However, we got the passport and I got up here as fast as I could. I plan to stay until the completion of the hearing this morning. Senator NEUBERGER. We will be very glad to hear your statement. Senator MORSE. Mr. Chairman and members of the subcommittee, I appreciate your courtesy in providing me with the opportunity to make a statement before your subcommittee on the Klamath termination program.

At present, we have before the Senate two proposals for solution of the serious and urgent problem that Public Law 587 poses for the Klamath Indian people, the people of Oregon, and the entire Nation.

I shall not have to make a choice until the matter comes before the Senate, but at this juncture I can express my preference and some of my views for your consideration.

I come before you primarily as a citizen who has a deep interest in all of our people in our land, and in the preservation of our great natural resources for posterity.

Under its able chairman, the subcommittee has made a record in hearings conducted during the past 3 years that has afforded all segments of our people an opportunity to know what the problem is, and to come forward with solutions. Federal purchase has received the overwhelming endorsement of the people.

Again, I wish to voice my wholehearted support for S. 2047, and to recommend its enactment with such modifications as you deem appropriate to serve its principal objectives.

If there is developed a sound and effective program for management by these Indians who elect to stay in the tribe, I believe that S. 2047 should be amended to permit them to attain this goal.

However, if the people who lect to continue as tribal owners cannot develop a real program that shows promise of working, I have the following suggestion to offer:

First, let me say that I see no benefit in transferring resource management responsibilities from one trustee, the Government, to another, such as`a bank, as has been suggested by the management specialists.

I would respectfully suggest that under the circumstances just mentioned, the entire reservation be acquired by the Government for national forest administration.

We are now apparently all agreed that Public Law 587 is defective. The Secretary of the Interior reported on January 13, 1958, that there is a need

to assure the continued sustained-yield management for the part of the Klamath Forest that must be sold to pay the members who withdraw from the tribe, and at the same time to make certain that the Indians receive the fair market value of the part of the forest that is sold.

S. 3051 embodies some concepts which require scrutiny.

I acknowledge that it merits serious consideration, but we should not make the error of accepting it only to find we have been led into a new unsolvable problem.

The Congress has wisely assured the sustained-yield operation of the Indian tribal resource so that it has been conserved from generation to generation.

Thus we have in large measure preserved the forest capital intact.

When we arrange to pay the Klamath people who wish to sell their forest capital, we must do so in a manner which fully compensates

them.

The Secretary recommends on page 1 of his January 13 letter that the Indians receive "fair market value." With this I agree.

Payment to the Indians of the full amount they could expect to receive if the forest land were sold under the present termination act.

I cannot agree with this concept of value.
On page 5 he calls for sale-

at not less than the appraised realization value—
and he defines this as:

The amount for which the lands could be sold on the open market prior to the termination date, without limitation on use, if as much as 70 percent of the forest were offered for sale. If 70 percent of the Indians elect to withdraw, that is the maximum amount they could expect to receive under the present law. I submit that this is a strange definition of fair market value.

The provision of Public Law 587 permitting withdrawal, which created this terrible problem, was a last-minute addition to the bill. The original bill proposed termination but not liquidation.

I believe that if we in the Congress had been aware that Public Law 587 would place as much as 25 percent of the reservation of the block for liquidation we would not have enacted it, and if the President had been so advised I do not believe he would have signed it.

If we had been aware that the result of Public Law 587 would be to cause a forced sale, this committee would have corrected the matter. I believe that the distinguished Senator from Utah, Mr. Watkins, who sponsored the termination bill, is in a good position to advise the committee on this point.

I digress from my prepared statement at the moment to make this additional comment, and I do not propose to press my argument analogies too far, but only to illustrate a principle that I think underlies them.

We are really dealing with here, in my judgment, with a very valuable natural resource heritage for future generations of Americans. I would look upon it, Mr. Chairman, as a form of stockpiling for the future of very valuable natural resource assets and capital investments, so to speak, that the future generations long after we are gone are going to sorely need in the United States.

