to implement the next steps in our long range plan, to-wit: 1) begin construction of an adjacent building to house doctors' offices, at an estimated cost of one million dollars and, 2) begin the planning stage for a parking garage to serve the hospital and office building. It would not be financially feasible to transfer our operations away from the L-K slide area and yet remain to serve the hi-density downtown area of Anchorage. To acquire land alone would be prohibitive. We urge the committee to take such steps as are necessary to stabilize the L-K slide area as the solution to this problem is crucial to our planning. Yours very truly, R. O. SUNIBORN, President, Board of Trustees. P.S.-We would appreciate being kept informed as to any decisions. PROBLEMS OF ALASKA SALE OF THE ALASKA RAILROAD AND AVIATION NEEDS OF ALASKA TUESDAY, JULY 7, 1970 U.S. SENATE, COMMITTEES ON PUBLIC WORKS AND COMMERCE, Anchorage, Alaska. The committees in joint session met, pursuant to call, at 2 p.m., in the Aleutian Room of the Anchorage Westward Hotel, Senator Mike Gravel presiding. Present: Senators Gravel, Jordan, Stevens, and Cook. Staff members present: M. Barry Meyer, counsel; and Bailey Guard, assistant chief clerk, minority. Senator GRAVEL. I call the hearing to order. Our first witness will be Mr. John E. Manley, the general manager of the Alaska Railroad. Mr. Manley, the floor is yours. Proceed at your leisure. STATEMENT OF JOHN E. MANLEY, GENERAL MANAGER, ALASKA RAILROAD; ACCOMPANIED BY HAROLD HEISS, SPECIAL ASSISTANT TO THE FEDERAL RAILROAD ADMINISTRATOR, DEPARTMENT OF TRANSPORTATION Mr. MANLEY. Thank you, Mr. Chairman. My name is John E. Manley and I reside at Anchorage, Alaska. I am presently General Manager of the Alaska Railroad and have held that position since March 4, 1962. I am accompanied by Mr. Harold Heiss, Special Assistant to the Federal Railroad Administrator. I regard it as a privilege and a pleasure to appear before this committee and offer a short briefing statement together with certain exhibits concerning the Alaska Railroad. The Alaska Railroad was located, built, and is operated by the Federal Government under the act of March 12, 1914 (38 Stat. 305). A copy of this act is submitted for the convenience of this committee and I have labeled this exhibit 1. The authority to construct and operate the Railroad was vested by that act in the President who, by Executive Order 2129 of January 26, 1915, delegated this authority to the Secretary of the Interior. After completion of the Railroad in 1923, the President, in Executive Order 3861, authorized and directed the Secretary of the Interior to operate the Railroad. On April 25, 1965, the President superseded Executive Order 3861 with Executive Order 11107 which continued the authority of the Secretary of the Interior to operate the Alaska Railroad but con ferred certain powers to the Interstate Commerce Commission with regard to tariffs of the Alaska Railroad. The Railroad now operates as a Bureau of the Federal Railroad Administration. The Alaska Railroad maintains 541 miles of right-of-way although we are presently operating only 521 miles exclusive of yard tracks and sidings. Yard tracks and sidings constitute about 125 additional miles of trackage. I might add, Mr. Chairman and members of the committee, that is occasioned by the conversion of the military bases from coal to gas and eliminating the need for the trackage from Jonesville down to Palmer. The Alaska Railroad presently maintains a fleet of 1,908 revenue freight cars, 35 pieces of passenger equipment, 52 locomotives, 257 pieces of on-track work equipment and a substantial roster of onhighway delivery equipment and containers, and I would like to introduce for the record and the convenience of the committee the Alaska Railroad Equipment Register No. 12-I (I.C.C.-F-77) as supplemented by Supplement No. 1. This has been labeled for the convenience of the clerk and the committee as exhibit 2. I might add at this point, Mr. Chairman, that this publication is in a state of constant revision because of the acquisition of new equipment and the retirement of old equipment. In between successive publications of this Railroad Equipment Register, the railroad industry, nationwide, is kept advised on a current basis by the listing the Alaska Railroad maintains in "The Official Railway Equipment Register”— I.C.C.