tory and their States to become commonwealths immediately so they would not have to pay any taxes. This is, of course, in jest. I would like to say a few more words so that I may not be misunderstood. I am opposed to commonwealth. I am for statehood because I think that the potentialities of Alaska can be realized only in the traditional American pattern of statehood. Senator O'MAHONEY. How can you have commonwealth status for an incorporated territory? Delegate BARTLETT. I do not believe you can. Senator JACKSON. I think the only doctrine of commonwealth status is predicated on the assumption that you should not bring into the Union an area that is not contiguous to the United States. The real history of the commonwealth approach is that commonwealth is one last step before final independence. The Philippines had a commonwealth status. The juridical definition of commonwealth status would mean that you would be laying the foundation for the independence of Alaska and Hawaii and it would certainly, in the case of Alaska, give the Russians an opportunity to bring it into the United Nations. The Russians still claim Alaska. If we are to grant the independence, I am sure they would insist that the contract and negotiations in the Seward administration be reopened and maybe the contract set aside for fraud and undue influence and a few other things. Delegate BARTLETT. I believe the Secretary of Interior in making his statement said Alaska became an incorporated Territory in 1912. The Supreme Court last week in the Tee-Hit-Ton case in its decision declared that Alaska became incorporated at the time of purchase from Russia in 1867 and there is some question there as to whether it became an organized Territory in 1884 or 1912. I will Senator JACKSON. I have some reports in addition to those already in the record which have been submitted to the committee. direct that they be included in the record at this point. (The reports referred to are as follows:) BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, Hon. JAMES E. MURRAY, Washington, February 9, 1955. Chairman, Committee on Interior and Insular Affairs, United States Senate, Washington, D. C. My DEAR Mr. CHAIRMAN: This is in response to your letter of January 31, 1955, requesting a report with respect to a bill, S. 49, to enable the people of Hawaii and Alaska each to form a constitution and State government and to be admitted into the Union on an equal footing with the original States. It is noted that this bill contains provisions in both section 115 and section 217 which would provide for the readjustment of the Federal Reserve districts so as to include any new State admitted to the Union and require national banks in such new State to become members of the Federal Reserve System. These provisions were recommended by the Board of Governors for inclusion in both the Alaskan and Hawaiian statehood bills when such bills were under consideration by the Congress in previous years, and the Board hopes, therefore, that these provisions will be retained in the present bill. In view of the fact that your letter requested that this report be expedited, since hearings are scheduled to begin during the week of February 7, 1955, time has not permitted the Board to ascertain from the Bureau of the Budget whether this legislation is in conformity with the program of the President. Sincerely yours, Wм. MCC. MARTIN, Jr. Hon. JAMES E. MURRAY, INTERSTATE COMMERCE COMMISSION, Chairman, Committee on Interior and Insular Affairs, United States Senate, Washington, D. C. DEAR CHAIRMAN MURRAY: Your letter of January 31, 1955, addressed to the Chairman of the Commission and requesting a report on a bill, S. 49, introduced by you (for yourself and 25 other Senators), to enable the people of Hawaii and Alaska each to form a constitution and State Government and to be admitted into the union on an equal footing with the original States, has been referred to our Committee on Legislation and Rules. After careful consideration by that committee, I am authorized to submit the following comments in its behalf: Whether or not statehood should be granted to the Territories of Hawaii and Alaska is a political question on which we express no opinion. S. 49 is divided into two major parts, title I, providing for the admission of Hawaii into the Union, and title II, providing for the admission of Alaska. Section 113, title I, of the bill reads as follows: "All territorial laws in force in the Territory of Hawaii at the time of its admission into the Union shall continue in force in the State of Hawaii, except as modified or changed by this act or by the constitution of the State, and shall be subject to repeal or amendment by the Legislature of the State of Hawaii, except as hereinbefore provided with respect to the Hawaiian Homes Commission Act, 1920, as amended; and the laws of the United States shall have the same force and effect within the said State as elsewhere within the United States." Comparable