So that the Insular Government of Puerto Rico might start its expanded educational and health program, this office worked with the WPB to secure priorities for health subunits and school units. Approval was secured for the latter and 250 new school units will now be made available in the Island.

Arrangements were made with the Geological Survey to assign geologists to Puerto Rico, on a reimbursable basis, to conduct a preliminary survey for oil; with the Fish and Wildlife Service to study fish resources; with the Navy Department for the release by Navy, as surplus to its needs, of the greater portion of the 21,000 acres on Vieques Island, Puerto Rico, previously acquired in condemnation proceedings for naval purposes.

The Civilian Food Reserve Unit of the Division of Territories, working with the Office of Supply of the War Food Administration, during the year procured and shipped to Puerto Rico and the Virgin Islands a total of 503,294 tons of foodstuffs and fertilizers. In accordance with the expressed policy of the Department, the Division has been for a long period returning to the regular trade channels the procurement of many of the food and feed commodities, and is completing final arrangements to discontinue all governmental procurement.

Agreements were reached with the debtors and approved by the Department in 478 hurricane relief loan cases, making a total of 1,704 loans which had been adjusted at the end of the year. Approximately 540 loans require further action. Collections for the year amounted to $137,686.05, as compared with $135,835.05 in the preceding year. The total sum of $913,113.46 has been realized from collections during the years 1938-1945.

Following the policy of delegating controls to the municipalities wherever possible, the Division arranged, at the request of the municipal council, for the community to lease and operate the federally owned St. Thomas Meat Market and Cold Storage Plant in Charlotte Amalie, Virgin Islands. Meats for this plant come principally from the St. Croix abattoir, which is operated under a lease with the St. Croix Livestock Association. During the past year 794 cattle, 277 sheep and 119 hogs were slaughtered at the abattoir and sold as government inspected meats.

The net profit from general operations of The Virgin Islands Co., before income tax, totaled $38,458.46. Approximately 45 percent of the $515,383 of total municipal revenues in St. Croix was paid by the company. Sugarcane cultivation increased 20 percent due, principally, to the Commodity Credit Corporation support payment of approximately 90 cents per ton of cane.

The Division continued to exercise certain fiscal responsibilities in connection with the Philippines. The total of Philippine public funds on deposit in the United States on June 30, 1945, amounted to

$481,218,704.92. During the year, payments in total amount of $26,062,777.81 were made by the Division from funds of the Philippine Government to meet obligations of the Commonwealth.

ALASKA

The year ending June 30, 1945, marked the transfer of military activities from all Alaska to the westward half of the Aleutian Islands. The decommissioning of numerous posts on the Alaska mainland and the reduction of personnel in others together with the cessation of military construction resulted in a sharp drop in economic activity. The territorial legislature, which met in its seventeenth biennial assembly, passed a considerable body of constructive legislation, some of which had been sought for years. It responded to the rising sentiment for greater Territorial autonomy and self-government by adopting a memorial requesting Congress to grant statehood, and by providing a referendum on statehood for the next general election. It created an Alaska Development Board to meet postwar problems following the precedent established in the 48 States and Hawaii. It replaced the inadequate part-time Commissionership of Health with a full-time Commissioner of Health responsible to a board of five appointed by the Governor and increased the appropriation for tuberculosis care. It recognized the increasing importance of agriculture in Alaska by establishing a Department of Agriculture. It prepared to meet the acute housing shortage and to take advantage of Federal legislation by establishing a Housing Authority. It met the economic problem of two groups of Territorial residents by increasing the maximum old-age allowance from $45 to $60 monthly and by raising the salaries of territorial employees 15 percent, thus approaching, if not quite attaining, the Federal employees' 25 percent differential.

The territorial legislature strengthened the social security program by adopting a retirement act for the territorial school teachers and by extending coverage of the Unemployment Compensation Act. It eliminated one growing obstacle to progress by passing a land registration bill designed to remove the dead hand of vanished ownership from those who had patented lands of mining claims or who had left the Territory and could not be reached. It took epoch-making steps to place the Territory abreast of contemporary thought by outlawing discrimination based on race in public establishments, and likewise abolishing discriminations long existing and sanctioned by government practice and procedure in the Territory's juvenile code and in the law relating to dependent children. The results of this legislative session were extremely gratifying on the whole, indicating an increased awareness of the Territory's needs and its important destiny in the American Union.

Development Requires Federal Aid

Alaska's needs are great because of the Territory's large area, its inadequate communications, its relatively sparse and widely scattered population, when viewed in the light of anticipated migration to the area after the war. This prospective influx is of two kinds. It consists, first, of a great number of Americans, chiefly from the armed services, who hope to carve out a livelihood along America's last frontier. Second, a large number of Americans will want to travel to Alaska for their vacations.

Unfortunately Alaska is unprepared for both groups. For the first and more important category, since they aspire to be permanent residents, it is clear that at present roads, utilities of all kinds, housing, and economic opportunities are inadequate for any considerable number.

