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STUDY OF ALASKA TRANSPORTATION

FRIDAY, OCTOBER 27, 1961

U.S. SENATE, COMMITTEE ON COMMERCE, Ketchikan, Alaska.

The committee met at Ketchikan, Alaska, at 1:30 p.m., pursuant to notice, Senator E. L. Bartlett presiding.

Senator BARTLETT. The committee will be in order.

Two weeks ago today this committee, Senate Commerce Committee, opened hearings in Alaska at Petersburg. Since then we have been here and there receiving testimony relating to fisheries and transportation principally. This is the 12th hearing conducted along the Pacific coast on these subjects. However, at San Rafael, Calif., beginning on October 4, and at Seattle a few days later, the only subject under discussion was that of fisheries.

I do not know whether it was coincidental or not, but this is the 12th such hearing held, and 10 of them have been in Alaska. We opened, as I said, at Petersburg, and went from there to Dillingham, then to Naknek and Homer. The next hearing after that was at Kodiak, then we went to Fairbanks and Anchorage and Cordova, and concluded the Juneau hearings yesterday.

We will be very glad to hear from anyone who wants to testify here on the fishery, on transportation, or any other subject within the legislative jurisdiction of this committee.

We cannot well receive information in praise or condemnation of the State's fish regulations, for example, because that is an internal matter with the advent of statehood, with which the Congress nor any other segment of the Federal Government has any connection.

The first witness today is Mr. Robert Sharp, whose mailing address is given on this slip as Box 1110, Ketchikan, and his title is represented as being that of city manager of the city of Ketchikan.

The statement regarding your name is correct, Mr. Sharp. Is there any other statement which I have made pertinent now?

STATEMENT OF ROBERT SHARP, CITY MANAGER, CITY OF KETCHIKAN, KETCHIKAN, ALASKA

Mr. SHARP. That mailing address, Mr. Chairman, will be changing shortly but I don't know what my new address is, so I gave my old

one.

Senator BARTLETT. You are departing Ketchikan shortly for another Alaska city I understand?

Mr. SHARP. That is right, Senator. I will be going with the Department of Public Works, State of Alaska, on November 1. Senator BARTLETT. We will be very glad to hear from you.

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Mr. SHARP. First I would like, on behalf of the city, to welcome you to Ketchikan, and the staff members who are accompanying you. I am glad you are here. You are in two fields of particular interest to all of Alaska-fisheries and transportation.

I would like to say a few things regarding transportation, first. We have read with a great deal of interest the Alaska International Rail and Highway Commission report, and what it has to say particularly in regard to highway construction.

I certainly agree with the recommendation in the report that in the executive branch there should be a technical office to follow through, further investigate the recommendations contained in the report.

I think the main thing that impressed me in reading the report is the thing that is so obvious when you look at the geography of what we call the 48 lower States and Alaska. In the emphasis placed on the Canadian road system improvements which are needed. Obviously you can't get to Alaska without coming through Canada.

It is also obvious to us who visited Canada on numerous occasions that if the major routes connecting with Alaska, through the river valleys of southeastern Alaska, as well as the Alaska highway connections, are to be made to contribute to the development of Alaska, there is going to have to be participation beyond the State funds. Otherwise, at least in my opinion, the funds available for highway construction in the Provinces involved, particularly British Columbia and Alberta, will not be sufficient to see the improvements that should be made 30 years from now. Very obviously with the amounts of money involved, 30 years from now we won't see the improvements that are recommended in the Alaska International Rail and Highway Commission report without some U.S. participation in those costs.

I don't think it is unreasonable to expect that we will have to participate on the Canadian side on many of these roads. We will have instances where the prime benefit will be to Alaska. We will have far fewer cases in my opinion where Canada will have the benefit coming their way from road improvements. That may not be true in at least one case which I will mention later, but certainly as a general statement I think it is true.

