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Mr. GORDON. Yes, sir.

Mr. Rich. Is that same statement that you made as to repairs and alterations applicable there?

Mr. GORDON. Yes, sir.

WAGON ROADS, BRIDGES, TRAILS, AND AVIATION FIELDS IN ALASKA

Mr. SCRUGHAM. The next item is on page 498, for the construction, repair, and maintenance of roads, and so forth.

Mr. GORDON. The justification for this item is as follows:

WAGON ROADS, BRIDGES, AND TRAILS, ALASKA Under the Permanent Appropriations Repeal Act of 1934, it is necessary that an annual appropriation estimate be submitted under this title, all collections to the credit of this appropriation being deposited as miscellaneous receipts, and an annual appropriation equal to such receipts authorized for the same purposes as the indefinite appropriation. Receipts available for this appropriation consist of 65 percent of all moneys collected from occupation and trade licenses outside of incorporated towns in the Territory of Alaska, and expenditures therefrom are authorized for the construction and maintenance of wagon roads, bridges, and trails in Alaska.

For the fiscal year 1938, it is estimated that receipts of $130,000 will be available, and the entire amount is requested for appropriation. This sum will be used entirely for maintenance of the existing road system, to supplement the regular annual appropriation for these purposes.

Estimated expenditures for 1938 and 1937, and actual expenditures for 1936, are as follows:

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YUNDS CONTRIBUTED FOR IMPROVEMENT OF ROADS, BRIDGES, AND TRAILS, ALASKA

(TRUST FUND)

In accordance with the provisions of the Permanent Appropriations Repeal Act, 1934, this fund is classified on the books of the Treasury as a trust fund, and all moneys accruing thereto are appropriated for disbursement in compliance with the terms of the trust.

Contributions in this fund are received mainly from the Territory, but occasionally contributions are received from private sources when the construction or improvement of a road is necessary to provide access to the property concerned.

As the purpose for which contributions are to be used is generally specified by the Territory or other contributor, any estimate as to probable projects on which funds will be expended is no more than a conjecture. For the fiscal year 1938, it is anticipated that $60,000 in contributions will accrue to this fund from the Territory, and it is estimated that this sum will be available in its entirety for maintenance purposes. No other contributions are expected for either maintenance or construction of projects.

Mr. SCRUGHAM. This also includes aviation fields, which, apparently was not in the preceding estimates. This appropriation is required by the Permanent Appropriation Repeal Act of 1934?

Mr. GORDON. Yes, sir. Mr. SCRUGHAM. This consists of 65 percent of all occupational and trade-license funds derived outside of incorporated towns?

Mr. GORDON. Yes, sir.

Mr. Rich. Why do you have on page 497 an item of $535,000, and on page 498 is an item of $130,000, and the wording is practically the same, for the repair and maintenance of roads?

Mr. Gordon. The explanation is, I believe, as follows: The item which we have just considered, namely, $535,000 is a direct appropriation by Congress for this purpose The item of $130,000 comes from special funds which will be turned into the Treasury. There is a fund that is known as the Alaskan fund. The Alaskan fund is derived from Federal taxes, Federal license taxes upon businesses and occupations in the Territory. That money is collected by the clerks of the courts, and turned in to the Treasury, and the act which created this fund with amendments specifies the use to which the funds should be put. We discussed a moment ago the 25 percent going to schools. We are now discussing 65 percent which, by law, is to be used for roads, bridges, and trails. This is a special fund in the Treasury of the l'nited States. Prior to the repeal of the Permanent Appropriation Act of 1934. This fund was a continuous fund, and automatically reverted to the Alaska Road Commission, but because of the Permanent Appropriation Repeal Act, it is necessary for us each year to estimate the amount in this special fund, and by act of Congress to reappropriate it for the use specified by law.

Mr. Rich. Hoes not the government that you have set up in Alaska have access to the funds set up there for the purpose of doing the things that Alaska wants to do for its own benefit, or do you have to come to Congress and get permission to do things you want to do because your funds are so tied up you cannot use them?

Mr. Gordon. This particular fund or funds in general?

Mr. Rich. I am trying to get at the point now of what authority the government of Alaska has, the set-up that you have up there? Do we tie up those fellows so that they cannot do anything themselves. Do you have to ask permission of Congress every time you want to do anything?

Mr. Gordox. There are two jurisdictions in the Territory of Alaska, one is Federal, and the other is Territorial. The Territory was given legislative powers in 1912. It has its own Territorial Legislature. It is in session now. That Territorial Legislature goes through the usual legislative steps, within the enabling act. It goes ahead and levies tares and appropriates its own funds for Territorial purposes, and expends them without reference to ('ongress, except, of course, with reference to the enabling act, which is similar to that of any Territory or any State.

