estimates were too low for the amount of work that had to be done in view of the increase in labor cost and the increase in the cost of supplies. Owing to the fact that supplies were increasing very rapidly cost, we have made contracts for about $6,000,000 of supplies which eats up a very large portion of the appropriation you have made.

Now I have sent a commission, thinking you would want to know just what the situation was, consisting of Mr. Meyer, one of my assistants who has this matter locally in charge, and Mr. Sheppard who was a railroad man on the Pacific coast, and Mr. Went, one of the engineers of the Interstate Commerce Commission and formerly the chief engineer of the Pittsburgh & Lake Erie Railroad—I think that was his railroad-to Alaska to look over the whole situation so as to be able to report to you in December, or whenever you desire, just what the practical course would be.

It may come down to a business question of whether or not it is advisable, with the high cost of rails and of labor and of other supplies to push our road through the Susitna Valley immediately or whether it might not be advisable for us to satisfy ourselves at present with connecting up the Matanuska Valley with Seward, so that the Navy could get its supply of coal either at Anchorage or at Seward, and connecting up the Nanana field with the Tanana River so that that coal field could be made available for the Fairbanks mining district. At any rate, the proposition I would urge now is that we be allowed a sufficient amount of money to push the Turngain Arm end of the work. That was estimated to cost $80,000 a taile. Our figures now show that we are running about 22 per cent over the estimate. The work we have done justifies that statement, and that is accounted for entirely on the ground of higher labor cost and high supply cost. I think that probably is not an excessive increase in the cost. It does not show any false estimate as to cost of bridges or the engineering features of the work. We have got rail laid on something over one-third of the entire route. We for a larger amount, of course, than the rail covers. have got clearing done for a much larger amount and grading done

If we get, as we will within the next 60 days, our road up to Chickaloon, then we will have a through line from the lower part of the Susitna Valley and from the Chickaloon coal field down to Seward, when we get the Turnagain Arm division finished, and that is what we want to work on this fall and winter.

road finished from there to Anchorage, and from Anchorage how The CHAIRMAN. When you get up to Chickaloon you will have the

many miles?

Secretary LANE. Fifteen miles or so south of Anchorage.

The CHAIRMAN. And this money is needed for work along Turn

again Arm?

on the general work, but particularly we want to push that TurnSecretary LANE. For work along Turnagain Arm. It is to carry again Arm work so we can have part of the road entirely completed. The CHAIRMAN. As soon as that is done it will be necessary to do a very large amount of work on the line from Seward to Mile 71? Secretary LANE. We are doing that; reconstructing the road and

putting in bridges and changing the road.

The CHAIRMAN. Reconstructing it so that it will bear the loads that are eventually contemplated?

Secretary LANE. That is just it; yes, sir.

The CHAIRMAN. It is not in that shape now?

Secretary LANE. It is not in that shape now, but it will be by the time we have the Turnagain Arm work finished. We are running a light railway up there now.

Mr. GILLETT. How long do you contemplate it will take to finish that Turnagain Arm work?

Secretary LANE. This winter and until the middle of next summer. The CHAIRMAN. If that much work was done, then you would have access to these more or less valuable coal deposits?

Secretary LANE. Yes. We have that now, Mr. Chairman, at Anchorage, but we do not have it at Seward.

The CHAIRMAN. Anchorage is not an open, all-year port?
Secretary LANE. No.

The CHAIRMAN. Are they taking any coal out there now-I mean is any shipped?

Secretary LANE. No; none is shipped. It is used purely for the town of Anchorage and the railroad.

Mr. SHERLEY. How far up will you have to go into the Chickaloon coal fields to strike the anthracite?

Secretary LANE. About 20 miles farther; but we have not anticipated doing that now nor did the original estimates, because it involved crossing the river again with an expensive bridge, and we can get as high-grade coal as is needed right at Chickaloon.

Mr. SHERLEY. Has there been any examination of that anthracite coal?

Secretary LANE. I do not think there has been any real test made of it. You see, it is a very inaccessible part of the country. It cost a good deal of money to get the coal out that was tested from the Chickaloon coal fields.

