41 



roads that we had not intended to do previously — dropping some 

 units, which required us to go back and re-cruise and re-layout 

 units is a cost. Some units were modified for visual concerns that 

 required us to go back and re-layout those units. Those are the 

 kinds of things that add up to the costs for these 105 million. 



The Chairman. That is why you need a million dollars, an addi- 

 tional million bucks? 



Mr. Morrison. That is correct. 



The Chairman. You stated and talked about all the good that 

 comes from the Forest Service, the moneys contributed to the com- 

 munity and the stumpage rates. What happens if Ketchikan Pulp 

 mill shuts down, this mill is shut down, Wrangell is shut down, all 

 the mills are shut down? Where are your sales going to be and 

 where is your stumpage going to come from? 



Mr. Morrison. Well, I am only speculating now, but if we do not 

 have a source for disposing of the low-grade materials, the pulp- 

 grade wood, here in Alaska, that means that it is going to have to 

 be shipped south or maybe shipped overseas. So it is going to be 

 much more difficult for operators to sell the 50 or 60 percent of the 

 timber that is low grade and cannot be cut into lumber. 



So that will make a very different economic situation for those 

 independent operators that would remain. It likely would go down. 

 If the timber harvest goes down — timber is the major contributor 

 to the receipts, and, therefore, a major contributor to the 25 per- 

 cent fund. So it is highly likely that those receipts would go down, 

 so the distributions to the boroughs would drop. 



The Chairman. So your personnel goes down? You have 525 

 workers now, I believe, down here in Southeast. 



Mr. Morrison. That is correct. 



The Chairman. How could you, Gary, put up a sale? How can 

 Mr. Janke put up a sale if, in fact, it is not economic? When we 

 talk about other businesses down here, the only way it could be ec- 

 onomical is if they cut nothing but the premium and the best of 

 trees; is that correct? It would have to be high grading like we used 

 to do during World War II. 



Mr. Morrison. It would be very difficult to have any timber 

 sales that could make money if they could not reasonably dispose 

 of the pulp wood; that is correct. 



The Chairman. Which leads me to, I guess, the premise of my 

 line of questions, is the communities receiving these moneys now 

 at the largess of the taxpayer — Senator Stevens' program and my- 

 self 



That is going to be gone this year, right, the 110 million? That 

 is not an ongoing thing, is it? It is over four years. It was 110 mil- 

 lion. 



Mr. Morrison. That is right, the 110 million is fixed, but it will 

 be distributed over four years, except for the grants to Sitka, 

 Wrangell, and Ketchikan, which are — can be distributed anytime 

 the program is properly set up and the requests made. 



The Chairman. Let us take your hat off for a moment and just 

 think as a forester. 



Again, I go back. Can you envision these sales coming up if we 

 lose all these facilities? What would you sell? The only thing I can 



