official being removed from office. I would like to clarify the record that in that instance the party was a member of the firemen's organization.

Senator BARTLETT. Of which organization?

Mr. O'NEIL. The firemen's. He was not removed from office.

We are having an election of officers at this present time, and he was not nominated for that office. So he was not removed.

It is our normal election of officers at this time, and he was not nominated.

I just wanted to clarify the record.
Senator BARTLETT. Is that all that
Mr. O'NEIL. That is all that I have.

you have?

Senator BARTLETT. Your organization supports this bill?

Mr. O'NEIL. We do, 100 percent.

Senator BARTLETT. How long have you been with the railroad? Mr. O'NEIL. Some 28 years and 1 month.

Senator BARTLETT. In what capacity?

Mr. O'NEIL. Locomotive engineer.

Senator BARTLETT. Have you had railroad service elsewhere?
Mr. O'NEIL. No, I have not.

Senator BARTLETT. Where were you born?

Mr. O'NEIL. I was born in Montana, but I have been a resident of Anchorage for 38 years.

Senator BARTLETT. Thank you, Mr. O'Neil.

Do you, by any chance, know the position of the American Federation of Government Employees on the bill?

Mr. O'NEIL. No, I don't.

Senator BARTLETT. Thank you.
Are there any other witnesses?
Will you please come forward?

STATEMENT OF BASIL O'NEILL, ANCHORAGE, ALASKA, PRESIDENT, LOCAL 183, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

Mr. O'NEILL. I am Basil O'Neill. My mailing address is Box 1623, Anchorage.

Senator BARTLETT. And you are president of

Mr. O'NEILL. Local 183, American Federation of Government Employees, the Alaska Railroad local.

Senator BARTLETT. Which covers all the Alaska Railroad employees?

Mr. O'NEILL. Under that jurisdiction. As he said, it is approximately 60 percent.

Senator BARTLETT. How many members?

Mr. O'NEILL. I would have to refer to the Secretary for that. Senator BARTLETT. Sixty percent, approximately, of all the employees. Will you please proceed, Mr. O'Neill?

Mr. O'NEILL. We took a little different approach to the thing than the trainmen did. When this thing first came up, the executive board of the local tried to determine the feeling of the local in establishing a position on the bill. As was already indicated, it was quite controversial, not so much that there were organizations against each other,

but that the veterans did not want to hurt the rights of the nonveterans, and the nonveterans did not want to hurt he rights of the veterans under the Veterans Preference Act, if you understand what I

mean.

Senator BARTLETT. I think that is very charitable on both sides. Mr. O'NEILL. Anyway, that is the truth.

It was our position as the executive board to establish a position on the bill for the local, with two sides on it. It was argued many times and at many meetings, and sometimes quite hotly. It was finally brought to a vote with a large representation and this position was taken unanimously: That the American Federation of Government Employees, Local 183, would support the bill in its entirety, with the provision that language would be added to the final paragraph of the bill giving arbitration rights to the unions on disputes with the company. It was felt by the veterans that they would be given machinery under the Veterans Preference Act for the settlement of disputes that they did not now have. And on the other hand it was felt by all that the seniority rights and the seniority system of the Alaska Railroad would be destroyed by the Veterans Preference Act. Therefore, the conflict came there.

It was felt by adding to the bill language for providing arbitration procedure that it would be a compromise for both sides and that they unanimously voted to support the bill.

Senator BARTLETT. Mr. O'Neill, has the action of local 183 been

reduced to written form?

Mr. O'NEILL. In correspondence with our national, if that is what you mean. We have been in constant correspondence with our national on it. They wanted to know our position at all times. As a matter of fact, they requested a poll on several questions.

One was "Do you favor veterans preference on the Alaska Railroad?" On that particular question the answer was not unanimous, but in favor of not having veterans preference on the Alaska Railroad. A second question was "Do you want civil service regulations on the Alaska Railroad?" The answer to that was "We do not want civil service regulations on the Alaska Railroad."

A third question was "Do you wish arbitration procedure provided in the bill," this bill we are talking about. An the answer was almost unanimous, a little over 90 percent, that they did want arbitration procedure in the bill.

