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Th« harbor study that I hav» been woMng on aa noted above ahowa tbat the 

 •cononte faaaibWty of preapedive Inprovamenta to the harbor and ila ancillary tecittUaa la 

 Nnkad to the rnaintanance of a viable ralfroad. The rattroad, now operated by a pubUc rail 

 authority, haa bean jual barely holding Ha vm atiar having aurvivad chapter 11 bankruptcy 

 prooaadlnga by *golng pubOe*. The piaeartoua aurvWal of the raidoad haa been In jeopardy 

 In the peat tan year* nwatiy beeauae operating revenue needed to cover the high coat of 

 maintaining the grade through the unstable alopea of the Eel raver gorge dropped along with 

 the reductions In the volume of lumber ahlpped due to curtaOed timber harvest levela. The 

 Headwaters Forest Act — currently drawn might ws8 be the straw that broke the camel's 

 back on the raiifoad since the transfer of 44,000 acres to the national forest would again 

 raduee timbar harvest perhapa by aa much aa 40 mlMon board tiset per year, hence reducing 

 the volume of freight carried by the railroad with an attendant loaa of operatbig revenue. 

 Such an event would cast the vlabitity of harbor knprovsmenta and federal Intereet in that 

 Impending pro^ m doubt. 



Let nne add a note about what i have called a piobiem of ooexiatence between the 

 management of private Ibreatianda and the national Ibfssta. First the nationai tbiest system, 

 wee created supposedly to prsvsnt Umber famine. Thia waa done on the baaia of the 

 damonatrably fisiae historical error that the private aactor would not dlraet adequate 

 inveatment capital into the production of standing timber. It ie now obvious that the national 

 foreat ayatem haa become the sauaft rather than the pravention of timber thmine in the U. S. 

 But the way that the national foresta are managed goes beyond thia problem Managenrwnt 

 la not subjected to the dladpiine of the bottom Hne as it ia in the private sector. Thus, 

 revenuea Itow ftom timber sales into the federal traaaury, and the costs aseodated with the 

 national Ibreat program are derived ftom the treasury rather than from timber sales revenues 

 revenues. There la no connection between revenues and costs. Aa s consequence, the 

 attempt by fbrest service bureaucrats to maximize their budgets la comnonty replete with 

 gold plated proviatons involving costs that exceed benefita and revenuea. But then the gold- 



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