The State of Alaska would have been much better off to receive a fixed percentage of the skins, such as Japan and Canada receive under the treaty, rather than a percentage of the profit.

Senator BARTLETT. Let me interrupt you once more to say that I think it is possible that at the time the statehood bill was under consideration, I could have made an arrangement whereby the State of Alaska would have been given authority in the Pribilof IslandsI didn't give serious consideration to this, because this is an international arrangement to a very great extent. It had been very successful. I certainly didn't want to do anything in trying to move the statehood bill along that would interfere. But, of course, neither I nor the State officials who came into office later on could have foreseen that which was going to occur.

Go ahead.

Mr. WADE. As it is now, we are dependent entirely upon the efficiency of the Bureau of Commercial Fisheries in administering the program and the ability of the Secretary of the Interior to see that the pelts are properly processed and marketed prudently.

In 1965, I learned through the press the details of a contract wherein the fur seal receipts were the basis of the Department underwriting a $377,000 contract. A requirement in the law that the State receive in advance all plans of this nature would at least permit us to project more accurately the contemplated income from this important Alaskan resource. It might be more efficient, however, to amend the Statehood Act so that Alaska's share is arrived at through an annual percentage allotment of skins.

I would further urge that you consider an amendment to this bill requiring that the U.S. Bureau of Commercial Fisheries office responsible for administration of the islands be located in Alaska. It is now located in Seattle. I feel that if this office were located in our State, it would result in closer liaison between the State and the Bureau in this important program.

There is one provision of the Bartlett bill-section 204a-which provides that the State of Alaska is to assume the total cost of education of the residents of the two villages. I support this provision unqualifiedly. I have long thought that the schools on St. Paul and St. George Islands should be a part of the State school system and should be staffed and financed in the same manner as our other rural schools.

I am told by Senator Bartlett that at the public hearing held on this bill in the islands last September, the village council proposed four amendments to it. Three of the four I accept and endorse readily. I would like to address myself to the fourth proposed amendment. This was the amendment No. 2 transmitted to us by your counsel, Bill Foster:

Amendment No. 2: That 15 percent of the net proceeds of the U.S. share or $100,000, before the money is split between the U.S. Government and the State of Alaska, shall be granted to the community government of St. Paul each year for the purposes of providing municipal services.

That is our information as to what the proposed amendment was to be.

It is understandable that the villagers feel the need of financial assistance, at least during the transitional period from a complete wardship status which has prevailed over many long years to a local self-government with high initial costs. I say this is understandable because they have suffered much and for long periods at the hands of the Federal Government. The Federal Government has been unjustly enriched at their expense, and at the expense of their labors, and, I might add, at the expense of the Alaska Government. You will recall that Alaska did not share in any fur seal profits until statehood. It was not until we became a State that we as a government received even 1 cent from this natural resource.

Now, as I have testified, we have been given our just due by a benevolent Congress, and I could not in good conscience agree to earmarking or dedicating any portion of this revenue to a special section of the State. Our State constitution prohibits any such dedication of funds. I would, therefore, suggest that if you feel this amendment is needed to assist the villages in this new venture of self-government, the amount needed be provided for out of the net profits that the U.S. Government makes from this operation.

Each year the U.S. Treasury is enriched by receipt of 30 percent of the net profits, which at times since statehood has amounted to as much as $300,000 a year. Prior to statehood, millions of dollars undoubtedly flowed into the Treausry at the expense of the people who are now requesting some if it back to help in a self-government

movement.

I submit that if such an amendment has merit, and I believe it has, then it is the responsibility of the Federal Government to finance it.

I certainly appreciate this opportunity to express the State of Alaska's views on this vital and necessary legislation, and I urge that it be given early and favorable consideration.

Thank you.

Senator BARTLETT. The committee thanks you, Mr. Secretary, for your appearance, and for the testimony that you have given. Mr. Foster?

Mr. FOSTER. I have no questions, Senator.

