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step to provide through billing service which we are using today quite extensively out of Kansas City, and Consolidated Freightways through Garrison now nearly has through billing service, not quite. I believe there has to be a watchdog agency.
Senator BARTLETT. Thank you, Mr. Anderson. The text of the remarks made at Ketchikan will appear in the printed record.
Mr. MCELROY. Let me ask you one question before you go.
Has the chamber made any estimate of what proportion of the total cost of living is accounted for by freight costs?
Mr. ANDERSON. No. There is a study in process on that, sir.
Mr. ANDERSON. Yes, sir.
Senator BARTLETT. Your personal opinion, not seeking to bring it down to percentages, is that a material factor or not?
Mr. ANDERSON. No, sir, I don't believe it is.
Senator BARTLETT. Why, then, are prices X percent higher in Anchorage than in Seattle?
Mr. ANDERSON. The reason, sir, is the cost of labor and handling, the cost of money for financing the inventory, and the cost of construction of the facility which you have to have to serve the merchant. Senator BARTLETT. Thank you.
Mr. Scepurek, please.
Will you give your name and your mailing address to the reporter?
STATEMENT OF ALBERT L. SCEPUREK, TURPIN SUBDIVISION, GENERAL DELIVERY, ANCHORAGE, ALASKA
Mr. SCEPUREK. Albert L. Scepurek. I live here in Anchorage. My mailing address is Turpin Subdivision.
Senator BARTLETT. Do you have an exact address?
Mr. SCEPUREK. It is General Delivery at present.
Senator BARTLETT. General Delivery, Anchorage, Alaska?
My interest is mining. I have a prospect, several, across the Cook Inlet, and also in the upper Susitna Basin.
Senator BARTLETT. What kind of a prospect?
Mr. SCEPUREK. They are ores. I am referring to iron ore, coal, and other related minerals pertaining to iron ore smelting for use within the industry.
I want to thank Senator Bartlett and Senator Gruening, also Mr. Roloff for the fine cooperation and work, and the tremendous amount of work that they had performed in reducing this 30 percent Alaska added cost of freight which, you recall, was dropped this spring, on behalf of shipments of ores and materials to and from Alaska.
Is that the way it is interpreted?
Senator BARTLETT. Yes, that is right. The Trans-Pacific Freight Conference of Japan imposed a 30-percent surcharge upon shipments to Alaska, with certain exemptions being made for the port of Anchorage. They diminished that on the order of 10 percent initially. Certain pressures were exerted and it was finally wiped out.
However, this does not mean that surcharges will not be imposed by individual lines on individual transactions.
I should like to use this forum as an opportunity to say to the members of the Trans-Pacific Freight Conference of Japan that if they believe that they can use this other method as a continued means of discrimination against Alaska ports, they are going to have quite a fight on their hands.
Mr. SCEPUREK. Thank you, Senator Bartlett. I appreciate that. Together with all of the problems that plague us here in putting a deposit together, for instance, what I refer to as private mining or private enterprise in mining and shipping ores worldwide in competition with worldwide market, we have found repeatedly, and ran into the same problem time and time again where the cost of transportation, the inaccessibility of a road, and the demand on bridges and the causeway here in particular referring to a deposit 40 miles across the Cook Inlet near Anchorage, with rates so preposterous in transportation and also waterway transportation, or referring to the transportation by rail, equivalent to the price charged now, or the existing rate in referring to the coal transportation from the Palmer area and assimilating a bunch of figures to ship ore competitive out of the region, seems to be out of proportion with the price you would receive for it.
What I am referring to are ores of an enormous amount in quantity and yet on the borderline of quality, passing the rules of quality ores that can be shipped and compete in the world market.
Using a figure that would help clarify these conditions, if we would assume that the transportation of 40 miles would be within the $1.70 bracket by rail, and port-handling costs of between 35 and 70 centsnow I am using all round figures that would probably be workable from the minimum to the maximum—we find ourselves that we are so close to putting an export contract together that with just a little bit more cooperation on the part of the transportation systems, and the port here in Anchorage with an amicable solution, I mean being more amicable toward putting this trade together, we could achieve such shipments and sale of such deposits, and yet if they were being put together on these very high or expensive rates we have nothing to put together because the world market wouldn't stand it. We have found this, for example, in coal, in steam coal, that would be priced within $5 to $7 to $9 a ton. To compete with Alaskan coal with the Australian market, for example, we found we are priced out of the picture.
