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the markets of the world. I think you will find Ketchikan Pulp has 

 probably changed ownership two or three times. 



When I was a kid there was an American Viscose Corporation 

 and some food machinery was in there so it had not been a hot in- 

 vestment or the original owners would have hung onto it and AOP 

 has lost so much money that the Industrial Bank of Japan prob- 

 ably owns the mill. Nevertheless there were commitments made; if 

 you go back to the actual settlement of the peace treaty with 

 Japan you will fmd out that General MacArthur in reconstruction 

 of the agreement with Japan provided to our State Department an 

 understanding that we would assist the Japanese in their recovery 

 and there is consequently the pulp mill and that pulp mill sale was 

 actually addressed in the terms of the peace conference. So these 

 things go way back and we are talking now of the merits of re-ex- 

 amining these contracts and we have every right to do so but there 

 is an awful lot of history, there are an awful lot of players and an 

 awful lot of good intentions and the commitments of two communi- 

 ties. The people, and rightly so, have the views of those who oppose 

 and those who propose changes in the mill. 



I think there are room for changes but again as we address sensi- 

 tivities here, there are — well, there is a long relationship and I 

 think it is important that you understand it and I appreciate your 

 giving me the opportunity to provide a little bit of background in- 

 formation. 



Senator Wirth. I think that is one of the reasons why the Ton- 

 gass is treated differently and we have to let people who are not 

 from Alaska, with the background that you have, know why is it 

 treated differently. One of the reasons is historic, you are setting 

 that out as one set of reasons, and second, the trade of wilderness 

 for forest is the second reason. I think another question that we 

 have to ask is if long-term contracts are voided does that mean the 

 mill is shut down and one of the reasons may be, Mr. Pihl, do you 

 know or Ms. Shaub, do you know that when in the fifties and six- 

 ties other long-term contracts were canceled by the Federal Gov- 

 ernment as they were on every other national forest and did that 

 result in all the mills in those forests being shut down — do you 

 know? 



Mr. Pihl. I do not know the answer to that or whether those con- 

 tracts ran their term. 



Senator Wirth. They ran their term but when they were fin- 

 ished there was no longer a long-term contract, and did the mill 

 shut down? In other words are long-term contracts necessary for 

 the viablity of the timber industry, has that been shown to be the 

 case in other forests? 



Mr. Pihl. I think those mills were in areas where there were 

 other sources of timber, private timber, ships from sawmills and 

 that type of thing. 



Senator Wirth. I think that is an interesting point to look at. 

 Take for example in the State of Colorado and the State of Mon- 

 tana where there is an awful lot of federal lands, do timber mills 

 succeed there without access to private lands? 



I think you have to understand that again, why is the Tongass 

 treated differently and second, is there no private timber available 



