Letter to the Editor
Dear Editor,
In a recent issue of the MIRROR
you printed a letter from an uni
dentified group of servicemen's
wives which related to what they
called “the bread situation here
on the base.” Since their letter
dealt with our business and tended
to impugn a reputation we have
worked hard years to develop, I
feel that I must respond.
The “bread situation” is this.
For nine years our firm has sup
plied bread to the Commissary
Store. During that time we devel
oped a reputation for high quality
and dependable service. On July
24th the Commissary Officer in
formed us by letter that commenc
ing in September he would pur
chase white bread from Seattle
and would use our bread only if
needed. This represents a change
in Government purchasing policy
which would to a degree affect
the economy of an Alaskan com
munity. We informed Senator
Bartlett of this. Naturally, he was
interested. Business taken out of
Alaska means that much less in
dustry in Alaska and Alaska needs
industry.
Immediately, in their letter, this
unidentified group refers to our
price as exorbitant. I would like
for them to see some of the factors
that enter into our price. First,
consider the size of our market.
We are a small shop serving a very
limited market. When we buy ma
terials we cannot reap the ad
vantages of volumn buying as the
Seattle baking factories do. We
cannot mechanize for volume and
cut labor costs. Do they expect us
to produce bread as cheaply as
giant baking factories? And there
is the transportation cost. This
factor figures in in several ways.
Are they aware that the Navy
gets a cheaper freight rate? Let
me illustrate this. I have before
me an invoice from one of our
flouring mills, for one shipment of
flour. The total of this invoice is
$1,678.21. The corresponding warf
age and freight bill amounts to
$626.24. Drayage from the dock is
$62.62, making the total landed
cost for this shipment $2,367.07.
You can see that the transportation
costs represent 29 percent of the
landed cost. The prices they pay
in the Commissary reflect a trans
portation markup of only 7 percent.
We get no special rates, no free
ride. We have to pay our way. The
Seattle baking factory doesn’t have
anything approaching our trans
portation cost percentages. Yet
they compare our price against
theirs. Is this fair? Is this reason
able?
Take the matter of wages. Our
LOU VEERMAN
AGENT
486-2656
SAILING FROM SEATTLE
MS TANANA
September 19 1
Womens Bay, Kodiak,
* Adak, Kodiak.
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and Federal Reservo System
payroll is higher than it would be
in Seattle for the simple reason
that it costs our people more to
live here. When our driver goes
to pay his rent, the government
doesn’t pay any part of it. He has
to pay his way. When our baker*
go to the grocer they have to pay
more than Seattle prices. The
reason is obvious. Our grocer has
to pay a real transportation
charge. He doesn’t get a cut rate
either. He has to pay higher wages
to his help also. His maintenance
and overhead costs reflect the cost
of transportation and are therefore
higher. So you see that transpor
tation costs are a substantial factor
to begin with and they snowball.
Our operating costs are higher
than Seattle. For instance, the fuel
for our ovens has to be shipped
from Seattle. This costs. The man
I
who delivers the fuel has a high
cost of living so he has to be paid
a higher wage. His initial invest
ment is higher, his operating and
maintenance costs are higher. This
all drives his price up higher,
which drives our costs higher.
We pay more for electric power
for the same reason. The fuel that
runs the generator is shipped in.
This costs. The tools, equipment
and spare parts are more expensive
because of transportation costs.
Distribution of power in this mari
time locale is a difficult thing. We
have dependable power in a diffi
cult area to produce it and this
costs. Higher priced power means
higher bread production costs.
Now take vehicle expense. This
represents a considerable portion
of our operating expense. When
we buy gasoline for our trucks, we
have to pay the full price plus
taxes that go for the maintenance
of the roads service people drive
upon in their out of state licensed
cars. I don’t think I have to go
into detail to show that the garage
man has to get more for his work
than does a garageman in the lower
48.
So you see, we not only start
with a transportation factor which
is over four times greater than
that of service personnel, but this
factor compound's itself.
And consider financing. In or
der to improve our plant and pro
duct we have had to borrow mon
ey, lots of it. Because it costs the
bank more to operate here we pay
a higher interest rate. Every dol
lar we have borrowed has been
charged 8 percent.
(Continued or. Pa?e 7)
Tis Fall Alright!
The kids are back in school..
The humpies are up the creeks...
The Silvers have shown up ......
The “Monsoons” are upon us... •
The Nights are getting longer.and
ltfs harder to get up in the mornings
So drop by our Delicatessen and try our
FRESH EGGS — BACON — COFFEE — TEA
DANISH CANNED BACON & HAM - FRUIT
JUICES
imop
MILK & BUTTER
CMAAL HALF & HALF
■ ICSfl SOURcream
CHOCOLATE MILK
COTTACE CHEESE
AND FOR THOSE GROUCHY ONES AND THOSE WHO THINK THEY DON’T
LIKE US ANYMORE — TRY OUR
°P®n D.
_ Phone
Day
486
*Nite 2600
Bakery & Delicatessen
“THE NORTH PACIFIC'S GARDEN OF EATEN"
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