system will continue after state
hood to operate on some kind of
a basis in Alaska and will relieve
the state from taking over the
whole burden now carried by
the federal government in this
regard.
Since some of the federal
agencies do not break their costs
down sompletely on an area ba
sis, it is not easy in every case
to determine exactly what the
total expenditures are at the
present time for all of the pur
poses listed. This is true particu
larly of court and police costs.
However, a thorough study of
federal expenditures in Alaska,
which c'.'d involve a careful
breakdown of such items, was
made several years ago covering
the period 1928-37. This devel
oped some useful figures, which
are available. Adjusting them
to their more recent (and some
what higher) levels, and applying
to them the assumptions made
in the foregoing three para
graphs, it is indicated that the
annual cost of the additional
services which would have to
be provided by the State of
Alaska would be approximately
as follows:
Judiciary_$680,000
Police system __— 250,000
Care of insane -_ 300,000
Fish and game - 350,000
Governor and Secretary 40,000
Legislature_ 25,000
$1,645,000
BUILDING COSTS
NOT INCLUDED
It will be noticed that some
of these expenses are less, but
most of them more, than in the
anti-statehood statement con
tained in an early chapter of
this report. The total does not
include anything for a state
capitol or for other buildings
which might eventually be re
quired. It does, however, in
clude all other foreseeable ex
penses. Certainly an allowance
of $350,000 a year to cover up
keep, interest charges and re
payment of principal on any out
lay for state buildings is more
than ample.
The total thus postulated,
$1,995,000 a year, compares
very closely with an estimate
made several years ago by then
Delegate Dimond, who said:
To furnish the equivalent of
the services being supplied to
us by the federal government
at the present time would rea
sonably require an expendi
' ture by the newly created
state of approximately $2,000,
000 per year. The additional
$2,000,000 a year of revenue
which I have mentioned might
not give us quite such elab
orate establishments as some
of the federal government ag
encies which we would take
over, but I am convinced that
the job could be done just as
well, if not better, than it is
being done at the present time.
It is almost axiomatic that lo
cal government is more eco
nomical than long-range gov
ernment, and we can reason
ably expect that to be the rule
in Alaska as it has been else
where.
Considerable assistance
toward meeting the additional
costs of statehood would be
forthcoming from several
sources. In the first place,
against the court expenditures
already mentioned should be off
set the sums which would be
collected by the courts in fines,
•etc. In the ten-year period on
which our estimates were based,
receipts of the federal courts in
Alaska averaged $377,957 a year.
PROCEEDS OF FUR
SEAL OPERATIONS
There is no reason why the
state should not receive in addi
tion the net proceeds of the
Pribilof sealing operations which
are carried on under treaty on
the basis of a United States
trusteeship for the benefit of the
United States, Canada and Rus
sia, and averaging more than
$500,000 a year for the past ten
years. Such net proceeds are
the result of an Alaska resource,
but of course will never be
turned over until insisted upon
by a voting congressional dele
gation from Alaska.
Upon granting statehood, the
I federal government customarily
i makes a gift to the new state of
lands, timber and other resour
ces for the benefit of state insti
tutions. Revenue from the sale
o? these lands and from the use
of these resources is used by
the state to help support its
schools, public buildings and
other institutions.
Could Alaska afford to spend
from $1,000,000 to $1,500,000 a
year more for statehood?
The cost of running the terri
torial government is now about
$2,750,000 a year. Alaska meets
this cost without imposing a
property tax, without imposing
an income tax and without tap
ping other sources of revenue
commonly made use of else
where to underwrite govern
mental services.
Alaska’s governmental costs
under statehood would be rough
ly half again as great as they
are at present. On its face, this
would appear to mean a 50 per
cent increase in everyone’s tax
bill, that is, in his territorial
tax bill as distinguished from
the amounts 'paid for municipal,
school district or federal .pur
poses. Statehood would not
change these latter. It is submit
ted that most Alaskans at the
present time hardly know they
are paying territorial taxes, these
levies being so moderate. (The
special transactions tax which is
to create a fund for Alaska vet
erans is not included in any of
the computations made in this
study, since it is of temporary
nature.)
ABSENTEE INTERESTS
WOULD PAY SHARE
The burden which statehood
would place upon the individual
Alaskan probably would be even
less heavy than the foregoing
discussion would indicate, since
statehood almost inevitably
would mean an overhauling of
Alaska’s notoriously inequitable
tax system. Under it, large cor
porations owned and operated
from outside the territory get by
virtually scot-free. It is suggest
ed that these alone, and particu
larly the non-resident fishing,
mining and transportation inter
ests, could well afford to pay
the entire additional amount
needed for statehood, .without
doing harm to themselves.
On a straight per capita ba
sis, which is not contended
would apply, the increased
cost of statehood for Alaskans
would be about $17.50 per
year.
