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the promotional aspect. There is reason to hope that more attention will be made to this than in the past.
In the old days, under both Republican and Democratic administrations, in my experience I have discovered universally that the regulatory agency, the agency of the Federal Government charged with protecting the people, almost automatically gave the carriers anything they asked for and anything they wanted. That has been true in all these offshore trades. Maybe now we can hope for a better deal. We surely can hope for it from your testimony when we get some competition.
How long has the barge line been operating?
Mr. HAMLIN. Coming into Ketchikan for a couple of months. They started in when the pulpmill went to Sitka. They are doing all the hauling for the Sitka pulpmill. They put on another barge and are hauling for both of us.
Senator BARTLETT. Are they giving you a regular service?
Mr. HAMLIN. Yes.
Senator BARTLETT. How often?
Mr. HAMLIN. Once a week. So far it has been very good. The reception here in town has been good. So that I think they are probably pretty happy with the way they have progressed.
I have often thought, whenever we get into trouble, wars or anything, the farmrs are about the first people that the Government subsidizes. If a farmer has a dairy farm and the price of cream is only 50 or 60 cents, and that isn't enough to keep him going, the Government pays him extra. Why has nothing ever been done to subsidize the people of Alaska or Hawaii, or operations like that, on these freight rates?
In other words, let's put it this way: Let's say that Alaska Steam has to have this money.
Senator BARTLETT. Mr. McElroy gave the perfect answer: Because they are not farmers.
Dean, seriously, this committee earlier this year held extended hearings on this very proposition, shipping to the offshore areas. It went on for days. Speaking for myself, I can say I reached one positive, definite, definitive conclusion, and that is, something must be done because you have something here, you have a situation here that is without parallel. You have merchant marines geared to serving Alaska, Hawaii, and Puerto Rico separately. They are not subsidized in any manner at all in direct contrast with our U.S. flag ships in foreign commerce. And yet the comparatively few people in each area, least of all in Alaska, are required to support the maritime industry. I think that there is going to be a need for something along the lines that you suggest.
We have done a lot of study of this, in addition to having the hearings. We have been brooding and fretting over it. We haven't hit upon a perfect formula yet, or even one that suits. But it will be discovered and when that day comes I hope that the Congress and the executive department of the Federal Government will be sympathetic. I agree with you that there may be lots of times, and perhaps for all I know, all the time, when high rates are justified. I don't know what goes into a carrier's costs. But if that is the case, especially in light of the fact that the committee was told last winter that the rate increases we have witnessed since the end of
the war are just the start of the beginning, then it would seem clearly to be the national interest to give protection to this trade similar, even if not identical, to that accorded U.S. vessels in foreign com
Mr. HAMLIN. We get cut down from every direction. We have to make about 25 percent more wages here in order to live, and then we have to turn around and pay income tax on that 25 percent, which cuts us some more. When it ends up we haven't anything left.
Senator BARTLETT. You are right.
Mr. HAMLIN. There are lots of us in that boat. That is all that I have to say.
Senator BARTLETT. Mr. McElroy?
Mr. MCELROY. I was just thinking of the witness we had in Anchorage who, in answer to the question of whether the high cost of living was occasioned by high freight costs, said, No, that it was an ingredient, but he thought high labor costs were more important.
Mr. HAMLIN. That is just a part of the evil. Take the position that I hold here. They have got to pay me more money for the same job than they would pay me if I had the same job in Washington State, for instance, because it costs me so much more to live up here. Then it is like a snowball. No matter what happens, something else happens. And I have to pay income tax on the higher living and because of that I have to have more money again and it keeps going round and round until it blows apart.
Senator BARTLETT. You recall, the joke around Alaska has been for years that the high cost of haircuts is because of the freight rates. Actually there is a little truth to it.
Labor costs had to be high because the general cost of living is high.
Mr. HAMLIN. It isn't because of cutting your hair but because his living on the side is higher and he has to have more money to take care of it.
Senator BARTLETT. Precisely.
Mr. HUSE. No questions.
Senator BARTLETT. Thank you, Dean.
STATEMENT OF PAUL J. WINGREN, GENERAL MANAGER, WINGREN FOOD STORES, INC., KETCHIKAN, ALASKA
Mr. WINGREN. I am Paul J. Wingren, Post Office Box 377, Ketchikan. I am the present general manager of Wingren Food Stores, Inc. We operate two retail food stores at Ketchikan.
