by the Secretary of the Interior pursuant to section 101 and renumbered section 403 of S. 2102, a bill to protect and conserve the North Pacific fur seals, and to administer the Pribilof Islands for the conservation of fur seals and other wildlife, and for other purposes, as amended by the Department's recent report thereon.

While it is true that section 4 of the Administrative Procedure Act (5 U.S.C. 1003) excepts from rulemaking foreign affairs functions of the United States, it is the general policy of this Department to follow the procedures of the APA in issuing regulations. We would expect to follow this policy in administering S. 2102. We would not, however, object to an amendment to renumber section 403 of the bill which would specifically make the APA applicable to such rulemaking. We suggest that there be inserted after the word "regulations" in page 17, line 20, the following "in accordance with the Administrative Procedure Act."

During the recent hearing on S. 2102, we promised to furnish your committee with language in section 206 of the bill, as amended by the Department's report of February 17, 1966, to authorize the conveyance by the Secretary to the municipality of some areas for recreation and other public purposes that are not necessarily contiguous to the major portion of the townsite. In order to accomplish this objective, we suggest that subsection 206(e), as amended by the Department's report (see p. 9 thereof), be amended by adding the following sentence at the end thereof:

"The Secretary shall also convey without reimbursement to the municipality at the time of incorporation such lands or interests therein outside the townsite boundaries for recreation and other public purposes subject to such conditions as the Secretary deems desirable to carry out the purposes of this Act."

It should be pointed out, that section 202 of the bill would also permit the Secretary to lease or issue permits to lands on the islands for recreational purposes.

Your letter of March 10 indicates that Southwest Point would most likely be set aside as a recreation area. While we would probably agree, we believe it is premature now to designate that area in the legislation.

You also requested hat specific language be included in the bill to include Marunich and Tsammana in the townsite. We believe that such language is unnecessary. The bill, with our amendments, gives the Secretary adequate authority to include whatever lands he deems necessary to provide an adequate townsite, including the areas referred to as Marunich and Tsammana. We also believe that it is undesirable to designate such areas in the bill. since circumstances may change. The flexibility provided in the bill in this regard is desirable. Sincerely yours,

MAX N. EDWARDS,

Assistant to the Secretary and Legislative Counsel. Mr. FOSTER. Another point raised by the community council was in regard to their interest to obtain copies of regulations written to implement the bill so they would have an opportunity to look at those, and not of course a veto over them but an opportunity to review those regulations. Would this be possible under the present bill?

Mr. McKERNAN. It is contemplated, Mr. Chairman, and is standard procedure. We would most certainly consult with the people most affected. And State authorities as well.

Senator BARTLETT. You would even have a meeting, a hearing, right at St. Paul?

Mr. McKERNAN. We certainly could if there seemed to be great interest in it.

Mr. FOSTER. There were some questions raised with respect to the civil service provisions of the bill, and this was not touched upon at least to any great length. I wonder if we could go back to that and discuss that.

Mr. McKERNAN. Yes. Mr. Chairman, I believe there were 144 residents permanently employed on the Pribilof Islands in 1950. The

interpretation by the Civil Service Commission has been that before 1950 these people in a sense were wards of the Government rather than employees. I would point out that the Bureau of the Budget has a comment in its

Senator BARTLETT. Relating to section 209 (a), on page 14.

Mr. McKERNAN. Yes. The Bureau of the Budget has a comment concerning this as set forth in the last sentence of the Department's report. The Bureau of the Budget indicates that it concurs

with the suggestions contained in the reports being transmitted to the committee by the Department of State and the Civil Service Commission.

Senator BARTLETT. What does the Civil Service Commission say? Mr. McKERNAN. I understand-I am not personally familiar with their report-but I understand that they take the same view they had before, that these people are not eligible for retirement benefits accrued before 1950.

Senator BARTLETT. I want to say for the record, not to you, that I would hope, I would earnestly hope, that if the committee saw fit to maintain that section in the bill, that civil service, or the Bureau of the Budget, would interpose no serious objection. Because here you have a small group of people who were working for the Federal Government, who were, as some alleged, in those days virtually slaves, living in a state of servitude. Now an effort is made in 1966 to redress the wrongs of the past, to give these people better incomes. I would want to believe that my Government would not deny those who worked years ago, opportunity that all other Federal employees had. Do you have any idea of what the annual cost of this provision would be?

Mr. McKERNAN. Mr. Chairman, I don't have that exact amount, but I could supply it for the record for you.

The Department has not looked upon this as a particularly undesirable feature of the bill. Of course we have worked very closely with the Aleut people. One could expect us to be very sympathetic. On the other hand the Civil Service Commission did make this ruling before, and it apparently is still their point of view.

