STATEMENT OF GORDON J. ZERBETZ, OF KETCHIKAN, ALASKA, GENERAL MANAGER OF THE STEDMAN HOTEL CO., INC.

Mr. ZERBETZ. My name is Gordon J. Zerbetz. My address is 437 Main Street, Ketchikan, Alaska.

I appreciate the opportunity that you gentlemen have given the citizens of Ketchikan, allowing us to appear before your committee.

Senator BARTLETT. And you are here as general manger of the Stedman Hotel Co. ?

Mr. ZERBETZ. Yes, sir; I am the general manager of the Stedman Hotel Co., a firm operating two hotels, two restaurants, two cocktail lounges, a package liquor store, and rental property in the city of Ketchikan.

I believe that our business, and every business in Ketchikan, is vitally concerned with Senate bill 2669. We support this bill wholeheartedly, and the operation of the small vessels in Ketchikan, has benefited us in many ways. I have them listed in my prepared state

ment.

We have a guarantee of weekly service; between Alaska Steamship and KMCA, we are assured of weekly service for our supplies. This regular service has enabled us to keep lower inventories. Hotels in Alaska are in a very unique position. Our nearest hotel supply houses are located in Seattle, Wash. Some of them are in Portland, Oreg. As you gentlemen are quite aware, there are quite a few items of merchandise peculiar to hotels that would not be stocked by other wholesale houses, or stores in Ketchikan; and when we are out of items, we are stuck.

Consequently, in Alaska, you have to maintain quite a large inventory; but this guaranteed weekly service has allowed us to cut down. considerably on quite a few of these items that we formerly have stored, in dead storage, so to speak; and consequently we have more working capital left to work with.

Our restaurants, our two restaurants, are assured of regular supplies of fresh produce and fresh milk. I can't emphasize really can't overemphasize the importance of fresh produce and fresh milk. I will backtrack a little and say that I was born and raised in Ketchikan, and to me, lettuce and tomatoes, up until recent years, I have always considered them to be more or less of a luxury.

My last item that I was going to mention was that a larger portion of the longshore payroll from these smaller vessels actually remains in our community. I see that Mr. Taro of the Southeastern Stevedoring is in the audience, and I understand that he is going to be a witness before this committee, and I believe that he could probably elaborate on that particular point.

Senator, if I could deviate from my prepared statement, just a little bit, and attempt to answer your statement that you made to Mr. Hunt, would that be permissible?

Senator BARTLETT. I would welcome it, Mr. Zerbetz.

Mr. ZERBETZ. Thank you. There were two items that you mentioned, Senator: (1) You mentioned unfair competition, and (2) the common carrier.

I am not too familiar with the method of operation of the Maritime Commission, and especially how they operated right after the war, but

I would say that if KMCA were to be given a vessel for the token payments that I believe they were made available to various common carriers at that time, we might be able to comply with the regulations at the present time.

But-and the other item was with reference to the common carrier. I am a member of Ketchikan Merchants' Cooperative Association, and I assure you that we are not interested at all in going into the common-carrier business. I respectfully urge the passage of this bill, gentlemen.

Senator BARTLETT. Your statement, especially the last portion of it, is very much appreciated, and will be helpful.

Any questions?

Mr. BARTON. No questions.

Senator BARTLETT. Thank you very much.
All right, Mr. Taro.

STATEMENT OF CLIFF TARO, OF KETCHIKAN, ALASKA, GENERAL MANAGER OF THE SOUTHWEST STEVEDORING CORP.

Mr. TARO. I have a prepared statement; I will read from it, if it is agreeable.

I am Cliff Taro, president and general manager of the Southeast Stevedoring Corp., Box 1411, Ketchikan.

I am in the stevedoring business, which is the contracting for the loading and unloading of vessels. As an employer of longshoremen, we are greatly concerned with the work opportunity for these men. We load pulp at the Ketchikan Pulp Co. on the average of one ship per month. For this loading we require from 60 to 70 men and the job lasts 4 or 5 days. In order for us to maintain this available group of men, it is essential that we have other work for them between the pulp loadings.

The small charter vessels employ all local men for their cargo operations. These earnings considerably help them to earn a reasonable living between the larger jobs.