Those funds, Territorial funds, expended by Territorial authorities and officers, have no connection with the funds that we are now dis. cussing, and this fund of $130,000, made available for the Alaska Road Commission, although in theory and in practice a Territorial fund, since it is derived out of the Territory, you might say, is returned to a Federal agency for the use for which it was set up in the beginning.

Mr. FITZPATRICK. You used the words "aviation fields" in there. Mr. GORDON. Yes, sir.

Mr. FITZPATRICK. What percentage of that $130,000 would be spent for aviation purposes?

Mr. Gordon. We do not have it segregated in that manner at the present time, and in all probability a small perrentage of it.

Mr. Rich. If you were a State and had the same rights as a State would you benefit more under the regular laws that are passed in this country than you do under the present set-up with funds contributed to Alaska because of special legislation?

Mr. GORDON. I do not know that I am prepared to answer that point at length. I think we would have to take it up item by item.

Mr. Rich. That is a pretty broad question. I do not want to take up the time of the committee on that now. I was wondering whether that would be something for you to consider, whether Alaska ought to have its right of Statehood rather than the appropriation legislation that you ask for regularly, whether it would not be just as wise to have it from the standpoint of the United States.

Mr. GORDON. I might speak on this particular road item; were the Territory of Alaska a party to the Federal Highway Aid Act, we would receive a sum enormously in excess of the sum for which we are asking.

Mr. Rich. That is a thing that you seem 'to be stressing very strongly here now, all the way through the hearing.

Mr. GORDON. I think Mr. Dimond is particularly qualified to speak on that point.

Dr. GRUENING. We need more roads badly, Mr. Rich.

ALASKA RAILROAD
Mr. SCRUGHAM. The next item is for the Alaska Railroad.

JUSTIFICATION OF ESTIMATE
Colonel Ohlson. The justification for this item is as follows:

THE Alaska RAILROAD

ALASKA RAILROAD APPROPRIATED FUND This item provides funds for necessary improvements to railroad property and equipment. The estimate of $200,000 for the fiscal year 1938 is therefore to be made available for capital expenditures, which it is expected will ultimately result in the reduction of the operating costs.

It is necessary to plan and carry out as much work as possible during the summer season of the calendar year 1937, and this item is therefore made immediately available after the passage of this appropriation act.

Compared with the appropriation of $200,000 for the fiscal year 1937, this estimate reflects a decrease of $100,000 in the operating deficit and an increase of $100,000 for capital expenditures.

As this fund is transferred to the Alaska Railroad special fund for expenditure, the detailed expeditures and complete justifications for all funds of the railroad, are given with the estimate for the special fund, which immediately follows this item.

ALASKA RAILROAD APPROPRIATED FUND AND ALASKA RAILROAD SPECIAL FUND

By the terms of the Alaska Railroad Act of March 13, 1914 (38 Stat. 305), and the annual appropriation acts, the earnings of the railroad, including its telegraph and telephone lines, are made available for the payment of its maintenance charges and operating expenses.

The annual estimates for appropriation of the amounts earned are stated under the title "Alaska Railroad special fund", and the estimates for the additional amounts required are stated under the title “Alaska Railroad appropriated fund."

The estimates cover maintenance, operation, and improvements of the property and equipment of the railroad, including telegraph and telephone lines and the river-boat line operated on the Tanana and Yukon Rivers.

A comparison of the operating deficits of the rail line and river line for 9 yean, omitting credits to operating expenses on account of transportation for invest. ment, is as follows:

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The Alaska Rural Rehabilitation Corporation colonization project in the Matanuska Valley which started during May 1935, caused a heavy movement of passengers, construction material, and supplies to Palmer during the 1936 fiscal year. There was also increased gold mining artivity throughout the territory served by the railroad with resultant increase of freight shipments and during the last 2 months of the year there was a heavy movement of building material to Fairbanks and Anchorage. The tourist traffic also increased during the year. These increased revenues are expected to continue during 1937 and 1938 with the exception of a falling off of freight as a result of completion of the construction work at Palmer lo large volume of business from any particular source is assured for 1937 or 1938 through the constuction in the next few years of an Army air base at some point adjacent to the railroad is anticipated

There will be an increase in operating expenses during 1937 and 1938 on account of the recently enacted Annual Leave Act, but with the gradual improvement of the roadbed and replacement of temporary structures with permanent, a returtin in maintenance and operating costs can be expected. The estimates for 1931 arr based upon the belief that no operating deficit will be incurred in the combused railroad and river services.