Senator BARTLETT. Instead of asking you to inquire into this, Mr. McKernan and-we understand the administrative maze through which you might have to wander-I am going to request counsel, Mr. Foster, to discover from the Civil Service Commission what the annual cost would be of including those who worked on the islands in the fur seal industry prior to 1950.

Mr. McKERNAN. We will be glad to supply any basic information that you require, Mr. Chairman.

(Pursuant to the request made above, a letter dated April 28, 1966, was received from the Civil Service Commission :)

CIVIL SERVICE COMMISSION,

BUREAU OF RETIREMENT AND INSURANCE,
Washington, D.C., April 28, 1966.

Hon. WARREN G. MAGNUSON,
Chairman, Committee on Commerce,
U. S. Senate.

DEAR MR. CHAIRMAN: This is in response to a recent telephone request, by Mr. Foster of your committee staff, for a cost estimate on section 209 of S. 2102, a bill "To protect and conserve the North Pacific fur seals, and to administer the Pribilof Islands for the conservation of fur seals and other wildlife, and for other purposes."

Section 209 proposes to grant civil service retirement credit for service performed by natives of the Pribilof Islands prior to January 1, 1950, in the taking and curing of fur sealskins and in other activities connected with administration of the islands, as determined by the Secretary of the Interior from records available to him.

The Bureau of Commercial Fisheries, Department of the Interior, has furnished us data on 54 Pribilof Aleuts currently subject to the Civil Service Retirement Act with recorded service prior to January 1, 1950. Their average age is 45.5 years; average annual wage, $8,086; average service already credited (including pre-1950 military service), 16.7 years; and average other pre-1950 service, 6.2 years.

Our most recent actuarial valuation of the Civil Service Retirement System (as of June 30, 1963) shows, for active employees, a present value benefit cost of 15.7 cents per $1 of salary per year of credited service at retirement. Additional service of 6.2 years for each of 54 employees with average salary of $8,086 would thus have a benefit cost of $425,000.

The Retirement Act provides that the annuity otherwise payable shall be reduced by 10 percentum of an unpaid optional deposit with respect to credited civilian service after July 31, 1920, for which no retirement deductions have been made. This deposit is calculated, with interest, on the basic salary and deduction percentage in force when the service was performed. We understand that, for the employees here concerned, compensation prior to 1950 was primarily in kind rather than in cash, and we thus have no basis for estimating any reduction in the $425,000 cost because of this provision of the Retirement Act. Sincerely yours,

ANDREW E. RUDDOCK, Director.

Senator BARTLETT. Thank you. Thank you, gentlemen.
Mr. McKERNAN. Thank you, Mr. Chairman.

Senator BARTLETT. Next we will have as a witness a gentleman who has been designated by the Alaskan constitution as the secretary of state. In other States I think he would be called the Lieutenant Governor, Huge Wade, who is here to present the State's position on this proposed legislation.

Do you have copies of your statement, Mr. Wade?

STATEMENT OF HON. HUGH J. WADE, SECRETARY OF THE STATE OF ALASKA, JUNEAU, ALASKA

Mr. WADE. Yes; I have some copies. I would prefer to read it. It is not my statement, but the statement of the Governor.

Senator BARTLETT. Governor Egan?

Mr. WADE. Yes.

Senator BARTLETT. If you have extra copies, we would like to follow them.

Mr. WADE. I want to say that I think we should bear in mind that this statement was made before the State was aware of any of these suggested amendments that have just been presented to the committee. In many respects, at least in one respect, the statement will bear upon and have some effect upon the proposal of the amendment dealing with education.

This is Governor Egan's statement.

STATEMENT OF HON. WILLIAM A. EGAN, GOVERNOR OF ALASKA,
AS PRESENTED BY SECRETARY OF STATE HUGH J. WADE
Mr. WADE. First of all, I wish to go on record as congratulating
you, Senator Bartlett-

Senator BARTLETT. I didn't hear that. Would you repeat that? Mr. WADE. First of all, I wish to go on record as congratulating you, Senator Bartlett, for recognizing the need to introduce S. 2102

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entitled "Fur Seal Act of 1965." It is necessary legislation, and I am in favor of all of its provisions.

