I have been actively engaged in merchandising in Alaska since 1915, and at present we have a branch warehouse and office at Fairbanks, Alaska; also a warehouse stock at Nome, Alaska, and a sales office at Anchorage, and do business in all parts of the Territory of Alaska. Our principal business is mining and construction machinery, trucks, and building materials. At the present time, in the rail belt of the interior of Alaska, I would estimate that 90 percent of the business is due directly or indirectly to the defense program, and with the high wages and high cost of doing business, it has made it nearly impossible for the gold miners to operate at a profit. I believe it is highly important that everything possible be done to assure efficient, continuous shipping to Alaska in the future, as in the past, where we have had approximately 70 days per year of strikes with the exception of the war years, it has caused untold hardships. More efficient harbor facilities, to speed up shipments, should be considered, such as improvements to the docks at Seward, also at Whittier and Anchorage. During the construction days of the roalroad, shipments were made direct to Anchorage, unloaded on barges and towed ashore at high tide, and possibly great savings could be worked out in the cost of freight for Anchorage if port facilities were created at Anchorage so that ships could come in there direct, at least during the open season. As the Government has spent millions of dollars in creating the port of Whittier, which is a water-level route to Anchorage, I would suggest that at least a part of the commercial freight be routed through Whittier and this would greatly relieve the congestion at Seward. The statements supplied by the two major shipping companies to Alaska indicate that the profit they are making does not justify the service they are giving, especially on passengers, and if more of the Government freight and passengers could be routed over the commercial lines it would give them the additional revenue needed to give more frequent sailings. Any economies made in the shipping would reflect on the cost of the defense projects, resulting in a saving to the taxpayers. It is regrettable that Seattle, with one of the finest natural harbors in the world, does not have more intercoastal and offshore shipping, and every effort should be made to keep our merchant marine active. However, at the present time, our shipments from the east coast, California, and even the gulf ports, are mostly coming by rail. I believe it in the interest of national defense to have a strong merchant marine and hope that management and labor can improve this condition so that water shipments will be greatly increased in all of our coastal ports. I believe it would be to the best interest of both management and labor to enter into an agreement whereby shipping to Alaska will continue uninterrupted during any controversies, as Alaska is nearly a hundred percent dependent on water transportation. During some of these shipping strikes it was necessary to truck from Seattle to Fairbanks and Anchorage a distance of approximately 3,000 miles, and the facilities of the airlines were taxed to capacity, with the people of Alaska paying for this extra cost even though they had nothing to do with the controversies. Alaska must develop industries to take the place of the defense spending when it levels off and this can only be done if the investors know that there will be efficient uninterrupted boat service. Yours very truly, Hon. CHARLES E. POTTER, GLENN CARRINGTON & Co., GLENN CARRINGTON, President. GROCERY SUPPLY, INC., Anchorage, Alaska, October 16, 1953. Interstate and Foreign Commerce Committee, United States Senate, United States Court Building, San Francisco, Calif. DEAR SENATOR POTTER: I had sincerely hoped to have been present in San Francisco to appear personally before your committee to express my views on the importance of water-transportation services to Alaska, as well as to offer a number of suggestions as to what should be done to improve existing services. Business pressures occurring during this particular time of the year, however, have prevented my leaving the Territory. Therefore, it would be most appreciated if you would accept this letter-statement for consideration and official introduction into the record. Water-transporation lines linking Alaska with the United States are of vital importance to the Territory's future economic development, its defense, and, of course, the welfare of its citizens. One glance at a map of North America and that importance becomes dramatically obvious, much more so than any number of words can picture. Obvious, too, is the essentiality that every effort be expended by appropriate branches of Government, as well as private operators to stimulate further development of the shipping industry and continued improvement in services. Owing to the seasonal factors peculiar to Alaska's geographic position and economy, a greater number of vessels are needed to meet the Territory's shipping requirements during the spring, summer, and fall seasons. Frequently, when demands for services