consider their position, I'd like to list some pertinent questions which I think we may have to consider in determining an overall transportation policy in the State of Alaska as it applies to waterborne commerce.

There are cogent arguments in favor of or opposed to an affirmative or negative answer to these questions and I think that the board of directors of the Alaska State Chamber of Commerce should study and consider these questions on a broad basis and from the conclusions a State chamber of commerce transportation policy should be written and adopted.

I have a booklet here entitled "Policy Declarations on Transportation and Communication" adopted by the members of the Chamber of Commerce of the United States upon the recommendations of the transportation committee.

We have serving Alaska right now in water-borne commerce a number of companies, all of which are familiar to us. Some of these companies have a long history of service to Alaska. Many have substantial investments in this service; others are charter operators and some are interested only on an occasional and infrequent basis. We will have next year the addition of the Southeastern Alaska Ferry System as another carrier in water-borne commerce.

No purpose would be served by listing the names of these individual carriers, but what will our Alaska State Chamber policy be as related to the number of carriers and the type of service they should offer?

Next question-What is the chamber's policy regarding regulation of rates of service? Should they be regulated or not?

What is the chamber's policy as to the effectiveness or ineffectiveness of the jurisdiction of the Federal Maritime Board?

What is the chamber's policy on common rating of individual ports in various geographical areas?

What is the chamber's policy in support of or as opposed to Senate bill No. 1765, introduced by Senator Bartlett, which is entitled "A Bill to Amend the Interstate Commerce Act in Order to Promote Coordinated Rail Barge Transportation."

or

Senate bill No. 1764, introduced by Senator Bartlett, May 3, 1961, entitled "A Bill to Amend the Interstate Commerce Act in Order to Require Justification of Certain Rate Publications and Suspension Board Actions."

or

Senate bill No. 2413, entitled "To Provide for Economic Regulation of the Alaskan Railroad Under the Interstate Commerce Act."

or

Senate bill No. 1725, entitled "A Bill to Permit the Establishment of Through Service and Joint Rates for Carriers Serving Alaska or Hawaii and the Other States and to Establish a Joint Board to Review Such Rates."

What is the chamber's policy with regard to regulation by the Interstate Commerce Commission of rates in water-borne commerce as well as surface transportation?

What is the chamber's policy regarding the establishment of a joint board which will have jurisdiction in all matters of joint rates, classifications, regulations and practices charged in through services. This joint board to consist of three members, one to be designated from the membership of the Civil Aeronautics Board, one from the Federal Maritime Board and one member from the Interstate Commerce Commission. The joint board to have the same power as conferred upon the Interstate Commerce Commission.

What is the chamber's policy with regard to the rates and types of service to be offered by the Alaska Ferry System?

What is the chamber's policy as related to Government competition in waterborne commerce, and to digress for just a minute, in airborne commerce as well? What is our policy to be in carrier agreements, carrier consolidations, competitive rates, ratemaking principles and transportation coordination?

My last question, which I feel is of tremendous importance to the State of Alaska and particularly as applied to water-borne commerce is: What is our policy going to be, and what is our attitude going to be toward the carriers who are required to provide unprofitable service to many coastal communities throughout the State?

I say to you ladies and gentlemen gathered here today that we do not have in Alaska the traffic consultants, the traffic practitioners, the ratemaking bureaus, nor all of the aids that our counterparts in the south 48 have so readily accessible to determine the policies that they should adopt, but we do have a wealth of human assets in our chambers and their members. We also have our friends in the Pacific Northwest who have these aids and who have demonstrated throughout the years by their presence at these meetings their willingness to assist us with our problems.

I am sure that there are those of you who are as anxious as I am to establish a solid chamber policy on transportation and, if you feel as I do that this is of great importance, I ask that we instruct the directors of this State chamber to take the initial steps and turn first to those who are in the industry for their suggestions and help in establishing our policy. I suggest that we do this by conducting a transportation seminar at which air carriers, water-borne carriers, rail and highway carriers would present papers and speakers offering suggestions and supporting these suggestions with appropriate data and research. Presentations also can be included by the State of Alaska Public Service Commission, the Civil Aeronautics Board, the Interstate Commerce Commission, and the Federal Maritime Board, all of which are regulatory agencies involved in these policies. In the business and public interest, I believe that Professor Stanley Brewer of the University of Washington would be eminently qualified to present his views on the subject.

From this seminar, the directors and the chamber's transportation committee would be better advised of policies that should be presented for adoption by the members in regular session.

