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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,

01 in 1936. Revenue passenger-miles increased from 3,184,778 in 1935 to 4,591,36 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. Vo 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.

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27,500

Ral line:
Freight...

$7,877, 932. 57 $964, 918.73 $1,091, 445. 81 $1, 338, 320.69 Passenger

2, 479, 638. 35 113, 524. 26 166, 085. 55 231, 151.91 Mail.....

509, 204. 66 25, 063. 14 24, 113. 66 27, 433. 38 Express...

91,848. 93 14, 006.14 13,927. 71 24,579.38 Hotels and restaurants.. .

361, 274.81 19, 864. 70 24,170.45 31, 245.80 Telegraph and telephone..

413,018. 50 11,715. 73 9. 751. 98 12, 155. 60 Power....

732, 848. 85 1, 064. 29 1.638. 67 1,536. 49 Other revenues...... 1,327, 073. 96 59, 283. 17 69, 568. 78 119, 293. 29

Total revenues..... 13,792, 840.63 1, 209, 440. 16 | 1,400, 702. 61 | 1,785, 716.54

$1, 278,000 $1,378,000 231, 000 231,000

27,500 21, 000 21, 000 32,000 32,000 12, 000 12,000

1,500 1,500 115, 000 115, 000

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Comparative statement of operating expenses of the Alaska R. R.

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$855, 000 228,000 30,000

Rall line:
Maintenance of way and

structures.. .. $14, 964, 565. 18 $768, 153. 73 $730, 089.75 $833, 088.21 $847,000
Maintenance of equip-
ment...

4, 272, 629. 77 | 192, 216.09 184,548.96 221, 299.92 228,000 Traffic...

334, 926. 41 24, 222.03 28, 654. 95 30, 649. 46 30,000 Traffic (investigation of resources)

182, 275.32 7,371. 63 16, 619. 18 27, 121.81 12,000 Transportation..

7,868, 902. 40 306, 821. 84 389, 511. 62 497, 665. 11 510,000 Miscellaneous operations...

1, 713, 427.88 49. 031.85 56, 252.96 92, 254. 44 92,000 General....

1, 254, 143.04 72, 114.93 82, 587.69 101, 920. 22 105,000 Total expenses....... 30, 590, 870.00 1, 419, 932.00 1, 488, 265. 11 1, 803,999. 17 1, 824,000

4,000 510,000

92,000 105,000 1,824,000

Estimated capital expenditures, 1937Roadway and structures and equipment To complete construction of warehouse at Holy Cross ------

ross.------------ $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, 1938Roadway and structures and equipment Replace wooden Howe truss bridge over Knik River with 10 spans 80

feet through steel girders on creosoted for pile piers.-------------- $200, 000

GENERAL STATEMENT BY THE GENERAL MANAGER OF THE ALASKA

RAILROAD

Mr. ScruGHAM. Colonel Ohlson, will you give us a general statement and any comments that you wish to make, particularly on the physical condition of the road, or any suggestions as to freight and passenger rates, tourist travel, and so forth?

Colonel Ohlson. I am pleased to be able to report, gentlemen of the committee, that the Alaska Railroad during the year 1936 got out of the red and into the black to the extent of $9,766 above its expenses. That, of course, represents the difference between operating revenues and operating expenses. It does not include capital investments.

A limited amount of improvement and rehabilitation work was done. This work consists of ditching, bank widening, grade raising, ballasting, filling in of wooden trestles, replacing wooden culverts with concrete pipe, placing rock to protect road bed against erosion from rivers and streams and making line changes to eliminate snow sheds.

AID RENDERED IN INVESTIGATON AND DEVELOPMENT OF MINERAL RESOG'RCES

The Alaska Railroad continued the activity of aiding the mining industry by maintaining an office and a geologist, who, in cooperation with the Alaskan branch of the Geological Survey, rendered assistance and furnished information to prospectors, mine operators, and prospective investors. In connection with this aid, a number of investigations of prospects, mines, and mineralized areas were made, and the information obtained was made available to the public.

Practically all of the mining camps served by the railroad and river-boat lines were very active during the fiscal year ending June 30, 1936. These camps included the Moose Pass-Hope gold placer and lode; Girdwood gold placer and lode; Willow ('reek gold lode; Nilchina gold placer; Yetna gold placer; Valdez Creek gold placer and lode; Broadpass gold lode; Kantisha gold, silver, lead placer, and lode; Bonnifield gold placer; Hot Springs gold placer; (ircle gold placer; Fairbanks gold placer and lode; Livengood gold placer; Ruby gold placer; Innoko-Iditarod gold placer; and many small districts The increase in mining activity is due largely to the increased price of gold and the operation of old low-grade properties by improved methods and modern equipment rather than to new discoveries

Some of the outstanding developments of the year were the installation of a gold dredge in the Moose Pass-Hope district; the successful installation and operation of a gold-gravel Washing plant in the Yentna district which will stimulate the further use of similar types of equipment where special operating conditions exist; the continued development of a low-grade gold-lode property in the Broadside district which gives promise of developing into a mine with large operations and which will produce considerable revenue to the railroad. 8 continued development of new gold-dredging ground in the Fair. banks district; and the installation of a new gold dredge in the ('ircle district.

