fields so as best to aid in the development of the agricultural and mineral or other resources of Alaska, and the settlement of the public lands therein, and so as to provide transportation of coal for the Army and Navy, transportation of troops, arms, munitions of war, the mails, and for other governmental and public uses, and for the transportation of passengers and property; to construct and build a railroad or railroads along such route or routes as he may so designate and locate, with the necessary branch lines, feeders, sidings, switches, and spurs; to purchase or otherwise acquire all real and personal property necessary to carry out the purposes of this Act; to exercise the power of eminent domain in acquiring property for such use, which use is hereby declared to be a public use, by condemnation in the courts of Alaska in accordance with the laws now or hereafter in force there; to acquire rights-of-way, terminal grounds, and all other rights; to purchase or otherwise acquire all necessary equipment for the construction and operation of such railroad or railroads; to build or otherwise acquire docks, wharves, terminal facilities, and all structures needed for the equipment and operation of such railroad or railroads; to establish, change, or modify rates for the transportation of passengers and property; to receive compensation for the transportation of passengers and property, and to perform generally all the usual duties of a common carrier by railroad; to make and establish rules and regulations for the control and operation of said railroad or railroads: Provided, That effective one hundred and eighty days after the enactment of this proviso, and thereafter, the oneration of the said railroad or railroads and the facilities and equipment thereof shall, to the extent applicable, be subject to the provisions of part I of the Interstate Commerce Act, as amended, in the same manner and to the same extent as if such railroad or railroads and facilities were privately owned and operated, except that so long as such railroad or railroads continue to be both wholly owned and operated by the United States of America or by one of its departments, corporations, or agencies: (1) the Interstate Commerce Commission in determining the lawfulness of rates or charges maintained, or from time to time proposed to be maintained, by such railroad or railroads, shall give due consideration, among other things, to the national public purposes which to a substantial extent prompted the construction, expansion, maintenance, and improvement thereof, with particular reference to the requirements of the national defense, as well as promotion and development of natural resources, and shall to the extent warranted by the facts recognize for valuation and cost-finding purposes a segregation of both capital investment and operating expenses which are found to be solely attributable to such national public purposes, distinguishing them from normal railroad common carrier investment and operational expenses; nor shall such rates and charges be deemed to be unlawful solely because they fail to yield sufficient revenues to cover any amounts for taxes not actually required by law to be paid or provide a return on capital investment; (2) those provisions of part I of the Interstate Commerce Act relating to the abandonment of extension of lines of railroads, discontinuance of service, issuance of securities, safety of operations and equipment, and penalties and forfeitures shall not be applicable; and (3) that in carrying out its duties under section 20 of the Interstate Commerce Act, as amended, the Commission shall consider the needs of the Comptroller General of the United States, the Secretary of the Treasury, the Director of the Bureau of the Budget, and the Secretary of the Interior pursuant to provisions of law with respect to the accounting, auditing, financial reporting, and budgetary requirements of such railroad or railroads. No free pass or free or reduced rate or fare transportation shall be given except as permitted by the provisions of part I of the Interstate Commerce Act. The President is empowered and authorized in his discretion, to lease the said railroad or railroads, or any portion thereof, including telegraph and telephone lines, after completion under such terms as he may deem proper, but no lease of such railroad or railroads shall be for a longer period than twenty years and no other lease authorized in this Act shall be for a longer period than fifty-five years, or in the event of failure to lease, to operate the same until the further action of Congress. If the said railroad or railroads, including telegraph and telephone lines, are leased under the authority given under this Act, they shall be operated by the lessee under the jurisdiction and control of the provisions of the interstate commerce laws. The President also is empowered and authorized to purchase, condemn, or otherwise acquire upon such terms as he may deem proper, any other line or lines of railroad in Alaska which may be necessary to complete the construction of the line or lines of railroad

designated or located by him, but the price to be paid in case of purchase shall in no case exceed the actual physical value of the railroad. The President also is empowered and authorized to make contracts or agreements with any railroad or steamship company or vessel owner for joint transportation of passengers or property over the road or roads herein provided for, and such railroad or steamship line or by such vessel, and to make such other contracts as may be necessary to carry out any of the purposes of this Act; to utilize, in carrying on the work herein provided for, any and all machinery, equipment, instruments, material, and other property of any sort whatsoever used or acquired in connection with the construction of the Panama Canal, so far and as rapidly as the same is no longer needed at Panama, and the successors to the Isthmian Canal Commission are authorized to deliver said property to such officers or persons as the President may designate, and to take credit therefor at such percentage of its original cost as the President may approve, but this amount shall not be charged against the fund provided for in this Act." SEC. 2. The Act of April 10, 1926 (44 Stat. 239), relating to free transportation on the Alaska Railroad, is hereby repealed.

[S. 2484, 87th Cong., 1st sess.].

