compensatory as to reductions and as to unreasonable high rates he will be required to show that the rates are not unreasonably or overly compensatory.

I think the general public, and certainly the carriers, need the protection of both the maximum and minimum control, rather than just the maximum, as is presently, to my understanding, under the Federal Maritime Board's regulatory control.

Senator BARTLETT. You have educated me. One final question: On the last paragraph of that same statement, is my inference correct that you would impose a mandatory requirement for the filing of through route and joint rates?

Mr. SANDERS. I would not, as such, Senator. However, the carriers that are not now participating in the joint through movement of freight covered by the single factor through rates should have the right, upon petition to the regulatory authority, and the showing of financial and other fitness, to join in the publication of through rates; but such carriers are not on the average of such financial stature or possessed of other capability of sufficient amount to get into the swing of things, so to speak. They have got to have some way by law to obtain their rightful share of the flow of traffic, I would

say.

The public interests would be further served by their obtaining a share of this traffic because competition would be sharpened to the point that the shipping public would receive the best possible service.

I believe that this mandatory publishing of through rates and routes should be not a blanket thing, but one that must be sought after and obtained upon the showing of good cause and good fitness by the carriers themselves.

Senator BARTLETT. Mr. Grinstein, do you have any questions to put to Mr. Sanders?

Mr. GRINSTEIN. Yes, Senator.

What circumstances would there have to be before you would require mandatory joint rates on through routes?

Mr. SANDERS. In the situation that exists as far as water carriers between the United States and Alaska, until such time as Alaska grows to contain far more people than it does today, there will only be tonnage enough to support a limited number of water carriers. It is conceivable to feel that they will not, for efficiency of operations, accounting procedures, many other reasons, want to have a whole flock of smaller motor carriers operating in connection with them, dividing the through rates on a division sheet basis and so on, and maybe they shouldn't have a whole flock. But I am quite certain that they can deal with two, three, or four carriers, instead of one each. I am not at all worried for fear that the existing motor common carriers having through-rate arrangements would be harmed by such action.

Mr. GRINSTEIN. In other words, it is your opinion that a water carrier could enter joint rates with three or four motor carriers but refuse to do so with others?

Mr. SANDERS. It is conceivable that they might do so if the act. weren't designed in such a way as to give the motor carrier who conceivably wanted to participate in through rates, some legal recourse in the event of refusal. This is an anticipatory thing which I would say needs to be built in to prevent panic. I don't know of any situa

tion that exists today. Actually, if it does exist today-it doesn't because of the lack of single control, anyway.

Mr. GRINSTEIN. I take it that when you suggest amending section 27(b) of the Alaska Statehood Act, that would have the effect of placing transportation to, from, and within Alaska on the same basis as transportation within the south 48 States?

Mr. SANDERS. Correct, with one exception. When you place the water carriers under part 3 of the act in the way that other coast wise water carriers are now situated, you don't make it a mandatory thing for them to publish joint through rates and routes within any and all people. Part 1 of the act, of course, is of a mandatory nature with relation to the rail carriers.

Mr. GRINSTEIN. Rail and water?

Mr. SANDERS. Rail and water. I am certain it requires the publication of joint through rates with other rail carriers. This suggestion that we are talking about as to a further inclusion in the act would be a departure from the norm as it exists today under parts 2 and 3 of the act relating to water carriers publishing through rates and routes.

Mr. GRINSTEIN. In other words, you would further amend the act in addition to section 27(b) to change the status of joint rates and through routes between modes subject to parts 2 and 3 of the act?

Mr. SANDERS. Right. I think some fair and equitable formula should be added which would make it possible for a land carrier to bring about the forcing of permission from a connecting water carrier to join in the publication of through rates and routes, but I don't think the water carrier in turn should be subjected to the whim of any and all motor carriers who may decide today they want through rates and routes in connection with some carrier. I think there should be a requirement for some showing of financial capability, equipment, capability, any of the other fitness requirements that are usually required of common carriers before they are given their final operating rights, for instance, by the Interstate Commerce Commission.

Mr. GRINSTEIN. In other words, you would impose some additional standard on the carrier subject to part 2 before he could qualify to compel a carrier subject to part 3 to enter into joint rates and through routes?

Mr. SANDERS. Right. I think the Commission, if it is given jurisdiction, should set up certain standards that must be met before it will issue an order requiring the joining in the publication of through rates and routes by a water carrier who has conceivably refused to do so until that time of its own choice.

I think the public interest requires that this be handled in a sane and safe manner, rather than on an impulse, a hammer over the head type of thing.