In conclusion, we must consider that there is invested in private and Federal capital an amount exceeding $100 million in air, rail, highway and water-borne transportation equipment and enterprise and, I urge that we take decisive steps to establish our policy in support of this adjunct of our Alaskan economy which is the key to and the forerunner of any development of an industrial complex in our State.

Mr. ANDERSON. Senator Bartlett, there are four bills in the Congress which you have introduced which in various methods and manners involve transportation and transportation regulatory agencies in Alaska. I refer to 1764, 1765, 1725, and 2413.

With the advent of statehood in Alaska I feel that the State chambers are going to be requested, such as you are doing here in your current hearings, to take a position with relation to not only the Senate bills but with relation to the policy or support of the regulatory agencies which now govern transportation rates and services in the State.

The Economic Development Committee of the State chamber, therefore, asked me to call attention at the State chamber convention to the problems that I felt should be considered. It would be repetitious to repeat them here as they are outlined in the prepared remarks which I have submitted. The directors of the State chamber at Ketchikan asked that we be permitted to comment on, prior to the time the record is closed, the information that is received by you in this hearing, and I believe that the directors of the Anchorage Chamber of Commerce feel pretty much along the same line, Senator.

We have not adopted a policy as far as transportation in any shape, manner or form to this date. But it is being considered both at the State level and at the Anchorage level.

Senator BARTLETT. Mr. Anderson, returning to your address before the State chamber of commerce, did you have many recommendations to make, definite recommendations?

Mr. ANDERSON. Yes, sir. I made one recommendation and that is that the State chamber of commerce conduct a seminar on transportation at which industry members, members from regulatory agencies,

and representation from our congressional delegation would recommend some guidelines or suggest guidelines for consideration to establish an overall State transportation policy.

I feel personally that the surface transportation and the air transportation is so interrelated and so important to the development of an industrial economy in this State that the chambers cannot take a middle-of-the-road position in every phase or aspect.

Senator BARTLETT. This morning in an opening statement I recommended, because I believe so strongly in local as opposed to national control, that it would be advisable for the State to develop for presentation to the National Government, including, of course, the Congress, a basic transportation program. In other words, to have Alaskans recommend initially what ought to be done, instead of having the Federal Government impose something upon them. Would you think that would be worthwhile approach?

Mr. ANDERSON. Yes, sir, Senator. I can say without any qualification whatsoever that I wrote an original presentation for the State chamber of commerce which made some very definite recommendations. And after reviewing it I felt that the problem was of so much significance at the State level that it would be more appropriate if it was given serious study by a wider group than just one committee.

In my experiences in gathering information for this presentation I requested information as to the activities of the Alaska Public Service Commission as a regulatory agency for motor carriers. I asked for a statement from Mr. Scavenius, on air carriers. I asked for_and received a statement from Mr. Roloff, of the Anchorage Port Commission. And I talked to three transportation consultants in Seattle, and I talked to, I think, probably the 10 major shippers in Alaska. I found that stateside shippers, Senator, who control substantial volumes of freight, have a tendency to oppose any regulation whatsoever because they are in the position of bargaining for rates with the amount of volume of traffic that they control.

...Senator BARTLETT. Would you repeat that, please?

Mr. ANDERSON. I find that shippers who control substantial movement of cargo are not necessarily anxious to see regulations of rates applied to Alaska because they are in a position to bargain for rates 'among competitive carriers.

Senator BARTLETT. This ties in with the statement made in your speech at Ketchikan in these words:

There are many in Alaska who feel that the best method for developing lowcost surface transportation is by regulation. Conversely, there are many in Alaska who feel that the best method for the orderly development of low-cost surface transportation is by complete freedom of regulation.

Mr. ANDERSON. Yes, sir.

Senator BARTLETT. Your conversations led you to the conclusion that these shippers believe that there could be orderly development of transportation without regulation?

Mr. ANDERSON. Yes, sir; but then when you talk to the industry— and I think they have a very excellent point-under the present rules and ground rules under which the industry operates-talking about the waterborne carrier service in Alaska, and I have called attention to this in these remarks that there are substantial carriers who have served Alaska in a regular and scheduled manner for many years

who have tremendous investments in the waterborne transportation to Alaska-we find in the summertime charter or noncharter carriers who bring up 1,000 or 1,500 tons during the summer months and to a degree skim the cream off of the year-round carriers operations.

Then the other problem in Alaska, which I think as far as regulated carriers is concerned is the problem of who is going to supply the service to the outlying areas, the villages, when there is absolutely no economical justification for providing waterborne service to these

areas.

It is obvious the rail belt area is the revenue producer for any carrier. But who is going to send a ship to the northeast cape or any of the rest of them?

