the Chulitna, Hurricane Gulch, Tanana, and a great number of wooden trestles. The condition exists at different places along the railroad. This is not the only place.

The colonel made a statement that that would probably do away with all the danger in connection with transportation. In Indian River Canyon we were tied up for 6 weeks with high water in 1932. The most dangerous place on the railroad is between Mount McKinley and Healy, in the Nenana Canyon.

Senator ADAMS. That is not involved in this.

Mr. OHLSON. That is not involved; and I will correct that statement with respect to being tied up for 7 weeks.

Mr. JOHNSON. I did not say 7 weeks.

Mr. OHLSON. What did you say?

Mr. JOHNSON. I said 6 weeks.

Mr. OHLSON. It was 19 days that traffic was interrupted. That shows how correct these statements are.

Senator NYE. Mr. Johnson, who was John E. Ballaine?

Mr. JOHNSON. He was the original builder of the Alaska Central Railroad.

Senator NYE. You have shown me, Mr. Johnson, what purports to be a copy of a letter addressed by John E. Ballaine to the commanding general, United States Army, Ninth Corps Area, at San Francisco. Mr. JOHNSON. Yes, sir.

Senator NYE. The letter is dated October 24, 1940.

Mr. JOHNSON. Yes, sir.

Senator NYE. Mr. Chairman, having read this letter, I should like to see it a part of the record.

Senator ADAMS. All right, sir.

(The letter is as follows:)

Subject: General Buckner's request of you to endorse change of ocean terminus of Alaska Railroad.

COMMANDING GENERAL, U. S. ARMY,

Ninth Corps Area, San Francisco, Calif.

SEATTLE, WASH., October 24, 1940.

SIR: The Alaska Weekly of October 18, 1940, published in Seattle, carries a dispatch from Anchorage, Alaska, quoting Gen. Simon Buckner, Jr., as saying before a gathering of businessmen in part as follows:

"A definite recommendation for the abandonment of Seward as the present terminus of The Alaska Railroad and the building of a new cut-off to Prince William Sound (at Portage Bay) had been made to the Ninth Corps Area headquarters."

There is a very long, a very large, and a very dynamic story behind the proposal for the change of terminal, which has national politics in a variety of ways to the bedevilment of some high officials in Washington. Indirectly but with proven certainty it has involved in the series of transactions that led to the conviction of Albert B. Fall for acceptance of a bribe of $100,000 when he served as Secretary of the Interior. It goes to the office of J. P. Morgan & Co. and H. Guggenheim Sons in New York in their openly avowed efforts to discredit and destroy the Government-owned Alaska Railroad, during the last 27 years.

By way of preliminaries, let me say that on returning from the SpanishAmerican War in the Philippines, as an officer in the first Washington regiment, I entered on railroad building in Alaska. I examined or explored all the pos sible railroad routes from the coast to the interior of that Territory, including the one from Portage Bay. I organized the Alaska Central Railway Co. and served as its general manager. I was president of the company that contracted to build the road, and built the first section of it. Then enlisting in its control a group of men backed by the Sovereign Bank of Canada. The bank failed in the financial panic of 1907 stopping work on the Alaska Central when the equivalent of 100 miles was finished.

In January 1910 George W. Perkins, a partner in the form of J. P. Morgau & Co. served notice on me that Morgan & Co. and M. Guggenheim Sons would not allow The Alaska Railroad, or any railroad, to be extended through the Susitna Valley to the Tanana River, or any railroad to be built in Alaska until they had their way in acquiring coal claims.

With this notice I begin to campaign to have the Government build a system of railroads in that Territory as the only power strong enough to overcome that New York opposition.

In the meantime, in 1911, Waler Fischer, Secretary of the Interior, went to Alaska personally, examined all railroad routes there, and, in his annual report for that year, he definitely recommended the Government's taking over the Alaska Central and completing it to the Tanana River on the identical route the Government-owned Alaska Railroad now occupies.

To defend his recommendations and to pave the way for selling the Copper River & Northwestern Railroad to the Government for $20,000,000 the Morgans and the Guggenheims, headed by Senator Guggenheim of Colorado, contrived to have President Taft appoint an Alaska Railway Commission in August 1912 with instructions to inspect railroad routes in the Territory and make recommendations. At this time the end of copper in the Kenicott district was in sight. It was the sole tonnage for the Copper River & Northwestern. If they did not succeed in selling the railroad to the Government they would have to junk it in the end.

The frame-up purpose of the Taft-appointed commission was evident in its make-up. Its chairman, Maj. J. J. Morrow, Corps of Engineers, United States Army, was a brother of Dwight W. Morrow, a partner in the firm of J. P. Morgan & Co., half owners of the Copper River & Northwestern. Its engineering adviser was Colonel Ingersoll, chief engineer of the New York, New Haven & Hartford Railroad, a Morgan property.

