many feet of Government owned timber are adjacent to Wrangell Narrows, and how much the improvement would mean, what it would be valued at, to that Government owned timber, by having Wrangell Narrows improved.

Mr. KINDRED. What is the fish up there which constitutes the biggest catch?

Mr. SUTHERLAND. Salmon, but the advantage by the development of Wrangell Narrows would be to halibut. The town of Petersburg is the principal fishing port in Alaska. More boats and men are located there than at any other port. It was built there by reason of a glacier. A glacier established the town of Petersburg. They get the ice out of the water and tow it in, icing fish.

Mr. KINDRED. Is the salmon preserved?

Mr. SUTHERLAND. Yes, sir; there is a large fishery. A great many canneries north of there would be served.

The CHAIRMAN. If you will kindly get the information bearing on the question that I asked you to get, Mr. Sutherland, it will be of considerable value to us.

Mr. SUTHERLAND. Yes, sir; it certainly will. There is nothing in the report.

The CHAIRMAN. Now, Mr. Newton, will you give us the statistics? Mr. NEWTON. I called on the Secretary of Agriculture for data relative to receipts and expenditures in the Philippines, Hawaii, Porto Rico and Alaska.

For the current fiscal year ending 1923, July 1, I find that we received from Alaska, from all sources, $1,149,208.01. We expended on Alaska $7,818,622.20. It is rather interesting to see what that was expended for.

For relief of the indigent, $13,086.60.

Mr. KINDRED. There are 65,000 people there?

Mr. NEWTON. Yes, sir; and we expended $13,000.

Under the Department of Agriculture, payments to States and Territories from the national forests fund, $7,806.54; agricultural experiment station, receipts from sale of products, $27.87; making a total of $7,834.41.

Under the Department of Commerce we expended $422,767.11, and that went for the following purposes: Aids to navigation, $95,408.62; protecting seal and salmon fisheries, $290,204.53; pay, officers and crew of vessels, Alaska fisheries service, $29,902.52; building and water supply, fur-seal islands, $378; fish hatchery, Yes Bay, Alaska, $6,873.44.

Under the Department of the Interior, salary of Governor of Territory of Alaska, $7,000; legislative expenses, Territory of Alaska, $47,010; contingent expenses, $7,479.94; reimbursement to Territory of Alaska for repairs to governor's residence, $857; construction and operation of railroads in Alaska, $323,741.84; construction and equipment of railroads in Alaska, $2,851,655.98; maintenance and operation of railroads, $1,297,195.03; education of natives of Alaska, $401,730. 37; public schools, Alaska fund, $50,982.56; colleges for agriculture and the mechanic arts, $50,000; care and custody of the insane, $146,441.47; medical relief in Alaska, $84,996.64; reindeer for Alaska, $12,653.38; Alaskan reindeer fund, $1,224.75; protection of game in Alaska, $24,088.82.

Mr. KINDRED. The item in connection with the insane would indicate a high rate of insanity?

Mr. SUTHERLAND. They are sent down to Portland to a private asylum.

Mr. NEWTON. At a cost of $146,000.

Mr. SUTHERLAND. We have nothing to do with the insane people, committing them to the institution at Portland.

Mr. NEWTON. You are charged with their care at Portland.
Mr. KINDRED. You have got a pretty big rate of insanity.

Mr. SUTHERLAND. A good many of the natives are included in that.

The CHAIRMAN. That includes transportation both ways.

Mr. NEWTON. Medical relief in Alaska, $84,996.64; reindeer for Alaska, $12,653.38; Alaskan reindeer fund, $1,224.75; protection of game in Alaska, $24,088.82; suppressing traffic in intoxicating liquor, $14,611.65; mining investigations in Alaska, $32,830.05; inspecting mines in Alaska, $115.20; surveying public lands, $2.09; under the Department of Justice, salaries, judges, marshals, etc., Territory of Alaska, $80,165.18.

Mr. McDUFFIE. For 65,000 people?

Mr. NEWTON. The Treasury Department expended $534,111.67, as follows: Expenses of collecting the revenue from customs, $42,916.44; internal revenue service, expenses of collecting the internal revenue, $927.65; additional income tax on railroads in Alaska (special fund), $14,395.31; coast guard, expenses of coast guard service $450,608.48; public health service, $17,749.61; public buildings under supervising architect of the Treasury, expenses of public buildings, $7,514.18.

Under the War Department, construction and maintenance of military and post roads, bridges, and trails, $550,796.04; wagon roads, bridges, and trails, Alaska fund, $28,122.11; special funds, funds contributed for improvement of military and post roads, bridges, and trails, $138,331.55; Nome Harbor, Alaska, $2,400, a total of $719,649.70.