When the larger common carrier vessels, operating under the steamschooner agreement, load or unload cargo in Alaska the largest percentage of work aboard the vessel is done by the ship's crew. The sailors work the hatch with the most cargo and if there are any lesser hatches the local longshoremen get the work. This means that over half of the work is done by other than local workers. These potential earnings, which are greatly needed by our local men and the community, are lost.

The small charter vessels are a boon to the local shippers, their operation is very flexible, the vessels being small can slip from one dock to another, with a minimum of lost time. If several of the local cold storage plants desire to ship a small amount of cargo, which happens very frequently, the charter boats can and will load at each and every plant on a continuous basis, thus it saves the shipper the added expense of trucking his cargo to a larger central loading point where bigger ships could load it.

I should point out that most of the docks and/or wharfs in Ketchikan are small and confined and not adequate for the larger vessels.

Following are a few of the accomplishments during the past 7 years that can be credited to the small charter boat operations: Created competitive operations which has

Maintained more frequent and regular schedules.

Assured the small ports of southeast Alaska more frequent service. (Prior to this some ports received only monthly service.) Started the regular shipments of fresh meats.

Assured the cold storage plants adequate space and transportation for their southbound shipments.

Created additional local employment.

Assured the merchants of timely delivery of their merchandise which eleminates unnecessary and costly warehousing locally. As it is most merchants do not have the storage space for large inventories.

Allows a shorter and less expensive haul of fish to the railhead at Prince Rupert, B.C., in order to facilitate faster delivery to customers in the East and Middle West. Allowed smaller out-ports without dock facilities for larger vessels or tonnage below their minimum requirements to receive service without the necessity of the added cost and delay of transhipments.

We strongly urge your support and help in the passage of S. 2669. Senator BARTLETT. Mr. Taro, how long has the Southeast Stevedoring Corp. been in existence?

Mr. TARO. Approximately 8 years.

Senator BARTLETT. Do you have all of the stevedoring work in Ketchikan ?

Mr. TARO. No; we don't.

Senator BARTLETT. What other company is there, or is it done by any other company?

Mr. TARO. No, we are the only stevedoring company in Ketchikan. Senator BARTLETT. Do you unload Alaska Steam vessels?

Mr. TARO. No, I don't.

Senator BARTLETT. Who does that?

Mr. TARO. They do it themselves, the mates take care of the ship and the local agent takes care of the dock.

Senator BARTLETT. So, you wouldn't have any figures to give us as a basis of comparison between the cost of unloading a ton of cargo from Alaska Steam vessels and one of these charter ships?

Mr. TARO. No, I wouldn't.

Senator BARTLETT. Would you have any personal estimate?

Mr. TARO. Under the present containerized shipments of Alaska Steam, I am quite certain that their cost of unloading is much less than the cost was at the time that the Ketchikan merchants started to operate; but their actual cost per ton would be beyond my knowledge. Senator BARTLETT. When one of these charter ships comes in, a typical one, how much freight will it have aboard?

Mr. TARO. Oh, from 100 to 150 tons.

Senator BARTLETT. Let's say it has 150 tons aboard. How many men have you put to work on it?

Mr. TARO. Well, they have two vessels that are capable of operating two hatches; for each hatch, we employ 8 men on the ships, that would be 2 hatches, 16 men per ship.

Senator BARTLETT. And how long would it take the 16 men to unload that ship?

Mr. TARO. Well, figuring on the basis of 15 tons an hour, per gang. Senator BARTLETT. And these longshoremen are local residents, are they?

Mr. TARO. Right.

Senator BARTLETT. Some of them have lived here for quite awhile? Mr. TARO. Yes.

Senator BARTLETT. What would you say is the quality of their work?

Mr. TARO. Very good; in fact, I have found that all of the longshoremen in Alaska are far superior to any down the coast.

Senator BARTLETT. I won't probe any further. That is a good answering statement.

Any questions?

Mr. BARTON. No questions.

Senator BARTLETT. Thank you, Mr. Taro.

We welcome you, Mr. Phillips.