Mr. GRINSTEIN. The arbitration procedure would be invoked to decide any issue in dispute between management and the union?

Mr. O'NEILL. We now have an arbitration procedure which applies, which is somewhat limited, and this arbitration procedure was asked to settle any dispute.

Mr. GRINSTEIN. Any dispute?

Mr. O'NEILL. I can't remember the exact language, but it was practically any dispute.

Mr. GRINSTEIN. Could it be called for by either party?

Mr. O'NEILL. Yes.

Senator BARTLETT. Thank you, Mr. O'Neill. We needed that information, and we are glad that you were here and willing to testify. Mr. Queer, will you come forward, please?

79299-62- -6

Mr. QUEER. Senator Bartlett, for the purpose of accuracy in representation, the Legion would like to have this clarified: That in the case of Mr. O'Neill, the assumption or allegation was made that in all probability the majority of the employees at the Alaska Railroad were being represented by him as members of the AFGE. The unknown factor is the actual membership in that lodge. I would imagine that if his group could encompass in his jurisdiction 600 employees, it would not be a reasonable representation if his lodge did not exceed 140 or possibly 200.

Senator BARTLETT. Thank you, sir.

Apparently there are no further witnesses on this bill, which is related to transportation. We will stand in recess for an additional 5 minutes and continue on transportation with Mr. Edward R. Sanders, managing director of the Alaska Carriers Association, as the first

STATEMENT OF EDWARD R. SANDERS, MANAGING DIRECTOR, ALASKA CARRIERS ASSOCIATION, INC., ANCHORAGE, ALASKA

Mr. SANDERS. I am Edward R. Sanders, managing director, Alaska Carriers Association. My mailing address is Box 3-124, Anchorage. Senator BARTLETT. Mr. Sanders, I appreciate the fact that you are not going to need any advice from the committee as to which bills or subjects are under consideration, so I am going to make a suggestion which I know is entirely unnecessary, and that is that you proceed in your own manner.

Mr. SANDERS. Thank you. If it will be of interest, I have a list of our members here which only lacks the last 20 or so newest.

Senator BARTLETT. How long would it take you to add the others? Mr. SANDERS. It is in the process of reissue now and will be completed by Wednesday.

Senator BARTLETT. I suggest that we wait for the new one and you forward a copy to me at Box 871, Juneau, and I will see to it that the committee receives that.

Mr. SANDERS. I believe you said, Senator Bartlett, that you wish me to proceed at random.

Senator BARTLETT. Just as you choose and I know it won't be at random.

Mr. SANDERS. Thank you.

First, I would like to state that the remarks of Mr. Smith of the Alaska Railroad show great progress and modernization of their previous thinking, and it is very acceptable to us, to the point that he didn't go far enough.

On page 2 of his testimony, second to the last paragraph, he recites a paragraph of Senator Magnuson's letter-pardon me, the letter of the Interstate Commerce Commission, Legislative Committee, addressed to Senator Magnuson on September 25, 1961. He quotes a paragraph there and goes on to say:

It is a well-known fact that the Alaska Railroad has been the most effective, stabilizing influence in Alaska in keeping ship rates down within reach of the citizens of Alaska.

Since we believe the objective of S. 2413 is to protect the shippers, passengers, and consignees in Alaska, we believe that a different and better approach to S. 2413 should be taken.

We agree that a better approach, or rather a revised approach to that of S. 2413 should be taken, but not for the same reason.

We also think that the welfare of the common carriers of Alaska deserve some consideration under the law. The Alaska Railroad is federally owned and operated in direct competition with privately owned common carrier effort. We think that definite consideration should be given to that. In my other prepared comments I will deal with that somewhat.

I would like to discuss S. 2413 in a little more detail.

The Alaska Railroad is a federally owned and operated railroad, built in Alaska approximately 40 or more years ago to open up and develop the then Territory of Alaska. It contributed very materially to the welfare of the territory and the Nation in that respect.

