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Aggregate also does business under the name Pacific Western Lines. Alagco Dock has performed terminal services for Pacific Western Lines and Northland Freight Lines, both of which are water common carriers.

On May 26, 1961, Mr. Grove G. Lautzenhiser, traffic manager, port of Anchorage, telegraphed the chairman of the Federal Maritime Board as follows:


Federal Maritime Board,
Washington, D.C.


MAY 26, 1961.

We are informed and believe that Alaska Aggregate Corp. is performing terminal services at its Alagco Dock, Anchorage, Alaska, in connection with T. F. Kollmar, Inc., doing business as Northland Freight Lines, and others, which are in flagrant violation of section 18, and other provisions of the Shipping Act of 1916 as amended.

It is hereby respectfully requested and urged that an immediate investigation be made to determine the extent of such violations and such remedial action as is deemed necessary be initiated by your Board on its own motion. We offer our cooperation with your staff in this connection.


Traffic Manager, Port of Anchorage, Alaska.

On May 28, 1961, Mr. Lautzenhiser dispatched a further telegram as follows:


Federal Maritime Board,
Washington, D.C.:

MAY 28, 1961.

It is hereby respectfully requested that the reference to section 18 in my confidential wire of May 26, 1961, be amended to read section 17.


Traffic Manager.

On May 29, 1961, Mr. Lautzenhiser received the following telegram in reply:

Manager, Port of Anchorage, Alaska:

MAY 29, 1961.

Retel 26th and 28th, information given insufficient to institute investigation. Please furnish us detailed information considered violation Shipping Act.

L. E. RATCK, Federal Maritime Board.

And, the following telegram over the signature of Henry Roloff, director, port of Anchorage, was dispatched on June 2, 1961:

Mr. L. E. RATCK,
Federal Maritime Board,

Washington, D.C.:

JUNE 2, 1961.

Reference your telegram to Lautzenhiser re port of Anchorage complaint on Alagco Dock. We are informed and believe that terminal services are being performed without adherence to published Alagco tariff. Also, FMB requirements are not being observed as pertain to Pacific Western Lines and filing of terminal contracts regarding labor agreements.

HENRY ROLOFF, Director, Port of Anchorage.

On June 6, 1961 the following further telegram was received:


Director, Port of Anchorage, Anchorage:

JUNE 6, 1961.

Retel 3d. We request detailed information concerning noncompliance with Alagco tariff and FMB requirements as pertaining to Pacific Western Lines. Letter follows re filing terminal contracts regarding labor agreements.

WILLIAM A. STIGLER, Federal Maritime Board, 3d Alagco.

Further, we have in possession a photographic copy of a letter written on Pacific Western Lines (division of Alaska Aggregate Corp.) letterhead to Mr. Paul Pearson, Foss Launch & Tug Co., dated March 23, 1961, which we quote below:


Foss Launch & Tug Co., Seattle, Wash.

DEAR PAUL: Concerning the unloading of lumber from your LST barges at our dock here in Anchorage, we are submitting for your consideration the following prices.

Commodity: Lumber, bundled (2,000 board feet per bundle).

Minimum shipment: 160,000 board feet at $8.40 per 1,000 board feet; 300,000 board feet at $7.80 per 1,000 board feet.

The above prices include wharfage, stevedoring on barge, handling on dock, and delivery to Ketchikan Spruce Mills yard.

The above rates would also include loading rail cars or trucks on our dock. These prices may be changed by our company informing you in writing 30days in advance.

Please advise if you plan to use our dock for discharging lumber shipments, so we may plan our operations accordingly.

Very truly yours,

(Sgd.) James J. Haagen,

Traffic Manager.

In addition to offering services for which no rates are named in the AlagcoDock terminal tariff named above, the rates quoted are substantially lower for the entire operation quoted than the rates named in the tariff merely for the services for which rates are named. This kind of solicitation or procurement of traffic constitutes unjust and unreasonable practices in violation of section 17 of the Shipping Act of 1916 as amended.


Alaska Aggregate Corp. doing business as Pacific Western Lines Local Freight Tariff No. 1, issued by James J. Haagen, traffic manager, F.M.B.-F. No. 2, effective February 34, 1961, names class and commodity rates between Astoria, and Portland, Oreg., Longview, and Vancouver, Wash.; and Anchorage, Kenai, Homer, and Seward, Alaska, on a point-to-point basis. (Anchorage is the only port of call served in Alaska.) In other words inland and beyond overland hauls. are included in the service contemplated in the tariff last named.

