Page images
PDF
EPUB

stalled at all, because in normal times it is regarded as an uneconomic thing. You would get the sulfur cheaper elsewhere.

Mr. DOLLIVER. You would have to have some basis for getting an amortization favored, and I am trying to get that basis.

Mr. WOODSIDE. The basis for it there is that here there is a means of recovering a basic commodity, it is extremely doubtful whether, upon a return to normal, those sulfur recovery facilities would be used, or could be economically used.

Also, I understand that they are subject to a pretty high rate of destruction and depreciation because of the type of the commodity being handled: acids.

So that you give a man with a certificate some assurance that within a short period of time he can recover a substantial portion of his investment.

or

Mr. DOLLIVER. Would that be over a period of 1 year, or 5 years,

Mr. WOODSIDE. Five years.

Mr. DOLLIVER. Is that the usual time that is granted? Five years? Mr. WOODSIDE. Yes, sir; right along.

Mr. DOLLIVER. That is all, Mr. Chairman, thank you.

Mr. BECKWORTH. Mr. Denny, do you have any questions?

Mr. DENNY. No questions.

Mr. BECKWORTH. Thus far, Mr. Woodside, if I understand your position, it is this: You have not been consulted on the other four projects that have come to you, in any manner, have you?

Mr. WOODSIDE. That is correct.

Mr. BECKWORTH. Other than the fact that you probably know their names, you do not know a thing about them; is that correct? Mr. WOODSIDE. That is right.

Mr. BECKWORTH. Suppose the National Production Administration should say to you that it regards each of those projects that it is now considering, four of them, necessary to the defense of the Nation, would your organization question them on that, or not?

Mr. WOODSIDE. It would work in this fashion: If the NPA recommended the four cases as necessary in the interests of national defense and the program and requirements people of DPA concurred with that, or, at least, did not disagree with it, they would then become eligible for certification under 124 (a) and probably would be processed on some basis which seemed to us to be a fair figure for facilities of that character.

Mr. BECK WORTH. I am not sure I understand you.

Suppose they make a flat-footed statement that these are essential to defense; do you have the power to veto that?

Mr. WOODSIDE. Yes, sir.

Mr. BECKWORTH. And I assume probably in the past your organization had the veto in a good many projects of that kind, not necessarily paper and pulp.

Mr. WOODSIDE. Yes, sir.

Mr. BECKWORTH. That is really what I was trying to get at.

Mr. WOODSIDE. We are not bound to follow the recommendation of any delegate agency, and I don't believe there has been any delegate agency where at one time or another we have not turned down a recommendation for one sort of thing or another.

Mr. BECKWORTH. Then you would not necessarily be bound by what the Forest Service might say about a given project; all you would have to do would be to take it into consideration where you would not be bound one way or the other; is that correct?

Mr. WOODSIDE. If the Forest Service raised any material question about the adequacy of the supplies of raw material for a particular project, that would be enough right there to hold that thing in suspension until the matter could be resolved.

Mr. BECKWORTH. To get back to my original question, then, you would not feel bound either way by their representation; it would simply be a factor of consideration?

Mr. WOODSIDE. Yes, sir.

Mr. BECKWORTH. That, too, would be true of any representation they might make with regard to say, Alaska, would it? Mr. WOODSIDE. Yes, sir.

Mr. BECKWORTH. Insofar as you know, has any consideration been given in the form of discussion even to the possibility of developing pulp production in Alaska?

Mr. WOODSIDE. It is my recollection that we have already certified a project in Alaska for pulp production.

Mr. BECKWORTH. You had something to do with that, did you not? Mr. WOODSIDE. Yes, sir.

Mr. DOLLIVER. Is that tax amortization?

Mr. WOODSIDE. Yes, sir.

Mr. BECKWORTII. That is what I had in mind along the lines of some of your previous statements.

And there is nothing to prevent you, if the need for the wood exists, from considering other kinds of projects where wood might be needed; is that correct?

Mr. WOODSIDE. Right.

Mr. BECKWORTII. And, as you pointed out, the RFC, if it was disposed to lend money to, say, a newsprint project in Alaska, the RFC could still do it under the new procedure that you have described here; is that correct?

Mr. WOODSIDE. Yes, sir.

Mr. BECK WORTH. That is an interesting innovation.

Who in the Defense Production Administration builds up these programs? Could you give us the names?

Mr. WOODSIDE. Mr. Trigg is the Deputy Administrator; Ralph Trigg is the Deputy Administrator of DPA for program and requirements, and Nathaniel Knowles is the Deputy Administrator for Staff Services.

As it works out, Staff Services does have a programing responsibility for those items which are of stockpile interest.

Aside from that, Trigg's office is primarily responsible for the matter of the DPA position on program and requirements.

Mr. BECKWORTH. This is not clear to me.

Suppose a paper mill wanted to make an expansion in Alaska and it should be determined that it is very, very necessary that we have more newsprint and various types of paper; to what extent could DPA help on that kind of proposition, if at all?

Mr. WOODSIDE. Well, tax assistance could be given through the necessity certificate.

So far as the law is concerned, I think that they would be eligible for loan assistance, although I personally believe that, in view of the limited funds available under 304, that the loans made under that section should be pretty well limited to those projects which have a pretty direct military interest.

That is just my own personal conviction, and that is what we have done so far.

