service of any such owner or operator. Other words defined in the shipping act of September 7, 1916 (Thirty-ninth Statutes, page 728), as amended by the act of July 15, 1918 (Fortieth Statutes, page 909), shall have the same meaning when used herein. SEC. 10. That any violation of section 4 of this act shall be deemed and construed as a violation of the navigation laws of the United States and punished accordingly. Any violation of any other provision of this act or the failure of any carrier or other person to perform any other requirement imposed by this act, shall be punished by a fine of not more than $10,000. All fines so imposed shall be paid. when collected, to the treasurer of Alaska and by him credited to the maritime fund hereby created. SEC. 11. That so much of section 29 of the act of Congress approved June 6, 1900 (Thirty-first Statutes, pages 330-331), as imposes a license tax upon "freight and transportation lines" and "ships and shipping" in the Territory of Alaska is hereby repealed.

The governor and representatives of the Alaskan Territorial Shipping Board are here. They have been desirous of having a hearing so that they can present the proposition involved in this bill. They probably will want to leave before a great while, so the committee has decided to give them this opportunity to be heard this morning. We do not expect to take up the bill for any definite action upon it, but will give those who are present and desire to be heard the time this morning for that purpose.

Now, Governor, we will let you proceed in the order that you desire. Give your full name and residence.

STATEMENT OF HON. THOMAS RIGGS, Jr., GOVERNOR OF ALASKA, JUNEAU, ALASKA.

Gov. RIGGS. I am governor of Alaska and reside at Juneau. Senator CHAMBERLAIN. How long have you been in that country, Governor?

Gov. RIGGS. Off and on for 23 years. I went there first in 1897. I was away from Alaska for the period from 1901 to 1906, but every year I have been back there in connection with the Government engineering problems, the survey of the Alaskan boundary from 1906 to 1914; member of the Alaskan Engineering Commission, 1914 to 1917; and governor since then.

Senator CHAMBERLAIN. And you have been over the Territory pretty well?

Gov. RIGGS. I have covered it as thoroughly as one person can. I have traveled extensively throughout the Territory in every kind of conveyance. I understand the people, I think, as well almost as anyone else, and the conditions in the Territory. I will bring to your attention the conditions that brought around the introduction and passage of the Territotial act approved May 1, 1919, authorizing the Territory of Alaska to enter the transportation business.

The CHAIRMAN. We had probably better have a copy of that act put into the record, Governor.

Gov. RIGGS. I will present a copy of the act, Mr. Chairman. (The paper referred to follows:)

SESSION LAWS OF ALASKA, 1919, CHAPTER 32.

AN ACT Authorizing the Territory of Alaska, and incorporated cities therein, to engaged in maritime and river commerce; creating the Alaska Territorial Shipping Board and office of Territorial Shipping Commissioner, prescribing their powers and duties; defining the duties of the governor and attorney general of Alaska hereunder; providing for compensation of officers and employees of said board, making an appropriation for the purposes thereof, and declaring an emergency.

Whereas freight and passenger rates of the steamship companies engaged in transportation to the ports of Alaska have become, by reason of recent increases a burden on the people of the Territory of Alaska, and are excessive and exorbitant, and based upon the unreasonable hypothesis of paying a large percentage on inflated and watered capitalization; and

Whereas such burden is a tax upon the very existence of the Territory and a grave and ever-increasing menace to its development, and the people are unanimously demanding relief;

Now, therefore, for the purpose of affording relief from such exhorbitant and excessive rates and enabling the people to receive their supplies and ship their commodities at reasonable rates:

Be it enacted by the Legislature of the Territory of Alaska, That there is hereby created and established a board, to be known and designated as the Alaska Territorial Shipping Board, which shall consist of the governor of the Territory of Alaska, who shall be the chairman of the board, the treasurer of the Territory of Alaska, and the secretary of the Territory of Alaska, who shall serve without compensation as members of such board: Provided, That the members of the Alaska Territorial Shipping Board shall be reimbursed for all the necessary traveling expenses incurred by them in the actual performance of their duties as members of such board, upon the approval and authorization of the board.

SEC. 2. Authority is hereby vested in the shipping board created by this act to establish a general steamship freight and passenger service between different Alaskan ports and between Alaskan and other ports and upon any of the navigable waters of Alaska and elsewhere, and for this purpose shall perform all the duties generally performed by the board of directors of a private steamship company. They shall ap point a person to be designated as the Territorial shipping commissioner, who shall perform all the duties generally pertaining to the office of general manager of a private steamship company, shall hold office during the pleasure of the board, and shall receive such salary as may be fixed by the board, to be paid monthly upon warrant issued upon the Territorial treasurer, in the same manner as salaries of other Territorial officials are paid, to be paid from the appropriation provided herein.

SEC. 3. The shipping board shall have full power and authority to do everything necessary to carry on a steamship freight and passenger business, as herein provided, and shall have power to charter, purchase or contract for the construction of suitable vessels as the interests of the Alaskan trade require, not in excess of the funds available for such purposes under the provisions of this act: Provided, The authority in this act granted to said shipping board is not to be construed as mandatory, but said board, if in its judgment the relief sought for by this act can be secured by proper action before the courts, the Interstate Commerce Commission, the United States Shipping Board, or through any other proper means, is hereby authorized and empowered to take such remedial action as may be deemed necessary, and may pursue such remedy contemporaneously with the exercise of the powers above set forth.