The Knik River Bridge of wooden Howe construction must be replaced, and while the use of concrete piers at a cost of $100,000 additional would be desirable. in the endeavor to reduce the expenditure, creosoted for pile piers with an estimated life of 20 years have been specified, making the total estimated cost of the bridge $200,000. The false work necessary for the construction of the bridge will be placed during 1937 and will support the present wooden spans until the work of constructing the new bridge is undertaken.

Statement of receipts and expenditures, fiscal years 1937 and 1938, and estimate for

appropriations, 1938 Estimate of funds to be available during 1937:

Appropriated for 1937 as "Alaska Railroad appropriated fund"... $200,000 1936 appropriation obligated in 1937 .

S. 591 Estimated revenues of operation, 1937 (appropriated as "Alaska Railroad special fund")....

1, 800 000

Estimated total to be available during 1937.--

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Estimate of fun is to be required during 1937.

For expenditures for capital account, shown in accompanying

statement For expenses of maintenance and operation of the railroad and

river txat line, estimate berrwith ..

INS, 591

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1.

Total, estimated expenditures, fiscal year 1037.... ... ... 2 ONS 5!

Statement of receipts and expenditures, fiscal years 1937 and 1938, and estimates for

appropriations, 1938–Continued

Estimate of funds to be available during 1938:

Amount estimated for appropriation as “Alaska Railroad appropriation fund” for fiscal year 1938.----

--- $200,000 Estimated revenues of operation of the railroad and river boat

line, fiscal year 1938, estimated for appropriation as “Alaska
Railroad special fund”--------

----------- 1, 900, 000 Total amount estimated to be available during 1938. ------ 2, 100, 000 Estimate of funds to be required during fiscal year 1938:

For expenditure for capital account, as shown in accompanying statement.--------------------------

200,000 For expenses of maintenance and operation of the railroad and river boat line, estimate herewith..--

-------- 1, 900, 000 Total, estimated expenditures, fiscal year 1938.----------- 2, 100, 000

OPERATING EXPENSES

Included under the general head of operating expenses are “Maintenance of way and structures", "Maintenance of equipment", "Traffic expenses”, “Transportation", "Miscellaneous operations”, and “General expenses", all of which are incidental to the continuous operation of the railroad. Similar accounts are kept in connection with the operation, during the season of navigation, of a river steamer line on the Tanana and Yukon Rivers. Operating expenses do not include expenditures for additions and improvements, chargeable to capital account under the classification prescribed by the Interstate Commerce Commission.

Operating expenses of the rail line amount to $1,803,999.17 in 1936; it is estimated that the total will be $1,824,000 in 1937 and 1938. With the completion during 1936 of construction work at Palmer a decrease in freight business is expected that will be made up in part from other sources, with a slight reduction in freight-train service and other expenses during 1937 and 1938. Operating expenses will be increased, however, owing to granting, under the act of March 14, 1936, of annual leave to employees who did not heretofore receive leave, and whom it will be necessary to replace.

The estimates for river-boat expenses in 1937 and 1938 is $8,935.13 less than in 1936 because during the latter year repairs were made on the steamers Nanana and Alice and the stern wheel gas boat, Matanuska, which should suffice except for ordinary running repairs during the next 2 years. There will be a slight increase in the expense of operating vessels and terminals on account of the leave act.

REVENUES OF OPERATION The revenues from freight and passenger traffic and other sources being made available to meet operating expenses, the prospect for an increase or a decrease in the revenues of the railroad has a direct bearing on the appropriations necessary.

FREIGHT REVENUES, RAIL LINE Rail line freight revenues amounted to $964,918.73 in 1934, $1,091,445.81 in 1935, and $1,338,320.69 in 1936. The figure estimated for 1937 is $1,278,000, and that for 1938 is $1,378,000. Shipments of construction material and livestock to Palmer added materially to the 1936 freight revenues and with the construction work completed there will be a falling off in freight revenue although there will still continue to be large shipments of supplies and feed. The production of vegetables in the Matanuska Valley, with the shorter haul to the Alaska markets than if shipped from the United States via Seward, and the favorable freight rates on these products will also tend to reduce freight revenues. Gold mining adjacent to the railroad has continued to increase and a gain from shipments for this industry is expected during 1937 and 1938. The number of tons of revenue freight carried increased from 109,214 tons in 1935 to 151,010 tons in 1936; ton-miles increased from 18,824,470 to 23,600,891.

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