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Mr. GRINSTEIN. Has the Secretary ever forced the railroad to forego a rate decrease because of the appeal taken by a carrier by highway or water?

Mr. SMITH. A couple of years ago, I believe it was in February of 1960, the railroad wanted to add a 5-cent increment to its division to take care of the dock charges an increase in that portion of it to take care of the dock charges at Seward. A retired ICC examiner was hired by the Secretary to hold hearings up here. We have only had one other change since that time, at which time we notified everybody in 30 days. We did not get any heavy protest, but it was with the understanding of the Secretary that if we received heavy protest, we would suspend the rates so a hearing could have been held.

Mr. GRINSTEIN. You do operate a pickup and delivery service by motor vehicle?

Mr. SMITH. Yes, sir; that is right.

Mr. GRINSTEIN. Do you confine that to a particular terminal area, or do you go beyond, for example, Anchorage?

Mr. SMITH. We do not perform any land haul truck driving. It is all pickup and delivery within the normal delivery areas. They are defined in our tariffs and they do not stretch out so very far from any town.

Mr. GRINSTEIN. Is there a procedure whereby an aggrieved carrier can appeal to the Secretary the question of the size of a terminal area? Mr. SMITH. No, not at the present time; other than just writing a letter of objection, something of that sort. There is no avenue for him to go through.

Mr. GRINSTEIN. In your formal statement you suggest an amendment to S. 1725. What would be the effect of the amendment?

Mr. SMITH. What we are trying to get at here is that it appeared to us that in the event an economic regulation for the Alaska Railroad didn't get by, that these bills, either one of them, might be construed as to indicate to the regulatory body chosen to regulate water carriers that they could not enter into a joint tariff with the Alaska Railroad. This position has been taken by the ICC many times. In fact at one time we did file our tariffs. But now we merely give them to the ICC as information. They refuse to accept them as a documented tariff. We feel that in our organic act that we have got the right to publish tariffs for connecting lines, but the ICC has stated that the other lines do not have rights to file tariffs with us.

So this brings up a situation where the water carrier in this particular case files a tariff, then we promptly file an overall through tariff, and you send them both out to the shipper, and 10 chances to 1 he will throw away the water carriers tariff and use the railroad tariff because it is an all-inclusive situation.

Mr. GRINSTEIN. The suggestion has been made that S. 1725 should be discarded and S. 1839, which would provide for ICC control or regulation of joint rates and through routes be substituted for it. What is your opinion of that? Would you prefer to see the ICC assume regulatory authority over joint rates and through routes, rather than a joint board approach?

Mr. SMITH. Of course my remarks naturally have not been cleared by the Department. Some people may question why I would be interested in the regulation of water carriers when the Alaska Railroad isn't.

However, my personal observation is that 1839 would be a better bill. The ICC now regulates water carriers in coastwise service in the lower 48 States. I don't see a condition here where Alaska is different. It is a State now and it should be treated as a State.

I think that instead of trying to create obstacles against freight moving back and forth, we should be encouraging.

Also I believe it saves setting up a separate bureau effect.

Mr. GRINSTEIN. Expanding that a little bit more, do you think it it would be helpful to the purposes and objectives of the Alaska transportation system if all modes of water transportation-rail transportation and highway-were put under the economic regulation of the ICC?

Mr. SMITH. All of them?


Mr. SMITH. Yes, yes. That would be a lot easier working.

Mr. GRINSTEIN. And transfer the jurisdiction presently in the Federal Maritime Commission to the ICC over water carriers?

Mr. SMITH. Yes. A single agency I think would do a better job of regulating it than two of them getting in together. Some of the rates of course are part water and part land, and things like that. I think that it would be just a lot better working situation.

Mr. GRINSTEIN. Another suggestion has been made, that a provision be inserted which would require compulsory, as opposed to permissive, joint rates and through routes as among lines. Could you give your personal opinion on that?

Mr. SMITH. Again this is personal, but I believe that the act should be compulsory.

I think that in the interest of keeping good water transportation, certain protection has to be given to those carriers in the business. They can't be shot at from every angle by the so-called gypsy making a trip now and then. And you have to rely on your regular carriers to really supply you when things are bad, cold weather, or things like that.

