The Nome Nugget

By FRANK W. VAILLE

WASHINGTON, (AP) - President Eisenhower recommended today that Congress provide a fund of 10 1/2 million dollars in special grants to help Alaska make the transition from a Territory to a State.

He proposed legislation whereby the 49th State could choose between receiving all of the grant money or request that a portion be used to continue certain federal functions.

Alaska came in for only $10,356,825 in earmarked funds in the proposed 1959-60 budget sent to Congress, but there was promise of additional appropriations to be asked later. The current budget carried requests totaling 24 1/2 million dollars.

In a reference to the transitional grants, Eisenhower said:

"The federal government should provide such financial assistance as is necessary to facilitate transfer to the state of such programs as highway construction and maintenance, airport operations, and public health service."

The grants would be continued for four additional years but in declining amounts.

In line with the President's statement, the budget deleted the request of previous years to finance operation and maintenance of public airports at Anchorage and Fairbanks.

The President said plans were being made to transfer the Anchorage and Fairbanks airports to the state in 1960 and to provide Alaska funds equivalent to those which would have been appropriated.

ACS to be Sold

The President said he will soon submit to Congress proposed legislation to authorize sale of the government-owned Alaska Communications system and to incorporate the Alaska Railroad "to facilitate its operations on a business-like basis."

Speaking of the ACS sales proposal, Eisenhower said:

"With Alaska now a state, a communications system should be developed which will be more responsive to the growing needs of the Alaskan economy and people, as well as to the needs of the government agencies operating in that state. In my judgment, such a system can best be developed by private enterprise."

The President sketched his plans for Alaska in a separate section of his message, saying he was "highly gratified" to be the first President in 47 years to welcome a new state.

New Problems Created

He noted that Alaska's admission because of its size, geographic location, extensive federal land ownership and federal administration of services - creates problems not previously encountered when new states were admitted.

Eisenhower said he did not believe it was in the long range interest of Alaska or the nation for the federal government to continue special programs in Alaska which, in other states, are the responsibility of state and local governments or of private enterprise.

Accounting for most of the difference from 1958-59 was the absence of such requests as 6 1/2 million dollars for mental health facilities and 4 millions for the expiring Alaska Public Works program.