Major General GIBBS. I meant by that, for instance, that we have a soldier up there, who is a private soldier and who gets $34 a month, and he also gets two or three dollars a day for commutation of quarters and rations, whereas any commercial concern would have to maintain a civilian operator up there at about the expense that the Eastern Extension Co. has to pay to get an operator down on the islands in the South Seas; and that average is somewhere around— well, more than $2,500 a man, and it might run to twice that, because, as you know, in order to keep a man there at all they build nice houses and tennis courts and places where men can live like civilized human beings right out in, you might say, uncivilized places.

The CHAIRMAN. You mean that if a private company were operating the system in Alaska they would have to pay very much more than you pay?

Major General GIBBS. Very much more; yes, sir.

Senator KEAN. But, of course, no company would take over the operation of this plant in Alaska, because it would not pay; that is the situation there, is it not?

Major General GIBBS. Senator Kean, the proposition has been revived every year continuously since 1911 within my knowledge by somebody proposing to take over the Alaskan communications system. They go and look at the books, and those that are responsible shy away from it, disappear, and we do not hear any more from them; and then there are those that have some idea of instituting a stockselling proposition, of getting this thing over from the Government and capitalizing it and selling it and eventually letting the stockholders hold the sack and Alaska getting nothing and there have been such, they recur from time to time. And, of course, they are very much annoyed at me, and at all of us, because we do not look favorably upon their advances.

Senator BROOKHART. Well, you stick to your guns on that.

Major General GIBBS. But the point is, that Alaska, which is so big that if you would superimpose a map of Alaska on a map of the United States, at the same scale, it would run from Montana to Florida, and people do not realize how big it is and that Alaska has to be given a communications system.

Senator BROOKHART. Are those stations pretty well over the whole Territory?

Major General GIBBS. Here is a map of Alaska that I have prepared. These red circuits are circuits of the Signal Corps system in Alaska.

Senator DILL. Have you a list of the names of the towns or points where your stations are located?

Major General GIBBS. Yes, sir.

Senator DILL. Have you a printed list that could be inserted in our record?

Major General GIBBS. Yes, sir.

Senator DILL. That would be a good idea.

Major General GIBBS. I will say that they are in the hearings before the House Appropriations Committee.

Senator DILL. But I should like to have them here for our purposes. Major General GIBBS. All right.

(The list furnished by Major General Gibbs is here made a part of the record, as follows:)

The CHAIRMAN. You may go on with your statement.

Major General GIBBS. The vast system of communications in Alaska as it stands to-day is shown here on this map.

Here are the

circuits, in the interior of Alaska, you see these red circuits here. Senator DILL. The commission grants licenses

The CHAIRMAN (interposing). Senator Dill, before you get off the financial end of it I should like to ask this question: General Gibbs, on what basis do you compute your rates? How are your rates computed so as to get the income produced there?

Major General GIBBS. Mr. Chairman, those rates are arrived at, partially arbitrarily and partially in conformance with rates that are established by our other communications agencies and that really become a connecting part of our system.

The CHAIRMAN. What are the connecting parts of the system?

Major General GIBBS. Let me illustrate: Take the whole of that Alaskan business, and it comes down to Seattle, and is there transferred to Chicago and New York or other points over the Western Union or the Postal Telegraph or the Radio Corporation of America and other connecting companies.

The CHAIRMAN. Who created the rate basis for you to charge for the service?

Major General GIBBS. The Secretary of War I think way back in the time when Hono. Elihu Root was the Secretary, and he established them at very low rates, conforming I believe to the policy of the Government that the whole of Alaska, every feature of Alaska, is a paternalistic venture by Uncle Sam, and that the thing to do was to favor them in every way, and facilitate their means of exploitation of the country, and good living, and so on.

The CHAIRMAN. So, as a matter of fact, the rates that you have established for this service would not necessarily be rates that would be established by a private corporation?

