the Alaska highway, built during the war, largely through Canadian territory.

Shipping services between Alaska and the States are not now easily provided on an economical and regular basis, nor will they be for some time to come. Weather conditions are difficult, adequate ports are few and scattered, and traffic is very unbalanced at different seasons. As a result, rates have been high and service somewhat unsatisfactory to the Territory. A new development has recently taken place in the establishment of barge transportation, which seems to offer possibilities for competition with the steamship services, although at present barges only operate to a few ports.

The Government has recognized that in view of the special need for effective sea transportation, assistance should be given to the development of efficient low-cost service, for the best interests of Alaska and the Nation as a whole. Assistance should be provided that will encourage the establishment of new industries in Alaska and consequent migration and settlement. At the same time Government assistance should be directed toward the establishment of a sea-transportation system which will become independent of Government subsidy as conditions permit. To this end the Government should audit the efficiency of subsidized operators as well as control the rates.

Present legislation permits nominal-rate charters of surplus Government-owned vessels to private operators. It is apparent that this type of Government aid is sufficient to keep shipping in the Alaska trade and can be administered to achieve even more desirable rate and service standards than have been provided since the present legislation was approved in March 1947. I recommend, therefore, that the present legislation be extended, in modified form, for 1 year. The modifications should prevent exclusive arrangements with any carriers and should provide financial incentives for efficient operations. The Maritime Commission has presented these recommendations in detail to the Congress. The Commission will also change its present contractual arrangements with the Alaska carriers along similar lines.

At the same time, because of the unique transportation conditions. existing in Alaska, I recommend that our maritime laws be amended to remove the present bar to shipping goods in bond between the United States and Alaska via Canadian rail, port, and shipping facilities. This bar does not apply between any of our States, and there is no reason thus to discriminate against Alaska. Furthermore, Canadian ships should be permitted to transport passengers and freight between Alaska ports, in order to provide more adequate service. These recommendations are also in accord with the mutual interest which we will continue to have with our Canadian neighbors in the development of the great Northwest Territory of this continent.

Another factor hampering transportation is that in several Alaska ports, docking and storage facilities are insufficient. Some ports are now being developed and others are being studied by the Navy, the Corps of Engineers, and the Coast Guard to determine the extent and nature of local improvements needed. A number of private-construction projects are awaiting the completion of these reports.

Land transportation in Alaska is provided principally by the Government-owned Alaska Railroad and the present inadequate highway network. The 1949 Budget now before the Congress includes funds for carrying forward a 5-year program of rehabilitation and

improvement for the railroad. Upon reconsidering the urgency of these improvements and the possible rate of construction I now recommend that this program be accelerated, in order to accomplish most of the work within 3 years.

There is also pending before the Congress a long-range program for improving the present highway system and building some important new roads. I shall shortly submit supplemental estimates to accelerate this program, as well as the railroad program.

In addition to these improvements of the highways in Alaska, it is important also to consider the roads through Canada. The Canadian Government has done an excellent job in maintaining the main Alaska highway, and it is being used increasingly by truckers and tourists. The so-called Haines Cut-off Road is an important link connecting southeastern Alaska at the head of the inland passage with the Alaska highway in the Yukon Territory of Canada. Since this road is of importance to the United States, but is so located as to be of less use to Canada, special arrangements will have to be made for its improvement and maintenance.

Because of the great distances and sparse settlement of Alaska, air transportation has developed rapidly. Both large-scale air lines and small-scale "bush pilots" operate extensively through the Territory and often provide the only direct link between town and settlements. It is especially important therefore that air transportation be encouraged.

The 1949 Budget, now pending before the Congress, includes funds for the improvement of air-navigation facilities in Alaska. In addition, I am glad to note that the Congress has just completed action on legislation for the construction of new airports at Fairbanks and Anchorage, where the present civil airports have become obsolete largely as a result of the establishment of military airports close by. 3. Constructing housing and community facilities

Another problem facing Alaskans and the Government in establishing proper conditions for further settlement and development is that of constructing badly needed housing and community facilities. The towns and cities of Alaska have grown so rapidly in recent years that the lack of these facilities is causing considerable hardship now and constitutes a serious bar to further growth.

To assist the construction of schools, hospitals, and community facilities, such as water, sewers, streets, and electric services, I recomment that special legislation be enacted to permit the Federal Works Administrator to provide such facilities and transfer them to the Territory and its municipalities upon terms which will assure a proper sharing of the cost. It is necessary and proper for the Government to assist in providing the elementary facilities necessary for sanitation, health, and education.

The Territorial government and Alaskan communities face difficulty in financing these facilities because of the inadequate financial structure imposed by the present Federal law. In particular, the Territory and the municipalities are unnecessarily hampered in obtaining funds for community development. Even in advance of statehood I recommend that these restrictions be removed, so that Alaskans may do as much as possible to obtain their own facilities and may carry their proper share of the cost of construction under the Federal program I have recommended.

In addition to the hospitals to be provided under this proposed legislation, special provision should be made for hospital facilities for tubercular patients, as the rate of tuberculosis in Alaska is about nine times that of the rest of the United States. The 1949 Budget and a supplemental request for funds which I shall shortly submit to the Congress provide for a substantial increase in the available number of beds for tubercular patients.

The housing problem in Alaska is extremely acute. In spite of the rapid increase in population during and since the war, there has been very little residential construction. This situation results from a number of special circumstances, including the limited residential building industry, the shortage of funds for home financing, the high cost of building materials transported from the States, and special land and utility problems.

Many of the actions recommended in this message will assist in removing these obstacles. Thus the improvement of transportation, the provision of community facilities, and the modification of the public-land laws will all aid the development of the home-building industry.

