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Congress

CONSTRUCTION OF ALASKAN RAILROAD.

August 18, 1919.- Committed to the Committee of the Whole House on the state of

the Union and ordered to be printed.

Mr. CURRY of California, from the Committee on Territories, sub

mitted the following

REPORT.

[To accompany H.R. 7417.)

The Committee on the Territories to whom was referred the bill (H. R. 7417) to amend an act of Congress approved March 12, 1914, authorizing the President of the United States to locate, construct, and operate railroads in the Territory of Alaska, and for other purposes, having considered the same, report it to the House with the recommendation that it do pass.

Hearings having been held on July 23, 24, 25, and 31, 1919, the report of the Alaskan Engineering Commission having been submitted and the testimony of officers of the Alaskan Engineering Commission having been fully considered, the committee finds:

That the President of the United States designated the Secretary of the Interior as the executive officer of the Government under whom the work was to be done. For the immediate direction of the work a commission of three was deemed best. Gen. George B. Goethals was asked to be a member of the commission. He declined. He was then asked to suggest an Army engineer as a member of the commission, and he recommended Col. F. Mears, who was then in charge of the Panama Railroad. The chief engineer of the Southern Pacific Railroad Co. and the chief engineer of the Atchison, Topeka & Santa Fe Railroad Co. were asked to suggest a man who had proper railroad experience and proper temperament and the knowledge of handling men to be a member of that commission. Both of these gentlemen suggested the name of Mr. William C. Edes, who also had numerous other indorsements for the position. Mr. Thomas Riggs, jr., was selected as the third member of the commission, due to his knowledge of Alaskan conditions through his connection with the United States Coast and Geodetic Survey as officer in charge of one of the survey parties defining the international boundary between Alaska and Canada.

Shortly after the United States' declaration of war against Germany Col. Mears resigned as commissioner, as he considered his first duty as an Army officer was with the Army during the war. In May, 1918, Mr. Thomas Riggs, jr., was appointed governor of Alaska and resigned from the Alaskan Engineering Commission. This left Mr. Edes the only remaining member of the commission. Due to the unsettled conditions prevailing as a result of the war, it was not deemed expedient to reorganize the commission at that time. Mr. Edes continued during the last year to direct the work efficiently and effectively, but recently, due to his failing health, it has been found necessary to place in charge of the work a younger and more active director. This has been done by the reappointment of Col. F. Mears, and his designation as chairman and chief engineer of the Alaskan Engineering Commission. Mr. William C. Edes is no longer a commissioner, but has been retained as consulting engineer.

That the construction of the Alaska Railroad by the Alaskan Engineering Commission has been prosecuted under most adverse conditions, due in large part to the war, and the work has been done at the lowest cost consistent with the permanent character of the work performed. The railroad will cost on completion approximately 31 per cent more than the amount originally estimated and the entire project, including terminals, rolling stock, and physical property, and maintenance and operation charges in excess of revenue during the entire period of construction less than 50 per cent more than the amount originally authorized to be expended. Since the commencement of the construction of the road, wages of employees increased 59 per cent; the prices of materials and supplies as much as 161 per cent, and transportation costs 147 per cent. The result of accomplishing this construction at an increase of no more than 50 per cent under such circumstances is due in large part to the system of station contracts by which the original estimates of excavation costs were very closely approximated.

That though engineering mistakes have occurred, due to flood and other unforeseen conditions, they have not been a material factor in the increased cost of the work and probably no greater than would be encountered on any project of such magnitude in a country of unusual climatic conditions.

That the development of town sites along the line of the railroad and the assistance rendered to home seekers have been of notable value in the settlement and development of the adjacent regions. The providing of ample sanitary housing facilities for employees was wise and was necessary for retaining ample working forces, the maintenance of a proper morale amongst the workers employed on the enterprise and necessary to the preservation of the health, and the maintenance of order in the new communities. The work accomplished has been of a substantial character, at a cost that compares most favorably with the cost of other railroads in Alaska and in the Western States, and especially so when consideration is had of the increased costs and abnormal conditious prevailing during the period of construction.