A BILL To provide for establishing and operating a foreign-trade zone, a Hall of States. and an international reception and information center at the Anchorage International Airport, Anchorage, Alaska, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That there is hereby authorized to be established, operated, and maintained at the Anchorage International Airport, Anchorage, Alaska

(a) a foreign-trade zone in accordance with the Act entitled "An Act to provide for the establishment, operation, and maintenance of foreign-trade zones in ports of entry of the United States, to expedite and encourage foreign commerce, and for other purposes", approved June 18, 1934, as amended; and

(b) a Hall of States where each State shall be provided with suitable space in which to have an exhibit in which it may display therein information concerning its traditions and may sell the commodities and merchandise it produces and manufactures.

SEC. 2. The United States Information Agency (hereinafter referred to as the “Agency"), acting in cooperation with State and local officials of the State of Alaska, and agencies of the Federal Government concerned with the foreign policy and international objectives of the United States, is authorized to establish an international reception and information center at said Anchorage International Airport, to provide for its staffing and operation, and to take such other action in connection therewith, in accordance with the provisions of this Act and other provisions of law, as may be necessary to create for foreign visitors a climate for better understanding the United States and its ideals and at the same time provide a facility for the operation of a foreign trade zone and a Hall of States.

SEC. 3. (a) In carrying out the provisions of this Act the agency is authorized to prepare plans and specifications for the construction, at or adjacent to the Anchorage International Airport, of a suitable building with requisite equipment, approaches, architectural landscape treatment of the grounds, and connections with public utilities. The preparation of such drawings and specificacations and all work incidental thereto shall be under the supervision of the Administrator of the General Services Administration in accordance with the provisions of the Public Buildings Act of May 25, 1926, as amended.

(b) The Agency shall operate an international reception and information center in such building when completed.

SEC. 4. The Agency is authorized to accept from the State of Alaska a lease or conveyance of such land as may be necessary for establishing the international reception and information center and additional facilities herein provided for and, as total compensation to the State of Alaska for such lease or conveyance, shall provide to the State of Alaska or to the city of Anchorage sufficient space in said center so that the said State or city may

(a) provide for the establishment, operation, and maintenance of the foreign-trade zone authorized by section 1 of this Act;

(b) arrange for a Hall of States authorized by section 1 of this Act; (c) establish and operate, directly or through lease arrangements, lounges and concessions for the comfort of foreign visitors.

SEC. 5. Foreign or domestic commodities or merchandise sold in the Hall of States or the foreign-trade zone, hereby authorized, shall be sold subject to the provisions of the Act of June 18, 1934, as amended, hereinabove referred to.

SEC. 6. There are hereby authorized to be appropriated such sums as may be necessary to carry out the provisions of this Act.

Senator BARTLETT. Shortly before the Congress adjourned, I introduced another bill which is not before this committee but instead is before the Senate Post Office and Civil Service Committee, having to do with Alaska Railroad employees.

I think it would be well to call the attention of the group to a letter written to Chairman Warren G. Magnuson, of the Commerce Committee, by Secretary of the Interior Stewart Udall on August 28.

I will read the letter in full text, together with Senator Magnuson's reply for your information.

DEAR SENATOR MAGNUSON: As you know, the officials of the city and the port of Anchorage have lodged complaints against the Alaska Railroad with this Department and with the Federal Maritime Board, and the Federal Maritime Board has sent a team of investigators to Alaska to investigate the complaints. I have given considerable thought to policy questions involved and the subject matter which has given rise to these complaints and the thought occurs to me that the issue is one of broad transportation policy rather than narrow Department policy on how this railroad should be operated. The nub of the matter is the interconnection-whether at Seward or Anchorage-of water-borne traffic to or from the State of Alaska.

Based upon these considerations, it has seemed to me that it might be appropriate for your committee, or its staff, to look into the substance of the complaints by the Anchorage officials, the overall question of this Department's operation of a railroad in Alaska, and the overall transportation policy for this

area.

If you should find this suggestion to have merit, I will be pleased to have representatives of the railroad, or any other department officials you may care to see, cooperate with you in every way. Assistant Secretary John A. Carver, Jr., will be handling this matter for me.

Sincerely yours,

S. UDALL, Secretary of the Interior.

SEPTEMBER 5, 1961.

DEAR SECRETARY UDALL: This is in acknowledgment of your letter dated August 28 in which you suggested that the Commerce Committee, or its staff, should inquire "into the substance of the complaints by the Anchorage officials, the overall question of this Department's operation of a railroad in Alaska, and the overall transportation policy for this area."

Although operations of the Alaska Railroad, to a very considerable extent, fall within the legislative purview of the Committee on Interior and Insular Affairs, it is true that the Commerce Committee has a jurisdiction applying not only to the railroad itself but the railroad's connection with the overall transportation problems of Alaska.

After your letter arrived, I discussed its contents with Senator Bartlett of Alaska. He will be in Alaska some time after adjournment of Congress and will hold hearings while there in connection with fishery matters. I have given him the additional assignment and he has accepted it of making the inquiry you sug gest relating to transportation, and Senator Bartlett will be in touch with Assistant Secretary Carver about this.