provisions, applicable to Alaska, are set forth in the second paragraph of section 207 (a), title II, of the bill. By reason of the foregoing provisions of the bill, it would appear in the absence of any other provision therein to the contrary, that the provisions of the Interstate Commerce Act, as amended, and other acts administered by or affecting this Commission and its functions would automatically apply to the proposed new States upon their admission into the Union without special provision therefor, and that such carriers, persons, and transportation activities in Hawaii and Alaska as would thereby become subject to the provisions of those acts would be brought within the jurisdiction of this commission to the same extent as such carriers, persons, and transportation activities in other States to which such laws apply are subject to our jurisdiction. In this connection, section 302 (i) of the Interstate Commerce Act in part defines "transportation in interstate or foreign commerce" subject to part III of the act, to mean transportation: "wholly by water from a place in a State to a place in any other State." *** In view of this language it would appear that enactment of S. 49 would operate automatically to bring water transportation between continental United States and Hawaii and to and from Alaska under the jurisdiction of this commission. Section 116, title I of the bill, however, contains the following provision: "Nothing contained in this or any other act shall be construed as depriving the Federal Maritime Board of the exclusive jurisdiction heretofore conferred on it over common carriers engaged in transportation by water between any port in the State of Hawaii and other ports in the United States, its Territories, or possessions, or as conferring on the Interstate Commerce Commission jurisdiction over transportation by water between any such ports." Under this provision the present authority of the Federal Maritime Board over transportation by water between ports in the United States and ports in Hawaii would be preserved. Transportation between those ports does not involve competition between different classes of carriers as contemplated by the national transportation policy, and there appears to be no reason why this commission should have jurisdiction with respect to such transportation. It is our understanding that the jurisdiction of the Federal Maritime Board with respect to water transportation to and from Alaska is substantially identical to that to and from Hawaii. However, there is no provision in title II of the bill comparable to the provisions of section 116, title I, as above quoted. Without such a provision, it would appear that, upon enactment of S. 49, jurisdiction over water transportation to and from Alaska would pass to this commission under the provisions of part III of the Interstate Commerce Act. In order that the present authority of the Federal Maritime Board over such transportation may be preserved, we suggest that title II of the bill be amended by renumbering the present "Sec. 222" as "Sec. 223," and adding a new section 222 reading as follows: "SEC. 222. Nothing contained in this or any other act shall be construed as depriving the Federal Maritime Board of the exclusive jurisdiction heretofore conferred on it over common carriers engaged in transportation by water between any port in the State of Alaska and other ports in the United States, its territories or possessions, or as conferring on the Interstate Commerce Commission jurisdiction over transportation by water between any such ports.' Editorially, we wish to call attention to several apparent errors in the bill. On page 11, line 2, the reference to section "4" probably should be changed to section “104,” and in line 24, the reference to section "1" probably should be changed to section "101." On page 30, line 4, the reference to section "5" apparently should be changed to section "205," and on page 42, line 17, the reference to section "7" should be changed to section "207." Respectively submitted, DEAR SENATOR MURRAY: This is in reply to your request of January 31, for a report on S. 49, a bill to enable the people of Hawaii and Alaska each to form a constitution and State government and to be admitted into the Union on an equal footing with the original States. The Department's overall position on this bill may best be set forth by quoting from the President's state of the Union address made to the Congress on January 6: "As the complex problems of Alaska are resolved, that Territory should be expected to achieve statehood. In the meantime, there is no justification for deferring the admission to statehood for Hawaii. I again urge approval of this measure.' The following additional comments and recommendations are limited to those aspects of the bill which would affect the national forests of Alaska under the jurisdiction of this Department: 1. Page 30, section 205 (a) of this bill would provide in part that the future State of Alaska be granted from the national forests a maximum of 400,000 acres of vacant and unappropriated land, provided that the lands so granted shall: a. Be adjacent to established communities or suitable for prospective community centers and recreational areas, and b. Have prior approval of the Secretary of Agriculture. This Department has no objection to the provisions of this section. 