Mr. SHERLEY. Where are you getting the coal now?

Secretary LANE. At Martin's mine, somewhere down here [indicating].

Mr. SHERLEY. Is that near the lignite part of the field or is it well into the coal fields?

Secretary LANE. It is in the low-grade bituminous. There was another mine opened farther down the valley to the southwest that is a high-grade lignite, out of which we have taken some coal.

Mr. SHERLEY. Have you gotten into the good bituminous coal at all?

Secretary LANE. Yes; we have a good domestic coal out of this mine that is being worked now.

Mr. SHERLEY. Is that Martin's coal good enough for naval uses? Secretary LANE. No; it is not.

Mr. SHERLEY. How much farther up is the good coal?

Secretary LANE. Just to the end of the yellow space at the Chickaloon field, which is about 14 miles.

Mr. GILLETT. Are these coal mines private property?

Secretary LANE. We have leased them. We have not leased the! Chickaloon body because we thought it was advisable for us to open that up for ourselves and make sure for a supply for ourselves before any other lease was made on that land, but this adjoining land to

We

the southeast of the Chickaloon field is where we have leases. have had difficulty in getting men to go in with sufficient amount of capital under our leasing system to put the kind of plant and make the kind of development we think is necessary. It not only takes development of the mine and a good deal of money for that and for tipples at the mine, but we have got to have facilities at Anchorage for dumping.

Mr. SHERLEY. What does that Martin's coal sell for at the mine now?

Secretary LANE. We have bought some coal at $4 a ton.
Mr. SHERLEY. Is that at the tipple?

Secretary LANE. Right at the tipple, at the railroad.

Mr. GILLETT. Is the Government the only purchaser?

Secretary LANE. No; the dealers in Anchorage also buy it. You know we have a town there of, I suppose, six or seven thousand people.

The CHAIRMAN. How much money do you want in addition to what you have now?

Secretary LANE. $4,000,000.

The CHAIRMAN. To what date will that carry you?

Secretary LANE. That will carry us through to July 1 of next year. The CHAIRMAN. What work is to be done up here in the Susitna Valley from Mile 71; is there some work to be done there?

Secretary LANE. Yes, sir.

The CHAIRMAN. Is it extensive?

Secretary LANE. There are two or three mining properties along Willow Creek that we want to get coal to, and we propose to lay the track up along this line, which is already cleared and graded, and it might be we will be able to get up still farther into here [indicating] this next year. This work up here [indicating] is rather important, because this field means the coal supply for this mining district over here [indicating]. The difficulty in completing this lies in the putting in of a steel bridge across the Tanana River. The CHAIRMAN. You stated, Mr. Secretary, that the cost of the work along Turnagain Arm is about 22 per cent now in excess of the estimate.

Secretary LANE. Generally, the work is about 22 per cent more. The CHAIRMAN. Is that during the last year or since the beginning? Secretary LANE. No; that is based upon the estimate per mile of road complete and the actual cost per mile of road completed from the beginning of the work.

The CHAIRMAN. Then your cost now is greater than 22 per cent? Secretary LANE. Yes; our cost now would be greater than 22 per

cent.

The CHAIRMAN. Because at one time-I think it was either last session or the one before that-they were running under their estimate.

Secretary LANE. Yes; and there are small portions of the road from Anchorage up that have been built at less than the estimate. For instance, take the item of rails alone. We bought our original rail at $30. Then we bought our next body of rail at $35, and the present contract for rail this year is $40, and that is a very low price.

The CHAIRMAN. I thought you were holding the steel barons down. Secretary LANE. I do not know to what extent we will be able to sit on them, but the prices so far that we have obtained for rail have been moderate as steel prices go. For instance, the Baltimore & Ohio paid the same price at the same time that we did for these $40 rails. The CHAIRMAN. But they evidently are mulcting everybody. The United States Steel Corporation in 1914 made $27,000,000 and in 1916, $257,000,000.

Mr. GILLETT. Have you kept your force up there right along? Secretary LANE. Yes; and that is one of the reasons why it is very desirable to allow this amount of work to go on, so that we can hold our men together.