Mr. GRINSTEIN. You know that the joint rate and through routing provisions in part 1 of the act have been notoriously ineffective to date.

When you were speaking earlier, you mentioned that except for one or two of your carriers, the others had been denied joint rates and through routes.

Mr. SANDERS. I wouldn't say they had been denied.

Mr. GRINSTEIN. Or hadn't been able to obtain, I think you said. Mr. SANDERS. That is right, yes. This is a hodge-podge growth of transportation characterization up here now, and that is natural in the absence of regulation, or complete regulation.

I think it is now time to obtain, through congressional action, a transportation picture which will let the public and let the carriers know what the future holds for them so that they can properly plan their own futures.

Mr. GRINSTEIN. Mr. Sanders, are some of the motor carriers in the State of Alaska treated as water carriers by the Federal Maritime Commission?

Mr. SANDERS. There is a designation under the Federal Maritime Act which is a designation of certain motor carriers as water common carriers, nonvessel operating water common carriers. That is presently under the Federal Maritime Act, right.

Mr. GRINSTEIN. Were these the particular carriers that you had reference to when you said that except for one or two?

Mr. SANDERS. Yes. I used that point to exemplify what I had in mind, yes.

Mr. GRINSTEIN. Has this situation resulted in your judgment in discrimination between those carriers who were able to obtain joint rates and through routes and those carriers who were not able to obtain?

Mr. SANDERS. We will say that at least if it hasn't it will in thẹ future, if not corrected, because the remainder of the carriers possesing rights legally obtained from either the Interstate Commerce Commission or the State Public Service Commission will conceivably have to participate in this movement or they will not obtain enough tonnage to warrant their continued existence as carriers.

Mr. GRINSTEIN. You were speaking before about the Federal Maritime Board only regulating maximum rates and not minimum rates. They have presently, or have had continuously, the authority to regulate minimum rates. They have just declined to do so.

Mr. SANDERS. I see.

Mr. GRINSTEIN. It would appear that the new Maritime Commission will exercise that power.

Senator BARTLETT. Just an expression of hope.

Thank you, Mr. Sanders. I am especially grateful to you for sitting here so patiently all day long, and being willing to go on so late in the afternoon.

Mr. SANDERS. Thank you for the opportunity to appear.

Senator BARTLETT. Off the record.

(Discussion off the record.)

Senator BARTLETT. On the record.

With the understanding that we will meet in the Council Chambers of the Loussac Library, the committee will stand in recess until 9:30 a.m. Monday.

(Whereupon, at 5:37 p.m., the committee was recessed, to reconvene at 9:30 a.m., Monday, October 23, 1961, in the Council Chambers of the Loussac Library, Anchorage, Alaska.)

79299-62-7

STUDY OF ALASKA TRANSPORTATION

MONDAY, OCTOBER 23, 1961

U.S. SENATE,

COMMITTEE ON COMMERCE,

Anchorage, Alaska.

The committee met, pursuant to notice, at 9:30 a.m., Hon. E. L. Bartlett presiding.

Senator BARTLETT. The committee will be in order.

Before opening our hearing this morning, in a study of Fisheries and Transportation that has carried us from Californa to Alaska, I would like to make an observation. On the matter of Alaska transportation a letter from Secretary of the Interior Udall to Senator Magnuson was put in the record in full in the hearing at Fairbanks and was further referred to during the opening hearing at Anchorage Saturday.

It urged that an overall transportation policy for Alaska be developed by the Government. I am in complete agreement with the position that an overall policy be developed. But testimony received so far, as well as difficulties had with my friends here, convinces me that this policy should be developed primarily and initially by the State of Alaska, so that it will include, and even concentrate, on the goals and objectives of Alaskans.

We, in Alaska, have a unique opportunity and challenge, for we are all agreed that transportation is a key to the future development of our State. It must be carefully planned and programed to see that our transportation resources by water, by air, by highway, and by rail are tailored to fit our very special needs.

I cannot see how the Federal Government sitting several thousand miles away in its seat of government, can plan development of this State as well as Alaskans can, and particularly I am convinced, and I hear in Washington, D.C., witness after witness and industry after industry, tell us what a snarl transportation is in the lower 48 States, and that we should apply and transmit the same situation to Alaska. What is developed here, because we are starting pretty much from scratch, could well serve as a model for improvement of the Nation's overall transportation system. It is my belief that State officials should begin the drafting of a program that will lead to the common goals of Alaska. If technical assistance from the Federal agencies is needed, I can assure you that we will make them available. And when the program is completed, I feel certain that the whole Alaska delegation in Congress will do their utmost to see that it is realized. I know that I will. And I know that support will come from many quarters.

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