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Let us assume that charter vessels are not in operation, and that you have a job at Klawock that requires 40 tons of construction material. Would a barge go there for that amount?
Mr. BARRY. Å barge would go there for that amount, at a price. Senator BARTLETT. From where, directly from Seattle?
Mr. BARRY. Directly from Seattle, or we could ship materials into Ketchikan, and transship them on small vessels or by barge over to Klawock and Craig. However, that duplicates the cost of transportation.
Senator BARTLETT. Is there a regular service between here and the west coast by small vessel ?
Mr. BARRY. There is a regular small vessel service, between here and the west coast; you could call it regular, I believe, in the sense that it
week. Senator BARTLETT. Is that vessel large enough to take 40 tons at one time?
Mr. BARRY. I do not know whether it is or not. Senator BARTLETT. You submit, however, that transshipment from Ketchikan would greatly increase your freight rates?
Mr. BARRY. Oh, yes, I would say that in the case of 40 tons, depending somewhat on the commodities, but coming from Seattle to Ketchikan by dray to the-or even if it didn't have to be moved by dray, if the transportation company operating over to the west coast could pick it up at Alaska Steam, I would say that it would still increase the cost of your ultimate delivery by 40 percent, 50 percent possibly, and maybe even more. It depends on the commodity, somewhat.
Senator BARTLETT. And, would you be inclined to believe that the same percentage increase would apply to foodstuffs; or do you have any information on that?
Mr. BARRY. I do not have information on foodstuffs.
Senator BARTLETT. Your information relates then to construction materials ?
Mr. BARRY. Yes; particularly construction materials.
Don King. We are glad to hear from you, Mr. King.
Mr. King. Senator, and gentlemen, I am Don King, owner and operator of King's Plumbing, Heating & Sheet Metal Co., 1817 Tongass Avenue, Ketchikan.
We are in the construction business, too, as a mechanical contractor; and our case is similar to the one you just heard from Mr. Barry. We ship quantities of merchandise to these outlying ports, in doing construction work, both for public works or the State; and, as a mechanical contractor, a lot of our equipment is large and bulky. We do a lot of shipping with Alaska Steam; but on these outlying jobs it is much more convenient to pick this merchandise up, in Seattle, and put it on Merchants’ Charter, taking it directly from Seattle to either Craig, or Klawock, or Wrangell, or Petersburg, wherever we
happen to be doing construction work; and I feel also that it helps us in keeping down our inventories.
As you know, we can't run down to the corner wholesale store and pick up merchandise very time we need it. Our inventory will vary from $25,000 to $40,000 a year in our shop. By having these two boats a week, it enables us, if we miss something on one job, we can pick it up and ship it on Merchants' Charter during the next week, not having to wait a full week for this merchandise.
A lot of times, our work that we are in, is quite-well, it is quite a public necessity; in other words, we maintain boilers, and oil burners, and lots of times, we need equipment, in a hurry.
Small stuff, we can get by plane, but anything that is large, has to come on these smaller boats; so I feel that Merchants' Charter has been quite an asset, as far as maintaining the small businessman here, because otherwise, we would have to carry such a stock here that it would be almost prohibitive.
Senator BARTLETT. Mr. King, if you have a shipment for Hydaburg, does the vessel ever go direct from Hydaburg to Seattle, or does it always put in at Ketchikan first?
Mr. King. Now, which boat do you have reference to!
Mr. KING. Normally, if we are doing a construction job, they will set their boat up to meet our schedule. If we have a time when we need a boiler, or a specific piece of equipment, they will more or less go out of their way to set up so that they can bring that direct from Seattle to Hydaburg, or Craig, or wherever we happen to be working.
We have just finished a job over at Annette Island; and they brought in a bunch of equipment for us there, along with the general contractors' merchandise, at a specific time; in other words. we don't have to order all of our material at one time. We order our basic material, anything for subsoil work, which is brought in at the time we need it; and then, later on, finished equipment is brought in; so it is a real convenience for us.
Senator BARTLETT. Have you ever inquired of Alaska Steam as to how much freight the company would require in one shipment, before it would put in at any one of these outports!
Mr. KING. Yes, I have.