SEC. 4. In the performance of their duties under the provisions of this act, the shipping board hereby created shall act as trustees for the Territory of Alaska, and all contracts entered into by them shall be made in the name of the Territory of Alaska by the Alaska Territorial Shipping Board as trustees for the Territory of Alaska and shall be signed by the chairman of the board and the shipping commissioner.

SEC. 5. The Territory of Alaska hereby consents to be sued in the name of the Territory on any and all causes of action growing out of any transaction or act of said shipping board in the performance of its duties as herein provided, and may bring such actions in the name of the Territory, upon the direction of the Alaska Territorial Shipping Board, for the enforcement of any rights or protection of any interests it may acquire under the provisions of this act.

SEC. 6. The governor of Alaska shall have the power to convene the shipping board whenever in his judgment the interests of the Territory demand it.

SEC. 7. A record of the proceedings of said shipping board shall be kept in the same manner as that of other territorial boards, and said shipping board shall publish, annually, a financial statement and report containing a summary of the business transacted by them.

SEC. 8. The attorney general of Alaska shall act as general counsel for the shipping board, but the board may employ and fix the compensation of such additional counsel as the interests of the Territory may demand.

SEC. 9. The incorporated cities of the first class of the Territory of Alaska situated on navigable waters are hereby empowered, either separately or two or more acting in conjunction, through their city councils, to establish a steam or motorship freight and passenger service between such cities and other ports or river points in Alaska or elsewhere, and for such purpose may levy special taxes on real and personal property: Provided, That the taxation for this and all other purposes shall not exceed 2 per cent of the assessed valuation of property within the city in any one year, may

impose business and trade licenses, and raise money by subscription or by the issuance of bonds when authorized by Congress: Provided, That no city shall enter into such business until such action has been voted for by a majority of the legal voters of such city at a special election called for the purpose. Any city taking advantage of the provisions of this act is hereby empowered to do all things necessary for the prosecution of the said business and may sue or be sued in the name of the municipality on any cause or action arising therefrom.

SEC. 10. It shall be the duty of the governor of Alaska and the attorney general of Alaska to cause a bill to be prepared and introduced in the Congress of the United States for a law authorizing the Territory of Alaska to issue bonds in any sum, not to exceed $5,000,000, the proceeds of the sale of such bonds to be used for the charter and purchase of vessels and to carry out the provisions of this act, and, if necessary, to cause a bill to be introduced in Congress validating any or all of the provisions of this act if its validity be questioned, and to lend their efforts to secure the passage of such bill or bills.

SEC. 11. The shipping board hereby created shall have power to make any needful rules and regulations for carrying on the matters intrusted to their management by the provisions of this act.

SEC. 12. There is hereby appropriated from the moneys of the Territorial treasury the sum of $300,000, to be paid by the territorial treasurer, as required, to the shipping board hereby created, upon requisition by the governor of Alaska.

SEC. 13. That an emergency is hereby declared to exist, and this act shall take effect upon and after its passage and approval.

Approved May 1, 1919.

Gov. RIGGS. In the spring of 1919 the transportation companies without warning, or without saying why it was necessary, again raised the tariffs, the freight and passenger tariffs. It seemed to the people of Alaska that this was arbitrarily done for the sake of gain. The freight and passenger rates seemed to the people of Alaska to be excessive, and there was a great deal of complaint. Every time the tariff was raised there was some industry cut off. There was loss of population. The population of the Territory was dwindling steadily. It has been laid very largely to the high, exorbitant freight rates. That was undoubtedly one of the prime factors.

In 1919, while the legislature was in session, it seemed that the only method by which to remedy the conditions was for the Territory of Alaska to enter into the steamship business, establishing rates and schedules to allow development. The members of the Territorial legislature expressed themselves as even being willing to suffer a slight loss. Several bills were introduced to meet the situation. The one finally adopted provided that the Shipping Board created by the act, consisting of the governor, the secretary of the Territory, and the treasurer, might investigate the situation thoroughly before taking any action in regard to the establishment of a steamship line. Senator CHAMBERLAIN. Was the act that you are now referring to an act of the Territorial legislature?

Gov. RIGGS. An act of the Territorial legislature; yes, sir.

Acting under that authority I retained, as special counsel for the Alaska Territorial Shipping Board, Mr. Maurice D. Leehey, of Seattle, Wash., who is an attorney practicing in both Seattle and in Alaska, with wide experience in Alaskan affairs. I also retained the services of Mr. Richard M. Semmes, who has been in the transportation business in Alaska for a great many years. For nine months they conducted their investigations and made a most exhaustive study of all the conditions affecting transportation in Alaska, and we have come down to Washington to present a remedial bill for the consideration of Congress. We believe that it will remedy conditions as to schedules and rates. We are asking the consideration of

the committee for this bill on its merits, because we think that it will cover the situation and remedy the existing evils. We hope that it will receive favorable consideration at the hands of Congress, and we put it up to their good judgment.

