BARTON. What are the requirements for membership in your organization?

Mr. ROLLOG. You have to have a business license, and of course you have to sign up as a charter member. We cannot ship to anybody other than members.

Mr. BARTON. In other words, the group doesn't hold itself out to serve the public?

Mr. ROLLOG. Definitely not; no.

Mr. BARTON. I was wondering about this canned milk that you hauled; that raised a question in my mind; that was for your account; was it?

Mr. ROLLOG. Yes; the canned milk was shipped to our store. I am a charter member so it was shipped directly to our store, and then billed to our wholesaler. It had all come consigned to me.

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Mr. BARTON. I see.
Mr. ROLLOG. But I had to get his order to fill up the cargo, you

see.

Mr. BARTON. I asked Mr. Wingren this question, and he didn't know; possibly you may not: but what additional cost would there be if you had to comply with Coast Guard requirements on inspection ?

Mr. ROLLOG. That is a technical question and I don't know. Mr. Hoage is in a better position to answer those questions than we are.

Mr. BARTON. Thank you, sir.
Senator BARTLETT. Thank you very much, Mr. Rollog.
The next witness will be Mr. Ernie DeBoer.
We are glad to hear from you, Mr. DeBoer.

STATEMENT OF ERNIE DeBOER, KETCHIKAN, ALASKA Mr. DEBOER. Thank you, Senator.

My name is Ernie DeBoer, and my address is 3612 Baranof Avenue, Ketchikan. I did not prepare a statement. I am here to acquaint you gentleinen with the importance of shipping fresh dairy products to Ketchikan.

At the present time, I am shipping approximately 1,500 gallons of fresh milk per week. I am shipping about nine-tenths of my products on Merchants' Charter ship. I think it is very important for quality, and freshness, to have two boats handle our products in a week.

Senator BARTLETT. Does that conclude your statement, Ernie?

Mr. DEBOER. Perhaps these gentlemen do not know that there are no cows in Ketchikan. We had cows at one time, but the shipping cost of feed was so high that we decided to drop the cows and to ship in fresh milk. We have one local creamery here that recombines milk, but not to a great extent.

Senator BARTLETT. How much milk do you ship in a week?
Mr. DEBOER. Approximately 1,500 gallons per week

Senator BARTLETT. And are there any other wholesale shippers here? Mr. DEBOER. Yes, there is one other, Crystal Dairy.

Senator BARTLETT. And you say you ship about nine-fifteenths of that, or three-fifths of that by charter boat?

Mr. DEBOER. Oh, more than that, Senator; I would say probably 280 cases to 40 cases; that is about what it would be, I would say.

Senator BARTLETT. Why do you divide it in that manner?

Mr. DEBOER. So far, I have found that the Merchants' Charter is just about perfect for me for shipping. They keep it cold enough so that when it arrives here, it is approximately 32°, and that's well down there for lasting qualities, to last at least a week, I think.

Senator BARTLETT. And when it arrives by Alaska Steam, what is the temperature?

Mr. DEBOER. The last two or three times they checked it, it has been 36°, which is OK, but maybe the lasting quality would not quite be as long as the milk that arrives here at 32°.

Senator BARTLETT. And why do you ship by Alaska Steam?

Mr. DEBOER. Well, there are a couple of items that seem to just fit Alaska Steam, like cottage cheese, that can't be sent in cold storage. I could send it cold room, with the Charter, but Alaska Steam with their

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box, I think they keep it right at 33° or 34°. That is just about perfect for cottage cheese; and whipping cream and also half and half cream, that cannot be frozen.

Senator BARTLETT. Most of your fluid milk, then, comes by Charter boat?

Mr. DEBOER. Yes, it does.

Senator BARTLETT. And, how long will that last, if kept at a proper temperature?

Mr. DEBOER. Senator, we have had it last at least 2 weeks, with arrival at 32o. We can keep it at least 2 weeks.

Senator BARTLETT. What do you think would happen to your business, what adverse effects would occur, if you were required to depend entirely upon Alaska Steam?

Mr. DEBOER. At one shipment per week?
Senator BARTLETT. Yes.

Mr. DEBOER. I couldn't rightly say, Senator; I have never tried it, but I think they could possibly ship it in. I would have to watch my orders very closely; I wouldn't be able to ship in enough milk to be able to push it; I mean, have any extra ; I'd have to run out.