They went to Alaska on a 60-day trip, traveled over the Copper River & Northwestern and on to Fairbanks; looked at the Alaska Central less than 2 days, and returned to Washington, submitting a report in favor of the route connecting with the Copper River & Northwestern. That was the first step in the scheme to sell it to the Government.

Major Morrow duly received the approval of Lindley Garrison, Secretary of War, for his report when the Wilson administration came in.

All these matters were fully and exhaustively presented by me to the House and the Senate Committees on Territories in hearings that extended from May 2, 1913, to July 30, including the particulars of the notice George W. Perkins served on me. They were debated at length on the floors of the House and Senate when The Alaska Railroad bill was under consideration December 1913 to April 1914. My testimony was quoted in full on the Perkins notice, occuping many columns of the Congressional Record, in addition to the printed records of the committee hearings. They are available to you for collaboration. No denial from any sources was made as to the accuracy and the truth of my statments. The result was the unanimous rejection of the Morrow report by the House and Senate committee by both branches of Congress and by President Wilson.

When all the facts were disclosed, Secretary of War Garrison officially reversed the approval of the Morrow report, issued disapproval of it and, in addition, Mayor Morrow was not reappointed to membership on the District of Columbia Commission. He went under a cloud.

President Wilson, in 1914, on passage by Congress of the Alaska Railroad bill, sent another commission to Alaska to examine railroad routes from engineering standpoints. In April 1915 he officially designated the route for the new Government-authorized railroad to be from Seward through the Susitna Valley to Fairbanks, taking in the Alaska Central as the first section.

But before President Wilson's designation of the adopted route, as soon as the Morgan-Guggenheim people were convinced their route would be rejected, they began a clamorous crusade, through newspapers they own in Seattle and Alaska, to have Portage Bay, instead of Seward, designated as the ocean terminal. Their obvious purpose was to discredit the project by having it start from the most fogand ice-bound and glacier-studded harbor in the whole southern coast of Alaska. They have kept up that determined fight for 27 years with every other means of open hostility to The Alaska Railroad. Through their actions in secret contracts which are on file now in the head offices of the Interstate Commerce Commission they caused the Alaska Railroad to be built at excessive cost, more than $130,000 per mile for $40,000 per mile work.

Mr. Ohlson, the present manager of the Alaska Railroad, was originally appointed by Hubert Work, Secretary of the Interior, in 1924, and one of the large

stockholders in the Guggenheim Co. He not only has been trying to have Congress appropriate money for the Portage Bay scheme, but has increased freight rates to 3%, the same classifications in this and other Western States. You can corroborate by asking the Interstate Commerce Commission for comparative freight rates. Seward to the Tanana River, 412 miles, and the same distance on any railroad in the United States. One result has been that shippers at Anchorage and other places in the Susitna Valley now meet the boats at Seward with lightdraft vessels and ship up Cook Inlet to Anchorage and to a wharf on Kenik Arm, with loss of tonnage in serious amounts to the Alaska Railroad. He states that by building from Portage Bay far inland he can defeat the boat service from Seward to Anchorage. He says it would cost $4,000,000 to make the Portage Bay connection. Every competent engineer who has examined it puts it at a cost of no less than $13,000,000.

Even then the route would cross back of Portage Glacier where a lake periodically forms to a depth of 300 feet. I send you herewith a photograph I took in 1915 showing that glacier within 20 feet of the mountain wall.

For several years, Manager Ohlson, has tried to have appropriations granted by Congress, and at every effort the House Committee on Appropriations has rejected his appeals. I refer you to the reprinted hearings in January 1940 and January 1939.

I may add here that Manager Ohlson stated at the same hearings that the cost of the Alaska Railroad was about $57,000,000. I have an official letter from the accounting office of the Department of the Interior, which shows the cost to date to have exceeded $80,000,000, including deficits.

He stated also that the cost of the Matanuska Colony to date was about $2,000,000. I have official letters from the management of the colony and from headquarters in Washington, D. C., giving the exact cost to date at more than $4,000,000 when the colony was started. With his cooperation he said officially and publicly that when each family had used up the original $3.000 the Government was advancing, the colony and all families in it would be self-sustaining. At this date the cost per family remaining is in excess of $34,000, and still the colony is on Government support.

I send herewith also an article I contributed to the Alaska Weekly, February 16, 1939, which gives more detail particulars about Portage Bay and the road from it. One point the Portage Bay advocates all ignore is that a cut-off is available from mile 29 on the Alaska Railroad north of Seward going through Moose Pass on a 1 percent grade and traversing the rich Kenai Peninsula directly in the middle. This Kenai Peninsla is the richest section in Alaska in soil and climate. Congress expressly states in the Alaska Railroad Act that its purpose is to open Alaska to settlement and development. That includes the Kenai Peninsula. Moreover, the marine insurance from Seattle to ports on Prince Williams Sound in winter months is 2 percent on vessel and cargo. From Seattle straight across to Seward the marine rate is only one-half of 1 percent.

