« PreviousContinue »
PRIBILOF ISLAND FUR SEAL SALES
Review of the Administration of Fur Sealskin Operations in the Pribilof Islands
THURSDAY, SEPTEMBER 23, 1965
SUBCOMMITTEE ON FOREIGN AID EXPENDITURES,
The subcommittee met at 10:05 a.m., pursuant to notice, in room 3302, New Senate Office Building, Senator Ernest Gruening (chairman of the subcommittee) presiding.
Present: Senators Gruening and Metcalf.
Also present: Herbert W. Beaser, staff director; William J. Walsh III, professional staff member; and Mary S. Glotfelty, clerk, Subcommittee on Foreign Aid Expenditures. Also, Glenn K. Shriver, professional staff member, Committee on Government Operations.
OPENING STATEMENT OF THE CHAIRMAN
Senator GRUENING. The committee will come to order.
For the record, I would like to report that the hearings and review of the administration of fur sealskin operations in the Pribilof Islands, the use of funds received from the sale of sealskins, and other related matters were undertaken by this subcommittee pursuant to an authorization from the chairman of the full committee dated August 25, 1965.
At this time, I shall insert in the record a copy of a letter from me addressed to the chairman of the Committee on Government Operations, dated August 19, together with a copy of his reply to that communication dated August 24, 1965.
REQUEST FOR AUTHORIZATION TO CONDUCT A REVIEW OF THE ADMINISTRATION OF FUR SEALSKIN OPERATIONS IN THE PRIBILOF ISLANDS BY SENATOR ERNEST GRUENING, AND APPROVAL BY SENATOR JOHN L. MCCLELLAN, CHAIRMAN OF THE COMMITTEE ON GOVERNMENT OPERATIONS
Hon. JOHN L. MCCLELLAN,
COMMITTEE ON GOVERNMENT OPERATIONS,
Chairman, Committee on Government Operations,
DEAR MR. CHAIRMAN: This is to bring to your attention a serious situation affecting the economy and efficiency of the operations of the Federal Government in carrying out the provisions of the convention of February 9, 1957, between the
U.S.S.R., Japan, Canada, and the United States, the administration of the provisions of title 16, chapter 5, of the United States Code governing the protection of fur seals and other fur-bearing animals, and the relationships of the inhabitants of those islands both to the Federal Government and to the State of Alaska. Involved in these operations are the Fish and Wildlife Service of the Department of the Interior; the Department of State in its overall responsibility for the carrying out of the convention and in its relationships to Japan, U.S.S.R., and Canada (which, under the convention, are to be given a portion of the fur seals permitted to be taken annually); the Coast Guard under the Department of the Treasury; the Department of the Navy; and the State of Alaska.
The sale of fur seals is the only nationalized industry in the United States. By statute, the processing and sale of fur seals, after being taken under regulated conditions by the inhabitants of the Pribilof Islands, is conducted for the account of the United States by a private concern under contract with the Fish and Wildlife Service of the Department of the Interior. The administration of the Pribilof Island Reservation and the regulation of the approximately 700 inhabitants of the islands are also vested in the Fish and Wildlife Service.
Under the Alaska Statehood Act, 70 percent of the net proceeds from the sale of processed fur seals is to be given to the State of Alaska.
This year, through a combination of bureaucratic bungling and inexcusable delay on the part of the Department of the Interior and that same Department's overexpenditure of funds from the sale of processed fur seals, more was spent on expenses and departmental programs than was received from the sale so that the State's 70 percent of net proceeds amounted to 70 percent of nothing.
The contract for the processing of Alaska fur seals had been held by the Fouke Fur Co. for more than 40 years. The company is regarded by the luxury fur trade of the world as the best processor of sealskins in operation. The Department of the Interior, in June 1962, quite suddenly announced the cancellation of its contract with the Fouke Fur Co. as of December 31, 1962, and called for new proposals. It was not until March 1963 that an award of a new contract was announced to a company known as Supara, of Chicago-a nonexistent company. After protests to the Comptroller General by the Alaska congressional delegation and Fouke Fur Co., the Comptroller General ruled that the award to Supara had been illegal. New bids were called for and finally, in May 1965 almost 3 years from the time the Interior Department announced it would receive proposals for the processing contract, the Department of the Interior awarded the contract to the Fouke Fur Co., whose contract had been terminated in December 1962.
