V
MEMBER ASSOCIATED PRESS
VOLUME XV. NUMBER 224.
SEWARD, ALASKA, THURSDAY, SEPTEMBER 4, 1930.
PRICE
TEN CENTS
SENATORIAL INVESTIGATORS
COMPLETE RAILROAD INQUIRY
Constructive Criticism of Obsolete and Wasteful Meth
ods, Suggest Changes to Increase Income and
Decrease Deficit.—Co-operation Promised
The Senatorial Investigating
Committee arrived in Seward
yesterday afternoon, held a
short session here, inquiring
into the situation and needs of
Seward, and departed in the
early evening for the States,
via Ketchikan.
Inclement weather prevented
the members of the Committee
from the enjoyment of a sight
seing trip in this neighborhood.
It is proper at this time to
give a brief review of the inves
tigation along the rail belt, and
the facts arrived at by the Com
mittee.
The Special train proceeded first
to Fairbanks, where an exhaus
tive hearing was held as to
freight rates and mining pros
pects. The Fairbanks people had
prepared for a round of pleas
ure for the visitors, with ban
quets and speeches, but in this
they were disappointed. The
banquet which was pulled off
was after the Committee had
entirely finished the inquiry, so
that if any of the Fairbanksites
had the idea that they could
cover up anything by the mere
volume of speeches they were
keenly disaooointed.
The visitors personally visited
the Chatanika region and view
ed what is left of the narrow
guage railroad! They had learned
that since the purchase of that
road there had been such a ri
diculously low’ freight rate up
there that the road had not
paid more than the cost of coal
it- run the engines. This wTas
shown in the rate charged the
heavy machinery of the dredges
of the Fairbanks Exploration Co.,
which had only five cents per
hundred or SI per ton added to
their freightage for the"'''Chat a
nika branch, with the transfer
a Fairbanks thrown in free.
The hauling of this tremen
dous machinery alone would
nave helped to sustain the nar
row guage" road if an equitable
ate h*d been charged.
rne committee learned mat
he F. E. Co., had favored clos
:ng the narrow guage road af- :
ter it had transported the
. five dredges and a vast amount
: 1 coal. Smaller miners testified
that the big company have,
planned to tear up the tracks i
to make room for their dredg- ;
ing operations, the Government
highway making a convenience!
thrir further transportation
by truck.
The charge was also made
that the F. E. Co., by the clos
;• of the road, would be able
later to gobble up the smaller
claims, because the latter would
be shut off from both railroad
b id highway, and would be
obliged to suspend. ‘
t The Committee visited the
ene of the dredging operations [
md verified the charge that the
. E. Co., wanted the ground ,
.< tupiecl by the railroad in the .
valley, as the grade was al
ready being destroyed on the
bay of their visit. ,
The Committee visited Nena- r
:.a and reviewed the operations
of the steamboats down the riv- ,
. and the management of the r
p- other Government institutions',
.g at that place. It was ascertain- ' <
:1 that this year the average. t
f passengers per trip down the1 c
river has been 12, some of them
being on passes with meals fur
nished free. The railroad sta
tion at this place has one sta
tionmaster and eight helpers,
which would seem to call for
j a larger station house and new
; rocking chairs for this small
regiment.
It is reported that at the
public hearing at Nenana as
elsewhere some of the merchants
appeared and testified that the
revocation of the law as to
trapping beaver would increase
tonnage on the railroad. It was j
ascertained, however, that the |
merchants each had thousands i
of dollars due from Indians, and
were more interested in the
settlement of these accounts
than they were in increased
tonnage.
The Committee did not visit
the Healy coal mines, and thus
! escaped a special dinner that
I had been planned. They had
learned by testimony that the
mines charged local people $5.25
per ton in carload lots at the
mines but had favored the F.
E. Co., with a rate of less than I
$2 per ton. This discovery is
said to have been more impor- !
tant than the anticipated din- j
ner that never came off.
A visit was made to McKinley
Park, where the weather was!
so bad and the clouds so low J
that no view was had of the j
great mountain. Members of the
party saw some mountain sheep
thro ti g h telescopes and had |
some enjoyable rides thru the
Park.