Mr. GILLETT. Despite the need for engineers in the war, you are going to keep them up there, are you?

Secretary LANE. Yes. There have been a few men who wanted to come in, and they have been allowed to go off the work, but I have declined the approval of the general policy of letting those men go off that work.

Mr. GILLETT. They can go off if they want to.

Secretary LANE. Oh, they can resign, of course.

Mr. CANNON. After all, so far as you have gone, from a financial and commercial standpoint, have you any reason to believe that we will get any considerable amount of coal or any considerable amount of anything else up there that will halfway justify the building of this road?

Secretary LANE. I think we have, Mr. Cannon. I do not think there is any doubt about it. The further you go into the investigation of the resources there the better you are satisfied that there are things there which have not been revealed. That is almost an unknown land, and we have in the Matanuska Valley a large body of coal which can be brought out and made available for the Navy and for the coast. You know now that we are sending coal-when I say now I mean within the last two months-from the Pocahontas and New River fields by rail from those West Virginia fields across the continent to supply our Navy in San Francisco. I do not know what that costs, but I would suppose it would cost $14 or $15 a ton by the time it gets there.

Mr. SHERLEY. We are doing the same thing for the Canadian market in the Northwest.

Secretary LANE. They are doing the same thing?

Mr. SHERLEY. I think they have been shipping coal, some of it from Illinois, but some of it also from the eastern coal fields, up into Canada and out into the Northwest. You know there is a great part of that country that has no coal at all, and they are dependent upon the States for their coal supply.

Secretary LANE. The Crow's Nest coal field is a very good field just north of Spokane, if you remember, and that is a coking coal. They have used that in the copper mines, but it is probably not extensive enough or has not been developed sufficiently to supply the needs. There is no coal except the Puget Sound coal from the tip of Lower California right up to Alaska, excepting that bit that is in British Columbia. Now, there is need for this Matanuska coal

if there is to be established a smelter on Prince William Sound, which is a very likely industry. There are big deposits of copper up there that now can not afford transportation down to Tacoma where the smelter is, and if we can get that coal out to Prince William Sound they can establish a commercial smelter to smelt that copper. Mr. SISSON. Do you find copper in abundance there?

Secretary LANE. Yes; they have one island in the Sound itself that is almost solid low-grade copper.

This valley, so far as it has been investigated-and it has been investigated by our own people somewhat and by the Agricultural Department and a survey made of it-promises to be a very good agricultural valley. The Mount McKinley country, from what all the geologists say, is a very promising country, but really has not been explored. Of course, the primary purpose of this railroad was to get a line from the ocean to the interior so that these people in the great Yukon and Tanana Valleys would have a means of ingress and egress additional to the river, which was closed up a good deal of the year. Mr. SISSON. Does that open up any English territory?

Secretary LANE. Yes; you have got to go into the White Pass country and down the Yukon River, all through the English territory, for a 1.500-mile strip.

Mr. SHERLEY. You mean by water?

Secretary LANE. Yes.

Mr. SHERLEY. And not by rail?

Secretary LANE. No; you can not do that by rail.

Mr. SISSON. I was asking if this railroad opened up any English territory?

Secretary LANE. Oh, no. I beg your pardon. This railroad does not do that at all. It goes directly through the heart of our own territory in Alaska.

AUTOMOBILE FOR USE IN SEATTLE, WASH.

The CHAIRMAN. You are also asking authority to spend $1,800 for an automobile in Seattle?

Secretary LANE. Yes; that is for the purchasing agent. We think that would be a beneficial expenditure, because it would save a certain amount of time.

Mr. GILLETT. I think we would want to have more specific information about that, Mr. Secretary.

Secretary LANE. We have there a considerable body of men who are engaged in purchasing supplies, and they have to go from the office down to the wharves and to the railroads and run around a great deal in carrying on this purchasing work. My own information upon the subject, of course, comes from the men who are on the commission, and their judgment is it would save our people time and remove the necessity for a larger clerical force if this automobile could be supplied. We, of course, can get along without it, but if we do not have it it simply takes up the time of men unnecessarily in doing this work.

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