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national forest, sole access to a huge portion of the annual allowable timber 

 harvest, and great competitive advantages that amount to monopoly power in the 

 local market. They effectively commit two-thirds of the commercial forest 

 land to the exclusive use of the mills. While these contracts may have served 

 a purpose in the 1950's when they were signed, they no longer make sense. 



In fact, Alaskan long-term timber contracts have interfered with normal 

 free market mechanisms and are barriers to competition. For example, timber 

 contracts have been used to manipulate the market and to eliminate 

 competition. In a case entitled Reid Bros. Logging against Ketchikan Pulp 

 Company (No. C75-165SR W.D. Washington 1981), two decades of antitrust 

 violations by the contract holders, under sections 1 and 2 of the Sherman Act, 

 were found to have resulted in the elimination of existing independent mills 

 and the payment of artificially low prices to loggers, thus eliminating the 

 independent businessmen. In addition, the holders of these contracts continue 

 to pay only an average of $2.00 per thousand board feet where average rates 

 for independent operators are approximately $40.00 per thousand board feet. 



Alaskan long-term timber contracts also antedate all major environmental 

 and resources management laws pertaining to the national forests, including 

 the Multiple-Use and Sustained-Yield Act of I960, the Wilderness Act of ^9M , 

 the National Environmental Policy Act of 1969, and the National Forest 

 Management Act of 1976. These laws have never been fully implemented for the 

 Tongass. As a result, the existence of these long-term timber contracts 

 impairs the ability of the United States, the state of Alaska, and other 

 responsible parties to properly manage nontimber resources in Alaska. 



It is important to realize that the termination of these contracts will 

 not impede any timber operator in any way from competing for timber supplies 

 from national forests located in Alaska. In fact, this bill will enhance 

 competition within the timber industry. A 1987 Congressional Research Service 

 report concluded that no compensation would likely be required. If by chance 

 compensation was required, the report placed it between $21 million and $150 

 million, with the low figure most reasonable. Even counting compensation, 

 millions would still be saved every year from less subsidies, enhanced 

 industry competition and more efficient forest management. I strongly believe 

 the contracts have ceased to further their original goals and their continued 

 existence damages other Alaskan industries dependent on access to natural 

 resources. 



Finally, in H.R. 987, 23 areas are selected for protection having 

 exceptional values for fish, wildlife, recreation, subsistence hunting and 

 fishing, and scientific research. They are areas of high-volume old-growth 

 forest, portions of the Tongass' rainforest with trees 200 to 800 years old, 

 which provides essential habitat for deer, grizzly bear, bald eagles and other 

 wildlife. This special forest occurs primarily along rivers and streams where 

 clear-cutting leads to erosion, siltation and other degradation of salmon 

 habitat. 



Since 1950, more than half of the highest-volume old-growth forest on the 

 Tongass has been logged. Less than five-percent of this habitat is protected 

 in wilderness. By the USFS's own rating system, 70-percent of the high value 

 wildlife areas and 72-percent of the high value fishery areas lie outside the 

 Tongass' designated wilderness areas — and are subject to whatever management 