Again, such a tariff goes beyond the scope of the jurisdiction of the Board and encroaches upon the jurisdiction of the Interstate Commerce Commission. Nevertheless, the Board had arbitrarily and apathetically accepted the tariff for filing rather than reject it as an improperly filed tariff. The failure to take overt action may be deemed the proximate cause of much of the chaotic, unsound, unlawful, and illegal, practices and conditions existing in Alaska and in the Alaskan trade today.

T. F. Kollmar, Inc., doing business as Northland Freight Lines, Local Freight Tariff No. 1, issued by T. F. Kollmar, general manager, F.M.B.-F. No. 1, effective July 2, 1960, names class and commodity rates between Seattle, Wash., and Anchorage, Alaska, via Northland Freight Lines.

Section VIII, hereof, shows the relationship between Northland Freight Lines. and Alagco Dock.


The Railroad leases certain of its terminal reserve land adjacent to the Anchorage tidelands area to such parties as Alaska Aggregate Corp., Anderson Terminal, and Union Oil Co., which is used in conjunction with the terminal operations of each party named respectively; and, under the terms of such lease agreements, the Railroad receives a certain percentage of the terminal revenues of each terminal operator. The Railroad is, therefore, a party to each of the violations shown herein of each of the terminal operators. Through such lease arrangements, the Railroad is an "other person" as that term is defined in section 1 of the Shipping Act of 1916, as amended, and is, further, believed to be in violation of section 17 and other provisions of the same act by virtue of the fact that it has not filed an appropriate tariff with the Board to apply in connection

with such terminal operations. And, further, the Railroad has not filed said lease agreements, themselves, with the Board; consequently, it violates section 15 and other provisions of the Shipping Act of 1916, as amended, and related acts.


The economic development of Alaska and its great potential are in serious jeopardy because of existing conditions in the transportation complex. This State represents the greatest arsenal of natural resources within the United States, and perhaps within the world. Alaska covers an area of 571,000 square miles. Stated another way Alaska is about the size of France, Spain and Sweden combined. There are within the State 120 million acres of land geologically favorable to gas and oil with vast oilfields already being developed; there are 125 million acres of timberland ready for export; it is estimated that 1 billion tons of coal lie in Alaska soil; approximately one-third of the United States' iron reserves can be found here; and the State has over 150 locations for hydroelectric power, plus the whole range of mineral ores awaiting discovery and development.

Should the Federal Maritime Board permit historical, current and existing chaotic transportation practices to continue it would not only mock the dignity of the established regulatory system of the Federal Government and the State of Alaska, but would stunt and even abort the entire economy of the State.

Alaska's cost-of-living index is the highest in the Nation. When this factor is combined with destructive and unlawful practices among and between public owned and private owned common carriers, the free flow of interstate and foreign commerce is obstructed and thwarted; the natural population growth and concurrent development is hindered by prohibitive economics directly and indirectly related thereto; and the Alaska arsenal of natural resources is economically precluded from availability to our citizens and the nations of the free world.

It is imperative that established statutes, authorized by the Congress of the United States, be invoked and enforced by the Federal Maritime Board with no passive application, no hesitancy of purpose or objective, and with no administrative delay. To do otherwise would perpetuate a known situation totally repugnant to the intent of Congress and the statutes of the United States.

Mr. ROLOFF. Sections IV and V of the resolution named, pertain to a variety of issues about specifically named nonvessel water carriers that Senate bill 1839 would seek to rectify. However, I would point out that this is a single-purpose type of legislation aimed at legalizing a type of transport not now covered by ICC statutes. My only purpose in bringing this particular bill before this committee is to plead a point, namely, that piecemeal, or, what perhaps can be called superimposed legislation, is not the answer to the myriad problems facing Alaska's transportation complex. Neither is it believed that so-called "home grown" legislation should be considered as having objective argument and logic in offering solutions to the regulatory problems facing us today. Hearings such as this one, held in the interest of establishing a full and complete record, and subsequently analyzed by career men in the field of transportation and regulatory law, compose the framework of providing the type of factual and objective data required by our congressional delegations in arriving at sound legislative conclusions. It should be emphatically stated that once the doctrine of "sound conclusions" prevails, then the development of Alaska's transportation complex will leap ahead to meet the great development potential that exists in this State.

Senate hearings on the subject of transportation were held in Alaska during October of 1959, and I recall that Senator Bartlett presided during those sessions. An analysis of the FMB transcript of the hearing held this June followed by a study of the transcript of the 1959 hearings will reveal that a great deal of additional and highly

important collateral data is now available to our legislators. This hearing should be the final inning in a long-drawn-out ball game—a ball game which had its beginning back in territorial days when Tennessee plan representatives were not privileged to plead the transport problems facing their home State.