Senator BARTLETT. And they have to be served?

Mr. ANDERSON. They must be served; yes, sir.

Senator BARTLETT. We had in the closing days of Congress a major piece of legislation, the so-called dual-rate shipping conference bill. The floor manager of the bill was Senator Engle of California. This was very controversial. It had earlier been passed in the House in entirely different form. It did confirm, by law, in effect, a waiver of the antitrust laws when the agreements made by these conferences is approved by the Maritime Commission.

The point that I want to make here is that to the best of my knowledge every shipper who testified was in favor of such an arrangement because of unhappy experiences in the past, or fear of unhappy experiences with the itinerant, irregular carrier who couldn't be depended upon, they informed the subcommittee and the Congress, to furnish regular service. They might have a trip or two where the rates would be much lower than the scheduled carriers offered, and this would seem wonderful. But the next ship wouldn't sail. And, of course, all of these things have to be borne in mind in connection with our own transportation problems, as you have already indicated.

Mr. ANDERSON. There is that, Senator, and there are two or three companies, as you well know, and organizations and combines, now studying the feasibility of furnishing a blackball-type ferry operation to all communities in southeastern Alaska via the Alaska ferry system which goes into service next year. This is going to take the burden away from the steamship companies of supplying some of this uneconomical service, but at the same time the State's policy as to the rates for movement of water vehicles and movement of trucks loaded with freight on that ferry system could affect the entire StatesAlaska rate system as it exists today.

I think when the constitution was framed for the State they recognized to a degree, through the Alaska Public Service Commission and its regulatory authorization, and through the State department of aviation and its authority to issue local service air certificates, that there needed to be consideration of this problem. But I don't think that the State itself—and I would preface this remark by saying this is no criticism of the administration nor the legislators, I just do not feel that it has been brought forcibly enough to the State's attention-that regulation of air carriers on certain routes could very well jeopardize the service of air carriers on international routes or StatesAlaska routes, or regulation of motor carriers on certain routes in the rail belt area of Alaska certainly has to be considered or extended to

regulation of motor carriers that may or intend to provide that type of service on the ferry system. These factors certainly tie to the rates that are established by the waterborne carriers, and that is why I hope that the State of Alaska, as you have suggested here this afternoon, will take official recognition of this problem and, if you may, establish a State transportation commission in an advisory capacity to help formulate this policy. I think it is most significant.

Senator BARTLETT. Thank you, Mr. Anderson.

Mr. McElroy?

Mr. MCELROY. I have no questions.

Senator BARTLETT. Mr. Grinstein?

Mr. GRINSTEIN. Have you come to any personal conclusions, Mr. Anderson, as to whether there should be or should not be regulation of the Alaska transportation resources?

Mr. ANDERSON. My personal conclusion is that there should be regulation but it should not be to the extreme limits that are applied by the Interstate Commerce Commission, because I think that the ground rules and procedures that are used in the States have been established certainly over two decades. With the lower 48 States having the advantage of a complete interstate highway system, and not so entirely dependent upon the public-service-type transportation, there has to be some freedom. But the carriers that have shown or demonstrated a willingness to serve both a profitable and an unprofitable route throughout Alaska over a period of years have to have protection from what I call the gypos that come June, July, and August, and we don't see them the rest of the year.

I am only referring to those that haul commercial freight for hire. The contract carriers available for the DEW line, MSTS, or Government freight, are an entirely different matter which I do not believe are affected.

Mr. GRINSTEIN. The form of protection you are talking of could be accomplished through certification?

Mr. ANDERSON. Yes, sir.

Mr. GRINSTEIN. What about economic regulation in the sense of rate regulation, maximum and minimum?

Mr. ANDERSON. I feel to a degree that the water rates that apply to Alaska have just now begun to settle out on a justifiable basis both from the return to the carrier and from the cost to the consumer. In years preceding the last 4 or 5 years we have had rates regulated largely by volume of traffic offered.

But I think that the pattern of rates that is being established at least for western Alaska could very well be adopted as an initial starting point, so long as that pattern wasn't adopted as a ceiling or umbrella but as a basis to start from either up or down.

Mr. GRINSTEIN. Would you have some agency protect either the carrier on the one hand or the shipper and consumer on the other hand from rate excesses either one way or the other?

Mr. ANDERSON. I don't know whether the Senator's board is the agency or not. But there certainly has to be an agency because to get a shipment to Bethel, Alaska, takes five bills of lading by the time you transfer it from Seattle, transfer it at Anchorage, put it on a truck, take it to the international airport, and transfer to Northern Consolidated Airlines. The Railway Express Agency has taken the first