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 years, omitting credits to operating expenses on account of transportation for investment, is as follows: 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 activity 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 No 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 reducta in in maintenance and operating costs can be expected. The estimates for 1938 are based upon the belief that no operating deficit will be incurred in the combined 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 fir 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 estimates 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 Estimated revenues of operation, 1937 (appropriated as "Alaska Estimated total to be available during 1937.. 85. 591 1, 800, 000 Estimate of funds to be requred during 1937 For expenditures for capital account, shown in accompanying statement For expenses of maintenance and operation of the railroad and river boat line, estimate herewith.. Total, estimated expenditures, fiscal year 1937.... 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 appro- Total amount estimated to be available during 1938_ _ _. Estimate of funds to be required during fiscal year 1938: For expenditure for capital account, as shown in accompanying For expenses of maintenance and operation of the railroad and Total, estimated expenditures, fiscal year 1938 OPERATING EXPENSES $200, 000 1, 900, 000 2, 100, 000 200, 000 1,900, 000 2, 100, 000 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. 139751-37-pt. 1- 44 PASSENGER REVENUES, RAIL LINE The passenger revenues of the rail line amounted to $113,524.26 in 1934, $166,085.55 in 1935, and $231,151.91 in 1936. Like the freight revenues, the increase in passenger revenue is due largely to the Matanuska Valley project. There was also a noticeable increase in tourist travel and a further increase is expected for 1937 and 1938. The increase in tourist travel will be offset by loss of passenger traffic to automobile travel over the recently constructed AnchorageMatanuska highway, and to airplane travel and the passenger revenues for 1937 and 1938 are estimated as approximately the same as for 1936, namely $231,000. The number of revenue passengers carried increased from 23,310 in 1935 to 43,081 in 1936. Revenue passenger-miles increased from 3,184,778 in 1935 to 4,591,856 in 1936. TELEGRAPH AND TELEPHONE REVENUES Due to a general increase in activities along the railroad belt telegraph and telephone revenues for 1936 increased $2,403.62 over the revenues for 1935. Νο change in telegraph and telephone revenues is indicated for 1937 and 1938. RIVER-BOAT REVENUES Freight revenues of the river boats were $44,438.59 in 1934, $48,674.70 in 1935, and $50,839.65 in 1936. The 1936 passenger revenue increased $1,365.35 over 1935. The increased revenues are attributed to increased gold-mining activities, particularly on the lower Yukon, and extra mail service performed. No increase or decrease is estimated in the freight or passenger reveunes of the river boats in 1937 and 1938, compared with 1936 except a reduction in mail revenue. Revenues: River boats.. Total revenues.. Expenses: Rail line.. River boats... Total expenses.. Less total revenues. Deficit.. $13, 792, 840. 63 $1, 209, 440. 16 $1, 400, 702. 61 $1, 785, 716. 54 $1, 718, 000 $1,818, 000 791, 961. 42 76, 693. 72 73, 252. 91 82,000 82, 809. 59 82, 000 14, 584, 802.05 1, 286, 133. 88 1, 473, 955. 52 1, 868, 526. 13 1,800,000 1,900, 000 1, 557, 563. 18 20, 408. 17 100,000 82, 607.66 Surplus.... 1 Fiscal years 1923-33. 179, 591.83 Appropriations. Deficiency. Expenses Fiscal years Fiscal year Fiscal year Fiscal yeared, fiscal ed, fiscal 1924-33 1934 1935 1936 Estimat- Estimat year 1937 year 1938 Comparative statement of operating expenses of the Alaska R. R. Total expenses.. 30, 590, 870.00 1, 419, 932. 00 1,488, 265. 11 1, 803, 999. 17 1,824, 000 1,824, 000 Estimated capital expenditures, 1937-Roadway and structures and equipment To complete construction of warehouse at Holy Cross.. $5,000 To complete addition to Curry Hotel.. 30, 000 Line change mile 53, 53.4 to avoid reconstruction of snow sheds. 116, 591 Preliminary work and placing falsework for Knik River Bridge preparatory to replacing bridge in 1938.. 25, 000 Riprap at various points on line.. 9, 000 Total.... 185, 591 Estimated capital expenditures, 1938-Roadway and structures and equipment Replace wooden Howe truss bridge over Knik River with 10 spans 80 feet through steel girders on creosoted fir pile piers-- $200, 000 |