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As in other resource industries, the timber industry 

 runs in cycles. We have just come out of the worst down 

 market period Alaska's timber industry has ever known. But 

 the markets have come back, employment has come back, and 

 the return to the federal government has increased. 



The most recent Forest Service accounting figures show 

 that during 1988, they received almost $11 million in timber 

 sale receipts and assets [roads], with operating expenses of 

 $12.6 million. These figures show the revenue from the 

 timber program better than a simple tallying of annual 

 appropriations and cash receipts, and were prepared under a 

 reporting system developed by the Forest Service and GAO. 



Because of the intensive management program set up in 

 1980, it is simply wrong to expect revenue from the Tongass 

 to offset outlays. In order to maximize wilderness 

 withdrawals from the Tongass while maintaining an adequate 

 timber base. Congress forced the timber industry to rely 

 upon marginal stands for a significant portion of future 

 timber supply. 



Intensive management is required in order for harvesting 

 from marginal timber stands and areas which are difficult or 

 costly to reach to be economically viable. Intensive 

 management -- not necessary but for the wilderness 

 withdrawals made in the Alaska Lands Act — has increased 

 the cost of the Tongass timber program since 1981. 



The chorus of attacks on timber management in the 

 Tongass have focused on cash flow -- how much the Forest 