It should be remembered I>y
Alaskans in considering wheth
er they can afford to make such
an outlay for statehood, that
any money paid in local taxation
to a state government would be
deductible from income in cal
culating federal income taxes.
Therefore, while the local taxes
of Alaskans might have to be
increased slightly to support a
state government, their federal
taxes would to some extent be
diminished.
As to Alaska’s ability to meet
the costs of statehood, Judge
Dimond has made the observa
tion that:
The revenue of the territori
al government is derived
from a system of taxation—if .
it can be called a system—
that is primitive beyond any
comparison to be found else
where in the nation. No one
can justly say tiiat by any
ordinary standards our tax
burden is now a heavy one.
Since Alaska is a frontier
country it is highly desirable
that taxes be kept just as low
as is consistent with the pub
lic welfare. So much produc
tive labor must be done in any
frontier country to bring the
wilderness in subjection that
special attention should be
given to the problem of keep
ing taxes to a minimum. But
that desideratum must have
been in the minds of all the
peoples of all the territories
when they considered state
hood. and yet they deliberate
ly, and I believe rightly, em
braced in each instance the
proposal to -become a stale.
Alaska, in my judgment not
only without oppression but
easily and readily, and in
complete harmony with the
maxim of low taxes for fron
tier countries, can secure
enough additional local rev
enue to undertake the burdens
of statehood.
COST OF STATEHOOD
LESS THAN LIQUOR
As perhaps throwing some
light upon Alaska’s ability to
maintain a state government, it
has been pointed out that the
value at wholesale of alcoholic
beverages shipped into the terri
tory last year was more than
twice as much as the additional
costs of statehood would be. It
might well be asked whether
the people of Alaska are not
willing to pay for the part of
their civilization which is nec
essarily embraced in that pro
posed extension of free govern
ment which is called a state a
small fraction of what they now
pay for some material thing such
as liquor which at best can be
classed only as a luxury.
Against the probable costs,
every Alaskan should weigh the
probable benefits of statehood.
These include self-government,
a sounder and more progressive
fiscal arrangement, a more ef
ficient administrative system,
votes and influence in Congress
both to obtain the material
things Alaska needs and to help
guide the course of national af
fairs, funds for road-building
through extension to Alaska of
the Federal Highway Act, re
lease of Resources now controlled
by the federal government, and
many other boons obtainable in
no other way.
Whatever statehood costs.
Alaska should get far more
back, not merely in the abstract,
but in simple financial and eco
nomic returns. When all these
factors are considered, it be
comes a question not so much
of whether Alaska can afford
statehood as whether Alaska can
afford not to become a state.
HIGHWAY DEVELOPMENT UNDER STATEHOOD
IN THE FOREGOING estimates, nothing has been included
for increased costs of constructing and maintaining roads.
The omission was intentional, for this is not an increased cost
of statehood as against territorial government; it is an in
creased cost of having roads as against not having them.
Alaskans, almost without exception, agree upon the desir
ability, even the necessity, of a greatly expanded system of
roads. What has gone on in this
respect should in itself convert
the most doubting person to the
advantages of statehood. After
the Alaska Road Commission
was transferred from the War
Department to the Department
of Interior in 1930, it is almost
literally true that no funds for
new construction were made
available until the war period.
They were appropriated then
not primarily because the In
terior Department asked for
them and they were considered!
by Congress as desirable to de- j
velop the territory but because I
the War Department reported
them as being urgently neces
sary in the prosecution of the
war.
If anything seems clear from
recent developments in Congress
with respect to Alaska it is that
the territory in the future is go
ing to have to pay a larger share
of highway costs. A provision
requiring Alaska to match fed
eral funds appropriated for the
Alaska Road Commission was in
sisted upon by the House Appro
priations Committee in the ap
propriation bill for the current
fiscal year. Delegate Bartlett,
after prolonged and vigorous ef
forts, was able to have the pro
vision eliminated, but the only
argument which appealed to
Congress in this regard was that
since the requirement was made
without notice, the Territorial
Legislature had had no opportu
nity to appropriate matching
funds, and if the provision were
permitted to remain, no use
could be made during the pres
ent construction season of any
of the 1946-47 federal appropria
tion.
The congressional confer
ence committee which finally
eliminated the matching re
quirement served notice in doing
so that in subsequent years Alas
ka will be expected to match fed
eral funds appropriated for high
way purposes in the territory.
MORE U.S. FUNDS
FOR ALASKA ROADS
The federal government will
do infinitely more for Alaska
roads (probably at least five or
six times as much annually) un
der the Federal Highway Aid
act than it has ever done in
the past or is likely to do in
the future under any other ar
rangement. An increase above
what the territory has been
spending on roads undoubtedly
will be required when Alaska is
admitted to participation in this
act. The important thing to re
member here is that such an in
crease will be required at that
time irrespective of whether
Alaska is a state or still a ter
ritory.