That the completion of the Alaskan railroad would have been accomplished within the amount originally authorized and at a much earlier date than is now possible but for the heavily increased cost of labor, material, and supplies, and there would have been a considerable saving both in cost and in time of construction, had the entire amount been appropriated so as to be continuously available; whereas by the system of annual appropriations the construction forces have been impeded and delayed in the prosecution of the work, and it has been impossible to take advantage of the full open working season in Alaska, from May to October, inclusive, by reason of such limitations. That in order to complete the railroad from Seward to Fairbanks by December 31, 1922, the sum of $17,000,000 additional to the $35,000,000,000 originally authorized will be required and this sum should be appropriated at the earliest possible date to be immediately and continuously available until expended. Delay in making such appropriation would have the effect of increasing the ultimate cost of the project and injuriously affect and postpone the development of Alaskan resources. The loss to the Nation by such delay would, through the discouragement of Alaskan industrial enterprises and the prevention of the creation of new wealth from her abundant resources, minimize and neutralize any apparent gain through temporary saving of funds to the Treasury.

That the importance of utilizing Alaska's coal deposits in providing fuel supplies for the Pacific coast and for the trans-Pacific merchant marine is second only to the fuel demands of the Pacific Fleet of the United States Navy. The activities of the Alaskan Engineering Commission have demonstrated the practicable, profitable character of coal mining in Alaska. Much of the Alaska coal is a coking coal and could be used to smelt iron ore and for other manufacturing purposes.

That failure to complete the Alaskan railroad after having made an investment of $35,000,000 therein would result in the loss of a very considerable portion of the investment, because with the operation of so much of the line as it is possible to complete for that sum, it would be impossible to earn a sufficient revenue to maintain the completed portions; and the consequent depreciation and deterioration would be great. The necessity for appropriating the $17,000,000 additional is evident for the protection of the funds previously invested.

When the sum of $35,000,000 has been expended, there will be two uncompleted sections of the railroad separated by a gap of 100 miles, on which no work has been done. The south section, consisting of approximately 227 miles of main line and 32 miles of branch line, which is now in operation, but which will require construction of snowsheds, riprapping embankments, etc., to be complete, will serve the coast ports of Anchorage and Seward, the interior settlements at Matanuska, Wasilla, and Talkeetna, and the coal mines of the Matanuska field. The north section, consisting of 106 miles of main line and 37 miles of branch, will be practically complete except for the construction of bridges over the Nenana and Tanana Rivers. This section will serve the terminal city of Fairbanks and the mines of the Fairbanks field, the town of Nenana, and the coal mines of the Nenana fields, effectively only with the construction of the bridges which will not be possible under the appropriation of $35,000,000. The revenue of these two widely separated and independently operated parts, when completed, would be confined to the earnings from such meager traffic as could be locally developed. This would be negligible as compared to the possible earnings resulting from through traffic from the Alaskan seaboard to the navigable waterways of the interior of Alaska. The operation of these fragmentary parts, , each independent of the other, can only be accomplished at a considerable loss, whereas traffic requirements of the interior promise to the completed road a much larger volume of business.

The economic development, however, of the vast Alaska interior is dependent upon the completion of the railroad to the navigable waters of the interior, and the development of agriculture in the region through which the railroad passes is dependent upon the creation of a market for the product, and this market can only be provided by the development of the mining and kindred industries adjacent to the railroad, and the development of the mineral resources is dependent upon proper provision of economical transportation for men, machinery, and supplies, and this is not possible with the railroad left in an uncompleted stage.

Of the $35,000,000 authorized in the original act there remains but $2,038,029 available, and that amount was appropriated in the last sundry civil act. This amount, however, will only be sufficient to continue the construction work on the railroad with the present inadequate force of about 2,460 men until the middle of October, and provide for operation and maintenance to the end of this fiscal year. The disorganization of the construction force before the completion of the project would entail a material loss in time and money.

That the length of the main line (standard gauge) from Seward to Fairbanks will be 471 miles; with branches, 545 miles; including branches and spurs, 549 miles. The total length of the railroad, including main line, branches, spurs, and sidings, when completed, will be 601 miles. Of this 371 miles have track in place and are in operation, and 34.5 miles of sidings are in place. All of the remaining portions of the line, with the exception of the 100-mile gap between miles 265 and 365 north of Seward, are in various stages of completion. The Government purchased the Alaska Northern Railroad of 71 miles running out of Seward, and paid for it the sum of $1,157,839.49. The Alaska Northern Railroad had cost the private owners $5,250,000. The reconstruction of the Alaska Northern has cost to date $1,801,155.08, and it is estimated that it will cost to complete $1,718,182.64 more, or a total of $3,518,337.72.

