Service and Bureau of Indian Affairs was in large long-term sales. Sales of timber from public domain or the revested O. and C. lands were limited. Ready availability of more accessible private timber was the major cause of this situation. In the 1940's the picture began to change, particularly in the West.

In the last 15 years the demand for national forest timber has so accelerated that the cut has risen 250 percent. On a Governmentwide basis the 2.4 billion board-feet of timber sold in 1940 brought in a revenue of $6 million. By 1956 it had climbed to 8%1⁄2 billion board-feet and over $150 million in revenue. The volume sold has more than trebled, while the value of the timber has gone up over 30 times. The price rise reflects in part the inflationary trend, but the rise in production reflects the demand for such timber as is now largely confined to Federal lands. The funds available for timber management have not kept pace with the timber demands.

After listening to testimony for 3 weeks by people from the 5 States where Federal timber sales are most heavily concentrated and after examining the agencies' records, the opportunities for the agencies to sell more timber are apparent. To the credit of all of the agencies, the witnesses were almost unanimous in praise of the agencies' effective administration with their limited funds.

The timber management budgets for the Forest Service and the Bureau of Land Management have three parts. They are not so defined but in actuality the expenses may be grouped to include the equivalent of operation and maintenance, capital investments, and taxes. First are the operating expenses which provide funds for current operations, such as for timber management, fire and insect protection, and repair and upkeep of facilities. Second are the investment expenses for roads, trails, bridges, buildings, and reforestation. Third, under the equivalent of taxes and governed by the level of receipts, are in-lieu payments to local governments.

The first two items are provided by appropriated funds and by the agency adjusting the appraisal price of timber sold to allow for purchaser performed tasks. For example, portions of road maintenance and construction, and slash disposal, are performed by timber purchasers and allowances as made in the appraisal price of the timber to offset the work done.

The third item is handled by annual congressional appropriations for payment to local governments of their proportionate share of the earnings authorized by the applicable statutes.

The budget, therefore, reveals only part of the operating and investment expenditures for the public forests.

Among the problems in providing for public forest management at a level which permits full development, are rapid completion of inventories, up-to-date management plans, recomputation of allowable cuts, development of adequate road systems, investments for reforestation, and provision for adequate living facilities for personnel. When demand for Federal timber was at a relatively low level, even the most farsighted administrator found it difficult to convince people at the departmental level, in the Bureau of the Budget and in the Congress, that the long-term outlook for timber requirements required greater preparation.

In the West, particularly, less and less uncommitted private timber is available for non-timber-owning mills. These mills, as well as

Management permitted an operator, who would not sign an agree ment, to trespass with impunity.20

Bureau of Land Management policy

The Bureau of Land Management under its statutory authority (43 U. S. C. 956) has formulated regulations that provide the terms under which rights-of-way will be granted across lands. These regulations implement a policy which recognizes that private owners who wish to cross public lands must grant reciprocal rights to the Government.

The policy statement in the regulations (43 C. F. R. 115.155) states that timber management problems can be solved by the Federal Government and the owners of intermingled lands; that the value of timber is affected by the transportation system available; that the duplication of road systems reduces the value of the Federal and private timber; that sustained yield, the opportunity for prospective bidders to purchase timber, and the other statutory requirements for the operation of Federal lands, require that the Government have access. Where a road system is adequate or can economically be made adequate to accommodate the normal requirements of timber haulers, the granting of rights-of-way across Federal lands will be conditioned upon grants to the Government with adequate provision for just compensation. Where a road cannot be made adequate to handle the normal requirements of both parties, the Government will not request rights. In entering into a right-of-way agreement the Government will seek to reduce all of the terms and the costs to specific statements and fixed figures. Provision is made for arbitration of disagreements by the road owner and the purchaser of Government timber. Provision is also made for short-term permits.

The arbitration of road-use fees is a matter of concern to the Government. Many timber purchasers are small concerns, while many of the arbitration agreements are with large companies. For example, the purchaser, with an immediate interest extending only to the small amount of timber he has purchased, does not have long-term interest in negotiating a fee covering a 1-mile road system. He will tend to settle on a fee without the use of the formal arbitration procedure. The Government, on the other hand, has a permanent interest because the road-use fee affects the value of all its timber.