are at their peak, operators lack a sufficient number of vessels to accommodate all traffic efficiently and with the greatest measure of speed. For that reason, operators should be permitted to charter on short notice vessels from the United States Maritime Commission at reasonable rates for limited periods of time. The Military Sea Transportation Service should be limited in the scope of its operation. At the present time this service is depriving private carriers of needed revenues, both in the movements of north- and south-bound cargoes. Evidence at hand indicates that private operators could move this cargo not only as efficiently, but also at less cost, resulting in substantial savings to the American taxpayer. Frequent maritime tieups, owing to labor disputes, have had a crippling effect on the Territory's economy. Legislative provision should be made requiring a 60 to 90-day cooling-off period before strikes or walkouts occur. Common anniversary dates of various maritime labor contracts also would be of help, but this, of course, could not be accomplished by Government direction. Facilities to permit efficient and fast transfer of cargo from ship to trucks on Government-owned docks should be installed at an early date. Such facilities are not now available at the Government-owned dock at Seward, Alaska, to cite one example. Aboard ship, cool-room and/or cold-storage facilities should be enlarged, especially to permit the hanging of meat, insuring the arrival of a better, more salable product. My qualifications for submitting the preceding recommendations are as follows: Coowner of a firm doing in excess of $5 million volume per year. KEITH M. LESH. Senator POTTER. I wish to thank you for your courtesy. We will be in recess until 10 o'clock tomorrow morning. (Whereupon, at 5:05 p. m., the subcommittee recessed until 10 a. m., Thursday, October 22, 1953.) MERCHANT MARINE STUDIES THURSDAY, OCTOBER 22, 1953 UNITED STATES SENATE, SPECIAL SUBCOMMITTEE ON MARITIME SUBSIDIES OF THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, The subcommittee met, pursuant to call, in room 261, United States Courthouse, 7th and Mission Streets, at 10 a. m., Senator Charles E. Potter presiding. Present: Senators Potter, Butler, Magnuson, and Congressmen Allen and Shelley. Senator POTTER. The subcommittee will come to order. We have been requested by our friends of the press that people who plan on submitting statements or will be testifying today, if you have your prepared statements with you, if you would submit the statements to Mr. Dewey back here, he can distribute them to the press as soon as possible. They have certain deadlines that they have to meet, and many of them are covering several beats. It would be a courtesy to them if they could receive the statements as soon as possible. So, if you have statements with you, and you plan on presenting them today, if you will turn them over to Mr. Dewey now, he will distribute them to the press. We have our good friend Congressman George Miller from across the bay. He has asked to be heard for a few minutes this morning. George, we are glad to have you here. STATEMENT OF HON. GEORGE P. MILLER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA Mr. MILLER. Welcome to California, Senator. We are very happy to see you and Senator Butler out here. Of course, Senator Magnuson is part of the western family. Senator POTTER. He has been indoctrinated already. Mr. MILLER. Yes. I want to thank you for the privilege of testifying this morning. I was out of the country until a week ago yesterday, when I got back to California. I was in Europe with the subcommittee of the Armed Services Committee, or I would have formally asked for this time. I want to address myself to two things. First, notice has come out of Washington that the Maritime Academy at Alameda is to be discontinued, and apparently put into mothballs. This is not a war baby. It was established before the war to serve the merchant marine on the Pacific coast, and during the war was used as a cadet training school and is now used to give refresher courses to people in the industry. If we are to maintain a strong merchant marine, and all of us from the seaboard States realize the necessity for doing that, we must continually train the men who serve that industry. We have no fight with the establishments on the east coast. But in the interests of serving the Pacific coast, I feel this academy should be maintained here, even though it means, perhaps, curtailing some of the activities or consolidating certain of the activities on the eastern seaboard. There are only three of these institutions in the United States now. Two of them are located in New York and one here. We just can't see the sense of closing this institution. Its budget is about $400,000 a year. It will cost about $100,000 a year to maintain Senator POTTER. Are they closing the schools in New York? Mr. MILLER. No, they are not closing the schools at Sheepshead Bay and Kings Point. They are staying open. One is an academy for cadet training; the other does the same work as is done here. Those could be combined into one institution. The