For highway construction, for the improvement of its health facilities, for the classification of lands, for the development of agriculture, and in countless other ways, Alaska needs Federal assistance which it has never enjoyed in sufficient measure. Alaska can probably do more than it has done in raising additional revenue for self-development, but the task of caring for a prospective citizenry larger than the existing population is clearly beyond the reach of the Territory with its small number of people and undeveloped resources. The development of Alaska the farthest North and West continental territory of the United States and of great strategic importance, to make it available for successful settlement by returning non-Alaskan soldiers, sailors and marines, Wacs, Waves and Spars the opening up of an area one-fifth as large as the 48 States, is a Federal responsibility and requires the prompt, generous, and intelligently directed support of both the Legislative and executive branches of the Federal Government. The prospective visit to Alaska during the summer of 1945 of several congressional committees should be a happy augury of the awakening of this interest on the part of national administration.

Influx of Travelers Expected

As for the second group of Americans, the numerous tourists who may spend their vacations in Alaska, it may be stated that they will find there sensational scenic beauty and wildlife abundance. However, accommodations are lacking to care for even a small fraction of those who will desire to go. They need to be developed jointly by Federal appropriations and private capital. The Federal Government has for years set aside vast areas as national parks and monuments in Alaska, withdrawing them thereby from other use, and as yet has made no appropriations for their development as it has for the national parks and monuments in the 48 States. Federal support is further warranted since the Alaskan economy hitherto has been

based almost entirely on industries-gold mining and salmon fisheries-and the tourist industry is clearly indicated as the single most important potential economic development. If the Federal Government does its part, private capital, both from outside Alaska, and within their means from Alaskans, may be expected to do its share in developing tourist business. Highway construction through Federal funds, of which the Territory has never had its fair share, essential also in this connection, is an excellent concomitant to every form of Alaskan development.

Alaska Road Commission

The Alaska Road Commission, which is responsible for the construction and maintenance of all roads and trails throughout the Territory except for roads in the national forests which are handled by the Public Roads Administration, carried out during the year the maximum reconstruction and maintenance program permitted by the funds available. No new highways were built. However, it reconstructed and maintained 2,700 miles of highways, 1,250 miles of sled roads and 4,000 miles of trails.

As the year ended, in conjunction with the Division it was working on a new program for road construction to be requested in its 1947 budget. Additional road construction is vital for some areas of the Territory to make additional lands accessible and to open markets. With prospective increased population, better transportation and communication must be made available.

Funds for the commission's program come from six sources: direct annual appropriations by Congress; reappropriation by Congress of a portion of the Alaska Fund, which is derived from Federal taxes upon the Territory's industries; appropriations by the territorial legislature; moneys allotted by the National Park Service; contributions by individuals, companies and corporations; and transfers from the War Department to cover cost of maintenance work on the Alaska highway.

Of these sources, the most important is direct appropriations by Congress and these must be augmented to make any extension of the program possible.

The Alaska Rural Rehabilitation Corporation

The fiscal year 1945 was a very successful one for the Matanuska Valley Farm Colony. Improvement in the methods of crop selection and marketing facilities is brought about as the farmers become better acquainted with Alaskan conditions. Gross business by the Matanuska Valley Farmers Cooperating Association in 1944 amounted to $1,235,016.92 as compared to $1,017,426 in 1943. Farm products sold through the cooperative increased from $370,000 in 1943 to $437,000 in 1944.

With revitalized interest on the part of the farmers and new personnel in the management of the Alaska Rural Rehabilitation Corporation and the Matanuska Valley Farmers Cooperating Association, the colony should continue to make consistent and satisfactory progress.

The Alaska Railroad

The Alaska Railroad's record of freight and passenger traffic in the fiscal year 1945 no longer recounts steeply rising volume. Rather, the changed war situation in Alaska has caused a reduction of military traffic in practically all areas served by the railroad. Net ton-miles of revenue freight carried were 21.5 percent less than the volume in 1944; however, the ton-miles were more than three and one-half times those in 1939, the last year before war activities affected rail traffic.

Gross operating revenues for 1945 were $8,603,546.36 as compared with $11,289,637.46 in 1944, a reduction of $2,686,091.10, or 23.7 percent. The net income amounted to $1,936,840.79 as compared with $5,242,924.45 in 1944, a reduction of $3,306,083.66, or 63 percent.

The total revenue freight hauled decreased from 627,847 tons in 1944 to 549,248 tons in 1945, a reduction of 78,599 tons, or 12.5 percent. Included in this year's tonnage were 225,887 tons of coal compared with 229,961 tons last year.

The total number of passengers carried was 88,998, an increase of 4,698, or 5.5 percent. Passenger-miles totaled 9,275,913, which was a reduction of 1,605,119 passenger-miles, or 14.7 percent under 1944. Four river steamers were operated during the season of navigation on the Tanana and Yukon Rivers furnishing service between Nenana and Marshall. Tonnage handled amounted to 17,365 tons, an increase of 12 percent over the preceding year. The Nenana marine ways were enlarged to accommodate all of the floating equipment. A fuel-oil storage tank was installed at Nenana and a barge was converted into a fuel-supply barge.

HAWAII

The cost of the war to Hawaii in terms of expended resources, natural and human, recurring and nonrecurring, is literally incalculable. Its civilian population, swollen during 3%1⁄2 years of war to a figure in excess of one-half million, cheerfully shared with uncounted thousands of service men and women accommodations and facilities for human subsistence which in other times would have been considered intolerable.

While the general health picture throughout the Territory improved during the year, work strain and congested living conditions undoubtedly contributed to the increased high death rate from tuberculosis. Marked progress on the Federal housing program during the latter part of the year promised to ease this situation.