The Bureau of Land Management presently issues short-term permits to road owners. Upon the expiration of the short-term permit the Government's rights of use also generally expire. If the Bureau of Land Management declines to issue a short-term permit, an operator is blocked from his timber until a long-term agreement is negotiated.

A short-term right may be viewed as a nonrenewable concession to the private landowner to permit use pending the development of a long-term agreement.

It would be preferable for the Government to negotiate for the long-term right at the outset. With the right to require reciprocal rights, the necessity for condemnation can be limited to situations where agreement cannot be reached. The successful negotiation of the many long-term agreements needed is time consuming.

By amendments published November 18, 1955, in the Federal Register to 43 CFR 115.174 (11) provision is now made to secure 20 See p.- hearing.

costs for personnel and equipment. Congress has steadily appropriated more funds than requested causing the executive branch to give greater recognition to the needs that exist. Even when the executive branch has raised their budget, the Congress has provided more funds for selected vital functions.

In an agency such as the Forest Service, which has broad service functions as well as business-type timber sale operations, consideration must be given to all of the activities authorized by law and supported by the Congress. For example, in the budget for fiscal year 1955 the Department of Agriculture, as a part of a general reduction, did not request money for two service functions under the State and private forestry program. This program is carried forward under the ClarkeMcNary Act and has been in operation since 1924.

The two items deleted were "Cooperation in forest tree planting, $447,000," a program most vital to the current soil-bank program of the administration, and "Cooperation in forest management, $632,000," a program of advice to farmers and small woodland owners. The 83d Congress restored these items in amounts slightly higher than the previous year's appropriation. Also since 1953 the budget. has not included a request for land acquisition funds, but each year the Congress appropriates a small amount.

Access-road construction is a vital program neglected by the executive branch, but for which the Congress has shown increasing consideration. Congress set the authorization for access roads for fiscal years 1952 and 1953 at $17.5 million annually. This was increased by the Congress to $22.5 million annually for 1954 and 1955, to $24 million for 1956 and 1957, and for 1958-59 to $27 million. During each of the last three times when the biennial highway authorization was under consideration by the Congress, the executive branch failed to seek an increase. In each instance, however, the Congress increased the authorization; first, by $5 million annually, next by $1.5 million annually, and again by $3 million annually.

The executive budget requests for fiscal years 1953, 1954, and 1955 were for less than the authorized amount. For fiscal year 1954, and again for 1955, supplemental appropriations were sought for access roads. In 1955 the total appropriated equaled the authorization but in 1956 and 1957 the full authorization was requested and appropriated. The 84th Congress took the initiative and raised the level of authorizations to more realistic levels. Thus the initiative in recognizing the value of this vital program passed from the executive to the legislative branch.

Corrective action needed

With its large staff of personnel to formulate budget requirements, the executive branch had failed to present a budget which recognized the rapidly growing need for a sound, businesslike management of the public forests.

All this indicates that, in the face of a real need to develop our public timber resources, the Congress has not been receiving the needed information for a long-range program and short-term budget.

The Forest Service has long been noted for the meticulous detail and careful planning with which it reviews workloads, accomplishments, goals, and cost of operations preparatory to its long-term budget development. Forest Service officers, from the ground up,

participate in the development of programs based on their estimates of local needs and guided by standards of production. The regional officers carefully review the requests and apply checks to temper overoptimism. After the data are cast into a regional budget they are further reviewed at the Washington office. The completed budget is available to the office of the Secretary and the Bureau of the Budget. Forestry has been a minor function in the Bureau of Land Management and Bureau of Indian Affairs, and there has not been a similar refinement in the development of forestry budgets. In the Bureau of Land Management for example, the forestry budgets for public domain lands were, until recently, prepared in the Washington office. Budget ceilings and controls for business-type activities for all Government are not drawn in terms of potentials for development or in terms of opportunity for compensating revenue. Instead, they are designed to fit into the same pattern as other governmental activities which produce neither raw materials nor direct revenue. A review of the basis upon which revenue-producing budgets are drawn is called for, in order to devise a method more responsive to the needs of sound business management.