-R.E.W. No. 374, issued by E. J. McFarland. The Alaska Railroad is under a mandate from Congress to operate within its revenues. As a matter of fact, the Railroad has not requested an appropriation for operating expenses since 1939 and, with the exception of the 1964 earthquake, has not requested an appropriation for capital improvements and replacements since fiscal year 1956. The Alaska Railroad ended the 1969 fiscal year with a net revenue of $313,000 after depreciation charges of slightly more than $2,400,000. For the record and the convenience of this committee I would like to tender to the committee exhibit 3 which is a summary statement of operations for the year ended June 30, 1969. During the 1969 fiscal year, The Alaska Railroad handled a total of 1,339,228 revenue tons for a ton-mile total of 227,096,000 tonmiles. During the same period, the Alaska Railroad handled 71,536 passengers for a passenger-mile total of 11,259,481. For the convenience and reference of the committee, I would like to tender exhibit 4 supporting the above figures. This exhibit is comprised of Monthly Detail of Rail Line Revenue Freight Traffic for the month of June 1969 and the year ended. June 30, 1969, Monthly Report of Revenue Freight Commodity Statistics for the same period, the Monthly Report of Revenue Freight Commodity Statistics for the month of June 1969, a freight traffic summary for the month of June 1969 and the year to date, Analysis of Carload Freight Tonnage, and Bureau of the Budget Form OS-D for the month of June 1969 and the year. Although fiscal year 1970 has now been completed, we do not as yet have our June statistics and revenue picture completed because it is necessary to close out the entire year to produce the June statement. As of the end of May 1970, we have handled 1,287,000 tons of freight for a ton-mile total of 248 million ton-miles, and we have handled for the same period 62,873 passengers, for a passenger-mile total of 9,855,376 passenger-miles. We anticipate our financial results will approximately equal the net figures for fiscal year 1969. For the record and the ready reference of committee members, I would like to present exhibit 5 which comprises the same information as contained in exhibit 4 except that it is for the fiscal year 1970 up to and including the end of May 1970. The Alaska Railroad's salable assets as of May 31, 1970, total $131,293,126.58, exclusive and I must emphasize exclusive-of most real estate. From this amount must be deducted the following items: (a) Cash, trust, and deposit accounts_ (b) Accounts receivable (net). (c) Prepaid expenses (which is an informational film on The Alaska Railroad)-- (d) Undistributed charges (expenses) $6, 803, 555. 00 3, 852, 532. 11 4, 321. 82 1,049, 421. 21 Leaving a net total of salable assets of $119,583,296.44. It must be emphasized that these figures do not include the value of 36,323 acres of real estate presently under control of the Alaska Railroad and which have been withdrawn from the public domain. The above figures do, however, include some 2,111 acres of land which have been purchased by the Alaska Railroad. For edification, this is from Old Alaska Central, Old Alaska Northern and from other pieces that we had to purchase because they were no longer in the public domain. For the ready reference of this committee I am submitting as exhibit No. 6 a breakdown of the land reserves of the Alaska Railroad which will indicate, by location, the acres purchased and the cost thereof and, by location, the acres which are under the control of the Alaska Railroad but which were withdrawn from the public domain. After reviewing the strenuous schedule of this committee and the vast areas you are covering in a short span of time, I have purposely condensed my oral statement. In the hope that you will find time while airborne, I would like to submit for your perusal and reading, while airborne, exhibit No. 7 which is a short history of the Alaska Railroad which was written by Dr. E. M. Fitch shortly before his retirement as assistant to the general manager. I would also like to tender, in view of the itinerary, a copy of Dr. Fitch's book published by the U.S. Government agencies and departments, and on the longer flights I think this will fill you in. This concludes my prepared statement, Mr. Chairman and members of the committee, and I would be happy to attempt to answer any questions which the committee may see fit to ask. If I am unable to provide precise answers for the committee, I would greatly appreciate the privilege of having this committee's permission to obtain the precise information requested and furnish it to the clerk of the committee within the prescribed period of time. Thank you very much for the opportunity of testifying. Senator GRAVEL. Mr. Manley, in my short career in the Senate I have been on a number of hearings and I think your testimony is certainly the most complete statement with the appendix that I have yet to see, and for that I congratulate you. 49-577 0-707 Mr. MANLEY. Thank you very much, Mr. Chairman. EXHIBIT NO. 1 ALASKA RAILROAD ENABLING ACT UNITED STATES CODE