And not only that as much as the inaccessibility of 40 miles without any roads or cooperation of the railroad, we will never achieve such a feat as putting the world market together or ship any ore out of Alaska unless we get these amicable conditions whereby we can depend on mutual cooperation among all these facilities in order to help put such market together.
Senator BARTLETT. Mr. Scepurek, how much would rates have to drop by way of a percentage estimate before these ores to which you refer could be competitive?
Mr. SCEPUREK. Do you mean the transportation portion of it?
Mr. SCEPUREK. It wouldn't take very much. It would be a minor percentage. Except that here I want to point out, there is a catch to this type of situation. If we were to figure water transportation and reloading across Cook Inlet of 17 miles, waterwise, that does make
a lot of difference in proportion to rail and the pricing with rail shipped this distance across the causeway.
Senator BARTLETT. Is there a demonstrable market in the Orient for Alaska products?
Mr. SCEPUREK. Yes. Let's put it this way. In competitive terms of tonnage and pricewise, assuming that we are on an even equal price rate on the world market, we could highly compete for these enormous tonnage deposits, you might call them, like iron ore, coal. There are other minerals of the same importance that will create a market along with the smelting industry that I am not too much aware of at present, but that I know are possibilities if the transportation and the port facilities are available at a minimum cost.
Senator BARTLETT. You mentioned a causeway. Perhaps you had better explain that a little bit more, because when the members of the Commerce Committee read the transcript of these hearings they won't be familiar with what you have in mind.
What do you mean by a causeway?
Mr. SCEPUREK. I will be glad to, Senator Bartlett. The causeway to this particular valley that I am referring to, the Tyonek and across Cook Inlet, which has certain deposits out there only 40 miles distant in a direct line which also could be followed with a direct line railroad or road, and better yet, boat.
Senator BARTLETT. Is this causeway which you have in mind in a different location from one that has been so generally discussed in Anchorage?
Mr. SCEPUREK. Not at all. That is the causeway.
Senator BARTLETT. How much would that cost? Has there been any reliable estimate?
Mr. SCEPUREK. I hear so many conflicting rumors.
Senator BARTLETT. In any case, the Corps of Engineers now has a modest appropriation to start a study of that, does it not?
Mr. SCEPUREK. Yes, as I understand it.
Senator BARTLETT. How much distance would be saved if that causeway were built?
Mr. SCEPUREK. Enormous. To the deposit that I am referring to, ore deposits, there would be a difference of 40 miles compared to 170 miles by the road of Palmer and Wasilla to the Susitna.
Senator BARTLETT. Thank you very much.
Mr. GRINSTEIN. Do you now ship any ore or coal?
Mr. SCEPUREK, No; but we have been approached for a contract of 1 to 2 million tons a year.
Mr. GRINSTEIN. If you can bring the transportation costs down? Mr. SCEPUREK. Yes, and at the same time use all round port facilities.
Senator BARTLETT. How far are your deposits from the water? Mr. SCEPUREK. From the water they are exactly-let me ask this question. To which water? To the port of Anchorage or to
Senator BARTLETT. No; to Cook Inlet, in a direct line from where your deposits are.
Mr. SCEPUREK. I am glad you asked that question. They are only 27-from 17 to 27 miles. But there is hardly no possible way to put a port in on that other side without being harassed with ice every year, or be taken out.
Some engineers are telling me it is impossible.
Senator BARTLETT. So you would have to truck it all the way around to Anchorage?
Mr. SCEPUREK. Yes; truck it or railroad would be a better proposi-tion because it is equipped, tonnagewise, at a lower cost rate.
Senator BARTLETT. You don't have any railroad in there?
Mr. SCEPUREK. No. Or no road, either. Both of them would bring the Anchorage area, or the Federal Government, a revenue between $27,000 to $450,000 a year on one deposit alone.
Senator BARTLETT. Thank you, sir.