The Territorirl Legislature has
petitioned Cro ress to admit
Alaska to the benefits of the
act. Alaska’s clr.lm to partici
pation has been pressed most
vigorously in Congress by the
present Delegate and over a long
period of years by his predeces
sor, but without success, for
reasons which were explained
fully in an earlier section of this
study. The truth is that without
votes in Congress Alaska has
no weapon with which to en
force its claim. With statehood,
Alaska would immediately come
under the act, since there would
no longer be any excuse to ex
clude her from the provisions of
this beneficial measure which
applies to all the states.
To what extent would Alaska
benefit under the Federal High
way Aid act? According to Dele
gate Bartlett:
If Alaska were to become a
state I very seriously doubt
whether the formula used in
the other states could be made
to apply, because if all the
acreage of Alaska were calcu
lated on that formula we
should be receiving a dispro
portionate amount of money
and, in fact, more money than
we could spend with economic
justification. If a formula such
as the one suggested in the
bill first introduced by Judge
Dimond and later by me—pro
viding that half the land area
be used as a basis of calcula
tion—were adapted, we should
profit enormously by compari
son with our actual experi
ence under the system which
has been used. But we are a
territory, and I doubt wheth
er that formula will ever be
applied to us so long as we
are a territory.
Delegate Bartlett states that
those who have spent son,«
considering the matter h
dicated Alaska would V
some $12,000,000 to sui1
of federal assistance »
with only half the land a*
ing used as a basis for
tion. aj
COSTS OF ALASKA
FOR ROAD PURPOSES
How much would Alaska
to appropriate on its
count in order to obtain ft
expenditures of this ma?n
on Alaska roads? Judge
makes an informed estima
follows:
Under the Federal High
act, the states must take
of the maintenance chai
Those charges for ai
roads made by the All
Road Commission alone at
present time amount to
proximately $1,000,000
year. It may be that i
gress will make a special
ception for the State of I
ka for a few years, but
cannot expect that any
exception will be pcrmai
and it may not be made a
Moreover, the appetite
Alaska for roads, if one
use that figure, is simplj
satiable. Further consii
tion of the subject has
vinced me that Alaska sh
be prepared to appropria
least $2,000,000 per yeai
the maintenance and cons
tion of roads from the oi
By that I don’t mean $2,
000 in addition to curren
piropriations, but $2,00(
per year in all. If the fei
government should retail
der its control a large sha
the 'public land of Alaska,
by the present road for
our share for the cost of
struction of new roads, ai
tinguished from mainten
of existing roads, wouli
proportionately lower
would be the case if alio
public land of Alaska, or
tically all of it, were ti
over to the State of A1
We do not know just
kind of action Congress
take on the subject and, I
fore, I suggest that to
care of every possible i
tuality we should make 4
lowance of $1,000,000
year, or approximately
for the maintenance of
ing roads, and at least an
$1,000,000 a year for new
struction.
Thus, with the expenditi
about $2,000,000 a year, n
of which would be an inn
Alaska would receive $1'
000 to $16,000,000 a yeari
of highway construction
maintenance.
If Alaska did not wii
spend $2,000,000 a year for
000,000 to $16,000,000 wor
roads, we could, of cours
fuse to take advantage o:
act, and thus not be requin
make the highway appn
tions mentioned. Undoub
other states would be delig
Obviously, though, this v
be poor business for Ala*
FEDERAL POWERS, RESOURCES AND RESPONSIBIU'
WHICH WOULD BE TRANSFERRED TO THE STA
THE federal government owns most of the land and <
■ natural resources of Alaska. There rests upon the
eral government, therefore, a special responsibility for
administration of public affairs in the Territory. This res
sibility no doubt will continue to some extent even
Alaska becomes a state.
A statement last year by the Department of the In«
advocating statehood for Alas
ka, included the paragraph:
It should be borne in mind
. . . that statehood does not
necessarily bring with it own
ership of all of the public do
main within the boundaries of
the territory. The states of
the Union, by federal grant,
were given -substantial acre
age for schools, for roads, and
for other public purposes, but
the rest of the federal land
was reserved to the federal
government for disposal under
appropriate congressional ac
tion.
Unfortunate consequences of
the federal land policy as it was
applied to. the western states
caused Congress to follow a dif
ferent policy with respect to
Alaska. The older continental
practice of outright sale of land
and resources has been super
seded by a policy of leasing for
development purposes.
Under this policy, Alas®
lands were withdrawn fr0
ry in 1906, the very large
gass and Chugach Nation®
ests were created in 19®®'.
ka oil lands were wh<V
from entry in 1910 and a
law for oil lands enac
1920, and there have been
more recent withdraws
reservations familiar to P
day Alaskans. , J
Thus Ihe coal, the t°"
the oil and other resoure
the Territory have be®,
served, in effect, in a -'
"store house" for futur .
While this policy of wh
al and leasing has no °ol
tected Alaska’s natural _
to a certain extent front P
tion by predatory intere