STATEMENT OF CLIFFORD R. PHILLIPS, KETCHIKAN, ALASKA, REPRESENTING E. C. PHILLIPS & SON

Mr. PHILLIPS. Thank you. My name is Clifford R. Phillips, Box 1752, Ketchikan. I am representing E. C. Phillips & Son, the local cold storage and fish processing plant. We have a plant about a mile the Narrows, that represents an investment of $400,000. We employ from 10 to 25 people, yearly, with a payroll of $65,000 to $75,000 a year. In poundage, we handle approximately 2 million pounds a year, of which I would say 90 percent is shipped by the Charter

up

vessels.

I worked for 2 days preparing a rather lengthy statement, and then after reading it over, and thinking it over, it all boiled down to three main facts: (1) we have always used Charter vessels, and have found it necessary to use them; and (2) the Alaska Steam has never given us adequate service; and (3) which is of course, the most important, if the Charter vessels are stopped from operating, we would be forced out of business.

That is all that I have to say, gentlemen. I will answer any questions.

Senator BARTLETT. Well, your statement is certainly short, and very much to the point. Why would you be forced out of business!

Mr. PHILLIPS. In the first place, our dock is located in shallow water, deep enough for the small charter vessels, but not deep enough for the Alaska Steam vessels.

Senator BARTLETT. Could you truck your shipments downtown? Mr. PHILLIPS. We have tried that. That is out of the question. The cost is prohibitive. In addition to that, there are many more problems. To truck the fish means that you have to have a long start in order to keep up with the loading of the boat; it is as least a mile; the fish would tend to thaw during that period; and the Alaska Steamship Co. is not prepared to bring that fish down to the proper temperature, after they have warmed up. Furthermore, they do not have any cold storage facilities at their dock. The fish would have to sit

out in the open, and in the summertime, of course, an hour or so out in the open would be disastrous.

Senator BARTLETT. Have you ever utilized the Alaska Steam services?

Mr. PHILLIPS. We-in the past-we used them quite often, and they used to give us a little better service; and at that time, we were operating on the cold storage dock, the Ketchikan Cold Storage dock.

Senator BARTLETT. You submit that their vessels are too large to put in at your present dock?

Mr. PHILLIPS. That is correct.

Senator BARTLETT. How long has your company been formed? Mr. PHILLIPS. The company has been formed since 1946. Prior to that, my father was in business for himself on the Ketchikan Cold Storage dock. We built our own dock in 1950-51.

Senator BARTLETT. What kind of fish do you handle ?

Mr. PHILLIPS. Salmon and halibut, sable fish, cod, herring.
Senator BARTLETT. Principally halibut?

Mr. PHILLIPS. Principally halibut, in poundage; halibut is by far the biggest product.

Senator BARTLETT. Do you handle any fresh fish?

Mr. PHILLIPS. Well, we handle it-it is all fresh, when it comes in but as far as shipping fresh, it is practically out of the question,

any more.

Senator BARTLETT. What temperature must that fish be maintained at?

Mr. PHILLIPS. It varies. Frozen could be maintained, very nicely, for a short haul, at 10 degrees above zero. Zero is the best temperature, but we'd be satisfied with 10, 12 for a 2-day haul-2- or 3-day haul.

Senator BARTLETT. Have you ever had any trouble in that respect when you used Charter vessels?

Mr. PHILLIPS. Not that I can recall; the only possibility of any trouble comes when they are moving from dock to dock; they may load a carload at our dock, and run down to the cold storage dock and leave the hatches open and load another car, and there would be a possibility of the fish warming up, but we have had no trouble, whatsoever.

Senator BARTLETT. Now, you ship enough fish so that if this law were not renewed, and the present Charter service were no longer available, you could charter a vessel on your own, which wouldn't have to meet any of these requirements?

Mr. PHILLIPS. No, we couldn't charter a vessel on our own, on that basis; in other words, we don't have the volume to keep a boat tied up just for ourselves.

Senator BARTLETT. And you inform the committee that you have an absolute dependence upon this service, and that if it is no longer available, you will go out of business, with your investment of over $400,000, and your annual payroll here in the community of Ketchikan of over $60,000?

Mr. PHILLIPS. That is correct, unless the Alaska Steam gives us similar, or adequate, or better service.

Senator BARTLETT. To do that would necessitate the placing of smaller ships in the trade by Alaska Steam?