In addition to these measures, I recommend that special financial terms for home construction be provided under existing programs of aid to private housing. The need for such special treatment of Alaska problems has already been recognized in some of our present housing legislation. Furthermore, I recommend that special development funds should be made available on a revolving-fund loan basis, in order to encourage immediate construction.

4. Lands for natives

A special legal problem is at present hampering the development of Alaska. This is the question of whether or not Alaska natives have claims to the ownership of certain lands. Until this problem is settled, it will continue to create some question concerning the title to land needed by individuals and companies for development in many parts of the Territory, including the national forests.

The determination of native claims under existing law would require a considerable period of time. In the interest of the development of Alaska, and for the benefit of all concerned, I recommend that the Congress authorize the Secretary of the Interior to grant to the natives their village sites and burial grounds, and such lands and hunting and fishing rights as are necessary for their economic livelihood, with due regard for the integrity of the national forests, provided that the natives waive claims to any additional lands. In addition, the Congress should extinguish by law any rights which the natives might have to other public lands. At the same time, the natives who do not accept such grants should, of course, be free to assert claims against the Government in a proper court with respect to any asserted rights lost by such extinguishment. These actions would clear title to the land granted and all other land and permit industrial and agricultural development to go forward.

I believe that this will be the fairest and most expeditious method for settling this long-standing problem.

5. Encouraging land settlement

Another step which should be taken to improve the opportunities for industriel, agricultural, and community development in Alaska is to improve our laws concerning the disposal of public land. More

than 95 percent of the land area of Alaska is now in the public domain. It can be settled, and is being settled, under the present public-land laws. But those laws should be amended to take account of unique conditions in the Territory.

Because of the isolated nature of the new farming and industrial areas which will be opened, and of the peculiar conditions found there, I recommend that legislation be enacted to permit land settlement on a group basis, in tracts of a size and shape appropriate to the terrain, and to permit homesteaders to live in communities rather than in isolated farm houses, where appropriate. Furthermore, I recommend that the Congress authorize appropriate technical and financial assistance for settlement and development. Together with necessary administrative changes to improve the handling of land applications and funds necessary to permit speedier surveying of land areas, I believe these actions will permit easier and more rapid settlement in Alaska.

All of the recommendations I have made, concerning statehood, transportation, housing and community facilities, lands for natives, and land settlement, are designed to make possible the early and sound development of industry, agriculture, and stable community life. These actions will establish a proper framework within which individuals and private companies can use the abundant natural resources of Alaska.

Until now the principal industries have been gold mining and salmon fishing and canning. Substantial expansion of these industries under present conditions is unlikely.

There are, however, numerous other promising opportunities for economic development. Many minerals, other than gold, including such scarce minerals as lead and zinc, have been located, although most of the Territory has not been thoroughly prospected. It can be expected, therefore, that the mining industry will continue to grow for many years. Funds have been included in the 1949 Budget for an expansion of mineral exploration and the establishment of a Bureau of Mines laboratory in Alaska, both of which will be important aids to new development.

While salmon fishing and canning are fairly stable, and are necessarily operating under careful conservation standards, there are possibilities for new fisheries of different types.

Sources of energy are basic elements in economic developments. Oil and coal, the present main sources of energy, are being shipped to Alaska. It is extremely important to develop more power sources within the Territory. Considerable coal is now mined there, with substantial possibilities for more. There are also oil deposits.

In addition, there are numerous potential hydroelectric power sites, although few of them have been sufficiently studied to prepare detailed construction plans. These power sites should be studied as rapidly as possible in order that power development can proceed promptly. In southeastern Alaska, and to a lesser extent elsewhere, extensive timber resources are available which can, when accompanied by suitable power development, be the foundation for substantial forestproducts industries. The most promising opportunities at present appear to be in establishing pulp and paper mills in the Tongass National Forest, where timber sales are available to private companies on a sustained-yield basis.

There are also many opportunities to produce construction materials, such as cement, brick, and lumber. Most of these materials are now being transported at high cost over long distances, and their production in Alaska will be of great value to home-building and other construction industries.

In addition, there are extensive opportunities for tourists and sportsmen to enjoy the spectacular scenery and unspoiled wilderness of Alaska. With improvements in highway, water, and air transportation there will be an increasing stream of visitors. Many economic opportunities will be present to provide accommodations and other services for such visitors.

Another important possibility for economic development is that of agriculture. Only small areas are now being farmed, and our knowledge is very incomplete concerning the farming methods, crops, and marketing systems best adapted to the special conditions of Alaska weather and soil. Several additional areas seem to offer good opportunities for farming, and the Agriculture and Interior Departments are conducting detailed studies of them this summer. Furthermore, the agricultural experiment station in Alaska is expanding its program of investigating crop and livestock possibilities.

It will necessarily be a slow process to develop further agricultural areas on a sound basis. Nevertheless, I believe that considerable expansion of agriculture will be possible, and it is certainly desirable for the Government to support agricultural settlement so that Alaska can become less dependent on imported food.

All these opportunities are now present or potential. With imagination and far-seeing effort by the people of Alaska and the Government, the resources of Alaska can play a growing role in our national economy and can provide a sound livelihood for the people now there and many thousands who will join them.

In the long view, the most important action the Government can take to assure this end is to permit Alaska to become a State. With the additional measures I have recommended, there is every reason to foresee a strong and expanding population of permanent residents, and to expect that the State of Alaska will be a strong partner in our great Union of States. HARRY S. TRUMAN.

THE WHITE HOUSE, May 21, 1948.

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