By the way, I have here a couple of copies of the hearing which was held in Washington on Senator Gruening's bill to amend the Saltonstall-Kennedy Act. They will be left on the table for any fishermen who might desire to have them and read the hearings. The next witness is Mr. Gaasland.
STATEMENT OF HAROLD A. GAASLAND, SPENARD, ALASKA
Mr. GAASLAND. I am Harold A. Gaasland, Spenard, Alaska. I represent the homesteaders in this area, being a homesteader myself. Senator BARTLETT. Mr. Gaasland, I understand that you are not going to testify on matters relating to the fishery or transportation? Mr. GAASLAND. That is right.
Senator BARTLETT. But instead on land matters?
Senator BARTLETT. Before you start, I should state that this committee has absolutely no jurisdiction in that area, and that this falls within the province of the Senate and House Committees on Interior and Insular Affairs. Notwithstanding, we shall be very glad to hear you. It will be our intention and purpose to transmit the testimony you are about to give to those committees for their consideration.
Mr. GAASLAND. My principal question is interpretation of what a right-of-way is through a homestead. According to the act of July 24, 1947 (48 U.S.C. 321-D), the reason I am concerned, I have a patented homestead. The highway is going through my property, which is fine. I received a letter from Howard Benson, the rightof-way negotiator, department of public works, Anchorage, relative to signing over
Senator BARTLETT. That is the State Department?
Mr. GAASLAND. The State Department, sir. And I asked him what constitutes a right-of-way. He is unable to give me that definition. There has never been one handed down, what constitutes a right-ofway.
Due to the fact that I have a patented homestead in the WillowTalkeetna area, and the homesteaders up there, which are being hurt, and myself, wanted me to bring it before you so that you could bring it to the group back there who have jurisdiction over it."
Senator BARTLETT. I think that I had best amend my opening remark. Apparently from what you say, this isn't a Federal matter at all, but one entirely within the State. I am wondering if you have
written the attorney general of Alaska for a ruling on this, Mr. Gaasland.
Mr. GAASLAND. I have not, yet, sir.
Senator BARTLETT. Do you know if anyone has?
Mr. GAASLAND. I doubt if they have. And it refers to the U.S. law here. This is a copy, an extract of it, sir [handing to Senator Bartlett].
I don't want to take your time.
Senator BARTLETT. We are glad to hear from you but we have to preserve proper procedures here. If this committee were to begin to instruct the State, there might be fireworks. So I think in this particular case, if you will permit, I will take this up as a Senator from Alaska with the attorney general in Juneau, and we will divorce it from committee consideration. Is that all right?
Mr. GAASLAND. May I suggest, if I know when you will be there, I would just as soon go to Juneau and meet with you, because this is a critical problem. It not only affects us along the right-of-way but also every homesteader in Alaska.
Senator BARTLETT. I am going to be in Juneau Wednesday afternoon and Thursday, but we are going to have hearings all the time. Let me talk to the attorney general and I will be in touch with you.
Mr. GRINSTEIN. Your question is what are your rights under this Federal act as a result of the right-of-way by the State agency?
Mr. GAASLAND. What constitutes a right-of-way. On my map they show that they have taken over 550 feet. That is not a right-of-way. Mr. MCELROY. Your question is as to the width of the right-of-way? Mr. GAASLAND. That is right. And how can they take this much property, 22-some-odd acres from me. I don't mind the right-of-way, according to the basic map I have here. But then they needed 25,000 cubic yards of gravel, so they zig-zag over here to take my gravel. I get nothing.
Senator BARTLETT. My difficulty is that approached with this now, I am unable to state whether this act was modified in any way or elimiinated by the Statehood Act. This is a 1947 law which may or may not have been changed by the Statehood Act.
Have you people who are so concerned with this retained the services of an attorney?
Mr. GAASLAND. I have not, sir. I thought I would bring it to you. If you want to make a note, the patented homestead is on November 10, 1955.
Senator BARTLETT. Off the record.
(Discussion off the record.)
Senator BARTLETT. Are there any other witnesses?
If not, the committee will stand in recess until tomorrow morning in Cordova.
Thank you all for attending, especially those of you who testified. (Whereupon, at 3 p.m., the hearing was recessed to reconvene Tuesday, October 24, 1961, in Cordova, Alaska.)