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progress toward self-government should and must proceed in a continuing smooth and orderly fashion.

I think it is most important that the first elected Governor take over his responsibilities with a solid new relationship to the Federal Government firmly established.

I think it is also important to take note of the fact that the Samoan leadership and electorate are somewhat mixed in their positions on the proposals in the bills before us. The Fono has adopted a position favoring the proposal but we are also aware that opposition to the proposal has been expressed formally by various members and groups within the Samoan community, including the District Governor and the traditional leadership of the western district. To those of us who fully understand the Samoan way, this is not to be disregarded.

Mr. Chairman, I will be most pleased to answer any questions the committee might have.

Mr. BURTON. Thank you, Governor Haydon.
The chairman of the full committee, Mr. Aspinall.
Mr. ASPINALL. I have got two or three questions.

Mr. Secretary, you have given us a new term, an unorganized, unincorporated territory. Would you please define that for me?

Mr. LOESCH. Mr. Chairman, I would like to correct that "unorganized and unincorporated.” Actually I noticed it for the first time as I went through the statement and I think it is perhaps a misprint. It is an unincorporated territory but I don't know that it is unorganized.

Mr. ASPINALL. In the category of unincorporated territories, that we have had heretofore in the history of our country, we have always had the relationship directly between the territory as a segment, acknowledged permanent segment of the United States. We do not have that at the present time, do we, with American Samoa ? Isn't their status that of a national?

Mr. LOESCH. Yes,

Mr. ASPINALL. Without any permanent relationship being designated at the present time.

Mr. LOESCH. That is true.

Mr. ASPINALL. So when you use the words "unincorporated territory,” they are used outside of the meaning that we previously have given to such category heretofore; is that correct?

Mr. Loesch. Yes; that is correct.
Mr. ASPINALL. All right. That is fine.

Now, you made a statement as you presented your statement about the full-time Fono. Do I understand that the legislatures of this area are paid on a full-time basis?

Mr. LOESCH. Mr. Chairman, what that means is that the Fono is now so organized that the members do not hold other governmental jobs. When the Fono was first organized, the membership or a good portion of the membership, were also employed by the Territorial Administration in more or less executive administrative positions. And, of course, the usual conflicts of interest were—if they didn't arrive, the potential was there and it was felt proper to provide that a member of the Fono would not work for the government.

Mr. ASPINALL. This change has been made during the last year and a half: isn't that correct?

Mr. LOESCH. Yes, sir.

Mr. ASPINALL. What is the salary of a member of the house of representatives and a member of the senate? Mr. LOESCH. $6,000. Mr. ASPINALL. A year? Mr. LOESCH. A

year. Mr. ASPINALL. Does that mean that their services can be called upon at any time the speaker of the house and the president of the senate, with the Governor's approval, demand?

Mr. LOESCH. Yes, sir.

Mr. ASPINALL. Do they carry on other activities in an economic system besides that of being members of the legislature?

Mr. LOESCH. They do; yes, sir.

Mr. ASPINALL. Let me ask this question for the record. How much administrative supervision does the Department of the Interior have at the present time over the activities in the Virgin Islands and in the territory of Guam?

Mr. Loesch. Virtually none, Mr. Chairman. The Department's relationship with Guam and the Virgin Islands consists solely of its oversight of the comptroller's office in each of those territories. The comptroller is a postaudit operation without any function of directing or controlling expenditures.

Mr. ASPINALL. You do use some of your personnel in an advisory capacity, as I understand it.

Mr. LOESCH. Yes, sir.

Mr. ASPINALL. Now, isn't that indicative of what will happen, we will say, in American Samoa if American Samoa is also given authority to elect their Governor?

Mr. LOESCH. Yes; it is indicative. In fact, I would think it would be almost definitive, and this is what gives us concern because, so far as Guam and the Virgin Islands are concerned, we are not faced with the problem of direct appropriations for carrying on the programs in those two territories.

By the nature of things, it will be necessary for us to continue direct congressional appropriations to Samoa. I think it would be quite a departure if there were no administrative or congressional oversight on the expenditure of such direct appropriated funds.