It wasn't my intention when I came up here to touch on this Russian crab situation that has been discussed at some length this afternoon. But it did arouse my curiosity as to whether or not you had any figures, either percentagewise or tonnagewise, on the import of Russian crab
Senator BARTLETT. Yes, Paul. It hasn't made a blessed bit of difference.
The information available to me is that the Russian crabmeat has been offered at U.S. eastern ports at prices higher than American producers are charging. So that there are no importations of Russian
crabmeat. I won't make an affidavit on this, but this is the information which has come to me.
Mr. WINGREN. My reason for asking the question is this: That I, as a retail grocer, have seen no offerings at any price. I wonder if we are making a mountain out of a molehill by getting all shook up about the importation of something that is not being imported.
Senator BARTLETT. As far as the imports are concerned, they aren't hurting our market at all because there have been none.
(Discussion off the record.)
Mr. WINGREN. I don't know what regulatory body this would come under, but I certainly would suggest that on any imports, whether they be Japanese, Russian, or Scandinavian, or whatever they are, that the law be such that the country of origin be visible and printed plainly. I notice it. We carry a certain amount of nonfood items. Among them is quite an amount of Japanese imports. And it is in very, very fine print, as a rule, "Made in Japan." People buy the stuff without being conscious that they are buying imports. Of if they were aware of it, they perhaps would pay the higher price for the domestic merchandise.
Senator BARTLETT. We learned something during this trip which came as a surprise to me; and that was that we sell to Japan annually twice as much in terms of dollars as we buy from them. I hadn't known that before.
Mr. WINGREN. I would be inclined to believe that.
So much for that. I would like to concur in Mr. Hamlin's remarks with reference to this 10-percent surcharge on Alaska freight that the Alaska shipper has been paying for a long time, and now on certain rates at least it has been waived. I think I am correct in saying that some rates have been reduced even beyond that 10 percent. urge that if it is at all possible that that 10-percent surcharge that we have been paying now since the date slips me--January 1960, nearly 2 years, I urge that that be refunded.
Senator BARTLETT. Will you put your question again?
Mr. WINGREN. I would like to urge that the 10-percent surcharge which Alaska shippers have been paying since January 1960 be refunded in view of the testimony that has gone before, which would certainly indicate that that 10-percent surcharge was not needed.
Senator BARTLETT. Let me say this, without seeking to speak authoritatively, because I can't, not being an expert;
(a) The decision as to whether the money will be refunded or not is to be made by the Federal Maritime Commission and by none other. (b) My recollection is that when the State petitioned that the amounts collected under the surcharge be placed in an escrow account, this was denied by the Federal Maritime Board, as it then was.
(c) That if the Federal Maritime Commission should decide that the rate increase was not justified, then the refunds would be made, but of course the only beneficiaries could be the shippers. The consumers, whom you are advised to charge more when you get a rate increase, will never be compensated. It will be simply impossible. So the fellow who actually paid the bill will have no chance of having his money returned.
Do you agree with me, is my memory correct, that they refused to establish-"they" being the members of the Federal Maritime Boardthis escrow account?
Mr. HAMLIN. Yes, that is right. The Alaska Steam contended in their answer to the accusation that their bills of lading or freight bills all showed the surcharge, the 10-percent surcharge as a separate charge, and that that was living up to the requirement that they were keeping it separately by showing it as a separate charge, and that an audit would actually show how much they had charged and would have to refund in case it was refundable. That was acceptable by the Federal Maritime Board.
Senator BARTLETT. And the proposals of every carrier in the 17 years that I have been in Washington has been accepted by the Federal Maritime Agency. Nevertheless, if it prevails, there will be refunds to the shippers.
Mr. WINGREN. I want to get my request in the record.
Senator BARTLETT. It is there.
Mr. WINGREN. I don't know the public law number, but the bill as introduced, there were joint bills, S. 2669, which had to do with charter boats, and you are familiar with the legislation
Senator BARTLETT. Intimately.
Mr. WINGREN. In this the small charter boats running to Alaska were granted an extension of waiver. As the bill was introduced it asked for a 4-year extension. As the law now reads, and I think I am correct in this, it expires at the end of 1962.
It is quite obvious that these charter boats are still needed. It is also quite obvious that at the end of 1962 it will be difficult if not impossible to comply with all the required regulations.