I think it is also obvious in connection with the Senate Joint Resolution 137, which has been introduced, that, beyond the need through Canada for highway improvements to develop Alaska, there is a great need within Alaska beyond the funds available under the Federal A-B-C program. When you consider such projects as a road to Nome to open up that entire area, a road down to Cold Bay, down the Alaska Peninsula, in the interior, two particular projects that I know have been discussed, it just becomes quite obvious with the cost involved, with $36 million to $37 million a year available under the A-B-C program, that these very vast regions of Alaska won't be opened up for many, many years to come.

I think an investigation by the Department of Commerce, called for in Senate Joint Resolution 137, is certainly in order.

I would hope to see some very valid recommendations for improvements of major roads in Alaska as well as connecting roads through Canada.

I would like to mention specifically some of the roads here in southeastern. If we depend on the A-B-C program they obviously won't

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be built for years to come. One is the Taku and Stikine. Now more emphasis is on the Unuk and Stikine Rivers. In the latter case the need may be earlier than we had thought in years past because of the mining development that is reaching very intensive exploratory stages at this time.

Here are three major routes in what is a small section of the State that probably we are talking in terms of $50 million to $60 million on the Alaska side.

Senator BARTLETT. That is in the aggregate?

Mr. SHARP. Yes, of the three on the Alaska side alone.

And what the total may be with the Canadian sections that are involved there will probably be a like figure.

So I would say that the road problem is one that can't be coped with under the present A-B-C program because of the inadequacies of the funds within Alaska, and the lack of authority to spend any of those funds if they were available in quantity in Canada.

So I think the highway problem certainly is going to require dealing with Canada. In that regard I have heard a proposed meeting solve one problem with the Canadians. Through our State Department it has been pending for well over a year; and that is in regard to a ferry terminal at Prince Rupert.

As you well know, Senator, no State can enter into an agreement with foreign countries. Consequently any arrangements or agreements made must be made through the State Department. I think that we should urge them to be more aggressive, take more initiative, and try to solve not only this problem of the ferry terminal, which is minor compared to the overall scope of highways, but to fully participate in conjunction with the Secretary of Commerce and in cooperation with the State of Alaska in trying to work out a highway plan within Canada which has so much importance to Alaska and its development.

The past 2 years particularly I have been connected with various programs and organizations interested in highways, airlines, and waterborne transportation. It has become obvious to me that there should be some coordination among the several regulatory agencies that have jurisdiction over these three types of transportation. What you do in highways may have a serious effect on the financial capability of waterborne transportation to serve various areas of Alaska. Conversely what is done in air transportation can affect both trucking and waterborne.

So I think there should be some consideration to at least mandatory coordination of these regulatories, if maybe not go further, and to the consolidation of them in dealing with Alaska, which I think in many respects has some very unique problems that perhaps the other States are not encountering at this time in international commerce regulation.

Senator, I believe those brief remarks are all that I have at this time. Thank you very much for the opportunity of making them. Senator BARTLETT. Thank you, Mr. Sharp.

About how much now, each fiscal year, does the State of Alaska receive from the Federal Government for the A-B-C program?

Mr. SHARP. Between $36 million and $37 million for the three classes of highways.

Senator BARTLETT. Do you know what the intention of the State department of public works is in respect to early large expenditures of these Federal allocations, that is to say, I have heard but do not know, that a very extensive program of repaving some of the main highways is under consideration.

Mr. SHARP. Senator, I know that the department in its programing to date has placed a great deal of emphasis on rebuilding a number of existing substandard highways because the maintenance expense is excessive at this time. A great deal of their funds will have to be devoted to that purpose. Otherwise their maintenance expense will be more than the State treasury could stand.

So it minimizes the amount of those funds available to build new roads into new areas of the State, major regions of the State, that need roads in order to develop.

Senator BARTLETT. This $36 million figure is much greater than was available to the State when it was still a Territory?

Mr. SHARP. Yes, it is greater.

Senator BARTLETT. On the other hand there is an essential difference, is there not, in that prior to statehood the Federal money could be used interchangeably either for construction or for maintenance?