With best wishes, I am,

Sincerely yours,

WARREN G. MAGNUSON, Chairman.

I read this without any knowledge at all about whether this subject will be of interest here in Fairbanks. But if it is, you are at perfect freedom to testify concerning it.

The first witness this morning will be Representative Frank Chapados, who is a member of the State legislature, a member of the legislative committee of the Alaska Carriers Association, and whose address is 515 Third Avenue, Graehl, in Fairbanks.

We are delighted to have you here as the first witness, Mr. Chapados. may proceed in your own manner.

You

STATEMENT OF FRANK CHAPADOS, MEMBER OF THE STATE LEGISLATURE, AND MEMBER OF LEGISLATIVE COMMITTEE OF THE ALASKA CARRIERS ASSOCIATION, GRAEHL, FAIRBANKS, ALASKA Mr. CHAPADOS. Thank you very much, Senator Bartlett. It is certainly a pleasure to be able to appear before this committee and to make comments concerning the subject of transportation, which is the subject that I am interested in, of course, representing the Alaska Carriers Association.

Senator BARTLETT. May I ask you if you have, in addition to a general interest in transportation, a personal business interest?

Mr. CHAPADOS. That is right. I am a partner in the H & S Warehouse Association, which is a business operating in the Fairbanks area. At the present time we hold a temporary permit with the Interstate Commerce Commission to operate in interstate commerce, and also permit with the Public Service Commission of Alaska. We have been active, of course, in the affairs and activities and the promotion of the Alaska Carriers Association.

As you have already indicated, I am here representing the Alaska Carriers Association as a member of the legislative committee. Due to the fact that we are not too well informed and do not have available many of the bills and other statutes which are involved in the specific legislation before the committee, I will not be able to go into specific recommendations and considerations. However, I think from a general standpoint that I can speak for the carriers association and pass on to you their general feeling toward the various pieces of legislation, and I am sure that at the time you meet in Anchorage that the executive director of the association will then go into the specifics of the various bills.

To begin with, considering Senate bill 1725, I know that you are aware that the carriers association has supported this approach to regulated water carriers and the provisions for joint service and the filing of joint tariffs between the United States and Alaska, and they continued that support until as recent as May 5 of this year at which time the resolution was passed by the carriers association in their annual convention supporting the passage of S. 1725.

Since that time

Senator BARTLETT. S. 1725 is the joint board bill, is it not?

Mr. CHAPADOS. That is right. That is the bill that you introduced in Congress.

Senator BARTLETT. Yes.

Mr. CHAPADOS. It is my understanding that since that time there has been a change in attitude on the part of many of the interested parties, who are at least trying to resolve this particular problem of regulation, and the situation has changed.

The carriers association, in their desire to try and support an approach that will produce the best possible solution, feel that the approach taken by the introduction of S. 1839 would perhaps be more desirable, since it would eliminate the fact that so many boards would be involved. The joint board concept, of course, would involve several regulatory agencies. On the other hand, S. 1839 would provide for regulation of water carriers by the Interstate Commerce Commission, and certainly would simplify the approach to this particular problem. For that reason I am sure that the carriers association has decided to support the approach of S. 1839 rather than that as set forth in the provisions of S. 1725.

They, of course, are not completely happy with the provisions of S. 1839 because they feel that the provisions are not necessarily as complete as they should be. This is my understanding. I go along with this particular thinking on the subject.

The carriers would prefer to see an approach taken whereby the Interstate Commerce Commission would be the responsible agencythe responsible regulatory board, and that the provisions covering the regulation of water carriers would be mandatory rather than permissive, such as the provisions of S. 1839 would provide for.

I believe, to try to explain our position, that the carriers are not necessarily insisting that the water carriers be forced to enter into joint tariffs with the land carriers a hundred percent without at least some provisions that would establish the standards which the land carriers, for example, would have to be required to meet in order to qualify so as to enter into joint tariffs with the water carriers.

In other words, if the land carrier is not meeting certain qualifications, I believe that in order to maintain good standards that you are going to have to not make it mandatory for the water carrier to enter into an agreement with them unless they do meet a particular standard of service.

Senator BARTLETT. You think there would have to be a qualification hedged about the word "mandatory?"

Mr. CHAPADOS. Yes, sir.

Mr. GRINSTEIN. Basically you would like to have mandatory joint rates as between rail, water, and highway movements?

Mr. CHAPADOS. I think so. I think a situation should never occur whereby any group of carriers or any particular type of carrier would be in a position to enter into an agreement with a carrier who would meet certain qualifications and standards.

Senator BARTLETT. Those qualifications and standards, Mr. Chapados, should be established in your opinion by law or by the ICC?

Mr. CHAPADOS. I would say that certainly the law should permit the ICC to regulate within this area. If the law is so tight that the regulatory group cannot promulgate regulations under the law, then, of course, we defeat our purpose here. I think the law should indicate that it is permissible for the commission to regulate so as to establish standards.

Does that answer your question, Senator?