For many years the production of copper has exceeded all other minerals, hence any appreciable decline in the quantity produced or in the price of the metal is reflected in the value of mineral production of the Territory. During the year 67,778,000 pounds of copper, valued at $9,489,000, was produced as compared with 73,855,298 pounds, valued at $10,361,336, for the preceding year.

The Federal Government and the Territory are endeavoring to stimulate mining, the former by the construction of roads and trails and the latter by participating in trail construction and also by offering to pay transportation in certain instances to bona fide prospectors. The success of this plan will determine future policy for Territorial assistance to prospectors.

The coal-mining industry shows little improvement since last year. Practically all of the production came from the mines in the Matanuska Valley and the Healy River field. Many improvements have been made at the mines, both in equipment and mining methods, hence it is expected that the quality of the coal placed on the market will improve and the cost of production be reduced. In the Matanuska field the Alaska Railroad standardized the track from the main line to the Moose Creek mines and this will facilitate the shipping of coal from this district. It is estimated that the domestic consumption of coal in Alaska is less than 160,000 tons per annum. and last year about 70,000 tons of this was imported.

The petroleum production was confined to the Katalla field as in former years. The oil is obtained from a number of shallow wells and is refined in the vicinity. The production is limited and the product disposed of locally at a price somewhat higher than the imported product. The oil-drilling operations on Pearl Creek Dome near Becharoff Lake in the Alaska Peninsula were discontinued early in 1926. One well was drilled to a reported depth of 5,034 feet before it was abandoned. There are other favorable localities in this region and no doubt other wells will be drilled in the district in an effort to find the source of the seepage oil that is present. Another company is drilling near Johnson Creek in the Yakataga oil field on the southern coast of Alaska, east of Katalla, but the well has not reached sufficient depth to determine the presence of oil in commercial quantities.

There are extensive deposits of marble in southeastern Alaska but only one quarry is operating at the present time. The deposits are favorably situated near tidewater and the marble is of excellent quality for building, some even approaching statuary grade, hence there is no question but that they will be worked more extensively in the future.

The pack of canned salmon, 6,652,882 cases, was the greatest in the history of the Territory, exceeding that of the previous largest pack, 1918, by 47,000 cases. This was the outstanding feature of the year. All fishing districts in Alaska shared the prosperity. This extraordinary abundance of salmon along the entire coast must be attributed to widespread favorable conditions in the sea, the nature of which are unknown. Unfortunately the conditions during the latter part of the year indicated that the season of 1927 will not be favorable for a normal pack and a material reduction may be antici pated. The total active investment in the fisheries was estimated to

be $74,557,522, of which 81 per cent was invested in the salmoncanning industry. This investment exceeded that of 1925 by 11 per cent and the increase is accounted for in the larger investment in operating capital and wages paid in central and western Alaska. The total investment was distributed as follows: $35,756.318 in Southeastern Alaska, $19,904,739 in central Alaska, and $18,896,465 in western Alaska. The total value of the fisheries products in 1926, exclusive of aquatic furs, was $54,669,882, an increase of $14,631,137 over the preceeding year.

The knowledge gained by the experience in the administration of the fisheries indicated that certain changes in the regulations were desirable, accordingly, late in 1925 a careful revision was made and new regulations were promulgated early in 1926. Changes were made in the quantity of gear permitted in certain districts, additional areas were closed to commercial fishing and weekly closing periods were extended. Possibly the most important change was the granting of privileges for taking of herring for bait purposes which was made possible by authority given to the Secretary of Commerce under the act of June 18, 1926. Patrol of all of the important fishing areas was continued throughout the season and the Commissioner of Fisheries was in Alaska for several weeks, during which time he gave his personal attention to the many problems that arose.

The unusually successful operations in the herring fisheries in 1925 invited new investments in 1926. Sixty-one plants, employing 2,101 people and representing an investment of $6,808,395, were in operation as compared with 54 plants, employing 1,839 people and an investment of $6,108,494, in the preceding year. Contrary to expectations, there was a decline in the production of the herring fisheries, especially in the Afognak and Prince William Sound districts. In outheastern Alaska there was no appreciable decrease in the supply, but the fish were smaller than usual. This resulted in a decrease in the number that were packed for food purposes and an increase in the Lamber that were used in the manufacture of meal and oil.