Mr. ASPINALL. Now, as you make that statement, you don't intend to say that the people of Samoa aren't just as capable of electing their own representatives and their own Governor as the people of the other territories: is that correct?

Mr. LOESCH. I certainly do not.

Mr. ASPINALL. It is a question of development of the relationship between the U.S. Government itself and the government of the people of American Samoa that is involved at the present time; is that correct?

Mr. LOESCH. That is correct.
Mr. ASPINALL. Thank you very much.
That is all, Mr. Chairman.

Mr. BURTON. The gentleman from California, our ranking member, Mr. Clausen.

Mr. CLAUSEN. I am pleased to welcome you again to the committee, Mr. Secretary, and also this has been my first opportunity to have a chance to have vou before the committee. Governor.

I was listening with interest to Chairman Aspinall's comments on the matter of the unorganized and unincorporated description, and I was reading through a book, a little booklet called Territorial Areas Administered by the United States, put out by Secretary Udall, and in this it says, "The term 'insular possession' may be used to refer to any unincorporated territory of the United States such as any territory to which the Constitution has not been expressed and fully extended. The Virgin Islands, Guam, and American Samoa are unincorporated territories. The unincorporated territories may be further subdivided into those which are organized and those which are unorganized, such as those for which the Congress has provided organic acts which serve the same purpose as do the constitutions of the States and those for which organic legislation have not been enacted. Guam and the Virgin Islands are organized with the unincorporated status and American Samoa is both inorganized and unincorporated."

Then they go on to spell out the term “Commonwealth and trust territory," et cetera, and I thought I would just bring that to your attention, Mr. Chairman, because it threw me just as well.

Mr. ASPINALL. If my colleague would yield, I already know that, but that just doesn't happen to be a legal document.

Mr. CLAUSEN. This is just an illustration. So apparently the same fellow who wrote this is writing some of the material down in the Department.

If I understand the testimony as presented by both of you, the position of the Department is one of having concern over the monitoring and the auditing of that portion of the Federal assistance that would go to the unit of government on American Samoa.

I mean, that is the primary area of concern, and not necessarily a major objection to the question of whether or not they are ready to elect a Governor and Lieutenant Governor. Is this essentially the position?

Mr. LOESCH. Essentially, yes, Mr. Clausen. My statement points out the Department is certainly not opposed to the election of Governor, Lieutenant Governor, of Samoa, provided the necessary preliminary planning and definition of relationship has been done. We think that we may be just a little bit premature here because it actually hasn't been done, and that is our only objection,

Certainly we feel that the Samoan people are fully as capable of handling their own governmental affairs as any of our other peoples.

Mr. CLAUSEN. Both the political status commission report and then the comments that you have made, Governor, indicate that there are in effect divided opinions among the people, themselves, as to whether or not they fully support the election of the Governor and the Lieutenant Governor.

Now, is this because of concern over established customs, the retention of the kinds of systems that are unique to their heritage and their culture, or would you mind elaborating on that, on your statement that said there is some opposition and yet there are some that are in favor? It may be helpful.

Governor Ilaypox. Yes, sir. In Samoa you hear a phrase very often, "Fa'a Samoa," "Samoan way." Samoan people had a form of law so far as we can determine by anthropologists that dates them back 3,500 or 3,700 years. Then the Watai system, and the chiefs.

We have several thousand chiefs of all graduations in American Samoa. This is the line of authority. We have seven paramount chiefs who are the very highest title in American Samoa. Usually the district governors are paramount chiefs and the traditional form of Samoan formulation of opinion is the district council meeting. This is where you go to the people.

And when the meetings are over, and sometimes it takes many weeks of discussion, and finally the paramount chief, in this case the district governor, speaks and he speaks for everyone. That is "Fa'a Samoa." And the western district has sent the committee a statement, not opposing the election which I don't oppose, myself, but opposing the timing as premature, primarily because we face constitutional reform

this year.

But we have in effect a western form of government, with a Fono, a legislature, which is just now starting-it is learning legislative techniques.

We also have that very old, ancient system that falls under the term “Fa'a Samoa,” and they often clash and are in conflict because for a very few years we have governed in Western ways, but for centuries they have governed in Fa'a Samoa.

