THE NOME NUGGET
Published Monday, Wednesday and Friday by the
NOME PUBLISHING CO.
NOME, ALASKA
Telephone: Main 125 P.O. Box 618
$1.50 PER MONTH * $16.00 A YEAR
E. P. BOUCHER . Managing Editor
CLINTON GRAY .. Production Manager
Entered as second class matter October 14, 1943, at the
postoffice at Nome, Alaska, under the Act of March 3, 1879.
•-¥
FEDERAL FINANCING IS THE KEY
(From The Pacific Northwest Public Power Bulletin)
Twenty years ago the federal government took
the initiative and what some people regarded as a tre
mendous risk in building Grand Coulee and Bonneville
dams in the Pacific Northwest. These federal invest
ments have been so sucessful that there is now talk
of taking over the job of developing the remaining 30
million kilowatts of Northwest hydro by means of a
regional agency.
Alaska today is in very much the position in which
the Northwest states stood 20 years ago. The economy
of the territory needs just a little electric push to get
off dead center.
An adequate supply of low cost power can do so
much to alleviate the drudgery and hardships of pio
neering our northland frontier. Last winter, for in
stance, over 4,000 families went through 40 degree
below zero weather while living in trailers.
About 90r, of Alaska’s supply of electricity comes
from diesel and steam generation. Rates are very high.
In Fairbanks electricity sells for six to ten cents per
kilowatt hour rising to as high as 15 cents in the
rural area.s
It is estimated that Alaska’s 130,000 population
reported in 1950 has increased 25' ( since then. Even
if true, it is largely due to military personnel and con
struction. Yet the real military strength is being gross
ly neglected, namely the-establishing of a healthy
civilian economy. There isn’t even a cement plant in
the Territory. The power shortage and high rates are
preventing the influx of private capital and industries.
An example is the rotting of a million tons of pulp
wood in the Tongass National forest every year or
enough to double our domestic pulp production. We
now import 80% of our needs from Canada. Federally
financed hydro plants such as the Swan Lake project
near Ketchikan and the Blue Lake project near Sitka
would stimulate the building of pulp mills. About
f
--£h+40£<2-~
150.000 kilowatts is needed in Southeast Alaska.
The analogy between Alaska and the Northwest
states is striking. Both have power shortages amid vast
hydro potential. In Alaska the shortage is acute while
8.250.000 kilowatts run wasted to the sea.
Fortunately Congress faces a simpler problem in
Alaska because the projects will be single-purpose
power developments on a strictly lOO'/i self-liquidat
ing basis. The absence of flood control, navigation and
irrigation complications such as cost allocations, non
reimbursable features and subsidies will avoid some
of the split-personality conflicts which have bedeviled
the federal program in the Northwest states. Alaska
also has no interstate compact problems nor large pri
vate utility corporations.
Regardless of whether Congress authorizes a
federal or a territorial agency to build these projects,
federal financing is essential. Money for first class
mortgages is not available for less than 8% and risk
capital demands 15 to 50%. !It is apparent that private
venture capital will not be attracted.
Furthermore, directly and indirectly, the biggest
customer of electricity in Alaska is Uncle Sam. He
pays most of the high rates which could be cut in half
by a good hydro program.
Federal financing is the key!
Two Former Army Men
Arrested and Charged
With Spying For Russia
WASHINGTON, Wl-Two for
mer U.S. Army men were accused
of spying for Russia today in
a plot linked to the Soviet Em
bassy here.
Atty. Gen. McGranery announ
ced that the two were arrested
in Vienna, Austria, Wednesday.
Simultaneously with McGran
ery’s announcement, the State De
partment announced it has de
manded that Russia recall Yuri V.
Novikov, second secretary of the
Soviet Embassy, because he has
“engaged in activities incompat
ible with his status as an accredit
ed diplomatic official.”
McGranery said the former
Army men are Otto Verber and
Kurt L. Ponger, both of New
York City. They are brothers-in
law, and naturalized Americans
from Austria.
McGranery said the indictment
names Novikov as a co-conspira
tor, but not as a defendant. Novi
kov is alleged to have been the
contact for the former Army men.
Verger and Ponger] picked up
in the Austrian capital Wednes
day, were rushed aboard an Am
erican plane and started across
the Atlantic.
McGranery said the arrests and
indictment were the result of a
combined lengthy investigation
by the FBI and Army intelligence.
Budget Bureau Recommends ACS
And Alaska Railroad Be Set Up And
Operated as Business Corporations
By FRANK W. VAILLE
WASHINGTON, UO — The
Budget Bureau recommended
that the Alaska Communications
System and the Alaska Railroad
be set up as government cor
porations to provide them with
the operating and financial flex
ibility needed for effective man
agement.
It also urged legislation creat
ing an Alaska airport revolving
fund to cover operations of the
government-built public airports
at Anchorage and Fairbanks.
One major change recommend
ed would require the three oper
ations to submit business - type
budgets disclosing income and ex
pense, costs, sources and applica
tion of funds, and profits and
losses.
It also would permit use of
revenues to carry on operations
both of the proposed corporations
and of the airports.
