Angaur mining trust fund

The Angaur mining trust fund was established pursuant to an agreement of December 1949, between the people of Angaur Island; representatives of SCAP, and representatives of the High Commissioner of the trust territory, for the purpose of mining phosphate rock on Angaur. Upon termination of SCAP, a new agreement was concluded in 1951 by the High Commissioner and the people of Angaur for continuation of the mining.

a The trust fund capital was derived from income received in the form of severance fees paid for each ton of phosphate ore removed from Angaur.

The agreement provided that the High Commissioner would be trustee, whose duties were to collect principal and income to build up capital, safely invest same, and distribute annually to the permanent residents of Angaur at the time of the agreement.

Mining ceased during 1955 fiscal year, and by June 30 of that year all moneys due and bills payable had been accounted for. Since then, the principal duty of the trustee has been to invest the capital, collect the income, and distribute to beneficiaries. All investments are in U.S. Government securities. As of June 30, 1960, the cost value of these securities was $1,164,000.

Following is a financial statement which shows the status of the fund as of June 30, 1960.

Assets:

Angaur mining trust fund, balance sheet, June 30, 1960

Liabilities and net worth at June 30, 1960------- 1, 193, 682. 79

Angaur scholarship fund

The Angaur scholarship fund was established during fiscal year 1957, at the request of the Angaur trust fund beneficiaries.

Original capital of $23,462.50 was obtained by transfer from the Angaur trust fund, with the added proviso that $1,462.50 be transferred annually from income of the trust fund before distribution to beneficiaries.

The purpose of the fund is to provide a means of financing the cost of higher education for those persons who might have the desire, and otherwise qualify, but lack the funds to pay for such schooling. The use of these funds is limited to members of the clans participating in the income from the Angaur mining trust fund.

Land use and occupancy funds, June 30, 1960

In June of 1956, the Navy Department transferred $1,245,323.80 to the trust territory government to pay for land used during World War II by the military services, and to pay for land retained by the military services for possible future The status of this money as of June 30, 1960 follows:

use.

1 Trust funds established by investing in U.S. Government bonds paying 34 percent interest. Interest collections are made semiannually and remitted to beneficiaries.

Mr. NUCKER. The increase is primarily for construction purposes. There is no major increase in our normal operating maintenance program, so that the increase is primarily one for additional construction purposes.

Chairman HAYDEN. I will place your statement in the record. (The statement referred to follows:)

STATEMENT OF D. H. NUCKER, HIGH COMMISSIONER OF THE TRUST TERRITORY OF THE PACIFIC ISLANDS

Mr. Chairman and members of the committee, I am pleased to submit our request for $6,104,000, which is needed to continue the administration of the Trust Territory of the Pacific Islands.

As in past years, this request is at a minimum level and is based on a maximum degree of participation by the Micronesians. During the past year we continued our policy of replacing Americans with Micronesians who had acquired the skills and abilities which permitted them adequately to meet the job requirements.

During the 61⁄2 years that I have been with the trust territory we have reduced by one-third the number of Americans in maintenance and operation activities. It is my hope that within the next 5 years the present number of Americans may be reduced by another 30 or 40 percent.

Its land areas of Its population of

The trust territory does not have unlimited land resources. 687 square miles is fragmented into more than 2,000 pieces. over 75,000 is living on 400 of these fragments scattered over an area of 3 million square miles of the Pacific Ocean.

With limited land areas, minimum natural resources, and a small population scattered over such a vast area, it becomes apparent that economic self-sufficiency is a most difficult goal to attain. Political development is taking place. The Micronesians are participating more and more in the administration of the area. I am proud of their achievements in the health, educational, and agricultural areas. They have a true desire to take part actively in the bettering of living conditions in the islands.

I think that the amount requested for the fiscal year 1962 is the minimum amount required to continue programs necessary to the discharging of our responsibilities to and for the Trust Territory of the Pacific Islands.

LOCAL REVENUES

Chairman HAYDEN. The local revenues are estimated in 1962 to be $1,400,000, the same as were available last year. I recall that most of this amount, or at least a large part of it, comes from the processing tax on copra and from transportation. In your justification you indicate that copra affords the main source of dollar income for the people of the trust territory and that the next most valuable crop produces less than 10 percent as much income as copra. What is the other crop?

Mr. NUCKER. A shell which is sold primarily to Japan primarily for the manufacture of buttons.

LAND CLAIMS

Chairman HAYDEN. Last year in the brief reference to the land claims problems in the trust territory it was indicated that the fund made available by the Department of the Navy was sufficient, if a settlement at $500 per acre could be agreed upon. Not long ago it was indicated that, while a final agreement had not yet been reached, a proposal had been put forward to pay each of the claimants $250 per acre without prejudice to settlement either of the final amount or the mode of payment. Was the $250 payment made, and if so, on what basis?

Further, has the settlement come any nearer to fruition?

Mr. NUCKER. The $250 payment has not been made. The Assistant Secretary, Mr. Carver, in talking to those involved, asked the attorneys to provide information as to the amount of money per acre per year the Micronesians were going to want. The total amount of money they would want for past use. Assistant Secretary Carver told the attorneys he wanted this information before any settlement in part was made even without prejudice. It is my understanding that that information has not as yet been made completely available. I have not had the opportunity to talk to Mr. Carver, who was out of town when I arrived, but discussions are still being held between the Assistant Secretary and Mr. Aikens, who is the attorney for the Micronesians who are involved.