Mr. WADE. Senator, I suppose the record will be held open so that we would be given further opportunity to comment on these new amendments that the Secretary of the Interior has submitted this morning.

Senator BARTLETT. I think this is what we had best do in that respect, Mr. Secretary.

Mr. WADE. And at that time, you mentioned earlier in the morning, you wanted the State's position on this sea otter matter. I am not in a position to give you the State's position on it at this time. We felt that there might be a change in the language of the bill so that the sea otter might be stricken. If it is not to be stricken, we would like to have an opportunity to have our commissioner of fisheries prepare a statement for the record.

Senator BARTLETT. That opportunity will be provided.

I think what we had best do, if this meets with your approval, is to make available to you as soon as it has been prepared, a copy of the transcript so that you may consult with Governor Egan and other interested State officials.

I would say that the record will be held open for 3 weeks. Will that be long enough? We want to move this without undue delay.

Mr. WADE. I am sure if the record is made available soon, we could do it.

Senator BARTLETT. It will be sent to you airmail. It will be ready tomorrow morning.

Mr. WADE. I have no copy of the record out there. Has that been printed?

Senator BARTLETT. It has not been printed. We will see that you get an extra copy. We hope to have the entire hearings printed. We were waiting until this hearing was held.

I am a bit puzzled, Mr. Wade, on one point. I am not altogether surprised, I might add, by the notion advanced by the village council of St. Paul that certain seal money go to the newly created municipality, if it is so created, or am I at all surprised that Governor Egan would prefer to have it come from the Federal money. The point which perplexes me is when you describe the amendment on page 5 of your statement: "That 15 percent of the proceeds of the U.S. share, or $100,000," be given to the community government at St. Paul annually? The record taken at St. Paul Island relating to this is in these words, to be found on page 19 of the Senate transcript:

Senator BARTLETT. The third amendment you suggested * **

and this was Mr. Merculieff, who was on the witness stand

*** I should think could be incorporated in the bill without any great fuss or bother, and I would be sure that the Bureau of Commercial Fisheries would be entirely willing to hold hearings before promulgating any regulations affecting the life of the municipality. I see no problem there. I think it is a good suggestion.

But, I can see considerable controversy arising as a consequence of your second suggested amendment, relating to your request that 15 percent of the net proceeds be turned over to the municipality.

Parenthetically I would say it was a good prediction. Continuing the quotation:

You said, or meant, 15 percent of the net or gross?

Mr. ILIODOR MERCULIEFF. The net proceeds. I am pretty sure the community would settle for 15 percent or $50,000 per year.

That is the end of the quotation.

I see no other figure in the transcript other than the one relating to $50,000. Do you know where the $100,000 figure came from?

Mr. WADE. I know where we got it. We got it from your counsel, Bill Foster.

Senator BARTLETT. Then I will ask Bill Foster.

Mr. FOSTER. Mr. Chairman, I got it out of a letter that I received from the community council dated October 5, 1965, which uses the amount of $100,000. I gathered that after the hearing the council got together and there was a rethinking of the amount involved. The letter that we received officially on this, proposing these amendments dated October 5 carry the figure of $100,000.

(The above-mentioned letter follows:)

Mr. WILLIAM C. FOSTER,

THE ALEUT COMMUNITY COUNCIL,
St. Paul Island, Alaska, October 5, 1965.

Senate Commerce Committee,

Washington, D.C.

DEAR MR. FOSTER: I am sending you a copy of the amendments I offered before the subcommittee hearing held on St. Paul Island on S. 2102. For the official record I wish to stat ethat the St. Paul community wants the wording of the amendments changed to the following wording:

Amendment I:

"All money from the sale of improved lots and unimproved lots under section 206 (c) shall be set aside for the community government. The Secretary shall turn over the money to the community government of St. Paul after incorporation and after the Secretary shall determine that the municipality is capable, financially and otherwise, to provide adequate municipal services to persons inhabiting these islands."