Mr. Chairman, as one Senator, I am not going to be too stingy with the lead pencil. I think we have to keep in mind that we have some moral obligations to these Indians. It is my view that they should have been encouraged more in decades gone by to participate in the privileges of first-class citizenship.

It is easy to take a so-called hardheaded business point of view and say, "We are going to give you just what your property is worth on the basis of some values that we fix in our time." If we do that, Mr. Chairman, we will discover that no matter what dollar sign you put on the timber in this reservation, it will be far below its true value 50 and 75 years from today. This forest, if properly managed, is going to be in bloom 50 to 75 years from today into great value if it is farmed properly.

Of course, this argument of mine is speculation, but statesmanship calls for speculation on such issues. If our predecessors had not been speculators in their political philosophy in regard to such abstractions as I am raising here this morning, I do not know where America would be today. Our predecessors were pretty farseeing men.

Therefore, because I think we owe a great moral obligation to these Indians, I think it would be inexcusable for us to take a hardheaded business, parsimonious attitude toward fixing the value on this property.

I am not going to be the least bit concerned if I vote to pay these Indians substantially more than pencil pushers might agree would be the price that would be recouped if we put an immediate sale price tag on this timber.

We know that we are paying substantially more to some foreign governments for some stockpiling of strategic minerals than the market value of the minerals. We are paying far beyond the fair market value. I would pay these Indians a good price for this timber, taking into consideration its value as a future stockpile of timber needed by American boys and girls of the future. Half facetiously may I say, Mr. Chairman, that even when we liberate men from penitentiaries we give them a little something. We do not find out if they have a little property with which they can pay for the suit of clothes or whatever pocket money the Government gives them when we let them out of the prison gate. Mr. Chairman, I am not going to be greatly concerned about criticism that may follow if we pay these Indians somewhat more than Government departments figure out by way of an appraisal formula as to the so-called fair market value of this timber. I think we are buying a valuable future heritage when we are buying this reservation. I think if we do buy it and keep it for those future generations with a substantial benefit paid to these Indians over and above a forced sale price, it will still be a cheap purchase.

I want to have you keep my point of view in mind because I fully expect when we get into debate on the floor of the Senate there will be those who will say that the position I am taking amounts to some kind of an undue financial handout to the Indians.

Whatever the price figure is, Mr. Chairman, I do not think it will be too much in view of what I think the Indians will be selling us if we can stockpile this reservation for the future needs of our country. Most certainly we had better start stockpiling some timber resources in this country if future generations are to have a sustained-yield source of lumber supply.

It is my sincere belief that the only proper way to determine fair market value is to ascertain, as best our competent appraisers can, the method of sale and period of time over which it could logically be conducted that would bring the Indians their best return.

The classical definition of fair market value involves the informed and willing buyer and seller not under compulsion to deal. If 70 percent of the Indians were forced to sell in 2 years, they certainly would not be termed "willing sellers." They would be forced sellers.

The sad fact is that the trustee the Secretary of the Interior-is forced to sell for the Indian, and as I read the law the Indian is virtually powerless to forestall the sale without going to court at great legal expense.

I also submit that the educational background and knowledge of timber value possessed by the average Klamath Indian permits only a very few to be defined as informed. I say this without any reflection upon the Klamath people, because the problem is one of extreme complexity.

I could say the same thing about the United States Senators, Mr. Chairman, on this problem. We have to face the fact that we are dealing here with a problem that calls for professional knowledge, and few have it.

I also submit that the record of Federal timber appraisals indicates that at times there have been wide disparities between the prices set by the Government and those offered by timber companies. I do not wish to imply that the Government has not tried to establish fair prices for its timber or that the bidders have always possessed superior judgment or information on timber values.

However, an informed private seller, recognizing a timber shortage and not under compulsion to sell, would not and should not let his product go at a "dump price."