Chairman HAYDEN. The settlement has not yet come to fruition? Mr. NUCKER. That's right.

ALASKA PUBLIC WORKS

Chairman HAYDEN. Next we will consider Alaska public works. The Alaska public works program will require $108,000 during fiscal year 1962, a reduction of $192,000 over the figure for fiscal year 1961. There will be placed in the record the statement and justification of this request.

(The justification follows:)

Increases: To provide for increased pay costs for approximately 6 months of fiscal year---

100,000

Budget estimate, 1962 (reappropriation)

8, 000 108, 000

The $70 million Alaska works program was authorized by the Alaska Public Works Act enacted by the Congress in 1949.

Of the 172 projects financed under this program since its authorization, 154 have been completed and transferred to the applicant public bodies.

These transfered projects have been sold to the applicants, in accordance with the act, at a percentage of their total costs. This is usually 50 percent, but on occasion there has been a slight variation up or down, each variation being compensated by another so as to permit, as required by the act, payment into the miscellaneous receipts of the Treasury of approximately one-half of the total cost of the entire program.

The total cost of the transferred projects is $56,884,645. Of this amount, applicants have turned over to the Government, in cash and securities issued by the public bodies, a total of $29,376,953. These securities are payable in annual installments over a period of years. The authorized rate of interest on these deferred payments is 2 percent per annum. Of the total amount received from the public bodies in payment of the purchase price of projects, $7,908,178 has been paid in cash which has been deposited into miscellaneous receipts of the treasury as required by the act. Securities accepted in the amount of $21,468,775 have, by administrative arrangement with the Department of Treasury, been turned over to that Department for collection of principal and interest as they become due. In addition to the cash payments against purchase price amounting to $7,908,178, there has been collected, as installment principal payments became due under accepted securities, the amount of $3,745,500, making a total collection against principal of $11,653,678. Interest on deferred payments in the amount of $1,438,730 has been collected. Total cash deposited into miscellaneous receipts of the Treasury is, therefore, $13,092,408.

Most of these securities mature annually over a 20-year period, but in one or two instances a longer period has been allowed while in a number of instances the maturity period is much shorter.

Of the 154 projects transferred to the public bodies, 22 projects were transferred upon substantial completion permitting beneficial use while last necessary steps to close the transaction were being taken. In such cases the transfer is made at an

estimated cost which is subject to adjustment upon full completion and ascertainment of actual cost. Of these 22 projects so transferred, actual costs have since been ascertained on 21 and they have been or are in the process of being finally closed out. Every effort is being made speedily to complete the one remaining project in this category, to ascertain its actual cost, and to close it out. It is expected that the remaining actions on all these projects can be completed and the projects finally disposed of during the current fiscal year.

The 18 projects not yet transferred are in various stages of construction. Little construction progress was made during the summer of 1959. Strikes by carpenters and plumbers in Alaska, the nationwide steel strike and summer-long inclement weather appreciably slowed up construction progress and threw a heavier than expected burden into the summer of 1961. This in turn has the effect of leaving a few projects to be completed and transferred in the fiscal year 1962. These remaining projects range in cost as follows: Of the larger ones, three are estimated to cost $3,020,00, $2,676,843 and $1,581,570, respectively, totaling $7,279,313; three others are estimated to cost $554,970, $554,000 and $512,035, respecitvely, a total of $1,621,005. Of the smaller ones, the cost of each of six others ranges from $250,000 to $500,000 totaling $2,295,892; and the costs of six others range between $24,950 and $250,000 for a total of $888,933.

Procedure in transferring projects is as follows: After semifinal inspection, contractors are called upon to remedy any deficiencies and to complete any overlooked items revealed. An estimated cost is then arrived at and the project is transferred to the applicant on that basis, with an understanding for later cost adjustment. Final inspection is then made as soon as practicable, actual costs are determined as early as possible thereafter, and the project is finally closed out. All of the work is being pressed forward as rapidly as good construction and other practices will permit on the remaining projects. The availability of a lesser sum than was requested for 1960 made it necessary to reduce personnel more rapidly than anticipated. This, the strikes, and the bad weather, threw more construction than anticipated into the 1960 construction season and somewhat more work than earlier anticipated will fall into the first half of the fiscal year 162. It is now expected that all projects will have been completed and transferred and that all property and records of the Alaska public works offices will have been disposed of by December 31, 1961. However, the amount requested to be authorized is requested to be available for the full fiscal year so that any unforeseeable delays may be taken care of.

Mr. WHEELER. I have a prepared statement, Mr. Chairman, which I will hand to the reporter, and I will just give the highlights of it. (The statement referred to follows:)

In 1949 the Congress enacted the Alaska Public Works Act (48 U.S.C. 486486j) authorizing a $70 million public works program. The public bodies of Alaska including the then Territory, were eligible applicants under the program. A project, if acceptable from the legal, financial, and technical points of view,

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