NIr. Clausen. Now, the one thing, of course, that I am concerned about would be in the area of fiscal matters. Do you have an idea of the total amount of funds that are coming from the Federal Government from various apportionments of the various agencies that is going to American Samoa wherein we obviously have to maintain some sort of monitoring and auditing device to see that the American-the stateside American taxpayer is protected?

Governor Haydon. Well, approximately $2 of every $3 in our budget comes from the Federal Government either by direct appropriation or other Federal grants. There is very little private grant money in American Samoa. You might as well say none.

Mr. CLAUSEN. What is the total operating budget per annum?

Governor II WYDON. Our 1970 budget, $15 million. Our 1971 budget, bet ween $18 million and $19 million. Our 1972 budget, $23 million to $24 million.

And we estimate next year it will be $281,2 million.

Mr. CLAUSEN. And how many people do we have now in American Samoa? Governor Haydox. 28,000. Mr. CLAUSEN. Living in American Samoa ? Governor HAYDON. Yes, sir.

Mr. CLAUSEN. What is the breakdown on their tax structure? Do they have an ad valorem tax? Do they have sales taxes? Do they have income tax? What is the principal source of revenue ?

Governor HAYDON. We are a duty-free port. We have excise taxes on alcohol and tobacco products, a small excise tax on automobiles. Otherwise, we have no taxes of any form. There is no property tax and no sewer assessments, no anything like that.

We do pay income tax and it is based upon the U.S. Federal income tax. We have a basic 21-percent income tax on everybody. You realize when the income tax law was passed 10 years ago if they didn't have a 212-percent basic tax there would be very little revenue raised. But from corporate income taxes—we are a big shipper of tuna and two canneries provide a large chunk of our corporate income tax, and through personal income tax, port charges, airport charges, a revolving fund, that is where we get $1 out of every $3.

With the much heavier infusion of Federal funds and other Federal programs this past 212 years, basically to provide roads and sewer systems, and water systems, that just weren't there, that money in turn generates additional local revenue through the form of income tax and spending power, so that at an economic level, the real income of Samoa is vitally dependent on the number of dollars that flow in from the United States.

Mr. CLAUSEN. Do the local units of government handle the auditing of the income tax program, or is it handled under the Internal Revenue Service of the United States?

Governor HAYDON. The Government of American Samoa has a tax audit branch and we handle it—we work very closely, however, with IRS, particularly the Hawaiian branch office of IRS. They help us, frankly, because we have a small staff in American Samoa, and some 8,000 returns they have to monitor each year.

Mr. CLAUSEN. Now, I won't take too much more time, but in my responsibilities associated with the Public Works Committee, there is one question that I would like to ask, and then I will want to make a statement in another area.

One is on roads, and the other is on the sewage treatment works and the general water quality control program.

First of all, in the matter of the statement, as you know, we have asked for the future needs information from the departments and we are hopeful that we can incorporate this into the future needs study table that will be part of the water quality legislation.

Now, regrettably, it did not come in time for us to incorporate it into the House version, but I do believe that we will be able to work it out in conference and I think that probably is what we are going to have to do because we are still trying to update the information throughout the entire United States, but I thought this might come as good news to you and you could take it back to your people, that we are not only interested, but trying to do something about it because we realize that this is a necessary element for the health and the development of the economy of the area.

Now, second; having been one of the prime sponsors of the legislation on the Roads Subcommittee, to provide for roads in American Samoa as well as Guam and the Virgin Islands, I am interested to know what kind of progress we are making. I mean, is the road program going forward in a satisfactory manner, because I am also on the oversight and investigations and I want to make sure that the money is being well spent and the roads are built to Bureau of Public Roads standards, and could I have your response on that?

Governor HAYDON. Well, we received $500,000 a year for 3 years with a 1-year carryover under the legislation you are referring to. I went over and met with DOT and arranged to have a man come to Samoa and write realistic specifications which would meet the transportation needs of Samoa and would conform with Federal requirements.

The man came and that road is now about 45 or 55 percent complete. The first project under those funds. And that road is much wider than any other road, paved road, that exists on American Samoa at present.

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