Now, I ask that Mr. Leehey may be treated as special counsel for the board.

Mr. Semmes will explain to you in detail all the investigations and the remedy suggested as embodied in Senate bill 4012.

Senator CHAMBERLAIN. Before you close-you speak of the transportation companies having done what seemed to be an arbitrary thing to the people up there in raising rates. What transportation companies do you have reference to?

Gov. RIGGS. We have the Alaska Steamship Co., commonly known as the Guggenheim Line, which operates some 15 vessels. Senator CHAMBERLAIN. That is between what points?

Gov. RIGGS. Between Puget Sound ports and Alaska, all ports in Alaska.

We have the Pacific Steamship Co., commonly known as the Admiral Line, which has about the same number of steamers, and operates similarly.

We have the Canadian Pacific Steamship Co., which operates from Vancouver, British Columbia, to four ports in southeastern Alaska. We have the Grand Trunk Pacific Coast Steamship Co., which did not operate passenger ships last year on account of going into the hands of a receiver, but which I understand is to operate this year, operating between Vancouver and Prince Rupert and the four main ports in southeastern Alaska.

Then we had the steamer Humboldt up to the year 1918, and there was a small independent steamship company, called the Seattle Steamship Co., which operated two ships. There have been other spasmodic attempts at ship operation also.

Senator CHAMBERLAIN. Now those constitute the only lines?

Gov. RIGGS. They constitute the only lines, the only common carrier lines. The big interests up there, such as the canners, some of the mining companies, and the Alaska Codfish Co. operate steamers for their private interests.

Senator CHAMBERLAIN. Do they operate between Alaskan ports and ports in the States, like Seattle, Portland, and San Francisco? Gov. GIGGS. Yes, sir.

Senator CHAMBERLAIN. They are operated on their own account and not for general cargo work or general passenger work? Gov. RIGGS. Not as common carriers.

Senator CHAMBERLAIN. Now do these lines that you have mentioned operate in the bays and inlets, and in any of the rivers of Alaska in conjunction with any river steamers?

Gov. RIGGS. The two main companies, the Alaska Steamship Co. and the Pacific Steamship Co., connect at St. Michael in northern Alaska, near the mouth of the Yukon River, with the river steamers of the White Pass and Yukon route.

Senator CHAMBERLAIN. Are they owned in part or entirely by the steamship companies?

Gov. RIGGS. The river steamers ?
Senator CHAMBERLAIN. Yes.

Gov. RIGGS. I believe that they are absolutely independent. They are owned largely by British capital.

All the four steamship companies, which I first mentioned, call at Skagway, which is on Lynn Canal in southeastern Alaska, connecting with the White Pass and Yukon routes, their rail route, which also further connects at the head of navigation at White Horse with their river steamers. So the transportation on the Yukon River controlled by the White Pass and Yukon routes is met at each end of their line by ocean transportation.

Senator CHAMBERLAIN. And you think they are independent lines? Gov. RIGGS. I believe them to be an independent line.

Senator CHAMBERLAIN. Except in so far as they may have traffic arrangements?

Gov. RIGGS. They have traffic arrangements, yes, sir; joint traffic arrangements.

Senator CHAMBERLAIN. Well, when the rates of these steamship companies were raised from the States into Alaskan ports, was there a corresponding increase in the rates on the river streamers?

Gov. RIGGS. There was an increase. I can not tell you offhand what that increase is, but the transportation charges on the Yukon River are very burdensome. The increase in rates has assisted to curtail the production of placer gold, low grade placers of the interior, the bonanza workings having been largely exhausted. The base rates from Seattle to Fairbanks, I am under the impression, is about $60, which is a horrible handicap to the operation of a low grade mine with the present depreciated value of gold.

Senator CHAMBERLAIN. Now, I interrupted you, Governor. Just go ahead in your own way.

Gov. RIGGS. I have retained the best counsel and the best traffic adviser available. These gentlemen have made an exhaustive study of the whole question. What we consider to be a curative act has been thought out by Mr. Semmes, and they can give you a much clearer, exhaustive explanation of our purposes than I can, because they have been constantly on the job for nine months, and unless there are some other questions to be asked me, I shall ask that Mr. Semmes be called as the next witness.

I have just been reminded that the Grand Trunk Pacific operated freighters last year, but not passenger ships.

Senator CHAMBERLAIN. Between what points?

Gov. RIGGS. Between British Columbia points and Alaska, southeastern Alaska.

Senator CHAMBERLAIN. Was there any active competition between them and the other transportation companies that you speak of, or did they charge practically the same rates?

Gov. RIGGS. The rates where they can be compared, take the merchandise rates into Puget Sound and their passenger rates, are identical with those of American companies. There is a differential between British Columbia ports, such as Prince Rupert, which is on the Grand Trunk, the terminus of the Grand Trunk Pacific, and Vancouver, the terminus of the Canadian Pacific Railroad. There is a differential there.

Senator CHAMBERLAIN. In favor of whom?

Gov. RIGGS. Of Prince Rupert, which is nearer Alaska.