96 



have been on those lands, not at the invitation of the company, but 

 with our own fish £ind game advisory committee. I have seen the 

 instream restoration program that the company is doing, the aban- 

 donment of logging roads. 



The company is doing those programs now so that the suggestion 

 that these modified retraining programs would take up the slack 

 from the loss of strong industrial jobs in the timber industry I don't 

 believe is meritorious. 



Mr. POMBO. So just close out this line of questioning, if we take 

 away the productive part of the economy from Humboldt County, 

 the people who produce something and earn a wage, then who is 

 there going to be left to buy things in the stores and to buy cars 

 or groceries or whatever is left of your economy? 



Mr. Dixon. The point that an old colleague of mine, a friend, said 

 to me I think is fairly relevant and he simply said that we cannot 

 create an economy by selling hamburgers to each other and I think 

 that concept has real merit even though it may be a bit hokey. 



Mr. POMBO. Thank you. 



Mr. DOOLEY [assuming chair]. Mr. Pomeroy. 



Mr. Pomeroy. Mr. Chairman, I have a couple of quick questions. 



Mr. Campbell, we were talking about the relationship between 

 debt equity and the business plan and you have acknowledged that 

 the increased liabilities on your ledger have stepped up your cut- 

 ting obligations. 



In light of your familiarity with the transactions of this year, can 

 you tell us why an additional $25 million was paid to Maxxam Cor- 

 poration? 



Mr. Campbell. We did two transactions. We have a $25 million 

 dividend to the parent which is quite within the indentures and 

 was publicly disclosed that we were going to do that. The lending 

 institution 



Mr. Pomeroy. That doesn't represent — I am not saying that it 

 was not disclosed. However, that is an additional debt that is part 

 now of the obligation. Had you not paid the $25 million to the par- 

 ent, you would have had $25 million less on your liability, unless 

 you care to 



Mr. Campbell. We also borrowed an additional $35 million 

 which we set aside in an annuity at a very favorable rate to begin 

 to pay back to the company and in case we had some sort of an 

 economic hiccough, we could continue to meet our obligations. 



Mr. Pomeroy. That is relative to your long-term debt relation- 

 ship to the parent, but this looks like a $25 million bonus now car- 

 ried on the compan5r's liabilities. 



Mr. Campbell. I think anyone who runs a large corporation is 

 aware that the corporate headquarters don't produce products. 

 They are very purely there in an administrative form and they 

 have to have cash to function to pay those people. 



Mr. Pomeroy. There was a stream of cash previous to the $25 

 million, of course, going to the parent. 



Mr. Campbell. That is true. 



Mr. Pomeroy. In fact, quite a considerable one. What is the obli- 

 gation of the company to the employees in light of the insolvency 

 of Executive Life, the company which was insuring the pension 

 fiind? 