seamen on the Pacific coast should not be put to the expense of having to go to the east coast to get these refresher courses. Many of them go into this school to take the short courses that last, maybe, 2 or 3 weeks. They go on the beach to do it. They are receiving no pay while they are taking these courses and preparing themselves to better serve the merchant marine. I sincerely ask that your committee take a look at the closing of this academy, which I feel is quite critical to the Pacific coast and to the shipping on the Pacific coast. Senator MAGNUSON. Congressman, I also did some checking on this. I understand that the subcommittee of the House Appropriations Committee, who handles the program for the ensuing fiscal year, stated that the program should be maintained at the level it was for the previous year, and no more reductions were to be made. Then, the Senate Appropriations Committee went along and adopted that language. That is the language in both reports. But, apparently, it hasn't been construed right, because I remember the discussion in the Senate committee. The intention was, of course, to economize and consolidate where you could, but not to close up one and then let the others go; in other words, keep the level on the east and west coast as best you could. So Congress has spoken on the matter. Mr. MILLER. I know that. There is a point of diminishing returns. You could economize by closing all of them and the momentum would carry it forward for another year, but where would you get officers to staff your ships? Think of the amount of money we spent in World War II, when every day over the radio broadcasts were coming that if you had a tickt in the merchant marine, and you wanted to go to sea, you could best serve your country by going back to sea. You telegraphed to Washington, and you were put on the payroll in a standby position until a ship was available for you, because we could build the ships, but we didn't have the officers to man them. Senator POTTER. That is the only in-training program that the merchant marine has? Mr. MILLER. That is right. Senator MAGNUSON. It is voluntary. The unions participate in it. They sometimes send their own people. Senator POTTER. Somebody made the statement yesterday concerning the amount of money that is spent for apprentice training in other fields of endeavor. That has not been curtailed. Mr. MILLER. Senator, you and I know-you were a Member of the House and I still know we vigorously and wholeheartedly support the George Barden Act and vocational training in schools, and this is just vocational schools for people of the sea. It is the same parallel as that. I think it is very shortsighted to close down this school at this time. Senator MAGNUSON. The loss of 1 ship would run that school for 10 years. Mr. MILLER. Yes. It will cost one-quarter as much to put it in mothballs. Senator POTTER. Your arguments have convinced me. Senator BUTLER. I will make you feel a little better. There must be some threat to close some of the east-coast institutions, because I have been importuned up and down the east coast to do all I can to keep Sheepshead Bay and Kings Point open. Apparently the word is getting around that all the schools are to be closed. Mr. MILLER. We could make common cause, because I think they should be maintained on the east coast, and they should be maintained, for my belief, on the west coast. Senator MAGNUSON. Maybe we should have had Sinclair Weeks up here yesterday, rather than down at the Commonwealth Club. Mr. MILLER. I know you have examined the full scope of the merchant-marine activities, but I would like to stress that I believe some thought should be given, and even a congressional directive, to cargo that is not military cargo, or strictly military in nature, pass over the facilities for handling cargo of the private docks, that commercial ships be used to handle that cargo, if we are to maintain our merchant marine on a high level. We are going to send a lot of cargo to Japan in part of the rehabilitation program. I can understand that, because I am on the Personnel Committee of the House Armed Services Committee, and I know of the effort of the Navy to maintain its own structure. Every time they put a new MSTS ship in commission, there is a new captain's job available for somebody. But if we are going to maintain a merchant marine on a high level, we have to turn this cargo over to them, not only the cargo, but the ancillary things that go to make the merchant marine, the docks. We can't handle cargo at an Army depot any cheaper than at private terminals. Those terminals are important. They were important in performing their services, towing services, the lift barges, all of those things that go to make an integrated merchant marine. They should be encouraged. I believe that cargo of a nonmilitary nature should use these facilities in order to keep the know-how among our people, and in order to preserve them for the future, because as soon as we can establish a durable peace, and we all hope for that, the merchant marine of this country is going to be invaluable and indispensable to it. We have to |