Four criteria should guide the formulation of a budget program:

1. The short- and long-term demand for the raw materials, and services which the lands can produce. This applies to renewable as well as nonrenewable resources.

2. The ability of the lands to meet demands for the raw materials or services.

3. The investments needed and the rate of investment required to attain the long-term goals in a reasonable period.

4. The funds required to operate the short-term program.

The revenues produced by these agencies provide money for the Treasury and support for local governments. In the case of the Bureau of Indian Affairs, the revenue is often the main income of the Indians. The lands provide wood, water, grass, minerals, recreation, and other products and services. They are the sinews of economic development in many areas.

Where private timber is in short supply and vast stands of Federal timber exist, the people will not long be satisfied when told that allowable cuts cannot be raised because budget ceilings are so low that funds for full management cannot be requested.

When the Government is in business-and it is in this instancea businesslike approach is demanded. The Federal appropriations process is compatible with a business approach, but has not always been so used.

Two phases of budgeting may become a problem as the public timber-sales activity increases. One is the effect of yearly appropriations on efficiency of operations. The other is the coincidence of the commencement of the fiscal year with the height of the peak workload period in the forest.

Most Federal timber is in areas where peak field activity occurs between the months of March and November. College graduates are available in June, and usually begin to seek employment in the early spring. The agencies, on the other hand, are often unable to determine their ability to hire personnel until later because firm commitments can seldom be made before July 1, when the budget period commences. To meet this situation temporary employees are

laid off early in the fall in order to conserve money for use the following spring. Thus, much effective field time is lost and the better temporary employees are discouraged from continuing with a Government

agency.

F. SPECIAL INDIAN PROBLEMS

Two great resources are involved in the work of the Bureau of Indian Affairs the people and the land. The committee held hearings at 4 places where Indians testified, and 3 of these the situations offer an excellent contrast.

The Klamath Reservation consists primarily of tribal land for which plans are going forward to terminate Federal supervision. The Quinaielt Reservation is almost entirely allotted and no plan for termination is underway, but the patent-in-fee process may become more prevalent. The Warm Springs Reservation is primarily tribal land. All three reservations are incorporated under the WheelerHoward Act of 1934.

It is vital that the Indian situation be recognized for what it is. Basically, the Indian approaches his forest land as do many small and even some large forest landowners. Interest in conserving the forest is often counterbalanced by an overpowering immediate need for money. In the past the Bureau of Indian Affairs has stood between the Indian and his desire to convert his forest capital to cash. Recently, the Department of the Interior has adopted a more liberal policy of granting patents in fee. This policy both facilitates the sale of land and resources by the Indians and makes sound forest management more difficult.

The broader aspects of Indian affairs concern the relations between the Bureau of Indian Affairs as a trustee or guardian charged with equipping the Indian to assume his proper role in our society, and providing for his economic welfare in the process. Timber policy and this program are closely linked in promoting the well-being of the Indians in the Northwest. Indian affairs need considerate attention by people who are liberal toward their fellowman and his troubles, who are persistent in seeking out remedies, and who, at the same time, are conservative with the Indians' money.

When the white man first came to this continent, a deep, luxuriant forest covered much of the country.

In the process of development the forests were exploited for their lumber. The land where the Indian roamed has been changed from a quiet forest and plain to a vast agricultural-industrial complex.

In return for the 2 billion acres of land within the continental United States which the Indians had unknowingly husbanded for our exploitation and development, he finds himself with 57 million acres, much of which is arid or relatively nonproductive. Only 6.9 million acres are forest. The Indian reservations embrace about 1.4 percent of the commercial forest land. It is to these lands that attention is directed.

The Bureau of Indian Affairs sells timber from the Indian lands for the commercial manufacture of lumber, plywood, paper, and shingles. Sustained yield is ordained for the Indian by law so the Bureau tries to restrict the annual cut to an amount approximately equal to the growth of the forest.