Mr. KING. Well, it was more tonnage than we had, let me put it that way. I don't remember the exact figures; but they—the smaller charter boats will take in smaller loads for us, which is quite essential
Senator BARTLETT. Thank you very much. Any questions?
Senator BARTLETT. Glad to have you here, Mr. Hunt; and the committee will be pleased to hear whatever testimony you have to offer.
STATEMENT OF OWEN HUNT, OF KETCHIKAN, ALASKA, GENERAL
MANAGER, TONGASS TRADING CO.
Mr. HUNT. Well, it is real nice to have the opportunity to share our problems with you, today.
My name is Owen Hunt, I live at 2034 Second Avenue; I am the general manager of Tongass Trading Co., and we operate seven distinctly different retail businesses in the city of Ketchikan. I think that we could best be classified as being the complete outfitting.company, designed to outfit, not only loggers and fishermen, and mining operations; but in addition to that, we serve the local citizenry, and also people that live in the adjoining communities, around Ketchikan.
I would like very much to urge you to do all in your power to help us maintain the KMCA as a part of our operation in the city of Ketchikan.
I think that, in order to realize the problem that we are faced with, it is going to be necessary for you to visualize, for instance, in the instance of a logging camp, that we have in the neighborhood of 35 logging camps in this particular area. They are located in the brush, and many of them are located as far as 50 miles from the city of Ketchikan itself. Those particular operations are dependent upon the merchants in Ketchikan, and are dependent upon ourselves for their requirements, not only for their everyday needs, but there are tremendous emergencies that arise in logging camps, whereby they must have supplies immediately.
Now, in order to protect ourselves, to see that we have the necessary supplies for these logging camps, we have found that it is practically vital to us that we split our shipments. We will generally go half KMCA and we will go half on Alaska Steam so that whichever boat gets to Ketchikan, we have the assurance that we have the supplies that will be so vitally needed in these outlying areas. I think that the Government during the Second World War realized the importance of dividing cargo. When they would make a landing on an island they didn't want to put all of their ammunition in one boat, and all their guns in another boat. That way they could wind up with soldiers on that island, with guns, and no ammunition to shoot. What we have attempted to do, in the way that we have used KMCA, has been that we have split our shipments between the two shipping lines. Consequently, whatever boat comes through, we have enough, as far as minimum supplies, to take care of the needs for these individual camps, individual operations that we supply,
In addition to that, presently, we have two weekly arrivals of boats in Ketchikan, which possibly doesn't seem like much, unless you are familiar with the fact that that can oftentimes save a logging operation 3 days in the receipt of necessary supplies that they might receive; and 3 days' time, to me, as far as an individual is concerned, doesn't amount to much, but when you figure that you have maybe 35 logging camps, and that there are maybe as high as 40 men affected, as far as the work is concerned, by any shutdown or slowdown in their operations, you can see that the thing grows by leaps and bounds. We found that KMCA was a tremendous factor in helping us in that respect.
I would like to say that I have no complaints on Alaska Steam. We ship by Alaska Steam, and frankly, if Alaska Steam was in the position of KMCA, the precarious position that KMCA is in, right now, I would be up here talking to you to see if there wasn't something that we could do to maintain the service that the Alaska Steam had to offer.
I would like to see two shipping lines; and I don't believe that when you are in an area such as we are in here, that we should be faced with a situation where we have one shipper controlling our lifeline, as far as serving the people of the community and the outlying operations.
That is my statement, Senator.
I propose now to make a statement and I would like for you to comment on it in case you want to I will say—and this is repetition of and a summation of testimony that was given to the committees, when the first bill was enacted.
It is well and good that this charter service be provided for these so-called outports; because, obviously, it would be uneconomic for a big ship to put into any one of them for a few tons of cargo. But, this type of service, this charter service should not be provided for ports such as Ketchikan, and Wrangell, and Petersburg, and Juneau, because it provides unfair competition for the common carrier, namely, the Alaska Steamship Co., which is required to comply strictly with the law in every particular, relating to manning of its vessels, relating to safety, and other factors. Why, then, should these charter vessels put into these principal ports and by evasion of the necessity that operates against the common carrier, have this privilege of taking the cream of the trade?