Under the Post Office Department, postal expenditures from postal revenues, $686,390.76, or a total disbursement for Alaska, $7,818,

622.20.

The CHAIRMAN. And our total income from Alaska was how much? Mr. NEWTON. $1,149,000.

The CHAIRMAN. Mr. Sutherland, we are dealing very generously with Alaska, and it would appear from the statement the Hawaiian Islands returns us about eight times the amount we expend on them.

Mr. NEWTON. In the Hawaiian Islands last year we collected $6,181,000 and spent $3,167,000 there, but that was to prepare our chief military cost for our national defense. We have expended under the Navy Department $760,000; War Department, $1,215,000. The CHAIRMAN. That is practically $2,000,000 out of $3,000,000 for national defense.

Mr. NEWTON. We collected $6,000,000 and really spent $1,000,000 for the upkeep of the islands.

The CHAIRMAN. My recollection is that even the Philippines returned quite a handsome profit.

Mr. NEWTON. Our receipts from the Philippines were $945,000 and our expenditures $634,000.

The CHAIRMAN. So that is $300,000.

Mr. NEWTON. Yes; but we lost on Porto Rico. We collected $530,000 from them and paid out $920,000 for them.

Mr. SUTHERLAND. Does that include the income taxes, net profits, and excess profits?

Mr. NEWTON. That is everything we collected.

Mr. SUTHERLAND. As I said before, those taxes are not paid in Alaska, although they come from there. The companies operate in Alaska, like mining companies and fishing companies, which are foreign corporations in every case, and all their profit taxes are paid in the States.

Mr. McDUFFIE. At their home station.

Mr. SUTHERLAND. Yes; it is not so in the Hawaiian Islands. I have been into that matter before, and I tried to get some statistics as to the amounts paid from Alaska, but it is impossible. They say in one year one company realized a profit of over twenty-two million, and paid a tax of 1 per cent, and you can imagine what the excess profits were for the year. That was in 1918 or 1919. Mr. McDUFFIE. How much did they pay the Territory?

Mr. SUTHERLAND. $218,000, or a tax of 1 per cent on the net profits.

The CHAIRMAN. Why do you not compel them to be incorporated in the Territory?

Mr. SUTHERLAND. I do not think we could do that.

The CHAIRMAN. I do not know that you could either.

Mr. KINDRED. Mr. Chairman, may I call Mr. Sutherland's attention to the fact that in this amount of money $7,000,000 which Congressman Newton has called our attention to, as expenditures in Alaska, over $4,000,000 of it, it is fair to admit, went for new railroad construction.

Mr. SUTHERLAND. Yes, sir.

The CHAIRMAN. That is the total for all railroad construction. Mr. KINDRED. I thought he read it that way.

Mr. MCDUFFIE. It cost $1,000,000 to maintain that railroad. Mr. NEWTON. In maintenance and operation of railroads in Alaska you have, first, construction and operation of railroads in Alaska, $323,000, and maintenance and operation of railroads, $1,297,000. Mr. MCDUFFIE. And then construction and equipment. Mr. NEWTON. Construction and equipment, $2,851,000.

The CHAIRMAN. About $3,000,000, in other words, for construction and equipment, and the balance for operation.

Mr. SUTHERLAND. Although the industries of the whole Hawaiian Islands are larger than ours in Alaska, that does not mean they are necessarily as profitable, because the investments in Alaska are very profitable in the fisheries and the mining investments; but of course there are a great many poor investments there.

Mr. KINDRED. Are the returns from mining increasing, or what is the status?

Mr. SUTHERLAND. Mining is about holding its own, but I look for a considerable increase in gold mining from now on. It has been about holding its own. We are next to California in gold production. Mr. McDUFFIE.. What did we pay for Alaska?

Mr. SUTHERLAND. $7,500,000.

Mr. McDUFFIE. We expend the purchase price in a year.

Mr. SUTHERLAND. I think we are getting more than the purchase price; $7,200,000 was the exact figures.

Mr. MCDUFFIE. Is the tonnage on that railroad, Mr. Sutherland, increasing any at all? There are times in the year when you can not move freight, are there not?

Mr. SUTHERLAND. Oh, no.

Mr. MCDUFFIE. Does it not go so far in the interior that the cold weather prevents you from operating?

Mr. SUTHERLAND. No; it operates all the time. There may be occasionally snowstorms. This winter we had no difficulty.

Mr. McDUFFIE. What is the terminus of it now?

Mr. SUTHERLAND. In the interior, do you mean?

Mr. McDUFFIE. Yes, sir.

