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nomic relationship with Japan, the perception of many that, for ex- 

 ample, the Japanese are not paying their fair share of the defense 

 burden. The American public is paying 6 percent of our gross na- 

 tional product, and the Japanese are paying 1 percent. You have 

 heard all of these arguments; but certainly, as we get to the floor 

 of the United States Senate discussing this legislation, the issue of 

 our relationship with Japan, our economic relationship, comes into 

 this. 



Governor Cowper. I would suppose. Senator Wirth, that any 

 time you have a harvest of natural resources that are ultimately 

 sold to the Japanese where you manage those resources for the use 

 of public funds that you could say, in effect, that that was a subsi- 

 dy to the Japanese. 



This is a little different situation. It is a grade higher than that, 

 and I recognize that. But, as I say, in the end, as we balance the 

 equities here we think that exist in the industry, it needs to have 

 some floor here. We find in Alaska that often we are controlled 

 forces that do not bother to ask us what we think, and we appreci- 

 ate you not being in that category. We do not want the rug pulled 

 out from under the industry, I guess is what I am trying to say. 



Senator Wirth. I am not taking issue with the argument. I am 

 saying that there is an old saying, "What you see depends on 

 where you sit," and there are many would do not sit where you do 

 and do not understand Southeast Alaska, you having been here, 

 from someone who is viewing it from quite a different perspective. 

 I did not raise this issue for the purpose of being contentious or ar- 

 guing about your position. It was just to point out that there is a 

 difference in flow here. 



That leads me to a second issue that relates very much to this. 

 There is in the proposal that you and the coalition put together, I 

 think, a very interesting idea and that is for kind of a value-added 

 approach. 



I come from an area of the country, and Senator Burns comes 

 from an area of the country, where people often view themselves as 

 Colonials. You know, the colonists are out there extracting our re- 

 sources and we have had that happen to us in mining and timber- 

 ing and water resources, so that for a long period of time we got 

 the lowest possible value for the resources coming out of our state 

 that go someplace else where value is added, and that is where the 

 real money is made. 



One of the arguments that I have been making, over and over 

 and over again to the Forest Service in Colorado is what we ought 

 to be doing is looking at the economics of this situation and try to 

 figure out how we add greater value to the investment that is 

 made there or to the resources that are taken out. And, therefore, 

 that value-added notion I think is a very creative one, and it may 

 give us an opportunity to work out some very interesting and per- 

 haps kind of model language. 



I find that very appealing, and I know that others coming from 

 states like mine, like yours, like Senator Burns' all live within this 

 sort of mentality, that somehow here we are, whether it is a big 

 bank or someplace else, with all the big money someplace else. The 

 loans get made to us. We are a capital poor area. The resources get 