TITLE 48 SEC. 301. Railroads; location, construction, and operation; free passes. The President of the United States is empowered, authorized, and directed to adopt and use a name by which to designate the railroad or railroads and properties to be located, owned, acquired, or operated under the authority of sections 301, 302, and 303-308 of this title; to employ such officers, agents, or agencies, in his discretion, as may be necessary to enable him to carry out the purposes of said sections; to authorize and require such officers, agents, or agencies to perform any or all of the duties imposed upon him by the terms of said sections; to detail and require any officer or officers in the Engineer Corps in the Army or Navy to perform service under said sections; to fix the compensation of all officers, agents or employees appointed or designated by him; to designate and cause to be located a route or routes for a line or lines of railroad in the Territory of Alaska not to exceed in the aggregate one thousand miles, to be so located as to connect one or more of the open Pacific Ocean harbors on the southern coast of Alaska with the navigable waters in the interior of Alaska, and with a coal field or fields so as best to aid in the development of the agricultural and mineral or other resources of Alaska, and the settlement of the public lands therein, and so as to provide transportation of coal for the Army and Navy, transportation of troops, arms, munitions of war, the mails, and for other governmental and public uses and for the transportation passengers and property; to construct and build a railroad or railroads along such route or routes as he may so designate and locate, with the necessary branch lines, feeders, sidings, switches, and spurs; to purchase or otherwise acquire all real and personal property necessary to carry out the purposes of said sections; to exercise the power of eminent domain in acquiring property for such use which use is declared to be a public use, by condemnation in the courts of Alaska in accordance with the laws now or hereafter in force there; to acquire rights-of-way, terminal grounds, and all other rights; to purchase or otherwise acquire all necessary equipment for he construction, and operation of such railroad or railroads; to build or otherwise acquire docks, wharves, terminal facilities, and all structures needed for the equipment and operation of such railroad or railroads; to fix, change, or modify rates for the transportation of passengers and property, which rates shall be equal and uniform, but no free transportation or passes shall be permitted except that the provisions of the interstate commerce laws relating to the transportation of employees and their families shall be in force as to the lines constructed under said sections; and except also that the issuance of passes to ministers of religion, traveling secretaries of Railroad Young Men's Christian Associations, and persons exclusively engaged in charitable and eleemosynary work when engaged in their work in Alaska; to indigent, destitute, and homeless persons inmates of hospitals and charitable and eleemosynary institutions, and to such persons when transported by charitable societies or hospitals and the necessary agents employed in such transportation; to newsboys on trains, persons injured in wrecks, and physicians and nurses attending such persons; the interchange of passes for the officers, agents, and employees of common carriers, and their families; and the carrying of passengers free with the object of providing relief in cases of general epidemic, pestilence, or other calamitous visitation is permitted: to receive compensation for the transportation of passengers and property, and to perform generally all the usual duties of a common carrier by railroad; to make and establish rules and regulations for the control and operation of said railroad or railroads; in his discretion, to lease the said railroad or railroads, or any portion thereof, including telegraph and telephone lines, after completion under such terms as he may deem proper, but no lease of such railroad or railroads shall be for a longer period than twenty years and no other lease authorized in sections 301, 302, and 303-308 of this title shall be for a longer period than fifty-five years, or in the event of failure to lease, to operate the same until the further action of Congress. If said railroad or railroads, including telegraph and telephone lines, are leased under the authority given under said sections, then and in that event they shall be operated under the jurisdiction and control of the provisions of the interstate commerce laws; to purchase, condemn, or otherwise acquire upon such terms as he may deem proper, |