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Where does the extra money go? Allan Sloan in the Los Angeles Times 

 January 17, 1993: 



Hurwitz is doing what they teach in junkmeister school: 

 borrowing. Why borrow $579 million to repay $510 

 million of bonds? So he can put fees, prepayment 

 penalties and some current interest on the tab — like 

 paying off your Visa by mortgaging your house. Not to 

 mention my favorite: $25 million of the borrowing 

 would go for Pacific Lumber to pay a dividend to Maxxam. 



How can a borrowed $25 million payment going from Scotia to Houston 

 possibly be in the interests of the timber workers or North Coast 

 communities? Does mortgaging redwood forests for decades to send $25 

 million to the "HoudLni of High Finance" provide stable jobs for timber 

 workers? 



I would like to address the issue of the cost of the legislation. Every estimate 

 Maxxam will provide will obviously be inflated. The value of the land 

 should not be judged on what the timber would bring at the sawmill because 

 it is quite possible some of these trees could never be legally cut. This would 

 reduce the value of the property substantially. Legislation I have introduced, 

 H.R. 1422 would impose a severance tax on old growth redwoods, further 

 reducing their value. There will be income from the land to the federal 

 government as the Forest Service determines what is appropriate to harvest 

 in a sustained fashion. There will be a cost, but I believe Americans are 

 willing to make this investment in this resource. 



Mr. Chairman, Maxxam simply should not have stewardship over such an 

 important non-renewable national resource as the last unprotected, virgin 

 old growth redwoods anywhere. The Forest Service can manage the lands 

 with more values than just profit in mind. 



This legislation has broad national support. More than 80 of our colleagues, 

 along with the Sierra Club, the Wilderness Society, and the National 

 Audubon Society support this legislation. Frankly, Mr. Chairman, when 

 people hear that 1000 year old, virgin, old growth redwoods are being chain- 

 sawed to pay interest on junk bonds support for the legislation grows. 



Thank you. 