I realize that there is no legislation pending at this time, but I do want to take the opportunity to point up that sometime in the near future I feel that it is going to be necessary to introduce new legislation and ask for further extensions.
Senator BARTLETT. Paul, you know if I had my way that would have been for a period longer than 4 years. You know also what the House report said when the last bill was passed.
I say the prospects are pretty bleak.
Mr. WINGREN. I recognize that.
Senator BARTLETT. I know you do.
The record will be held open for the introduction of additional testimony if anyone so desires, until November 20. Statements submitted in writing should be mailed to Mr. Harry Huse, U.S. Senate Committee on Commerce, 5202 New Senate Office Building, Washington 25, D.C.
The record is rather voluminous after 10 hearings in Alaska. We appreciate the opportunity of having been in Ketchikan, of having heard all of those who desire to testify. I personally regard the Alaska hearings as having been most successful. In addition to everything else, I want to thank those who have made physical facilities available for us, who have made us so comfortable in our hearing rooms as we have gone about-I almost said "the Territory" the new State. Certainly we are winding up here in Ketchikan in excellent quarters.
The committee, having been in recess at the conclusion of other meetings, will now stand in adjournment.
(Whereupon, at 5:15 p.m., the committee adjourned.)
COMPTROLLER GENERAL OF THE UNITED STATES,
Hon. WARREN G. MAGNUSON,
DEAR MR. CHAIRMAN: We refer again to your letter of April 28, 1961, in which you asked for our comment on S. 1725.
S. 1725 would permit the establishment of through service and joint rates via common carriers serving Alaska, Hawaii, and the other States and would create a Joint Board with regulatory authority over those rates. The bill is identical with S. 2452, 86th Congress, 2d session, as amended and passed by the Senate on May 4, 1960. In our letter to you on August 21, 1959, B-140351, we commented at length on S. 2452 as it was originally introduced. Most of our suggestions for changes were incorporated in the amended version which passed the Senate. One suggestion, however, concerning the imposition of civil liability upon carriers participating in through service and joint rates, was not adopted.
We continue to believe that the proposed legislation should subject to civil liability carriers which violate their duty to establish just and reasonable rates, charges and classifications, and related rules, regulations and practices, and should provide for aggrieved shippers a remedy by way of reparation for damages resulting from such violations. Rail carriers subject to part I of the Interstate Commerce Act and water carriers subject to part III are subject to civil liability for violations of the act. There are now pending in the Congress S. 676, S. 1283, H.R. 2765, and H.R. 5596, identical bills to amend sections 204 (a) and 406(a) of the Interstate Commerce Act to impose similar liability upon motor common carriers and freight forwarders. Inclusion of comparable provisions in S. 1725 is warranted from the standpoint of uniformity and equality of treatment of carriers. It is essential also in fairness to shippers and, as to Alaskan traffic especially, it is important to the Government, since a large proportion of the total Alaskan commerce is reported to involve transportation performed for or on behalf of the United States.
We note, also, that S. 1725 as now drawn, does not permit carriers which participate in the through service and joint rates to offer free or reduced rate service to the persons (including the United States) or for the purposes identified in sections 1(7) and 22 of the Interstate Commerce Act, 49 U.S.C. 1(7) and 22. We strongly urge that S. 1725 be amended to so provide. This could be accomplished by changing the punctuation in line 20, page 3, section 4, from a period to a colon and adding thereto the following proviso:
"Provided, That the provisions of sections 1(7) and 22 of the Interstate Commerce Act, as amended, shall apply to common carriers subject to this Act with respect to the through service and joint rates authorized in this Act."
Hon. WARREN G. MAGNUSON,
JOSEPH CAMPBELL, Comptroller General of the United States.
U.S. DEPARTMENT OF AGRICULTURE,
DEAR SENATOR MAGNUSON: This in reply to your letter dated April 28, 1961, offering us an opportunity to comment on S. 1725, 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.
We have no objection to passage of this bill. We believe legislation designed to permit the establishment and preservation of through service and just and reasonable joint rates affecting traffic moving between the mainland States, Alaska and Hawaii is desirable.
The Bureau of the Budget advises that there is no objection to the presentation of this report from the standpoint of the administration's program.
CHARLES S. MURPHY, Acting Secretary.