AGRICULTURAL DEVELOPMENT IN MATANUSKA VALLEY In the fall of 1934 President Roosevelt indicated a desire to alleviate the suffering of some of the settlers in the drought-stricken Northwestern areas and directed the F. E. R. A. to arrange to move some of these settlers to the Matanuska Valley.

Two hundred settlers and their families were selected from Michigan Wisconsin, and northern Minnesota. Fifty-eight of these families have since returned to the States for various reasons. However, those who came to Alaska with the intention of improving their condition will unquestionably succeed.

NEED OF MODERN FACILITIES TO PROVIDE FOR FUTURE BUSINESS It is expected that freight revenue in 1937 will exceed this year's totals. Tourist traffic is expected to increase; but with the present hotel facilities in the rail belt, including Mount McKinley National Park, being far from adequate in comfortably providing for the present travel, the expansion of the tourist traffic presents a serious problem, and it is of vital importance that modern facilities are provided for the future.

DATA ON REVENUE AND EXPENDITURES Revenue from all sources, including nonoperating income, was $1,867,395.32, an increase of $390,827.56, or 26.468 percent.

Total expenses for rail and water line were $1,888,934.30, an increase of $331,371.12, or 21.275 percent.

The total deficit for rail and river-line operation and including miscellaneous operations was $17,443.89, a decrease of $56,230.77, or 76.323 percent. From this should be deducted the amount of $27,121.81 expended during the fiscal year for investigation of minera. and other resources, which would show a profit of $9,677.92.

From the attached chart showing a comparative statement of revenues and expenditures of the Alaska Railroad, by fiscal years, it will be noted that the deficit has been reduced each year except during the year 1930, when the revenues decreased and the expenses increased, due to serious wash-outs and heavy maintenance cost; but in the operating-ratio statistics is reflected real efficiency in railroad operation, and in the tabulation shown below there will be noted a reduction in the operating ratio except during 1929 and 1930, on account of having heavy maintenance cost and wash-outs. In 1926 it was 199.9; in 1927, 164.9; in 1928, 159.32; in 1929, 179.28; in 1930, 209.34; in 1931, 154.31; in 1932, 132.09; in 1933, 122.73; in 1934, 117.26; in 1935, 103.61; and in 1936, 100.70.

The Alaska Railroad will face a deficit for the year 1937, owing to a decrease in revenue caused by the Pacific coast maritime strike and increased expenses on account of the Annual and Sick Leave Act applying to the Alaska Railroad.

This strike tied up commercial shipping to Alaska between 5 and 6 weeks last fall, which resulted in serious food shortage and other supplies; and due to urgent appeals from the Governor and the various chambers of commerce of Alaska to the President and the Secretary of the Interior, the President, on November 17, 1936, issued Executive Order No. 7498, authorizing and directing the Alaska Railroad to provide necessary transportation service to and from the Territory

during the interruption of shipping or for such period as deemed necessary by the Secretary of the Interior, and that passengers and freight rates charged by the commercial carriers be maintained by the railroad.

This service resulted in an operating loss of approximately $153,400, which included about $49,000 for repairs and improvements on Office of Indian Affairs motorships North Star and Borer, which repairs would have to be made at a later date when required for their service if it had not been done by the railroad.

Other contributing factors to the operating loss was the lack of tonnage on the return voyages, as during the winter months there is practically no shipping from Alaska to the States. Also, because it was not agreeable to the maritime union to man, load, or unload ships belonging to owners then in controversy with the unions, it was neces. sary to charter two ships from packing and fishing companies, which were not entirely suitable for economical commercial operation, owing to the absence of cold-storage space and passenger accommodations in one and limited cold-storage space and passenger accommodations in the other.

To cover this deficiency an appropriation in the amount of $153,400 has recently been requested through the usual channels.

A considerable number of wooden bridges have been replaced with steel bridges, and a great number of the approaches and trestles have also been filled with earth. There remain, however, some of the original structures that are now badly deteriorated through decay and dry rot which must be replaced at an early date. In fact, one bridge 800 feet long over Knik River must be rebuilt this year and another bridge 640 feet long over Matanuska River as soon as funds are available, because of their imsafe condition; and trains are now required to move over these bridges at restricted speed.

It is not the thought or plan that the Alaska Railroad should be brought up to the high physical standards of class I railroads in the States, but it is the thought that the property should be placed in condition for safe, efficient, and economical operation; and a $200,000 appropriation is, therefore, urgently needed.

Further, I want to state, as has been discussed here before, that Alaska is a wonderful country with tremendous possibilities and resources. The need is to get these resources started to produce, and any appropriation that is made for that purpose will be money well spent.

ALASKA'S GREATEST NEED IS INCREASED POPULATION i Alaska's greatest need, of course, is an increase in the permanent population. There are a great number of transient people coming up there in the spring with the swallows, working in the mines, for the road commission, and for the railroad during the summer months, returning with their earnings to the States in the fall.

The youngsters of the settlers in the Matanuska l'alley will erentually replace a certain number of that Inboring class, and those people will remain in Ilaska, and it will be helpful. Ilaskans should, of course, also help themselves to a certain extent.

For instance, the coal that is imported from British Columbia and l'tah into southeastern Alaska--there is no reason why the Alaskan people should not utilize their own resources in that respect, and something should be done about that.

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