In fact, the proposed legislation is long overdue. The administration of the Pribilof Islands by the Federal Government is not a bright page in the history of our Government. Conditions in the islands that existed at the time of the purchase of what is now the State of Alaska were deplorable and did not materially improve under U.S. stewardship until 1950. Since that time the Bureau of Commercial Fisheries has worked diligently at improving the administration of the islands within the provisions of existing law. The Bureau, was, of course, saddled with such provisions of present law so as to be unable to avoid the unpleasantness of requiring permits to visit the islands for all persons wishing to go out there. It was unable, under existing law, to make any exceptions, and consequently even State officials, including the Governor, were required to apply for permits to visit the islands. I applaud the provision in the Bartlett bill removing this requirement for a permit.

Before statehood the territorial government paid little or no heed to the Pribilof Islands. The islanders received little or no benefit from legislation in early territorial days. It was only when such progressive legislation as the grant-in-aid social programs came along that any benefits flowed to the Pribilovians. After statehood they began to reap additional benefits of local State government. Their voices. were heard, and such programs as extension of the airport brought them closer to the rest of the State. They are now sharing in all laws administered by the State government.

Last year, because of certain articles of a derogatory nature in the Alaska press, I was moved to appoint a task force to study conditions in the islands. As a result of this study, certain changes were recommended and the State is now more aware of the needs of the two villages of St. Paul and St. George. The task force report made a strong recommendation that S. 2102, the Bartlett bill, be enacted. Senator BARTLETT. You were chairman of that Mr. WADE. Yes, I was. Senator BARTLETT. I think we ought to incorporate the report to which you have just referred, in the committee testimony.

group, were you not?

Mr. WADE. I would urge it. I think it is a very good idea.

The State of Alaska was very grateful to the U.S. Congress when it was provided in the Statehood Act that the new State would share in the net proceeds of the sale of the Pribilof fur seal pelts. In fact, during the campaign for statehood, mention was often made of this natural resource, and the proponents of statehood argued that if Congress gave us statehood, we could expect it to do as it did and grant the new State a share in the profits of this program. I must say, however, that our anticipated revenue from this source was greater than what we have actually realized. The second year of statehood, our peak year, we received $1,050,002, as our share of the amount received from the fur seal pelts, and the amount has fluctuated in the following years and finally dwindled to where in the current fiscal year, 1965–66, no revenue was received.

Senator BARTLETT. Secretary Wade, may I interrupt at that point to ask you if it is not a fact that State officials calculated that they might

reasonably expect from this source an average amount of three-quarters of a million dollars, and predicated the State's revenue positions upon that expectation?

Mr. WADE. Yes, we did, Senator. Our Governor in his financial report to the legislature, in reciting the anticipated revenues, carried this item as $750,000. This past year we expected a leaner year and we reduced it to $650,000. As the Governor said in his statement, the Bureau of Commercial Fisheries has estimated that in the next fiscal year of 1966-67 we will receive no more than $200,000.

This decline in revenue, coming so early in statehood when we are losing our Federal transitional grants and when our revenue from other sources has not reached its full potential, has been indeed crippling. There are many reasons for the decline. I need not dwell upon them, but I do want to stress that built into this source of revenue is the increasing cost of administering the islands by the Bureau of Commercial Fisheries.

The Bureau of Commercial Fisheries has been most cooperative in working with the State since statehood, but even to this day the State has no detailed knowledge of what administrative costs of the islands are charged against the gross profits of the sales of the pelts. We are not consulted and have no voice in determining what new capital investments are to be made or when they are to be made by the Bureau even though such investments materially affect our revenues. I would appreciate your considering an amendment to this bill to require that the operating budget of the Bureau of Commercial Fisheries as it pertains to this program, together with reports of receipts and contemplated expenditures, be submitted to the State prior to its submission to the Bureau of the Budget.

Senator BARTLETT. Do you know why it is requested that it be submitted to the State prior?

Mr. WADE. We would like to get some idea before we make our budget up at the State government as to what our revenues are going to be. And if they are going to buy a new boat for the operation up there, or if they are going to make a large capital investment out of current revenues, then we ought to know about it so that we can reduce our estimates and reduce the expenditures of State funds in other sections of the State to meet this anticipaed loss of revenue.

Senator BARTLETT. If the committee should give consideration to this suggested amendment-and my personal opinion is it should so consider it-I should think that additionally there ought to be incorporated a provision providing for consultation between the Secretary of Interior and the Governor of Alaska on contract arrangements before any such contract arrangements are made. Would you be agreeable to that further proviso?

Mr. WADE. I certainly would, Senator, and the Governor in his statement mentions that as one factor later on that is disturbing.

When a State depends upon such a source of revenue from a natural resource, it comes as a hard blow to be notified suddenly that because of unfortunate circumstances your total receipts for the fiscal year will be zero. The State has no legal right to receive information on the sale of the pelts even after they have been processed. We don't get any report on how the sale goes.