Senator BARTLETT. Would you say then that the continuation of the Charter boat service, for you, is desirable, but not essential ?

Mr. DEBOER. Well, it is very desirable, that's for sure, because of the way I handle it, and the way that they handle it, to get it here.

Senator BARTLETT. When was the local dairy discontinued, insofar as

Mr. DEBOER. As cattle?
Senator BARTLETT. Yes.
Mr. DEBOER. That was discontinued in 1953.

I would like to explain that a little bit more. We were running about 30 cows then, and I was managing for Mr. Andres, who owned the Crystal Dairy at that time. All of a sudden we found ourselves with a marine strike on our hands, and no way to get feed in here for the cattle. We were running low on hay, and our grain was about gone, and there was no way to feed these 30 head of cattle. We decided to slaughter them, which we had to do; and inside of 1 week we slaughtered about 20 head. We saved the best that we had. By that time, we got some relief from Canada from one shipment of hay through a Canadian boat. We did have trouble landing this feed here. It arrived here because of the foot-and-mouth disease in Canada; they shipped it on up north; they couldn't get it off, and through a lot of redtape we got it off on the way back. This relieved us at the present time, but after that Mr. Andres decided to call it quits on the cattle business.

Senator BARTLETT. How much does milk sell for per quart retail ?
Mr. DEBOER. 34 cents.
Senator BARTLETT. That is in the stores?
Mr. DEBOER. In the stores; yes.
Senator BARTLETT. How much is a quart of milk in Seattle?
Mr. DEBOER. Right at the present time it's 21 cents.

Senator BARTLETT. In Ketchikan you used to get a considerable volume of milk from Canada. Do you import any from there now?

Mr. DEBOER. No; there is no milk imported from Canada at all at the present time, no fresh milk or otherwise, either.

Senator BARTLETT. Thank you, Ernie.
Mr. Barton ?

Mr. BARTON. I would just like to ask him how the costs of the Char. ter Association and the Alaska Steam compare?

Mr. DEBOER. Well, it is very much the same, I am quite sure.
Senator BARTLETT. Any further questions!
Thank you, Ernie, very much.
Mr. DEBOER. Thank you.
Senator BARTLETT. The next witness is Mr. James G. Barry.

STATEMENT OF JAMES G. BARRY, KETCHIKAN, ALASKA

Mr. BARRY. Senator Bartlett, gentlemen, my name is James G. Barry, Post Office Box 2667, Ketchikan, Alaska. I am a general contractor at Ketchikan. I am a partner in my organization.

My testimony principally would be toward the effect of the Merchants’ Charter service to the outports and remote areas around the Ketchikan and southeastern Alaska district.

We have had numerous jobs out of the area of Ketchikan, namely, at Klawock and Craig and Annette Island; and we have found that the service which can be rendered by the Merchants' Charter Association greatly aids us, and our customers, in getting the materials into these areas, at a reasonable rate, which doesn't make the cost of construction prohibitive.

At Craig and Klawock, in 1955, we had the contract, for the U.S. Government, under the Alaska Public Works, which amounted to over half a million dollars. The nature of the harbors and docks at Craig and Klawock would not allow the Alaska Steamship vessels to dock there, and thus the means of transportation had to be either barging the materials into the area, or using a carrier, such as Merchants' Charter Association.

They, at that time, provided the transportation for all of our materials into that area, and by being able to use that transportation, there was a considerable saving effected to the Government, in the cost of the construction of those jobs.

We have had several jobs at Annette Island, and that is also what you might consider a remote area, so far as transportation is concerned. It is very close to Ketchikan, however, the Alaska Steamship Co. cannot see fit to go in there for less than 75 or 100 tons. The jobs that are performed over there, in small construction, do not have the tonnage to come up to that requirement. We have also found that the Merchants' Charter Service aids the economy of the job considerably. Barging is always a means of getting material in, but it is not the most economical, by any means. I would say that possibly our business would extend over most of southeastern Alaska, from time to time. We certainly hope to see the Merchants' Charter Association continue, in order to be able to give the service that helps these outport areas.

I can also see that without being able to operate into the areas of Ketchikan, Petersburg, and Juneau, they possibly could not maintain a service, only to the outport areas.

That is the extent of my testimony.
Senator BARTLETT. Jim, thank you for your statement.

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