The usual stop was made at j,
Curry, where the Committee en
joyed the fine entertainment at l (
the Government hotel. Inquiry
there and in the records at An- :
chorage, however, disclosed the j ^
fact that the hotel is run with j..
a loss to the railroad of over 1
$30,000 per year. This dampened ,
some of the enthusiasm over j
the fine entertainment of the (
tavern.
n.1 iviciifU.xiUork.ci Liicr pax i/,y wcuu i (
over some of the farm territory ;,
by autos, and took dinner at the
Experiment Farm. Admiration j
was expressed at the work of ^
the Experiment Farm, and the i (
courage of the surrounding far- |
mers, but the committee indicat- | <
sd that the results so far of j £
building up a farm section was j (
small in comparison with the j ^
money which had been expend- j ^
?d. The idea was expressed that j j
r local market must be built |
ap for farm products before the J j.
experiment could be called a j ^
success. ; c
To build up this market two !
plans were put forward. One was |
;he establishment of creameries ja
ind canneries. The other was an j £
ncrease in freight rates, so ad- j c
usted that outside farm pro- j s
iucts could not come in and j ,
compete with the local products, j f
3oth plans would result finally! „
n increased tonnage for the :
ailroad. ! 3
Up to this time the Experiment j y
"arm has cost upward of $250, j f •
00- ^ ; n
The Committee visited the j E
toal mines and inquired into; £
marketing conditions. The fact I v
ras disclosed that the Maianus- | a
:a coal had not successfully j v.
milt up a market along the
oast of Alaska because, of the^j
| desire and habit of people to
use lump coal. The larger part
of the Matanuska product is nut
coal and steam coal, and it is
found that the habits of people
are not easily changed. It was
decided that an educational
campaign would be necessary to
build up the coal business.
The Committee e x p r e ssed
some surprise at the claims of
Alaska lumber when it was
‘ learned that the new buildings
at the Experiment Farm, the
new school building at Eklutna,
and all other new buildings were
; being, entirely constructed from
lumber shipped from Seattle,
At Anchorage the Chamber of
1 Commerce had planned the
usual banquet with speeches, but
the Committee decided against
1 this, desiring all the time to be
occupied in detailed inquiry into
the railroad business and the re
| sources of the Territory. Here,
I as well as at Fairbanks, the
I Committee held hearings all day
j Sunday, and late Sunday night.
| It had become plain by this
time that the Committee had
come up here to work hard and
conscientiously, and not to be
entertained with many flowery
speeches and more or less diges- ;
jtible grub.
in au me irip me <jommiu.ee ,
; had been accompanied by the
Chairman of the Interstate Com
merce Commission, who had
assigned to the Interstate Aud-;
itor expert the job of examin- j
ing the books and affairs at the j
railroad headquarters. This ex- |
pert spent ten days and nights;
■ on the books, and his findings,1
| supplemented by the quizzing of j
; heads of departments, revealed |
the true conditions which the j
Committee had cone to Alaska
! to improve or correct.
Most of the hearings at An
chorage were semi-private, and
went into figures and statistics
! that would not have held the |
interest of any ordinary aud
ience. Two hearings were held
at the city hall, however, being
interrupted at times by appar
| ently demented persons who de
manded to be heard on vision
; ary and preposterous proposi
1 tions. One man even sought the
I aid of the Committee in bring
! ing to a successful conclusion
| a case of immaculate concep
tion at his house. Admiral
Coontz listened to his plea, and
promised the attention of the i
Committee “so far as it might
aid in increasing tonnage to the
railroad and the bettering of
Federal Relations regarding In
terstate Commerce and the Laws j
of Navigation”
This lucid promise seemed to
satisfy the man for the time,
and the further hearings of the
Committee being semi-private, it
is not learned whether the pe- :
titioner sought further to break j
into the proceedings.
Heretofore the inquiry had ,
been open to the public, and the »
facts briefly stated above were j ]
open to any newspaper willing , i
to print facts. The official in- j ]
ouiry into the books at Anchor- j. ]
age cannot be so easily reviewed, j
But this paper believes that it! j
can give a brief and correct c
story of what was found, and
the conclusion arrived at by the jt
Committee and the General C
manager of the railroad. I
The road shows a deficit of! c
SI,300,000 for the last fiscal j
year. The Committee ignored j
the blaring suggestion of one J
newspaper that “AN ANNUALj r
DFFCIT OF ONE MILLION j c
DOLLARS A YEAR IS MONEY j r
WELL INVESTED,” and wentji
ahead with a constructive in- \ \
vestigation. 1 r
One instance was found where j q
the dropping of three men who' f
! SEWARD BUSINESS MEN APPEAR
BEFORE CONGRESSIONAL COMMITTEE
I
Tell Somewhat of the Needs and Desires of Local Com
munity-Request of Longer Stop of Trains at
Seward to be Given Careful Attention.
---—.-m
perform no real duties will re
sult in a saving of more than
! $30,000 per year. Without doubt
these three men agree that the
deficit was well “invested,” and
possibly they are newspaper
stockholders.
The “promotion” of tourist!
travel was found to have cost j
within $3,000 of the railroad
fares obtained from the tour-j
ists.
A Chicago office for the rail
road was found to have cost
about $12,000 per year, with no
particular duties for the oper
ators of this office evcept to shake
hands with each other.
The Seattle office was found
to be operated at a cost at least
double what was necessary.