I want to emphasize that this is not a statement which I make in my present capacity, but I merely repeat it to you, having heard it so many times in the past; and would you care to comment on that?
Mr. Hunt. Well, my only comment on it, would be that our primary concern is to provide service for our customers, much needed se ice. From the history of this community I think that if we were to revert to an operation where one shipping line had had the say as to the type of shipments that would be picked up, what we could do, and what we couldn't do, that we would be subjected to situations that we do not now have.
I do not think that—I am not a shipping man, I am not in the shipping business, but I do not think that it takes a genius to figure out that it would put a man in a wonderful position if he had the only ship line. I imagine what they want is to keep their boats full. By the same token, I think that a better situation for them would be a situation whereby they not only had full boats, but they had a full doc so that they would have the insurance of knowing that they had a full shipment.
I can, certainly I don't believe in unfair competition either, Senator, but I do believe in a 4-year extension, as far as the operation of KMCA would be concerned. With that 4-year extension, at least it would give us another period until another type of shipping comes into this particular area. I can't see how, from past history, how we can operate here with one shipping line, and for one person to have a hold on that shipping to the extent that they can hold off shipments if they don't want to, and cut down on the services that we are now provided with.
Senator BARTLETT. What damage, Mr. Hunt, do you believe is done the Alaska Steam, financially, by the volume of cargo carried by these charter boats?
Mr. Hunt. I think that the average merchant in the area will ship, I would say, offhand, it would average out to where they ship about 50 percent of their merchandise by each carrier, they will split their shipping about half. I think that if Alaska Steam had all of the shipping that was coming into this area I don't believe that they would have the warehouse facilities to handle it. I don't think that they could handle the amount of shipping that is coming into the town now.
Senator BARTLETT. In any case, I think my question had later be directed to Alaska Steam, and we will find out what percentage of their total Alaska volume is removed from them by reason of this operation.
Any questions, gentlemen ?
Senator BARTLETT. That will be received and accepted, and incorporated into the record.
TONGASS TRADING CO., INC.,
Ketchikan, Alaska, October 15, 1959. COMMITTEE OF SENATE, INTERSTATE FOREIGN COMMERCE COMMITTEE, Washington, D.C.
GENTLEMEN : In considering bill S. 2669 I suggest that you do all in your power to see that the 4-year extension be granted. We, at the Tongass Trading Co. feel that the small-boat operation must be maintained in order for us to adequately serve not only the fishing industry but also loggers, residents, and allied businesses.
With boats arriving twice weekly we can oftentimes save industries as much as 3 days in the event of a breakdown. It also gives us an opportunity to split our shipments having half of our merchandise come on one boat and half on another so that if either comes through on time we will be protected with a reasonable amount of any given item.
I feel that this bill is vital to our business and urge you to encourage a 4-year extension, Yours truly,
OWEN Hunt, General Manager. Senator BARTLETT. Glad to have you here, Mr. Zerbetz. I notice, Mr. Zerbetz, and I will say this before you identify yourself that you have a prepared statement which will be incorporated into the record.
KETCHIRAN, ALASKA, October 19, 1959. SUBCOMMITTEE, SENATE INTERSTATE AND FOREIGN COMMERCE COMMITTEE.
GENTLEMEN: I appreciate the opportunity you have given the citizens of Ketchikan to appear before your committee.
I am the general manager of the Stedman Hotel Co. Our firm operates two hotels, two restaurants, two cocktail lounges, a liquor store, and rental property in the city of Ketchikan.
Our business, and every business in Ketchikan, is vitally concerned with Senate bill 2669. We support this bill wholeheartedly. The operation of the small cargo vessels into Ketchikan has benefited us in many ways:
1. We have a guarantee of weekly service.
3. Our restaurants are assured of regular supplies of fresh produce and fresh milk.
4. A larger portion of the longshore payroll from the small vessels goes to longshoremen in our own community. We respectfully urge passage of this bill. Yours truly,
GORDON J. ZERBETZ,
General Manager, Stedman Hotel Co., Inc. Senator BARTLETT. And now if you will proceed to identify yourself.