I submit that the concept of not being under compulsion to buy or sell is fine for a classical definition, but in the business world we seldom find this unique circumstance. Generally, price is determined by availability of the supply and the extent of the demand.

It is the responsibility of the trustee to assure the beneficiaries the best possible price, but in so doing he should not glut the market so as to depress demand and reduce the price. If timber demand is high he can speed up its sale and take advantage of high prices, but surely he does not have the right to "break" the market and unduly soften the price.

In addition, in embarking upon the new programs called for by either S. 2047 or S. 3051, there is no requirement in Public Law 587 or elsewhere that the value set on the property be computed as though the timber were being dumped on the market.

I respectfully suggest that the figure to be used for setting the minimum price for which private purchasers or the Government can acquire the lands, be defined as the fair market value of the land and timber if offered for sale over a period of years and in a manner designed to produce the best net income to the Indian people.

Suppose for just a moment that there is only one bidder for each sale unit. The appraised price will then become the controlling factor. We have no right to cause the Indians to suffer a loss that may result from a price conceived under the narrow terms of Public Law 587 with its rigid time limit.

We should correct this deficiency in Public Law 587 and I am surprised that the administration in its role as trustee did not so suggest. If the Congress fails to enact either S. 2047 or S. 3051 it would be imperative in my judgment that we clothe the Secretary of the Interior with sufficient authority to at least protect the value of the Indians' timber by extending the sale period.

I wish now to turn to my second point-the 75-year sustained-yield covenant proposed in S. 3051. If this land were added to the national forests, sustained-yield management along with other great public uses would be assured.

We have witnessed in this Nation most terrible scuttling of our private forests. From Maine to Florida, then west to our own great

State, the timber industry has marched leaving behind it stumps and wasteland and ghost towns.

In fact, it is a well-recorded fact that during this period the timbermen stole vast quantities of timber from the public domain and secured vast acreages on questionable procedures and lax administration on the public-land laws.

We have also witnessed in the past few years a new alertness by the timber industry to the precepts and benefits of conservation. This awakening has been slow and it has been small. We have over 360 million acres of commercial timberland in this Nation that are in private hands, but only one-ninth of this is in the tree-farm movement. I hope that each member of this committee will recognize that a tree-farm sign does not insure sustained yield.

This is not the time or place, Mr. Chairman, to go into this particular matter other than by way of a brief remark in passing.

I want to point out there are many claims by private timber operators that they are operating so-called tree farms. I respectfully suggest that an investigation of their actual practices would show quite a disparity between the signs on the acreage and the timber practices which they are following.

Do not forget also that in some jurisdictions the tree-farm sign is productive of certain benefits that accrue to the timber owner taxwise and otherwise. There is a need, I respectfully say, for a very thorough examination of how much actual tree farming is going on in acreage that has a tree farming sign on it.

It only assures cutting practices that "may" result in ultimate productivity of the forest again. A tree-farm company can be liquidating its timber and still be a tree farmer. Let us encourage better private forestry, but let us not delude ourselves that a sign and a screen of trees along a road is forest management.

S. 3051 provides no way of assuring that the prospective private purchaser is now practicing sustained yield on "his own" land. It may be that there are private purchasers who desire to acquire this reservation, who are now dedicated to sustained-yield forestry. But that fact in and of itself does not assure the continuation of this wise practice.

If this committee is going to proceed on this basis, I respectfully make these suggestions:

Under private purchase there would have to be devised a system of inspection to assure compliance with the proposed covenant. Before the covenant terminates there should be satisfactory evidence that the other lands owned by the purchaser are operated upon a sustainedyield basis.

Suppose the purchaser is a company hopeful of proceeding on a sustained-yield program, a firm which today honestly believes that the acquisition of all or part of the Klamath Forest would assure this worthy goal. What would our position be if at the end of 75 years the management should decide to liquidate its timber? What could we do if the first area selected for liquidation were to be the great Klamath forest?

If an opportunity for private purchase is the desire of the majority, I do not believe that we should leave to chance the realization of the conservation goal.