30 



vesting those sales in 1991, 1992, and 1993, while we built and got 

 the bugs out of the new mill. 



That is not the way it worked out. When the mill was half built, 

 the administration, the Forest Service, stopped all operations on 

 those timber sales. The cash-flow from those sales was to fund con- 

 tinued operations. We would sell the wood into our existing mar- 

 kets. It would provide a bridge from our old reliance upon our old 

 growth customers to the new second growth economy. 



When that was taken away, the company has always been resil- 

 ient and we found other sources of supply. We completed the mill. 

 Since the mill was completed, we have paid the mill loan down 

 from $5 million to $4 million. But in order to do that, in order to 

 complete the mill, we used up all of our operating line of credit be- 

 cause the cash-flow from the 318 sales was not available. 



In desperation, earlier this year, I talked to Tom Tuchmann, who 

 I understand is going to be here later today. I made a proposal to 

 him that Mayr Brothers would return our 14 million feet of Section 

 318 timber sales, our Forest Service sales, to the government, fore- 

 go any additional claims if the Federal Government would pay off 

 the $4 million remaining on the loan. There was a great deal of in- 

 terest in that proposal but he said, contrary to what our attorney 

 said, he said the administration did not have the authority to do 

 that. 



Well, where are we now? Our bank that has our operating line 

 of credit lost faith that we would ever be allowed to harvest those 

 timber sales, so they pulled our loan early this year. We were 

 forced to liquidate all logs and lumber inventory to pay off that 

 loan, lay off our 170 people. 



The other bank, the local bank that has our mill loan, is con- 

 cerned about the loan, about maintaining their eligibility for the 

 guarantee, so I have a broad side here. They have called in auction 

 companies and this is a proposed auction, September 17 and 18, 

 auction proposal, of our entire facility, not only the new mill, the 

 mill we already owned free and clear at the time we took the loan 

 out, even the pickup that I drove to the airport to come here and 

 testify. 



My father is 81 years old and he still comes to work every day. 

 If this auction occurs, it will kill him, if not actual physical death, 

 emotionally. To think that your 63 years' work is auctioned off at 

 a scrap iron auction because your government will not honor its 

 commitments, that is not the country I grew up in. It is certainly 

 not the country that my grandfather, Marzellinius Mayr, came to 

 at the turn of the century by shoveling coal in the boiler room of 

 a freighter. 



To conclude, it is not a raw material problem, the reason our 

 mills are closed. It is a financial problem caused by the Forest 

 Service not honoring their contracts. If the Forest Service would 

 pay the damages, the monetary damages we are due for their ac- 

 tions, we could start our mills back up using State, private, and In- 

 dian logs. 



Thank you for the opportunity to address you today. I would ask 

 that my oral and written comments be made a part of the record. 

 Thank you. 



[The statement of Mr. Mayr may be found at end of hearing.] 