The production of the halibut fisheries increased 31 per cent over the production of 1925. This increase is attributed to the fact that more boats were engaged in fishing. The cod fisheries suffered a decline in the value of investment and of products, as well as the Lamber of people employed.

The value of the products from the whaling industry increased hghtly during the year. Five hundred and eighty-one whales were caught, and the total value of the products was $679,814.

FUR SEALS

The number of seals in the herds on the Pribilof Islands is estimated to be 761,281, an increase of 38,231, or 5.29 per cent over the preceding year. During the year two public auction sales of seal kins from the Pribilof Islands were held at St. Louis, Mo. Twentyne thousand three hundred and two skins were sold for a gross price of $745.410. The increase in the seal herds is due to the protection afforded by the Government, and, unquestionably, if this protection Tere withdrawn the herds would be decimated and in a short time disappear.

The report of the general manager of the Alaska Railroad indicates satisfactory progress. For the first time in the history of the project the deficiency for operation was less than $1,000,000.

The revenue increased 26.6 per cent while the cost of operation and maintenance increased 3.9 per cent. Operating ratio decreased from 199.9 in the previous year to 164.8 for the year ended June 30, 1927. The total deficit for all expenditures, including charges to capital account, decreased $419,556, or 22.8 per cent less than last year, while the deficit for all expenses except charges to capital account decreased 23.7 per cent. The total commercial tonnage amounted to 82,416 tons, an increase of 17,380 tons, or 26.7 per cent more than for last year, while the total tonnage including railroad freight increased 11.3 per cent. There were 53,609 revenue passengers carried as compared to 57,567 for the previous year. The transportation revenue from the rail lines increased $251,390, or 30.6 per cent. There was a general increase in the shipments of all commodities, especially in mining machinery and supplies. The train service was improved to meet the demands of the increased traffic during the tourist season.

The boat service on the Yukon and Tanana Rivers operated in conjunction with the rail service between Seward and Fairbanks was improved by extending the route to Marshall, a distance of 135 miles. This is a distinct improvement in transportation facilities in the lower Yukon River.

Alaska cooperates with the Federal Government in the construction of roads and trails. A comprehensive plan of development has been adopted that, when completed, will provide the Territory with a well-coordinated system of transportation routes. The Alaska Road Commission has jurisdiction over Federal projects outside of the national forests and all forest roads within national forests are authorized by the Forest Service and constructed by the Bureau of Public Roads. Prior to March 1, 1927, the work of the Bureau of Public Roads in Alaska was supervised by the district office at Portland, Oreg. The work had increased to such an extent that it was deemed advisable to create a district in Alaska with a district engineer in charge. The change became effective March 1, 1927, and greatly facilitates the administration of the road work in the national forests in the Territory.

During the year 41.1 miles of new roads were under construction within the national forests. In addition to this, approximately 168 miles of roads were improved and maintained. Three parties were in the field making preliminary surveys for trails to remote and inaccessible areas in the national forests. These trails will permit prospectors and miners to reach unexplored regions and eventually aid in the development of the Territory.

The Alaska Road Commission constructed 76 miles of wagon road. 135 miles of sled road, and 3871⁄2 miles of trail; reconstructed 96 miles of wagon road; graveled 100 miles of wagon road, and maintained 1,067 miles of wagon road, 85 miles of tramway, 758% miles of sled road, 4,6921⁄2 miles of permanent trail, 313 miles of temporary trail. In addition to the above, the commission constructed for the Territory 16 airplane landing fields and 19 shelter cabins and maintained 400 miles of telephone lines, 4 airplane landing fields,

and 25 shelter cabins.

Since its organization in 1905 the Alaska Road Commission has expended $12,028,339.42 in the Territory. Of this amount, $7,900,000 was appropriated by the aid of Congress. $3,308.443.98 was allotted from the Alaska fund, and $819,895.44 derived from Territorial appropriations.

Federal funds for roads in the national forests are provided by the Federal highway act of June 11, 1916, and since that date $3,488.555.55 has been expended by the Bureau of Public Roads in and jacent to the national forests. Of this amount, $253,645 has been made available by Territorial appropriations and $3,234,940.85 allotted from Federal funds.