Another point, Seward is centrally located on the coast of Alaska for all vessels east and west, including those from the new naval air base at Kodiak. Portage Bay would add a hundred miles for all vessels from the Westward, and make ingress and egress often in winter months impossible for days at a time because of dense fogs and thick snows in that nest of high mountains and active glaciers. These glaciers often send out floating bergs so thick that vessels could navigate through them only in clearest weather, and then with great risk.

It is not a stuation therefore for the army to interfere in adding to other blunders like the Marrow report.

Very truly,

I have no property interests anywhere in Alaska.

JOHN E. BALLAINE.

J. E. B.

Mr. JOHNSON. That letter was mailed to Mr. Urbach, at Seward, Alaska, by Mr. Ballaine.

Mr. OHLSON. Incidentally, Mr. Ballaine is the man who built the Alaska Central and Alaska Northern Railroads, which went into the hands of receivers. Naturally, he had to defend the route that he selected.

AIR CORPS OF THE ARMY

FURTHER STATEMENT OF BRIG. GEN. DAVENPORT JOHNSON, ASSISTANT CHIEF OF AIR CORPS, IN CHARGE OF TRAINING AND OPERATIONS

FLYING FIELD AND ORGANIZATION EQUIPMENT

Senator ADAMS. You have an item for flying-field and organization equipment not included elsewhere, $61,000,000. What is that? General JOHNSON. Shall I break that down, Senator? Senator BYRNES. Generally, what is it?

General JOHNSON. Additional equipment for 2 new technical schools and increase in the present schools to provide for an annual output of 100,000 trained technicians, $3,182,000; additional equipment for 36 new flying schools, including 3 gunnery schools and 6 replacement centers, $41,061,000; additional special equipment, flying schools, $17,375,700. The supporting data for the additional equipment for the 2 new technical schools and the increase of the present technical schools to provide for an annual output of 100,000 trained technicians

Senator ADAMS. Under subdivision (b) you have additional equipment for 36 new flying schools.

General JOHNSON. Yes, sir.

Senator ADAMS. Those are in addition to the existing schools?

General JOHNSON. Yes, sir.

Senator ADAMS They are schools of all three classes?

General JOHNSON. Two classes, sir.

PRIMARY TRAINING FURNISHED BY CERTAIN FLYING SCHOOLS

Senator ADAMS. How many primary schools?

General JOHNSON. No primary schools are included. There will be 20 new ones, but those are furnished by the civilian schools with whom we have contracts.

Senator ADAMS. This does not include any of the contract schools? General JOHNSON. No, sir.

Senator ADAMS. It includes the other two groups?

General JOHNSON. The two types are the basic and advanced.

Senator ADAMS. You are going to have 36 of those?

General JOHNSON. Yes, sir.

Senator ADAMS. You are convinced that we need 36 new schools?

General JOHNSON. Thirty-six units; yes, sir.

Senator ADAMS. This language says "new flying schools."

General JOHNSON. Yes, sir.

Senator ADAMs. Every school is located at a different place.

General JOHNSON. Yes, sir.

TYPE OF EQUIPMENT AT VARIOUS SCHOOLS

Senator ADAMS. Every school must have a headquarters, a headquarters staff, dormitories, machine shops, and so forth.

General JOHNSON. That is correct in principle. We take them by units. Perhaps in certain places we may be able to combine two

schools into one, if the facilities are such as to warrant it. In other words, a school unit provides for approximately 150 cadets. If we can have enough facilities to make the unit 300, we will combine the two units and thereby save, if we possibly can. We have planned for 36 flying schools or units.

Senator HAYDEN. Thirty-six flying units, which might be at 25 or 30 different places.

General JOHNSON. That is exactly what I am trying to say. Senator OVERTON. Is that a much more expensive program than if you were to consolidate the schools?

General JOHNSON. It would be less expensive to consolidate them. Senator ADAMS. Then, why do you have so many?

General JOHNSON. We based the size of the unit on our experience, and experience has shown that most of them have been of that size. At present we have 10 basic training schools turning out 12,000 students, and we are going to have 12 new schools to step it up to 30,000. Senator ADAMS. Does the plan provide for 30,000 a year? General JOHNSON. Yes, sir; at the rate of 30,000 a year.

Senator ADAMS. When they are turned out they go into the service for how long?

General JOHNSON. For 1 year or longer.

Senator ADAMS. At least 1 year.

General JOHNSON. At least 1 year.

Senator ADAMS. So you are going to have 90,000 pilots at the end of 3 years?

General JOHNSON. Yes, sir; less attrition for various causes. (Discussion off the record.)

Senator ADAMS. Is there anything further you need to present to us today, General?

General JOHNSON. I think not, sir. Thank you.

Senator ADAMS. Thank you very much.

(Thereupon, at 6:10 p. m., the subcommittee took a recess until tomorrow, Thursday, March 27, 1941, at 10:30 a. m.)