In recent years private enterprise has been attempting to assume its position in Alaska as it has in the other States of the Union. The very framework of our Nation is based upon the principle that free enterprise shall be fostered and permitted to thrive. Without it our strength as a nation would vanish because the vigor and strength of the individual would no longer exist.

To maintain free enterprise is to encourage private ownership and operation of all the kinds of business activity that make up the complex structure of our country. When our massive, centralized Government enters into competition with private enterprise it should only do so in those underdeveloped areas where private enterprise cannot yet sustain itself. As private enterprise feebly first establishes itself and start growing to mature and effective stature, the Federal ownership and operation of competing functions should phase out-not cease prematurely-but phaseout with relation to the growth and capability of private enterprise.

The Alaska Railroad is still needed in Alaska, it still must be operated by the Federal Government until private interests will take it over. It must, however, be in a proper state of phasingout of governmental competition with private enterprise. It would appear that the people of Alaska and of the other States of the Union need for the following actions to take place:

(1) The Alaska Railroad be operated in exactly the same manner as a privately owned railroad.

(2) That it should be regulated, exactly in the same manner as the other railroads, by the Interstate Commerce Commission.

(3) That its rates and charges include in full measure the full, necessary ratemaking increments that privately owned railroads are compelled, economically, to include

Proper depreciation of rolling stock and other facilities; (b) Increments in lieu of taxes if Congress will not allow cities, boroughs and/or the State to tax it as all the private railroads are taxed-we favor it actually paying proper taxes to the governmental entities through which it passes;

(c) Increments in lieu of profit; such surpluses thus obtained could revert to the Treasury;

(d) Increments in lieu of return on investment; these funds could also revert to the Treasury; and

(e) The normally arrived at basic cost return.

Generally, if the Congress fails to establish a competitive situation that will allow the many motor common carriers, that are attempting to not only compete with the Alaska Railroad along its routes but to offer the only available service to many points in Alaska not served by the Alaska Railroad, then our way of life will have been prevented from establishing itself in Alaska; the residents of areas of Alaska not served by the Alaska Railroad will be deprived of their only means of adequate land transportation.

If the motor common carriers are not given their rightful opportunity to compete with their own Federal Government's Alaska Railroad the entire development of Alaska will be set back and thwarted until a more enlightened Congress assumes control of our Federal Government.

Therefore, S. 2413, and a companion bill in the House, should be enacted but only if and when amended to require the Interstate Commerce Commission to require that the rates and charges of the Alaska Railroad contain the proper increments as outlined above.

Senator BARTLETT. Do you want to have questions at this point, Mr. Sanders?

Mr. SANDERS. As you wish.

Senator BARTLETT. You have suggested-you have urged, in fact, that the regulation of the Alaska Railroad be identical with that of privately owned railroads. Mr. Smith this morning said that he feared the terms of the bill as now drafted would pose constitutional questions and would create the very curious situation of the Attorney General being obliged to act on behalf of the ICC as prosecutor, perhaps, and in behalf of the Alaska Railroad and in that capacity being the defendant. Do you have any comment on that?

Mr. SANDERS. I have one comment there. Congress is the body, the governing body, to whom we entrust the proper disposition of matters such as this. Certainly in their wisdom they can find a satisfactory answer. I don't dispute that there may be truth as to Mr. Smith's contention that mechanical or interdepartmental overlapping authority, jurisdictional, other difficulties, may set in without corrective action of Congress. But I am quite certain that in passing this type of bill, Congress will find an answer. That doesn't worry me in the least.

Senator BARTLETT. If your points (a), (b), (c), (d), and (e) were adopted, this would necessarily involve an increase in Alaska Railroad rates, would it not?

Mr. SANDERS. Yes, sir; and they should be increased.

Senator BARTLETT. You say they should be increased?

Mr. SANDERS. They should be increased to include these increments. If operating economies over and above and beyond those that are in existence today in the operation of the Alaska Railroad could be placed in effect, fine; let the rates stay there or go down. But the employment level of the railroad now is three or four hundred less than it was some years ago, not too far back. That shows that they have been instituting more and more efficient operating procedures.