399 



The long term contracts were let about 35-yrs. ago in an effort 

 create economic and community stability in S.E. Alaska by utilizing 

 the timber resource of the Tongass. It was a good idea and to a 

 large extent it worked. The resultant industry has provided jobs and 

 created a relatively stable economic situation here. The United 

 States has more than kept its part of the bargain through deficit 

 sales, low stumpage rates, purchaser credits, force account road 

 construction, and in some cases, variances of water and air quality 

 standards. Industry, on the other hand, has depended on the good 

 nature of government rather than aggressively seeking improved 

 technology or widespread end product enhancement to become 

 competitive in world markets. The long term contracts tend to make 

 people complacent with the existing situation rather than developing 

 better ways to make a business more economically viable. The 

 contracts also inhibit competition and small independent operations. 



Some suggest that it would take a great deal of money to terminate 

 the contracts. That may be true, but considering a 35-yr. period to 

 depreciate investments and the fact that there should be a continual 

 supply of timber from the Tongass NF based on the sustained yield 

 principle, contract termination damages may not be all that great 

 considering the other options. I also suspect, given a timber 

 harvest level based on a plan following the mandates of the National 

 Forest planning act and the principles of NEPA, there will always be 

 a viable timber industry in S.E. Alaska even though the current 

 players may have backed away from the table. 



It goes without saying that the Forest Service should be subject to 

 the annual budget process. It seems that no one disagrees with this 

 point. The 23 areas that are identified in S. 346 are another 

 matter. These areas seem to contain values that may warrant special 

 management. The planning process currently underway should be able 

 to develop management prescriptions for these areas as long as they 

 remain in an undeveloped condition so that all the options for 

 management are open. 



Thank you for the opportunity to comment on this important issue. 

 Sincerely, 



William ^. Holman 

 PO BOX 5972 

 Ketchikan, AK 99901 



Enclosures 



