Colonel OHLSON. No, sir; only the earnings in 1935 and 1936. Mr. FITZPATRICK. I mean, you did not get any funds from any other department of the Government?

Colonel OHLSON. No, sir.

Mr. RICH. You made no improvements?

Colonel OHLSON. Yes; we made a certain amount of improvements. Mr. RICH. Where did you get the money for the improvements that you made?

Colonel OHLSON. The appropriation that we received through Congress.

Mr. RICH. The regular appropriation?

Colonel OHLSON. Yes, sir.

Mr. BURLEW. The Alaska Railroad has only had one allotment of emergency funds.

Colonel OHLSON. Yes; about 4 years ago.

Mr. BURLEW. $100,000 and some-odd."

Mr. RICH. You have an item of $200,000 appropriation for the construction of these bridges, have you?

Colonel OHLSON. Yes, sir. It only covers one bridge, however. The renewal of the bridge over the Knik River will cost $200,000.

EXPLANATION OF ITEM OF INCOME FOR FISCAL YEAR 1936

Mr. RICH. Looking at the operating revenue and expense statement on page 18, the estimated revenue for the year 1937 is $1,800,000, and the expense $1,900,000.

Colonel OHLSON. Yes, sir.

Mr. RICH. Or a deficit of $100,000?

Colonel OHLSON. Yes, sir.

Mr. RICH. If you have a deficit of $100,000, that does not agree with the figures you have stated, that you have an income of $9,766. Colonel OHLSON. On page 18?

Mr. RICH. Yes; page 18, looking at the year 1937.

Cononel OHLSON. Yes; that will be $100,000 for capital expenditures, and $100,000 for operating deficit, this year, 1937, but, of course, we are discussing 1938 now.

Mr. RICH. Would you say you had an income of $9,766? You could not have that for 1938?

Colonel OHLSON. That is the estimated income for 1938.

Mr. RICH. You mean you are figuring you are going to receive in 1938 $9,766 more than your expenses?

Colonel OHLSON. These are the figures we are talking about now, for 1938. Are you taking the 1938 or the 1937 figures?

Mr. RICH. You made the statement awhile ago that your income was $9,766 more than your expenses.

Colonel OHLSON. Yes, sir.

Mr. RICH. In this report you read.

Colonel OHLSON. Yes, sir.

Mr. RICH. What year was that for?

Colonel OHLSON. 1936.

Mr. RICH. 1936?

Colonel OHLSON. Yes.

Mr. RICH. According to this statement, it shows your deficit last

year was $20,408.17.

Colonel OHLSON. Yes; but there should be deducted $29,121.81 expended during the fiscal year for investigation of mineral and other resources which will show a profit of $9,766.

Mr. RICH. Does the railroad have the power and the privilege of spending that money for the development of resources?

Colonel OHLSON. Yes, sir.

Mr. RICH. What powers do you have outside of the operation of the railroad?

Colonel OHLSON. An appropriation made by Congress in 1933, of $250,000.

Mr. RICH. Do you have any more of that money left?

Colonel OHLSON. There is, I think, about $18,000 to $20,000 of it left.

Mr. SCRUGHAM. Mr. Rich, this may answer your question. The terms of the act are given on page 501, I think, including the authorizations. Is that correct, Colonel Ohlson?

Colonel OHLSON. Yes, sir.

Mr. SCRUGHAM. That is on page 501 and 502 of the bill.

AMOUNT RECUIRED FOR REHABILITATION OF RAILROAD

Mr. RICH. What I am trying to find out from the gentleman's statement is when this road will be self-sustaining. He says if he gets money enough to carry his overhead for 4 years it will, at that time, be self-sustaining, and I am interested now in finding out how much he thinks it is going to take to carry him over a period of 4 years.

Colonel OHLSON. There will be required approximately the amount of $2,150,000, spread over a period of 4 years, to take care of the necessary rehabilitation work.

Mr. RICH. What will that money be spent for, primarily?

Colonel OHLSON. For making line changes in order to eliminate the renewal of wooden snowsheds, ballast roadbeds, patch ballast of certain distances, to construct 12 new section houses which are badly dilapidated and unfit for human habitation, and complete piling, piling trestle approaches, box cars, and refrigerator cars, replace wooden bridges with steel bridges, placing of approximately 40,000 yards of riprap per year, for a period of 3 years, manufacturing concrete culvert pipes, and placing concrete culvert piles. Also the purchase of one locomotive.

The Alaska Railroad has, since it was started, purchased four new freight locomotives to replace old worn-out locomotives that were transferred from the Panama Railroad to the Alaska Railroad which are now fast becoming obsolete and very costly to maintain and repair. They are small engines and we can only haul very small trains with them, and by the utilization of heavier power we can increase ton per train-mile and thereby reduce your operating expenses, and it will be absolutely necessary within the next year or two to purchase another locomotive in order to further reduce operating

expenses.

Mr. RICH. That means it will require about $500,000 a year for the next 4 years?

Colonel OHLSON. Yes, sir.

Mr. RICH. You have had this road in operation since 1916?
Colonel OHLSON. Yes, sir.

Mr. RICH. And the total amount expended amounts to $30,000,000? Colonel OHLSON. About $71,000,000.

Mr. RICH. I was looking at your operating costs there and receipts, revenues.

Colonel OHLSON. Yes, sir.

Mr. RICH. Are you going to get in enough receipts from your operations to take care of these expenditures?

Colonel OHLSON. That is, after our replacements.

Mr. RICH. Yes; after your replacements.