The responsibility for the protection of game and fur-bearing animals in the Territory is in the Alaska Game Commission. The embers of the commission are appointed by the Secretary of Agriculture and the executive officer is the chief representative of the Biological Survey in Alaska. Rules and regulations governing hunting and trapping are prepared by the commission and promulgated by the Secretary of Agriculture. In some instances the regulations lid not meet existing conditions and changes were made in the length of the open seasons. For a number of years trapping of beaver has Lot been permitted and as a result these animals multiplied until it was evident that trapping could be resumed without danger of exterination. The month of May was designated as an open season and it is estimated that more than 20,000 beaver were caught. The present system of sealing the skins has not been altogether satisfacory because of the lack of a sufficient number of game wardens and nability of some of the trappers to reach an officer authorized to eal the skins. This phase of the regulations is being studied and an ffort will be made to devise some other method of certification that will more nearly meet existing conditions and facilitate early shipment of the pelts.

The value of land fur-bearing animal pelts shipped from the Territory is estimated to be $2,349,640.

The Territorial legislature provided funds for stocking certain reas with fur and game animals. Beaver were placed on Baranof land and elk were sent to Kruzof Island. Reports received from stricts where beaver and muskrats were placed in 1925 indicate that The experiment is a success. An alarming increase in the numbers of solves and coyotes with a resulting damage to wild life was reported Tom several districts. The Alaska Legislature appropriated funds and authorized the employment of a skilled predatory animal hunter cooperation with the Biological Survey in an effort to destroy These animals.

Revenues from licenses, fines, and forfeitures collected by the comission amounted to $36.074.11. Fifty per cent of this was deposited with the Territorial treasurer and covered into the school fund. Seventy-eight nonresident hunters visited the Territory during the

ason.

The Territorial board of health cooperates with the United States Public Health Service and the United States Bureau of Eduation in suppressing contagious diseases and enforcing quarantine gulations. Smallpox vaccine and diphtheria antitoxin are supped, free of charge, to all localities where there is anyone qualified to administer them.

Practically all of the companies engaged in the fisheries insist that the nonresident employees shall submit to a physical examination before embarking for the Territory. These examinations are made by the United States Public Health Service free of charge, and this policy has resulted in a decided improvement in the physical condition of the personnel employed in the industry.

The Bureau of Education is responsible for the education and welfare of the natives. This involves administration of schools, hospitals, relief of destitution and supervision over the reindeer herds. A system of schools and hospitals is maintained throughout the Territory. Eighty-five schools with a total enrollment of 3,616 pupils were maintained during the year. Medical assistance was rendered by six hospitals situated at Noorvik, Akiak, Nulato, Kanakanak, Tanana, and Juneau. Supplementing the hospitals, nurses were employed in many villages. In many cases where local facilities were inadequate the patients were sent to Seattle for special

treatment.

Industrial schools have been established at Kanakanak and Eklutna, in the third judicial division, and White Mountain, in the second judicial division. These institutions receive and care for the native children and the results achieved more than justify the expenditures. The facilities for medical service and hospitalization are inadequate and every effort should be made to improve them. The hospital boat on the Yukon River was placed in commission about the 1st of June and started on the trip down the Yukon River. Prior to June 30, 852 patients were treated. This boat furnishes a service that can not be supplied in any other manner and ample funds should be provided for its maintenance. The buildings at Tanana formerly occupied by the United States Army were transferred to the Bureau of Education. A hospital has been established and plans should be made for developing this station so that ultimately it will be equipped with isolation wards for tubercular patients, a home for defective children, an industrial school, and headquarters for the hospital boat. Tanana is situated at a strategic point for such development. During the summer it is accessible by water transportation from all parts of the Yukon drainage basin and during the winter there are well-defined trails leading to nearly every section of the interior that is tributary to the river system. The other hospitals that are maintained by the Bureau of Education afford excellent facilities but they are all inadequate in that they are without isolation wards for tubercular patients or patients with contagious diseases. In most places these accommodations could be supplied at comparatively small expense and the value of the institutions would be greatly increased. The hospital at Juneau, especially, is in need of an isolation ward.

Last year Congress authorized the Secretary of the Interior to allocate and lease grazing lands in Alaska. This is of utmost impor tance to the industry. Approximately two-thirds of the reindeer belong to the natives and the herds are increasing so rapidly that some steps must be taken to protect the ranges from overgrazing, The most serious problem confronting the industry is that of dispos ing of the surplus animals. Recently one of the reindeer companies has developed a plan for the shipment of the best parts of the meat