Mr. SHARP. That is true since 1956. The 1956 amendment allowed Federal-aid funds to be used for both maintenance and new construction.

Senator BARTLETT. And in the old days, the days when the Alaska Road Commission did the bulk of the road construction and maintenance in the Territory, that same feature applied?

Mr. SHARP. That is true. That is true and also the Forest Service highways which are now maintained by the State were maintained from Federal funds, not territorial funds.

Senator BARTLETT. Let's assume that which we don't know will Let us say that the Federal Government were to recognize the highway needs of Alaska, especially in consideration of the fact that so little had been given by the National Government in years. gone by, and would add substantially to the A-B-C program, say on the order of $40 million a year, so these highways that you mention, and perhaps others, could be constructed in a hurry. Would this place an intolerable matching and maintenance requirement upon the State government?

Mr. SHARP. My offhand opinion, Senator, is that they would have to double their maintenance. They would have to appropriate from their general treasury. The income from the tax and gasoline by the State is not sufficient to accommodate the maintenance expense as well as all their matching fund expense under the existing program, much less add to the ABC program 100 percent. I think $40 million is the figure you used. It might present budget problems in the treasury to accommodate the matching requirements, although I couldn't speak for the State in that regard.

Senator BARTLETT. On the other hand, Alaskans could correctly say to the Federal Government that uniquely among all of the States, and even the Commonwealth of Puerto Rico, Alaska does not share in the international highway program which finds the National Government paying 90 percent of the construction cost. Is that your understanding?

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Mr. SHARP. That is very true, and the efforts to obtain either an appropriation in lieu of the exclusion from the international system of international defense highways, or have certain roads in Alaska designated under that system, has met with no success even though it has been pushed for at least 5 or 6 years to my knowledge.

Senator BARTLETT. The Department of Commerce has always said,

"No."

Mr. SHARP. The most recent, I think, turndown was about 1 or 2 years ago when they brought some of the system in Hawaii, after statehood, under the international system, but refused to recommend, nor the Congress act on, the inclusion of Alaska.

Senator BARTLETT. Yes. This was one of the most curious decisions rendered in my view by the Federal Government, because the Senate Public Works Committee had directed the Department of Commerce to analyze the situation, to study it, and to come up with conclusions. As you say, there was a designation within Hawaii of the international highways. My recollection is that similar treatment was denied Alaska on the grounds that there was no connection with any possible international highway, and no direct connection with any other State. It was a little difficult to determine how this would be the case with Hawaii.

Mr. SHARP. Senator, if one of the main purposes of the international system is to provide defense roads throughout the United States, and the strategic location that this State has in that defense picture is to be recognized, then we must recognize that you have to go through Canada to get to Alaska. It is just as important for land connections to the defense installations in Alaska as it is from some point in the Midwest to an instalaltion on the west coast.

Senator BARTLETT. We all remember how it was when the first International Highway Commission, which was likewise headed by Chairman Magnuson, made repeated recommendations for a connection by highway and the military always rejected the proposal as being unnecessary, unwarranted, and then one fine day, after the war had started, the Department of Defense, which it wasn't then-the Department of the Army, I guess-announced that the construction of the highway would start, but along a route which had not been recommended by the International Commission after careful studies.

So although today the military likewise says that a railroad, for example, isn't necessary, for military purposes, we don't know what the decision of the next commander might be or what the decision of the present commander might be under different circumstances.

Mr. Sharpe, as you know, because you followed the transportation situation closely, the Statehood Act continued the Federal Maritime Board, now the Federal Martime Commission, in regulatory jurisdiction over the Alaska maritime trade. This despite the fact that the Interstate Commerce Commission has that jurisdiction in intracoastal and intercoastal trades.

In an effort to bring about a situation which would permit lower costs for the consumers in Alaska, I introduced a bill which would have established a joint board, composed of representatives of the Federal Maritime Commission, the ICC, and the Civil Aeronautics Board. And twice this has passed the Senate, and twice the House failed to act upon it. The main purpose of this bill is to permit the

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