Mr. GRINSTEIN. You think it should be made compulsory?

Senator BARTLETT. Mr. Smith, in respect to delivery of freight by truck, do you go out as far as Big Delta from Fairbanks, for example? Mr. SMITH. No; we do not, ourselves. What we do have is an arrangement with a couple of common carrier truck carriers wherein we show rates to Big Delta. However there is a provision in the tariff that specifies it will move by common carrier at a certain rate beyond Fairbanks.

Senator BARTLETT. Do you make an arrangement with one of the local truckers?

Mr. SMITH. Yes, sir.

Senator BARTLETT. For delivery.

If S. 1839 were enacted into law, the bill you have been discussing with Mr. Grinstein, would there be a requirement then additionally for separate legislation for economic regulation of the Alaska Railroad?

Mr. SMITH. The way I see it there would be, yes.

Senator BARTLETT. You have a proposed substitute for S. 2413. Is this draft similar to or identical with that which was supplied the committee earlier this year?

Mr. SMITH. Yes, sir. I don't necessarily say that this is the bill exactly the way it should be written. I do believe that possibly if we sat down with the ICC and a member of the committee we could work out something and try to see if the Department of Interior would then approve such a bill.

The Department has not as yet decided to agree to this bill. They just haven't made the decision. However, I definitely have recommended against it.

Senator BARTLETT. I beg your pardon?

Mr. SMITH. I have recommended against the bill as written.
Senator BARTLETT. Against the bill as introduced?

Mr. SMITH. S. 2413.

Senator BARTLETT. For the purposes set forth in your statement? Mr. SMITH. Yes, sir.

Senator BARTLETT. You have recommended against it for those purposes?

Mr. SMITH. Right.

Senator BARTLETT. It wasn't quite clear to me what constitutional issues are involved.

Mr. SMITH. Basically the Alaska Railroad is a portion of the executive branch of the Federal Government. The Interstate Commerce Commission is not. When you have a regulatory body of the next step of Federal Government having control of a section of the executive branch, while in the case of the Alaska Railroad it doesn't sound bad, the next thing is, does it set up a precedent that is bad toward the whole working of the Government. I am not in a position to make that decision however.

Senator BARTLETT. For example, the Interior Department is in the executive branch of the Government. And the Bureau of the Budget is likewise situated. If the Department of Interior comes over to the Bureau of the Budget and says we want to ask the Congress for $149 million for certain constructions on the Alaska Railroad, the Bureau of the Budget can say no and the Department of Interior cannot ask Congress for that money.

So you do have this one branch of the executive department controlling another. Those are both executive. ICC isn't. Neither is the Civil Service Commission, which has told you that you must adhere to the Veterans' Preference Act.

I don't think this is as simple as that. In any case, aside from the merits, Mr. Smith, of your draft as opposed to S. 2413, I was wondering why there was a need for repetition of so much existing language? Mr. SMITH. Where is that?

Senator BARTLETT. All through the bill.

For example, there is a long recital to the effect that:

The Railroad will be entitled

this bill nothwithstanding

to issue passes to ministers of religion, traveling secretaries of railroads, Young Men's Christian Association

and I doubt if you have had one request.

I notice one sad lack: there is not a provision in this bill for the issuance of a free pass to a banana peddler, and I believe every other railroad in the United States is empowered to give those passes.

I was thinking it might be a little more wordy than it need be.
Mr. SMITH. It probably could be cut down somewhat.

Senator BARTLETT. In any case the committee is grateful to you for presenting this statement and accepts it with the understanding that it represents your personal conclusions and does not necessarily bind the Department of the Interior.

Mr. SMITH. That is right.

Senator BARTLETT. I want to say to you, Mr. Smith, and to all other witnesses, that you will have the privilege for 30 days of submitting additions in writing to the statements made, and these should be addressed to Mr. Harry Huse, Senate Committee on Commerce, Washington 25, D.C. People who desire to offer testimony on the subjects under consideration by the committee but who have not had the opportunity to come before us will likewise have the privilege of filing written statements.

Thank you, Mr. Smith.

Mr. SMITH. Did you want us to give you this court reporter's copy of the FMB hearings today?