This unconscionable and inexcusable delay in awarding the contract raises the question of whether the Fish and Wildlife Service is the proper agency to administer the processing and sales part of the convention or whether it could not be administered more effectively, efficiently, and economically for the United States by the Department of Commerce or by the State of Alaska itself.
The numerous complaints received from the inhabitants of these islands raises the question as to whether their health, welfare, and educational needs could not be better served through the Indian Bureau of the Department of the Interior, through the Department of Health, Education, and Welfare, or through existing agencies of the State of Alaska itself.
The overexpenditure of funds received from the sale of processed fur seals, leaving nothing to be turned over to the State of Alaska, is a clear breach of faith with the State which, in the Alaska Statehood Act, was assured that there would be "net" from which the State could be given 70 percent.
The situation calls for a thorough investigation so that all the facts involved can be brought to light. In view of the number of Federal and State agencies involved and the involvement of Japan, U.S.S.R., and Canada, this seems to be an appropriate subject for investigation by the Senate Committee on Government Operations.
In view of my familiarity with the subject and the scope of the activities of the Subcommittee on Foreign Aid Expenditures you might deem it appropriate to instruct that this investigation be conducted by that subcommittee.
With best wishes, I am,
ERNEST GRUENING, Chairman.
Hon. ERNEST GRUENING,
COMMITTEE ON GOVERNMENT OPERATIONS,
Chairman, Subcommittee on Foreign Aid Expenditures,
August 24, 1965.
DEAR SENATOR GRUENING: In accordance with your suggestion in your letter addressed to me under date of August 19, 1965, I am hereby delegating to your Subcommittee on Foreign Aid Expenditures authority to conduct studies, or hearings if necessary, into problems relating to the utilization of the proceeds obtained from the sale of processed fur seals on the Pribilof Island Reservation. Should your investigation of the administration of Pribilof Island Reservation regulations now affecting the approximately 700 inhabitants of the islands, and the sale of fur seals by the Fish and Wildlife Service of the Department of the Interior, warrant action by the full committee, the recommendations of your subcommittee will be given careful consideration.
With kind regards and best wishes, I am,
JOHN L. MCCLELLAN, Chairman.
Senator GRUENING. Alaska fur seals are unique throughout the world. Their availability in Alaska was a large factor in the decision. in 1867 to purchase Alaska. This being an Alaskan resource, but with some of the final product going to foreign countries, the Alaska Statehood Act contained a provision for the continued operation of the Pribilof fur seal operation by the Federal Government but with a proviso that the net proceeds from the sale of this Alaskan natural resource, the fur seals, were to be divided 70 percent to the State of Alaska, and 30 percent to the Federal Government.
Shortly after the purchase of Alaska the 41st Congress (1870-71) recognized the importance of the fur seal industry by making the Pribilof Islands a reservation and giving a 20-year exclusive concession to a private San Francisco company named the Alaska Commercial Co., later succeeded by the North American Commercial Co. The Alaska fur seals have their breeding grounds on the two small, fogbound islands of St. Paul and St. George which, with two smaller adjacent islands in the southern Bering Sea, constitute the Pribilofs. Conservation of the herd has been a problem over the years even when the Pribilofs belonged to the Russians and measures had to be taken for their conservation. Pelagic sealing the taking of the seals at sea-increased rapidly so that while in the late 1870's only 1 vessel was hunting seals in that area, by 1894 the number of vessels had increased to 100.
The leasing law of 1870 forbade pelagic sealing and was, of course, an effective curtailment of the Alaska Commercial Co. but not upon vessels of other nations, notably, those of Canada, Japan, and Russia. In 1911, a treaty (37 Stat. 499) was entered into between Japan, Canada, Russia, and the United States; forbidding pelagic sealing and dividing the take of seals annually on the Pribilof Islands among those four nations. Supervision and administration of the operation would be conducted by the Federal Government.
The treaty was renewed from time to time. The 1911 International Convention providing for the preservation and protection of fur seals and the Interim Convention on Conservation of North Pacific Fur Seals of 1957 will be inserted in the hearing record as exhibit 1 (see p. 51). The 1911 treaty was implemented by statute which will appear in the hearing record as exhibit 2 (see p. 60).