The Wrangell sentinel., 1942-02-13
Here's the Story of How Rate Increase Was
 Put Over on Alaska

of each vessel for the period be.
 tween November 30 and December
 21, 1941, and the additional items
 of expense as to each vessel for such period actually paid or hereafter
 payable due to the war. For some reason unknown to me, it is insist ed by the Commission examiner that
 the items of expense embraced in crew bonuses and additional normal operating expenses from delays due to the war are military secrets and cannot be revealed to the public, al- though available to all Government officials or representatives. inelud- ing myself. who were present at the hearing. Making a military secret of such information, to my mind, comes under the general head of horse feathers" and serves no useful pur- pose, but I nevertheless feel con strained to follow the admonitfon of 1 the examiner with regard to secrecy of these items because with respect to those two items at least 1t appears from the testimony that the com panies have actually sustained the increased cost of operations repre- sented therein.
 In this case, the companies them selves possess practically all the evidence, and it is only from their books and accounts and from the i personal knowledge of the officials of the companies that the facts can , be obtained
 The Northland Transportation Company, through it's representa- tive, Mr. Ira L. Ewers, made a sim liar statement with respect to the operations of the NORTH SEA, one of the vessels in the Northland | Transportation Company MT. Ewers also represented the Alaska Trans portation Company, but it appears that all the vessels of that company have already been taken over by the Government.
 Go into Revenues
 The testimony of MT. Mitchell for the Alaska Steamship Company and MT. Ewers for the Northland Trans portation Company was confined en- tirely to what had happened since December 2, 1941. When I was af- forded an opportunity to cross-exam- inc MT. Mitchell, I demanded that he furnish statement showing the income and operating expenses, the taxes paid, and the net profits of the Alaska Steamship Company for 1941. Counsel for all companies im- mediately objected to the product ion of any such evidence, saying that it was not relevant. there upon pointed out that the 459o in- crease in rates allowed by the Com mission, and now in effect, is a SURCHARGE upon rates thereto fore in effect and that no one could possibly tell whether such a sur charge is justified unless 1t is known l if the companies were already mak- ing sufficient profits under normal charges to cover the extraordinary expenses resulting from the war The examiner held that my request was in order and that the informa- l tion should be furnished. However. the counsel for the companies still declined to give the information de- sired. It appears that under the law, an examiner of the Commission has no right to compel the production of evidence, and so the matter must be reported to the Commission and then the Commission, if deemed proper, may require the companies to pro- duce the evidence demanded.
 One of the substantial items of in creased expenses due to the war was that of war risk insurance on the vessels. In this connection, the ! values assigned to the vessels for in- surance is most important It ap- peared from MT. Mitchell's state
 ment that the total insured value of the Alaska Steamship fleet was approximately $7O0O,0OO, consid- I erable more than the amount found ! as the total value of the assets of the Alaska Steamship Company for rate-making purposes in the hate
 hearings held in 1940 and 1941 in
 which the Maritime Commission l. had allowed a substantial increase in rates. In that hearing the Com. mission held that the fair value oi the assets of the Alaska Steamship !, Company for rate making purposes ] was $6,650,OOO which included $1,. . 250,00O of working capital, as wei | as property other than ships, but nc , specific finding was made as to tht
 value of the vessels for such pur.
 pose. In this connection, it may b, of interest to note that both tht . Alaska Steamship Company and tn, : Northland Transportation Company l have almost invariably made sub . stantial profits on their operations r The normal dividend rate. on. stocl ]. of the Alaska Steamship Company ? appears to have been 6%, but W,
 find that in 1888, the company pal. e a dividend of 40, in. 1884 SS, il t 1895 56, in 1886 14. in 1887 16%