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stable employment. 



Complete "reform" of forest practices in Southeast would 

 involve both the repeal of Sec 705(a) of ANILCA and the 

 termination of the 50-year contracts. Senate Bill 346 would 

 achieve these ends and place 23 key commercial fishery watersheds 

 and wildlife habitat areas under a temporary moratorium from 

 logging . 



S. 346 is clearly in the national interest on economic 

 grounds. The expense incurred in providing below-cost timber is 

 beyond reason from a national perspective. According to the 

 Congressional Research Service, between 1970 and 1984 the Forest 

 Service spent $375 million on sales in the Tongass and received 

 only $62.5 million in revenues from the sales. Between 1982 and 

 1985, the Forest Service spent $263 million and received only 

 $2.9 million. The Forest Service estimates that Tongass timber 

 management will lose 55 million over the next five decades. 

 Based on the estimated employment of 2,300 workers in the timber 

 industry in Southeast, these losses alone could supply each 

 worker with $43,478 per year for the next five decades . The 

 Chief of the Forest Service has noted that even if the Forest 

 Service were to cut and deliver the trees to the mills free of 

 charge, the timber companies would still lose money. 



The justification for these below-cost sales is that they 

 provide jobs in Southeast Alaska. This argument, however, is 

 seriously flawed. S. 346 will not reduce employment in Southeast 

 and will, in fact, probably increase in employment. First, 

 private lands (held by Alaska native corporations) are now the 

 source of a large timber harvest in Southeast. The repeal of 

 subsidies to operators on federal land would improve the 

 employment situation on private lands. Second, Employment in the 

 timber industry ranks third, behind tourism and commercial 

 fishing, in Southeast Alaska. The timber industry is an indirect 

 competitor with these industries by virtue of the aesthetic 

 impacts of logging (detrimental to the tourism industry) and the 

 impacts of logging on salmon spawning grounds (detrimental to the 

 fishing industry). Thus, even if the net effect of S. 346 were a 

 reduction in timber employment in Southeast, it would be balanced 

 by an increase in employment in the other industries. Finally, 

 cancellation of the 50-year contracts could have a beneficial 

 effect on the job situation in Southeast by improving the 

 competitive ability of other timber companies. For example, in 

 1981, the Reid Brothers Logging Company (no relation) won an 

 anti-trust suit against APC and LPK . One last economic defense 

 of the subsidy might be that it is desirable from the perspective 

 of balance of trade; however, if this is a goal of the subsidy 

 other forests would provide much more cost-effective returns. 



Strictly speaking, national goals such as the preservation 

 of genetic diversity could be met without reforming timber 

 management on the Tongass, since several protected areas do exist 

 in the forest. However, in order to comply with the basic 

 provisions of sustained forestry and multiple-use management in 

 the NMFA, reformation is essential. Moreover, to meet 

 environmental considerations at a state and local level, federal 

 action is clearly warranted. The Forest Service provides 450 mbf 

 per year to timber companies; only a portion of that (roughly 