Colonel OHLSON. In my opinion, it can be done. Of course, Congress and the Senate enact laws which often increase the operating expenses of the Federal Government. In the case of the Alaska Railroad there was an act passed by Congress last year, applicable to the Alaska Railroad, the Annual and Sick Leave Act, and that alone will increase the operating expenses of the railroad approximately $93,000. Mr. FITZPATRICK. For 1 year?

Colonel OHLSON. Yes, sir; per annum.

Mr. RICH. Where do you expect to get this $2,000,000 of special appropriation from the Government? Are you to look forward to that through the appropriation committees, or are you going to try to get it through projects?

Colonel OHLSON. The only means I have is to ask for an appropriation from Congress.

Mr. RICH. There was some place in the report I saw where you are going to ask for $200,000 more for some bridges. I just cannot locate that now.

Colonel OHLSON. It is on page 502 of the bill.

Mr. RICH. That is not included in this appropriation bill now, is it? Mr. SCRUGHAM. Yes, sir.

Colonel OHLSON. Yes, sir.

Mr. BURLEW. Then, in addition to that, we have asked for some emergency funds to build some other structures, which we have not yet received.

Mr. FITZPATRICK. Has the tonnage you have been carrying over this railroad increased much during the last 7 years?

Colonel OHLSON. Sir?

INCREASE IN TONNAGE AND REVENUE OF RAILROAD

Mr. FITZPATRICK. Has the tonnage you have been carrying over this railroad increased a great deal during the last 7 years?

Colonel OHLSON. Yes. Last year it increased. The revenues increased from 1931 in the amount of $688,440 to $906,123 in 1932. In 1934 the revenues were $964,918, and in 1935 they were $1,091,445, and in 1936 they were $1,338,320.

Mr. FITZPATRICK. Was the increase on shipping into Alaska, or shipping out of Alaska?

Colonel OHLSON. The increase was inbound.

Mr. FITZPATRICK. Can you give us an idea of what in money value you shipped out of Alaska to this country during the last few years? Colonel OHLSON. I do not have that statement.

Mr. FITZPATRICK. We have been taking more out of Alaska than we have been putting in there?

Colonel OHLSON. Oh, a great deal, because of the tremendous amount of fish products, minerals, and furs, the trade balance is in favor of Alaska.

Mr. FITZPATRICK. In other words, if the money taken out of Alaska had been invested there it would have developed Alaska a great deal? Colonel OHLSON. Yes, sir.

CONSTRUCTION OF KNIK RIVER BRIDGE

Mr. RICH. In building this Knik River Bridge you are asking for $200,000?

Colonel OHLSON. Yes, sir.

Mr. RICH. You expect to continue the operation of this Alaska Railroad indefinitely; there is no thought of abandoning it, is there? Colonel OHLSON. No, sir.

Mr. RICH. Then you said it would require $100,000 to put it in permanently to put in concrete piers?

Colonel OHLSON. Yes, sir.

Mr. RICH. And if you drive in these piles, they will last only 20 years?

Colonel OHLSON. Yes, sir.

Mr. RICH. Why don't you ask for $300,000, and do it right so that you will not have to renew the piling in 20 years?

Colonel OHLSON. Because I was afraid I could not get the money for that.

Mr. RICH. When you do anything I firmly believe in doing it right, and I believe if you intend to ask for anything to put that bridge in you better do it right.

Colonel OHLSON. That is very true. There are many other things that can be figured along the same lines.

TIE TREATMENT PLANT

For instance, with respect to the replacement of ties used on the Alaska Railroad, I have asked for appropriations on many occasions for the construction of a tie-treatment plant so that we could treat our ties. It would increase the average length of life of a tie by 100 percent, and thereby save the Government not less than $3,000,000 on ties, in the renewal of all the ties on the Alaska Railroad.

Mr. RICH. What percentage annually would you save in your ties? Colonel OHLSON. We could not show any actual saving for the first 7 years, but after that because of the fewer ties used, because a treated tie will last 100 percent longer than an untreated tie, we could show a great saving. On one division of a railroad, when I was superintendent, we did not put in any ties all year on account of the fact that all the ties had been treated before they were put in. Mr. RICH. What is the average life of a tie up there?"

Colonel OHLSON. The average life of an untreated tie is about 9 or 10 years.

Mr. RICH. And the life of a treated tie would be double that?

Colonel OHLSON. Yes; 24 or 25 years.

Mr. RICH. Have you submitted to the Appropriations Committee what it would cost to put in that creosoting plant? I suppose you mean a creosoting plant?

Colonel OHLSON. Yes.

Mr. RICH. What would it cost to put that in? Colonel OHLSON. We have asked for an appropriation of $135,000 on two or three occasions, but it has been cut out.

Mr. RICH. Is the report you have submitted available so that we can get it?

Colonel OHLSON. Yes, sir.

Mr. RICH. I would like to see a copy of it. I would like to read it. Colonel OHLSON. Yes, sir.

Mr. SCRUGHAM. Are there any further questions?

Thank you very much, Colonel Ohlson. You have been very helpful. I have repeatedly heard Mr. Taylor express his very high regard for the work you have done in Alaska. We are very fortunate in having you with us.

COMPARATIVE STATEMENT OF REVENUES AND EXPENSES BY FISCAL YEARS

Colonel OHLSON. Mr. Chairman, I desire to submit a comparative statement of revenues and expenses of the Alaska Railroad by fiscal years with my statement.

(The chart referred to is as follows:)