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pacts of timber harvest activities in on-site "timber audits." After a few years of 

 inspections the results show that State of Montana timber harvests are more sound 

 environmentally than the Federal Government's, and they make money to boot. If 

 you spend much time in Forest Service offices it is easy to see why this is the case; 

 while Forest Service technicians spend most of their time in the office doing paper- 

 work, State employees spend most of theirs out on the ground where they can do 

 some good. 



One More Time: Below-Cost Timber Sales Are Not a Subsidy 



The Forest Service sells timber to the highest bidder in a public auction which 

 generates a fair, open market price — the same price that is generated when other 

 entities, like States or private landowners, sell timber. The difference, as demon- 

 strated above, is that these other landowners don't lose money. The reason is effi- 

 ciency, not subsidy. If the Government artificially lowered prices to below fair 

 market, which it does not, then this would constitute a subsidy. 



Think Globally — Act Locally 



Every time Earth Day comes around each year we are reminded of the global im- 

 pacts of local decisions; this is a good way to look at below-cost sales. What happens 

 on a broad scale when we quit cutting trees on the Routt National Forest in Colora- 

 do, the Wallowa-Whitman in Oregon, the Jefferson in Virginia, the Hiawatha in 

 Michigan, the Superior in Minnesota, or the Gallatin in Montana? 



— Wood substitutes will have to fill some of the void. Metals, such as aluminum, and 

 petroleum-based products, such as plastic, are nonrenewable and require many 

 times the amount of energy to produce than do wood products. 



— More wood products will have to come from outside of the United States where 

 environmental concerns are much less important; especially in some Third World 

 countries where deforestation is a serious problem. We are the world's champion 

 at growing trees. In every region of the United States we grow significantly more 

 than we harvest. It doesn't make sense not to take advantage of this. In addition, 

 we already import a third of our lumber needs in this country; reducing harvests 

 here will greatly exacerbate our trade deficit problem. 



— The reduction in timber sale volume would be 1.6 billion board feet; enough wood 

 to provide for the construction of 145,000 single-family homes. Pulling this volume 

 off the market would raise lumber prices significantly, adding another $4,000 to 

 the cost of building a home. How many families will this keep from the American 

 dream of owning their own home? 



In Conclusion 



Alston Chase, the national environmental columnist, recently wrote in an article 

 concerning the administration's recent move on below-cost sales, "The purpose of 

 national forests is not making money, but protecting land and sustaining people. 

 And this policy would devastate both." 



Below-cost is a surrogate of the larger issue and battle over land use allocations, 

 manipulated by preservationists to stop the use of national forests that in any way 

 conflicts with their agenda. It doesn't matter to them that tens of thousands of fami- 

 lies will be displaced, or that it will cost taxpayers more money, or that forest 

 health will deteriorate to the point where insects, disease, and fire will become the 

 primary forest managers, or that it will make it more difficult for American fami- 

 lies to buy a home, thus stalling economic recovery. 



As prices that companies pay for Forest Service timber continue to increase, most 

 national forests will move into the above-cost category. And although this will re- 

 lieve the economic concerns espoused by the environmental community, you can be 

 sure that they will continue to find other issues to manipulate and oversimplify in 

 their attempts to stop the cutting of trees. 



As a result of their efforts, the appropriate questions concerning below cost have 

 been ignored and we have found ourselves in a familiar spot where the issues are 

 hyperpolarized, dominated by either-or rhetoric. If reason and common sense are 

 not brought back into the equation, tens of thousands of people will lose their jobs 

 in the crossfire and ignorance will again take its toll. 



Again, thank you for the opportunity to discuss this with you. Our industry is pre- 

 pared to review with you the Labor Management Committee's study and survey on 

 below-cost sales; and we are ready to work with you and the administration to pro- 

 mote options which will help restore profitability to timber programs on the nation- 

 al forests while retaining essential resource management tools. I would appreciate 

 any questions you have. 