Senator BARTLETT. Why don't you mail it to us in Washington; attention Mr. Grinstein.

Mr. SMITH. Thank you, sir.

Senator BARTLETT. The committee is going to stand in recess until 1:45 p.m. We are going just as late as we can this afternoon. If all goes well, we will turn to the subject of the fishery at the beginning of the afternoon session. The committee will be in recess.


Senator BARTLETT. The committee will be in order.

We are now to hear S. 2593, which I introduced on September 21, 1961, by request.

The veterans' organizations will be heard from first.

We are glad to have you here.



Mr. QUEER. I am Albert Queer, Box 5024, Mountain View, Anchorage.

The reason that I am here, sir, is at the request of Jack Henry Post. Some time back correspondence was received in the State relative to this hearing, and to the presentation of the bill. The gist of that letter was somewhat to the effect that probably the national office of the American Legion might have expressed no disapproval of the subject proposed bill in its form. However, it gave the opinion that if the local post opposed the bill, then they would consider it further. On the basis of that, I have been asked to make this presentation in behalf of the American Legion, Jack Henry Post, Spenard Post 28, and the Women's Post No. 1, and also the VFW Post of Anchorage.

For the record, I would like to state that the veterans' organizations I represent in no way oppose collective bargaining or employee organizations in any Federal agency, whether it be the Alaska Railroad, the Federal Aviation Agency, Public Health Service, Defense Department, or any other, so long as their aims do not conflict with the law of the land and in the interest of better employee-management relations. In fact, I personally feel that the employee organizations

and management of the Alaska Railroad are to be commended for their advances in this field. As a Federal agency their agreements are unique and are far in advance of other Federal agencies, and they serve to protect the rights of the railroad employees covered by them. We cannot overlook the fact that there is a possibility for a need of this type of employee-management relationship in other Federal agencies. The present administration in Washington recognizes the possibility of this need in the establishment of the President's task force exploring this field in all Federal agencies.

However, we, as veterans and representing veterans' organizations, do not let this possible need be paramount over a very definite and established existing need, this need being the protection of veterans and their rights as set down in the law of the land, that law in this instance being the Veterans Preference Act of 1944.

Ours, the veterans' organizations opposition to the proposed bill is based on the language of the bill and the effect it will have on the provisions of the Veterans Preference Act as applicable to the Alaska Railroad. We feel that this bill, if enacted into law, will serve to scrap the Veterans Preference Act of 1944 insofar as its application and enforcement on the Alaska Railroad is concerned.

We are particularly concerned in this phrasing in the bill. We have no objection in its outlining here:

A bill to improve and encourage collective bargaining between the management of the Alaska Railroad and representatives of its employees and to permit to the extent practicable the adoption by the Alaska Railroad of the personnel policies and practices of the railroad industry.

To go on further with the bill:

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That with respect to the Alaska Railroad the Secretary of the Interior is authorized, without regard to the provisions of civil service laws, except the Veterans Preference Act of 1944, as amended, to appoint or hire such officers, agents, attorneys, and employees as may be necessary for the operation of the Alaska Railroad, and to establish rules governing such hiring and appointments.

Under (e), this, if enacted, would give the Secretary of the Interior the power, as quoted here, to establish rules governing promotion, retention, discharge, layoff, recall, seniority of employees the settlement of grievances and disputes, and related personnel problems. We feel, in this part of the act, that this would give the Secretary of the Interior the power to employ those provisions as set down particularly in sections 12 and 14 of the Veterans' Preference Act.

Under (j), we pass on this power to establish performance ratings-rating systems-without regard to the requirements of the Performance Rating Act of 1950; and, under (j), to—

negotiate and enter into written agreements with duly authorized union representatives, which agreements made without regard to the provisions of the Veterans' Preference Act of 1944 relate to but shall not be restricted to wage rates and rules, promotions, demotions, retention, discharge, layoff, recall, seniority of employees, and settlement of grievances and disputes.

This act in this state does not provide-in fact, it destroys the rights of appeal under the Veterans' Preference Act reserved for veterans. As I stated in starting, at the beginning, we have no quarrel, and in fact encourage the collective bargaining as set up by the Alaska Railroad with the employees. However, there seems to be a flagrant

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