Mr. SUTHERLAND. Fairbanks.

Mr. McDUFFIE. How far is that?

Mr. SUTHERLAND. Four hundred and sixty-eight miles.

Mr. McDUFFIE. Is that not about as far as it is possible to go with the road?

Mr. SUTHERLAND. I think so, at the present time. There are oil deposits there; we know it.

Mr. McDUFFIE. We had a witness before this committee some time ago who told us of visiting up toward the Arctic Circle, and my recollection is that he said there were lakes of oil up there and that you could see the oil on the surface.

Mr. SUTHERLAND. Yes; I have pictures of lakes of oil in my office. Mr. McDUFFIE. Are they staked out and claimed by oil companies or individuals?

Mr. SUTHERLAND. In a few cases, but there was a great withdrawal there. We withdrew a large area from entry for oil. It is so far away that it does not attract capital. The Canadians went over in the Arctic section and drilled a well and had a gusher, but they have done nothing with it, as it will not pay.

Mr. McDUFFIE. It costs so much to get it away.

Mr. SUTHERLAND. Yes, sir; in the section where we are drilling, there is a paraffin base, and that is different; much more attractive to capital.

Mr. NEWTON. Someone testified that there were lakes of oil in Alaska.

Mr. SUTHERLAND. Yes, sir. I said I had pictures of them in my office.

Mr. WILSON. They are within the boundary of Alaska?

Mr. SUTHERLAND. Yes, sir.

Mr. McDUFFIE. I believe you said that you could get a ship up there 30 days in the year in June.

Mr. SUTHERLAND. Yes; that can be done.

Mr. McDUFFIE. You could go up there 30 days in every year? Mr. SUTHERLAND. You might some years, and some years you

could not.

Mr. NEWTON. You could not operate a railroad there the year round.

Mr. SUTHERLAND. The ice comes down from the Arctic, and in the summer it does not move off shore, so as to allow vessels to get by.

Mr. KINDRED. How many miles of the new railroad are in operation now?

Mr. SUTHERLAND. The 468 miles that I spoke of.

Mr. KINDRED. Is there some more of it to be completed?

Mr. SUTHERLAND. No, sir; that is complete.

Mr. MANSFIELD. How much tonnage is there on the railroad? Mr. SUTHERLAND. Well, the railroad has a tonnage sufficient to pay expenses. The new manager took hold of the road, and he is reducing the expenses very materially. He reduced the force considerably and is making an effort to have expenses and receipts somewhere near meet.

Mr. NEWTON. Are the receipts increasing any?

Mr. SUTHERLAND. Yes, sir; there is a little increase.

Mr. NEWTON. What do they haul?

Mr. SUTHERLAND. Coal; also they have a lot of ore-15,000 tons of galena ore that comes from Canada.

Mr. NEWTON. How many trips does your passenger train run? Mr. SUTHERLAND. Three times a week.

Mr. NEWTON. Three trains each way a week?

Mr. SUTHERLAND. Yes; in the winter it is reduced to two trains. Mr. McDUFFIE. It was interesting to me to hear some one testify that the coal you use on that railroad was bought by the Government from Australia, in spite of the fact that there is so much coal there.

Mr. SUTHERLAND. Before they reached the mines with the railroads they might have, but they do not now.

Mr. MCDUFFIE. They are using their own coal now?

Mr. SUTHERLAND. Oh, yes, indeed.

Mr. MCDUFFIE. Is that a very good grade of coal?
Mr. SUTHERLAND. Yes; It is a good grade of coal.

The CHAIRMAN. What did the Department of Agriculture say to you about that timber?

Mr. SUTHERLAND. Colonel Greeley was out of town, and Mr. Preston tells me that he is not much acquainted, but he says the standard timber in the Tongas Reservation is 70 billion feet. That point would be about half way, but I think there would be a larger proportion of timber south of the narrows than north of it, from my own knowledge of the country.

Mr. NEWTON. What sort of lumber is that.

Mr. SUTHERLAND. Fir and hemlock.

Mr. NEWTON. You plan to bring it down and get it out to the ocean steamers and around the coast?

Mr. SUTHERLAND. My plan would be for ocean steamers to get it and bring it around the Horn.

Mr. NEWTON. You plan to run ocean steamers through this canal?

Mr. SUTHERLAND. Yes, sir. The Sullivan Co. was planning to establish right here, north of the narrows, at Thomas Bay, and I have been told that is about the best stand of timber in southern Alaska, in that particular place, right north of Wrangell Narrows; but I think there is a larger body of timber in the south here [indicating on map] than there is in the north, and perhaps not much larger. Mr. MANSFIELD. What is the principal use of that character of lumber?