Amendment II:

"That 15 percent of the net proceeds of the United States share or $100,000, before the money is split between the U.S. Government and the State of Alaska, shall be granted to the community government of St. Paul each year for the purposes of providing municipal services."

Amendment III:

"That the Bureau of Commercial Fisheries furnish the council with copies of the regulations written to implement S. 2102 before these regulations are adopted. The council would like to be able to review these regulations and offer suggestions for changes."

Would you see to it that the wording of the three amendments is changed in the official record?

I would also like to offer a fourth amendment to S. 2102. Would you enter this fourth amendment in the official record of the hearing on S. 2102?

Amendment IV to section 206(a):

"In addition to the land set aside for the establishment of a townsite, the Secretary is also authorized to set aside sufficient land in the areas known as Marunich, Tsammana, and Southwest Point for purposes of recreation and cabin sites. The Secretary shall survey the land set aside at Marunich and Tsammana points into lots, blocks and streets, and issue a patent therefore to a trustee appointed by the Secretary. The trustee is authorized to convey to the community government titles to improved or unimproved lots for cabinsite or other purposes not inconsistent with the purpose for which the Secretary administers said islands, with or without reimbursement. The Secretary shall also survey the land set aside at Southwest Point and cause this area to be set aside for a recreation area not to be subdivided. The title to this area shall be conveyed to the community government."

We enjoyed visiting with you during your short stay on St. Paul. You were of great help to me during your stay. I hope to see you in Washington when further hearings are held on S. 2102.

ILIODOR MERCULIEFF, President.

Senator BARTLETT. I understand. I was in Alaska about that time and didn't see it. I will ask the St. Paul witnesses about that. If I can find it, I would like to call your attention to something else relating to this, Mr. Secretary.

Mr. Foster asked this question on page 33, of Mr. Merculieff:

Mr. FOSTER. At the present time, as I understand it, the receipts from the sale of the fur seal are divided 70 percent going to the State and 30 percent going to the Federal Government. As I understand your interest would be in obtaining 15 percent of the United States' share?

Mr. MERCULIEFF. Negative on that, no. [Laughter.] We were under the understanding that 15 percent is shared to Japan, another 15 percent to Canada, and the remaining 70 percent, after all the so-called bills that are paid for the islands, the balance of that goes to the State of Alaska.

I think the State of Alaska should be lenient enough that they can give us at least 15 percent of their net proceeds.

Elsewhere we have pointed out that 15 percent of the net proceeds of that year would be zero.

So the people of St. Paul on that occasion at least, through the village council, has a positive view on where the money ought to come from.

Perhaps if it came to a pinch they would just as soon take it from the Federal Government. We will see.

Mr. WADE. I want to emphasize very much the government's strong feeling about this. We feel that the villages out there could well use some transitional funds at least, and I would like the record to show here how much the State got from the sale of these natural resources for the last 5 years. The record should also show how much the Federal Government was enriched because of this. And we feel that because of this long abuse that the native people out there have had at the hands of the Federal Government, that actually the Federal Government is morally obligated to see them over this transition. Senator BARTLETT. Thank you. Mr. McKernan, can you furnish those figures?

Mr. McKERNAN. Yes, sir.

(The information requested above follows:)

Pribilof Islands receipts, fiscal years 1961–65

Senator BARTLETT. Thank you. The committee thanks you, Mr. Secretary.

Mr. WADE. Thank you, Senator Bartlett.

Senator BARTLETT. Now we are going to hear from those who are chiefly concerned about this, the principal parties in interest-Mr. Iliodor Merculieff, who is president of the village council, and Mr. Terenty Philemonoff, vice president.

Gentlemen, will you come forward.

You, as Secretary Wade has just said, have heard a lot of suggestions that are new to you, and you likewise will be furnished by airmail a copy of the transcript of today's proceedings so that you can study it, so that you can report back to us within this 3-week period as to your recommendations concerning the amendments proposed by both the Federal and State Governments. Is that all right?