The Government also purchased the Tanana Valley Railroad for $300,000. This road is narrow gauge, 44 miles long, and the purchase price included the shops and terminals at Fairbanks. Its rehabilitation to date cost $46,407, and there will be a further expenditure of $84,300 on this line. It is stated that this railroad cost the original owners about $800,000.

It is estimated by the engineers and the Alaskan Engineering Commission that on its completion the cost of the Alaska railroad, on the basis only of mileage of main line and Matanuska branch, totaling 508.4 miles, will be about $73,200 per mile, while the cost of the entire project on the same basis will be $99,200 per mile. Including estimated maintenance and operation expenditures in excess of revenue to and including the year 1922, not included in the foregoing, the cost will be about $102,300 per mile. The latter estimate includes all equipment, rolling stock, terminal facilities, inciuding harbor improvements at Anchorage, dock and wharf facilities at Seward, Anchorage, and Nenana, physical property, purchase and rehabilitation of the Alaska Northern and Tanana Railroads and all expenses of every kind and character connected with the construction of the road, and its activities, including operation expenses in excess of revenue during the construction of the road from 1915 to 1922 inclusive, which is estimated at about $5,987,000. The only other Government built railroad, that across Panama, cost $221,052 per mile.

The cost of construction of the Copper River & Northwestern Railwav, 194.98 miles in length, extending from Cordova to Kennicott, Alaska, is given in the hearings on the Alaska case before the Interstate Commerce Commission at about $83,000 per mile. The book value of this railway in its return to the Interstate Commerce Commission for the year 1917 is given as $146,090.39 per mile. The grades for the last 65 miles on this road are 4 per cent. This road is not equipped as completely, even proportionately to its length, as the Government railroad in terminals, rolling stock, construction, operating and marine equipment, machinery, and physical property.

The Pacific & Arctic Railway & Navigation Co., owning the White Pass & Yukon Railway from Skagway to the international boundary at the summit of White Pass, a distance of 20.4 miles, shows in its return to the Interstate Commerce Commission for the year 1917 a book value of $115,343.68 per mile. This road is narrow gauge with 4 per cent grades.

The only two recently built railroads in the United States are the Virginian from Norfolk, Va., to Deepwater, W. Va., 435.3 miles, which cost, exclusive of equipment, $151,000 per mile, and the Chicago, Milwaukee & Puget Sound line from Mobridge, S. Dak., to Seattle, which is said to have cost $130,000 per mile, exclusive of equipment. Labor and material were both much cheaper when these lines were built than they are now.

The report of Mr. J. L. McPherson, engineer of the Alaskan Engineering Commission, to Hon. Franklin K. Lane, the Secretary of the Interior, embraced in Report of Hearings, pages 18-48, inclusive, sets forth in a clear, consise, and complete manner the work to complete, work accomplished, and necessity for early completion of the Alaska Railroad. Mr. McPherson is especially equipped to make this analytical report, due to his long experience as an engineer in Alaska and his extended study of Alaskan conditions.

That all possible inducements, with proper safeguards against monopoly, should be extended to pioneer endeavor in the utilization of Alaska's resources, to encourage and to bring about the intensive private development essential to a stable citizenry. Such a policy will create traffic for the railroad and in time make the enterprise profitable.

The region tributary to this railroad has produced in mineral wealth over $111,000,000, of which the Fairbanks section at the interior terminus of the road has produced in excess of $71,000,000, practically all of which has been from placer gold. Throughout the Alaskan interior only the very richest and most profitable mining is possible under the uneconomic conditions now prevailing. The completion of this railroad will make profitable the mining of large bodies of low grade ore, the development and working of which is not now practicable.

The known mineral resources of that part of Alaska that will be served by the railroad are gold, silver, copper, coal, lead, tin, iron, antimony, tungsten, and platinum.

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