2. Page 34, section 205 (g) (1) would provide that in addition to the 25 percent of national forest receipts paid annually to all States for distribution to the counties in which national forest land is located, the future State of Alaska would receive annually an additional 121⁄2 percent of such receipts. After Alaska becomes a State it would have equal status with all other States with respect to receiving the 25 percent of national forest receipts paid to the States. This we believe to be equitable. However, we believe there is no justification for the new State of Alaska receiving 37% percent of national forest receipts while other States receive only 25 percent. Therefore, we suggest that the present section 205 (g) (1) be deleted. 3. Page 34, section 205 (g) (2) would release from escrow funds received from the sale of timber or land of the Tongass National Forest which are now held in a special account under authority of the Tongass Timber Sale Act of August 8, 1947 (61 Stat. 920) for the purpose of safeguarding possible payments in regard to the settlement of Indian or native claims to these land and timber values. This section would also, in lieu of such special account, authorize an appropriation in the amounts necessary to pay such judgments, if any, as may result from adverse native claims to such timber or lands. The provisions of the Tongass Timber Sale Act prevent the distribution of the 25 percent of timber sale receipts from that national forest to the State for local road and school expenditures, and an additional 10 percent of these receipts for national forest road and trail work. Release of these funds would be desirable to assist the new State. As of December 31, 1954, the amount in the special account fund totaled $1,507,260, and should increase very rapidly in the future due to the cutting operations of the new pulp mill at Ketchikan. As a corollary to suggestion No. 2 above, the following changes are needed: Page 34, line 18, delete "(2)"; page 34, lines 23 and 24, delete "shall not be subject to the provisions of this subsection, and"; and on page 35, lines 5 and 6, delete "Subject to the provisions of this subsection and", and in lieu thereof insert "and shall be disposed of in accordance with". With these minor revisions, we recommend retention of these provisions to release the funds in escrow. 4. Page 35, subsection (i), line 22 following the word "prescribe" delete the period and add the following, except as provided in subsection (a)." There appears to be a conflict between the provisions of section 205 (a) on page 30, which specifies that national forest lands to be granted to the State of Alaska shall be selected with the approval of the Secretary of Agriculture, and those of section 205 (i), on page 35, which provides that all lands authorized to be granted to the State of Alaska shall be selected subject to the regulations and supervision of the Secretary of the Interior. This conflict could be corrected by the above amendment. In view of the time limitation, we have not obtained the advice of the Bureau of the Budget regarding the relationship of this bill to the program of the President. Sincerely yours, TRUE D. MORSE, THE SECRETARY OF COMMERCE, Hon. JAMES E. MURRAY, Chairman, Committee on Interior and Insular Affairs, United States Senate, Washington D. C. DEAR MR. CHAIRMAN: This letter is in reply to your request of January 31, 1955, for the views of this Department with respect to S. 49, a bill to enable the people of Hawaii and Alaska each to form a constitution and State government and to be admitted into the Union on an equal footing with the original States. Whether or not Alaska and Hawaii should be admitted as States is a matter of policy not within the purview of this department. It is believed, however, that if S. 49 is to be enacted, amendments should be made to correct undesirable provisions of the legislation as introduced. These amendments are set forth in the attached memorandum prepared by my Deputy General Counsel. Due to the urgency of this matter we have been unable to secure the advice of the Bureau of the Budget as to the relationship of S. 49 to the programs of the President. Sincerely yours, (Signed) SINCLAIR WEEKS, Secretary of Commerce. To: The Secretary of Commerce FEBRUARY 11, 1955. From: Deputy General Counsel, Department of Commerce The bill S. 49, has been examined in this office and the following amendments are believed to be desirable: On the admission of Alaska to statehood under S. 49, the jurisdiction of the Federal Maritime Board with respect to regulation over carriers by water providing