The complexion of the Alaskan transportation picture has changed extensively since the Senate hearing of 1959. A major example is that a new seaport, built and financed by the citizens of Anchorage, has come into being since that time. Completed this year at a cost in excess of $8 million the port of Anchorage has already opened up trade with the Orient, the South Pacific and New Zealand, and has been the means of establishing new carriers serving from Pacific coast ports. The city of Anchorage is the largest city in the State, and when you include the total population within a 60-mile radius, this area contains about one-third of the total population in Alaska. Hence, factors as exist today were not in consideration during the hearings of 1959.

Certainly the jurisdictional controversies confronting Alaska and Hawaii in 1959 required some coordinating legislation, but Alaska in 1961 is still sorely in need of sound jurisdictional legislation governing its transportation complex.

I would point out that passage of time alone has moved the ICC to extend its overland controls in Alaska, so that there appears to be a sound regulatory program in the making at this time. Also, the State of Alaska has established its own Public Service Commission and moved toward smooth control of intrastate commerce. However, there is still no adequate control over the policies and rates of the Alaska Railroad as the Anchorage Port Commission resolution so emphatically points out.

Senate bill 1225 is another example of how complex the solution to the total Alaska problem can become, and it is respectfully suggested that the solution to our problems is to be found in the simplification of regulatory law rather than in complicated structures which appear to have been designed to fit on top of an already shaky pyramid. Establishment of any joint board envisaged by the enactment of S. 1725 would still leave the Alaska Railroad free of jurisdictional control over its administrative policies and ratemaking practices.

As port director of the port of Anchorage I am heartily in favor of single board jurisdiction over transportation between Alaskan interior points and other points in the contiguous 48 States.

On the surface the joint board approach might appear to be the proper solution, but would it not, in fact, through necessary coordination of policies of two executive and one legislative branch agencies, namely, the Civil Airlines Board, Federal Maritime Commission, and Interstate Commerce Commission, be an unwieldy combination whose rules would necessarily be different from all of the parent bodies? We would anticipate even greater delays than are now experienced in the handling of regulatory cases. Frankly, we cannot conceive that this new creation would do more than add a new regulatory agency to the Federal payroll, devoted exclusively to Alaskan and Hawaiian transportation matters and, more important, still powerless to exert any effective control over the Interior Department's railroad.

Most transportation experts recognize the desirability of through rates. Approval of through rates is quite a different thing from approving joint rates in which the segments are not separately stated as proportions of the through rate. The transcript of the June hearings of the FMB contain pertinent and interesting testimony on this subject which are of paramount interest to Alaskans. It is believed that a separate statement of through rates is essential to keeping all rates adherent to costs in any given trade route. The practice of requiring the filing of proportional rates is historic. The FMB found several years ago that publication of through rates by the Alaska Steamship Co. and the Alaska Railroad without such separate statements was an unreasonable practice and required the Alaska Steamship Co. to establish a separate proportional rate tariff which is maintained to this date. The proposed legislation, as framed, would reverse this requirement.

While I do not wish to state that any such practice is plannedand let me make this point unmistakably clear in the record-I would, in an objective and logical way, ask that you consider the opportunity an unregulated Federal carrier would have to exert absolute control over the movement of commercial traffic on its lines where a through rate tariff is published by it and regulated ocean carriers. It would be, in fact, possible for the Department of the Interior's railroad to employ Federal funds to frustrate the growth and development of the port of Anchorage and, at the same time, to subsidize any carrier with whom it enjoys through rates, providing the separate statement of proportional charges is not a requirement.

Let this also be doubly clear in the record-the port of Anchorage has no desire nor intention to force increased rates on shipments moving from the Northwest ports to Alaska. On the contrary, it is the port's contention that an all-water route to Anchorage is necessarily going to be less costly than a water-rail route. The only way it would prove to be otherwise is for the rail carrier to operate at a loss. I believe this subject is also adequately covered in the recent FMB proceedings.

However, to return to the basic question of through rates, it is believed that one agency should have control of traffic moving between the south 48 States and the State of Alaska. It is not believed that the best means will be served by the erection of a hybrid joint board. It is further believed that the most efficient and desired results can be obtained through vesting the control of rates, safety and service on interstate traffic moving over sea routes, thence on connecting carriers, in the Interstate Commerce Commission. There is a suggested provision, however, when vesting this unified control in the ICC, and that is that the general provisions of part III of the Interstate Commerce Act be modified to meet the need.

Service to Alaska is, after all, a coast wise shipping operation. Under unified ICC control proportional rates, (and it is meant by proportional rates published proportional rates) can be established, kept reasonable and nondiscriminatory.

Senate bill 1839 is another example of how complex and complicated is Alaska's transportation complex. This legislation, in all likelihood, represents another attempt by nonvessel water carriers to be recog nized as "water carriers in intercoastal trade without vessels." This

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