(7 of 9)
Stepovich's Alaska faces problems that will only become more intense with statehood. Once federal supervision and federal dollars are removed, Alaskans, who now pay a territorial income tax equal to 14% of their federal tax, will have to dig even deeper to pay increased costs of self-government. They are already strapped by what they call F.C.L.—fearful cost of living. Virtually everything Alaska uses is brought in by steamer and airplane, and because the territory produces so little for ships and planes to haul profitably back to the States, the freight charges boost retail prices to alarming levels. A Seattle dollar shrinks about 19¢ in Juneau, 29¢ in Anchorage, 35¢ in Fairbanks. Wages consequently run 15-40% higher than comparable Stateside payrolls, and that is a factor that holds back large-scale investment from Stateside in Alaska's potential.
Rhapsody in Riches. But Alaska's promise sends statehooders into rhapsody. The oil boom, centered in the Kenai Peninsula, has brought the big U.S. oil companies hurrying north to drill the place full of holes—even though drilling a well there costs almost three times as much as it does at home—and already they have filed for leases on 27 million acres. The timber business racked up $34.3 million in 1957, and that economic youngster is still in short plants. Near Ketchikan, hard by the 16 million-acre Tongass National Forest, is a new, $52½ million pulp mill, and timber folk talk about production of 2 billion board feet a year (v. 33 billion Stateside). Scarcely tapped, too, is Alaska's mineral treasure, which boasts 31 of the 33 metals on the U.S.'s critical list (exceptions: industrial diamonds, bauxite). The North American continent's only major tin deposits lie in the Seward Peninsula, and some of the world's biggest known iron-ore deposits wait in the Klukwan section. Coal, as one engineer says, is "all over the damn place."
Alaska's biggest business is fishing (1957 take: $93 million), which is controlled by Seattle packers, supervised by an absentee government—and this outside control is the pet hate of Alaska statehooders. They claim that it weakens the Alaskan labor market by bringing in outsiders for half its 25,000 seasonal work force, and more important, severely depletes stocks by the use of fish traps. As it is, the industry is slipping (8,000,000 cases packed in 1936 v. 2,500,000 in 1957), and the sagging market makes it all the more imperative that the new state get new, diversified industry if it is to pay its own way.