“Management has little incen
tive to seek increased revenues
when all, or a substantial part, of
the money must be paid into mis
cellaneous receipts of the treas
ury. Ventures which are unpro
fitable to the government may
have to be abandoned in order
to conserve appropriated funds.”
“While the separation of -com
mercial and military services of
the ACS is not practicable at this
time, the objective should be to
obtain private operation of com
mercial facilities as rapidly as
| possible, consistent with the in
terest of national defense and the
development of Alaska.”
Declaring that ACS has made
“no attempt to relate rates to
costs,” the Budget Bureau recom
mended that commercial services
be operated on a self-sustaining
basis and that free service to gov
ernment agencies be discontinued.
Among other benefits, the Bu
reau observed that discontinuance
of free service to government
agencies would discourage the
authorization of long distance
telephone calls and long tele
grams. It estimated the cost of
this free service at $4,888,400 for
the year ended last June 30.
In the case of both the ACS
and the railroad, the Bureau as
serted that a major problem in
the adjustment of rates would be
the separation of costs attribut
able to commercial and military
operations. The latter, it said,"
should not be considered in es
tablishing a rate for commercial
services.
Runaway Train
Crashes Through
Capitol Station
WASHINGTON, UPi — A run
away passenger train, its horn
screeching a warning, crashed
through a barrier into Union Sta
tion Thursday.
At least 49 emergency patients
were rushed to hospitals but al
most miraculously no one was re
ported killed.
The train, the Pennsylvania’s
Federal Express from Boston, de
molished the stationmaster’s of
fice and smashed a newstand in
the center of the concourse, an
area separating the track from the
waiting room.
The electric locomotive and
one car then plunged through
the reinforced concrete floor into'
a baggage room in the basement.
There was no immediate ex
planation as to why the brakes
apparently failed as the train ap
proached the station through the
yards.
Passengers estimated its speed
variously as between 30 and 50
miles an hour.
Only the long, continuous warn
ing blast of the horn and the
plunge through the concourse
floor averted a heavy human toll.
Had the floor not given away,
the train would have plowed on
into the main waiting room.
■f
Suit Asking Ouster of
Auditor Moore Runs
Into Legal Technicalities
ANCHORAGE, UP,—A challenge
of Neil Moore’s right to hold the
office of Territorial Auditor be
came involved in new legal tech
nicalities in U.S. District Court
here Thursday.
Judge George W. Folta instruct
ed attorneys to' ffle briefs within
a week on two legal points; that
were raised.
The suit was brought by Horace
Pugh. He asked Moore’s ouster
on the contention that the elective
office of auditor does not exist
any longer — even though Moore
was elected to it in the 1952 gen
eral election. «■
Pugh’s case is based on the
Government Reorganization Act
passed in the closing days of the
1951 Alaska Legislature. It pro
vided for abolishing the elective
office of Auditor and making the
office an appointive one, with re
duced powers. The Reorganiza
tion Act never was put into oper
ation, however.
Pugh’s attorney, Roger Cremo,
challenged at Thursday’s hearing
the legality of Atty. Gen. Gerald
Williams defending an individual.
Williams, as attorney general, is
acting as legal counsel for the
auditor.
Then the question arose over
whether the action should have
been brought against the Terri
tory rather than against Moore as
an individual.
It was on these two legal points
that Judge Folta ordered the at-i
torneys to' submit briefs.
GEN. MILEY. ALASKA ARMY
COMMANDER, GREETS NOME
ROTARY WITH STAFF OF 9
The Rotary Club meeting on
Thursday, Jan. 15 had a large
number of guests in attendance.
In addition to nine officers in
the party of Maj. Gen. W. M.
Miley, there were: Robert Thom
as, William Barber and Charles
Stack of the CAA.
The military men were:
Maj. Gen. Miley, commanding
general, U.S. Army, Alaska; Col.
R. C. Snyder; Col. Larry Johnson,
adjutant general, A.N.G.; Lt. Col.
Smith; Lt. Col. Bech, deputy com
mander of A.C.S.; Lt. Col. Cam
eron, A.N.G.; Major Bessler;
Capt. Walsh, aide to Gen. Miley;
Lt. Farmer, assistant to Col. John
son.
General Miley, commander of
the U.S. Army in Alaska, gave
brief remarks to the club. He
stated the main purpose of his
visit was to become acquainted
with this part of the Territory
and to meet the businessmen of
the communities where military
installations are located.
Will Ask Eight Per Cent
Pay Boost For Military
To Offset Cost of Living
WASHINGTON, UD — The De
fense Department wants an eight
per cent cost-of-living boost in
military pay, to bring it closer to
civilian wages as a spur to enlist
ments.
The proposal to be presented to
Congress calls for $84.24 mpnth
ly, instead of $78, for a new re
cruit. It would provide $330.22
monthly for an enlisted man with
30 years’ service.
Warrant officers, depending
upon grade and length of ser
vice, would get from $236.97 to
$522.96 a month. Commissioned
officers’ pay would range from
$240.08 to $1,072.38 a month.
The Defense Department said
Wednesday the proposal must
clear the Budget Bureau before
being submitted to Congress.