transportation between other States and Alaska would be transferred to the Interstate Commerce Commission pursuant to part III of the Transportation Act of 1940. It is believed that S. 49 should be amended to retain this jurisdiction in the Board. Originally, the United States Shipping Board and subsequently the Maritime Commission, had jurisdiction over carriers by water, whether in interstate or foreign commerce. With the passage of the Transportation Act of 1940, Congress transferred to the Interstate Commerce Commission jurisdiction over carriers by water engaged in interstate commerce; that is, the coastwise and intercoastal trades. The jurisdiction over carriers by water in foreign commerce, as well as those engaged in transportation with our Territories, districts, and possessions, was retained in the former Maritime Commission, since the problem of these carriers were of a markedly different nature than those which were faced by the interstate commerce carriers. The jurisdiction of the Board under the Shipping Act, 1916, over persons carrying on the business of forwarding or furnishing wharfage, dock, warehouse, or terminal facilities in connection with common carriers by water would not be affected by the enactment of S. 49. It is believed that the problems and practices in ocean transportation between the United States and Alaska are similar to those of the overseas trade, and the development of Alaska depends on such transportation to a greater extent than the geographically contiguous States of the Union. In the trade of Alaska there is no competitive rail route comparable to that existing in connection with the coastwise and intercoastal trades. It is believed that motor-carrier competition overland through Canada would be small in relation to the ocean movement to Alaska. The handicaps involved in overland transportation to Alaska from the United States are exemplified by the fact that a service has been developed for the carriage of trailer body containers by sea from Puget Sound ports to Alaska for delivery by truck at the destination. There has been considerable development of traffic in the Pacific area and, while operations to Alaska by American-flag lines serving the Far East have arisen largely in connection with military cargo transport since the Korean emergency, there may well be further expansion of trans-Pacific traffic with stops in Alaska. In our opinion, the problems of shipping services and of defense requirements in connection with Alaska can be met with greater flexibility under the jurisdiction of the Federal Maritime Board than under the Interstate Commerce Act applicable to interstate commerce. In view of the foregoing considerations, we recommend that the bill, S. 49, be amended by inserting in title II of the bill a provision with respect to Alaska identical to that with respect to Hawaii contained in section 116. The administration of the Federal Airport Act by this department would also be affected by the admission of Hawaii and Alaska as States. That act contains separate authorizations for appropriations and for apportionment of appropriations for the several States and for the Territories. Alaska and Hawaii are especially mentioned as Territories. Accordingly, upon admission of Alaska and Hawaii, there would be under the bill upon question as to the authority applicable to the new States. In addition, there would be some question as to the disposition to be made of unobligated funds previously appropriated for grants for projects in the Territories. For this reason, we recommend that section 117 of the bill be renumbered section 118. and recommend that a new section 117 be inserted reading as follows: "Any funds appropriated for grants for projects in the Territory of Hawaii pursuant to the Federal Airport Act, which remain unobligated at the time of admission of Hawaii into the Union, shall remain available for such grants thereafter, as provided in the applicable appropriations act. Following admission of Hawaii into the Union, the State of Hawaii shall be treated as a State for purposes of subsequent appropriation and distribution of funds for grants under the Federal Airport Act, pursuant to sections (5) (b) and 6 thereof." Similarly, we recommend that section 222 be renumbered section 223, and a new section 222 be inserted identical to the language proposed above, except for substitution of "Alaska" for "Hawaii" wherever it appears therein. Section 221 (a) of the bill would entitle Alaska to share in the apportionment of Federal-aid highway funds authorized under the Federal highway legislation, upon the same terms and conditions as any of the several States. The bill provides, however, that for a period of 15 years after the admission into the Union, the maximum Federal share payable on account of any project in Alaska shall be calculated on the basis of the areas of unappropriated and unreserved public lands and nontaxable Indian lands, existing in Alaska on the date of approval of |