The railroad had for years
past operated a steam plant and
on the side furnished electrici
ty to the town of Anchorage de
riving therefrom an income of
more than $60,000 a year. This
electrical business was turned j
over to private hands just prior
to the administration of Mana
ger OhLson. Nothing was receiv
ed in return for this, and the
railroad made a contra&t to
maintain its own plant as an
emergency pi- nt. The Committee
was astonished to find that this .
one net income-producer was i
given away, and that the opera
tion of the steam plant of the (
railroad costs more now than it ,
did when it sold elect: c.iv.
It is learned that the auditing ,
department was severely criti- j
cized because of laxness in col- .
lecting accounts due the rail- (
road, more than $200,000 being ]
allowed to accumulate on the
books at Anchorage alone with (
now no hope of collection. Yet (
;hese acounts are canicd by the
the department as “assets” of ^
the road, instead of being strick
en off and carried in the “sus- ‘
pended account.” j
The “Reindeer Department” was!^
found to be a $14,000 joke on ^
the railroad, inasmuch as not £
a single reindeer is found in the (
rail belt, and certainly none are c
being shipped. t
Anticipation of an increased £
tourist travel had seemed to c
call for increased train service, ^
resulting in a loss to the rail- ^
road, because the tourist travel t
greatly decreased. This was on v
account of the bad conditions t
n the States. jg
Too much service. Too low
height rates. Too much dupli
ration of jobs. Too much slack- ^
ng in Departments. Too many f
ligh-priced and low-action pro- t
noters. Too many barnacles In- 1
aerited from previous manage- *’
nents. #
That tells the story of a “de- T
icit well invested,” as the An
horage Timse puts it.
And it is in the correction of ^
hese evils that the Senatorial
Committee and the General
Manager agree lies the salvation -
if the Alaska Railroad. X,
a
GOING TO THE FAIR?
Should any number of local
esidents desire to go to An
borage next week for the an
c
.ual Fair, they are asked to so
afcrm Agent Sweek, A. Ry., for, \
possible, a gascar may be ar- ‘
anged leaving here Tuesday,
'he visitors could return on next 1
’riday’s regular passenger. I
Senator Robert Beecher Howell
of Nebraska, as chairman of the
Special Senate Committee, jcalled
the hearing to order, and in a few
words complimented Seward upon
its location, its enterprise, and up
on the character of citizenship lo
cated here. The Senator paid a
fine compliment to Miss Mays, so
journing here, a resident of Neb
raska, and stated the enthusiasm
of Miss Mays for Seward hits caus
ed him to share in her belief as to
the fact that there are great pos
sibilities in store for Seward
Mayor McMullen had presented
a list of persons to be called as
witnesses and Senator Howell cal
led former Mayor L. V. Ray as the
first witness.
Ray occupied about an hour, a
large portion of the time being tak
en up by the remarks and state
ments of Senator Kendrick and
Senator Howell in response to mat
ters brought forth by Mr. Ray
Ray gave the history of the Alas
ka Central Railway and of the/
Alaska Northern, the designation
Df Seward as the Coast Terminus
by President Wilson under date of
April 10th, 1915; told of the settle
ment of Seward, its growth, and
pointed with pride to the fact that
Seward was independent of pater
nal and governmental aid; that
Seward h adpaid toward the Fed
eral improvement of the Lowell
2reek; that the permanent em
ployes of the Railroad in Seward
vas 18; and that most of these
employes owned property, paid
,axes, sent their children to Sew
ird schools and were a part of the
immunity, respected and well
iked.
Mr Ray then called attention to
wo matters which he believed
should be brought to the attention
)f the Untied States Senate at its
lext session. The revision of the
mtiquated Alaska Code, one half
he expense to be borne by tn
federal Governmnt and on half by
he Territorial Government. He
hen called attention to the exces
ive cost to litigants in Alaska
if having to prosecute appeals in
>an Francisco, enlarging upon this
o some extent, and suggested that
,s in the First United States Cir
uit Court of Appeals, a law permit -
ed one of the judges of that court
o hold sessions in Porto Rico, and
hat some similar legislation could
/ell be enacted so that a judge of
he Ninth Circuit Court could hold
essions in Alaska.
Ray gave figures showing the
robable minimum expense in some
00 cases going to San Francisco
rom Alaska since the year 1900.
d litigants of $1,000 in each case.
Ir- Ray further suggested a me
lod of relieving the situation
ould be the establishment of a
erritorial Supreme Court- On be
lg asked by Senator Kendric:
hich plan he recommended, Ray
lid; ‘T most respectfully urge the
stablishment of a Territorial Su
renie Court, for the more power
ad authority delegated to the
erritory the more we come within
government of the people and by
le people.”
Senator Kendrick then inquired
; length as to the various phases
£ the proposed Supreme Court,
s jurisdiction, etc., and then stat
1 he was in favor and would go
i record, and thot he believed the
unmittee would coincide with
s views for the’establishment of
(Please turn to Pajre Three)