Major General GIBBS. Not if they had their own way. And right here I should like to continue with a word along the line I had started

out on, in regard to proposals that have been made from time to time by commercial concerns: As I have said, no responsible commercial communications company has made a definite proposal to us for taking over this Alaskan system, but others have, and it has always been evident to me that in any case any one who would take it over and would attempt to make it balance, come out even, not lose money on it, would naturally discontinue the service to far distant points where the revenue is small and where there are only small communities of people, and, of course, they being back at a great distance, communication means much more to them than to anybody else in the world-that such a private comunications company would discontinue those stations and simply maintain the paying stations and skim the cream off the business as a money-making proposition, and thereby not give to Alaska a really effective communications system. That is the reason why we are in that business to-day and have been for 30 years.

The CHAIRMAN. What is back in my mind is this: Assuming that this system was sold to a private company with the stipulation that the service be continued, what rates would they have to charge in order to make it self-sustaining? In other words, if a rate-making commission had to fix the rates based on a maintenance of this service, what would those rates be in comparison with the rates that are now charged?

Major General GIBBS. Well, sir, I do not believe that you could make it pay under such circumstances, and maintain the kind of service that we give those people in Alaska, if a commercial concern doubled the rates.

The Chairman. And, of course, the higher the rates the less business there would be.

Major General GIBBS. Yes, sir. Now, take, for instance, if you will analyze this statement that I have prepared here in my annual report, and if you were to count in everything that a commercial company would have to pay for-and at the rates we charge, which are lower than it would cost them, we are losing $150,000 a year; it is my best judgment that with the rates commercial companies would have to pay by way of salaries and maintenance of men in Alaska, and everything else that goes along with it, it would cost them at least $500,000 a year more than it costs us. So that if you take $500,000, plus the $150,000 represented by our deficit along the line I have mentioned, there is your mark to shoot at in figuring what rates they would have to charge in order to make it self-sustaining. Senator BROOKHART. Is that because the Army pay for a man is less than what is paid to a private individual?

Major General GIBBS. That is one item, and then there is the maintenance of the man, which is much simpler and cheaper, as you understand.

The CHAIRMAN. Have you a schedule of the rates that you charge, here with you?

Major General GIBBS. I do not think I have it with me, but I will file it.

(The schedule of rates filed by Major General Gibbs are as follows:)

WASHINGTON-ALASKA MILITARY CABLE AND TELEGRAPH SYSTEM TARIFF SHEET

The rate shown in each column is in cents per word. The first column figures under each station indicate the day word rate; the second column figures the night word rate.

The minimum charge is ten times the word rate shown.

The rates on radiograms between points in Alaska and between Seattle and points in Alaska, when handled over the Signal Corps circuits or when handled over both the naval radio and Signal Corps circuits is 5 cents per word.

When one system receives the coastal charge the other receives the 5-cent charge.

The coastal station charge on radiograms via Army or Navy radio stations is 12 cents per word.

The rate on foreign radiograms and foreign cablegrams is 25 cents per wordno minimum-to which the other line rates outside of Alaska must be added. The deferred rate is one-half the regular rate. (See rule 11, Tariff Book.)

The Signal Corps charge on local traffic between Signal Corps radio stations and other line radio stations in Alaska is $0.50-5 day; $0.40-4 night. This charge will not apply when the Signal Corps or Navy receive tolls on account of through traffic.

The rate on Territorial business sent by officials of the Territory of Alaska, between points in Alaska, when handled exclusively by the Signal Corps, is onehalf the regular commercial rate, minimum 25 cents. Where the half cent appears it will be made a whole cent in favor of the Government.

The indication "TY" will be written in and transmitted as a part of the check.

Press rates

Seattle to

(Group 1). Cordova, Craig, Haines, Juneau, Ketchikan, Petersburg, Seward, Sitka, Skagway, Valdez, Wrangell..

(Group 2). Chitina, Circle, Copper Center, Fairbanks, Fort Egbert, Fort Gibbon, Fort Yukon, Grundler, Hot Springs, Little Squaw Mine, Livengood, Nulato, Ruby, Wiseman.

(Group 3). Bethel, Fortuna Ledge, Holy Cross, Iditarod, Kotzebue, Nome, St. Michael, Tacotna.