84 



vest in that type of an investment if they do not have a guarantee 

 of timber, and that means they have got to have a long-term con- 

 tract because they are not going to invest $250 milHon, and I do 

 not blame them, but what I am worried about is the people in this 

 room that have jobs, the people that have small businesses, et 

 cetera — because, as I say, that mill could shut down, close the 

 doors, just like they did the Sitka mill. That did not hurt George 

 at all. He walked away with no headache, but it has affected that 

 town, and if that happens in Ketchikan — again, I do not think any 

 of this would have happened if it was under State control because 

 the governor supports it, finally, all the legislative bodies, both 

 sides of the aisle support it, and I do believe — ^you cannot say it — 

 I think the Forest Service supports, but back east they do not. 



Mr. Powell. Just to comment on that, and I know there is lots 

 of disagreement in the current draft preferred alternative, but it is 

 certainly the intent of the forest supervisors that made that deci- 

 sion that there would be adequate timber to supply the needs of 

 the industry, including meeting the contractual obligations of KPC. 



Now, as we go through this and further refine with public com- 

 ment, we will see if that assessment that we have made and if that 

 is what the public still wants, but that was one of the parameters 

 of that preferred alternative. 



The Chairman. I think you are sincere. You probably failed the 

 contract because, if not, you will go to court. As you know, the Su- 

 preme Court the other day ruled that government cannot go 

 around changing contracts, and that is going to have far ramifica- 

 tions for Sitka and Ketchikan and probably going to cost the tax- 

 payers millions of dollars, but, again, it goes back, if we have an 

 environmentally sound mill, it is going to take a huge investment. 

 If they do not have that guarantee, they are not going to make the 

 investment. They will run until the end of five years, and then we 

 have got a serious problem all over Southeast, and those that do 

 not want any logging will be happy. I understand that. They will 

 be the first to say we are going to have added-value entrepreneur- 

 ship. You still have to sell a sale of timber, and you cannot sell one 

 tree, to my knowledge. Under the Forest Services practices, you 

 have to take, in Southeast, the nonsalvagable tree, because other- 

 wise we are high-grading, which we did in the 1930's and 1940's 

 and actually during the war. We did quite a bit of that. A lot of 

 the best timber stands we have today are where we did some log- 

 ging in the 1940's and they left the old trash on the ground and 

 everything else. 



Mr. Powell. Just another comment on the KPC extension, and 

 I know you know this — I am not sure some of the folks may under- 

 stand that, thought — our position on that, the Forest Service posi- 

 tion, is, really, we do not have the authority to issue that permit, 

 so we are not — or that contract extension, so you are not hearing 

 from us yes or no. It is an appropriate issue for Congress to deal 

 with, and I think the hearings next week will start to kick that off, 

 but that has not been our position for or against. It is just outside 

 our authority to extend that 



The Chairman. And I do believe you will fulfill the remaining 

 years of the contract, and I agree with you. Congress originally 

 granted those contracts. It was a congressional action. It was not 