But so far as the procedure and the statute is concerned, you might say any project might be eligible for a loan.

Then I suppose this is perhaps rather farfetched, but conceivably the Government might say, "Well, we will enter into a procurement contract."

Mr. BECKWORTH. I have one other question on which to clear my own mind.

The moratoriums that you mentioned do not apply to the four projects, do they?

Mr. WOODSIDE. The four newsprint cases?

Mr. BECKWORTH. Yes.

Mr. WOODSIDE. Yes, sir.

Mr. BECKWORTH. Do they?

Mr. WOODSIDE. Yes, sir.

Mr. BECKWORTH. I am talking about the four projects that are already before the NPA.

Mr. WOODSIDE. Yes, sir.

Mr. BECKWORTH. They could not go ahead now?

Mr. WOODSIDE. As I read that moratorium, I would say that newsprint was one of those things to which it would apply.

Mr. BECKWORTH. What would it take to get the moratorium changed in the case of newsprint? Whose decision would it be? Mr. WOODSIDE. Well, Mr. Fleischmann could move them.

Mr. BECKWORTH. He could accept them, if he wishes to?
Mr. WOODSIDE. Sure.

Mr. BECKWORTH. Colonel Denny, did you have any more questions to ask?

Mr. DENNY. No.

Mr. BECKWORTH. We do appreciate the testimony you have given us and the time you have given us, Mr. Woodside.

The chairman wishes to apologize again for being late, but he was detained by another meeting.

I wish to recognize, as one who is in the audience with us at the request of our very fine friend from Alaska, Bob Bartlett, Mr. George Sundborg, who is the general manager of the Alaska Development Board, who happens to be here in Washington at this time.

I might say we have been favored with the testimony of Mr. Bartlett a number of times, and we welcome you to our presence, Mr. Sundborg. We are glad to have you with us any time you can be with us.

If at any time you want to make any observations, you are certainly welcome and feel privileged to do so.

Do you have a statement?

STATEMENT OF GEORGE SUNDBORG, GENERAL MANAGER, ALASKA DEVELOPMENT BOARD, JUNEAU, ALASKA

Mr. SUNDBORG. Yes, I have a statement.

Mr. BECKWORTII. Without objection, your statement will certainly be made a part of the record.

Mr. SUNDBORG. Thank you.

(Statement referred to is as follows:)

STATEMENT ON ALASKA'S NEWSPRINT MANUFACTURING POSSIBILITIES BY GEORGE SUNDBORG, GENERAL MANAGER, ALASKA DEVELOPMENT Board, Juneau, ALASKA

The richly timbered coast of southeast Alaska has long been recognized as an area which is capable of producing large quantities of pulp and pulp products in perpetuity. Specifically, an opportunity exists at the present time to establish one or more large newsprint mills which could produce this product at costs which are believed to be competitive with the industry elsewhere and remunerative at present and prospective newsprint market prices.

THE AREA INVOLVED

Southeast Alaska is a long, narrow, island-dotted strip of land about 350 miles in length and 120 miles wide. It consists of both mainland and some 1,100 good-sized islands. The whole area is served by protected navigable waterways, all of which are ice-free the year round.

Virtually all of southeast Alaska is within the boundaries of the Tongass National Forest, the largest such forest under the American flag. Its total area is 16,080,000 acres. The forest is under the supervision of the United States Forest Service.

Good sites for pulp mills exist at Ketchikan, Sitka, Juneau, and Thomas Bay. Plans are already underway for the construction of a pulp mill at Ketchikan with construction to begin early in 1952. This will not manufacture newsprint, however.

Southeast Alaska enjoys regular steamship service with Puget Sound via the Inside Passage. Distances by steamer from the rail heads of Prince Rupert and Seattle to the Alaska pulp-mill sites are as follows:

[blocks in formation]

The forest of southeast Alaska is predominantly a mixed stand of western hemlock and Sitka spruce with western red cedar and Alaska cedar associated with them in some areas. The volume of commercial timber in the Tongass National Forest is estimated as follows:

[merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][ocr errors][merged small][subsumed][subsumed][subsumed]

The forest cover extends from tidewater to an altitude of about 2,750 feet in the southern portion of the area and 2,000 feet in the northern. At about the 1,500-foot level, commercial timber gives way to dwarfed, limby trees classified as noncommercial. Seventy-five percent of the commercial timber is within 22 miles of tidewater. Only rarely do good stands extend inland more than 5 miles.

Average volume per acre of commercial timber varies from 15,000 to 20,000 board feet, but volume of 40,000 board feet per acre are common over extensive areas. The majority of merchantable trees are from 2 to 4 feet in diameter, from 85 to 140 feet high. In its more advanced stages of overmaturity, the forest contains about 75 percent hemlock and 25 percent spruce by volume, the spruce consisting of scattered, exceptionally large trees. The overmature hemlock is 3 to 4 feet in diameter, the spruce 4 to 6 feet. The hemlock carries considerable defect. The younger trees range from 8 inches to 2 feet in diameter, and are tall, well-formed, clean-boled, and sound. This combination of overmature and young timber constitutes about half the commercial timber of the region, which can yield much pulp timber, also much spruce saw timber of large size, cedar shingle timber, long hemlock piling, etc. Mature timber includes mixed stands which have not yet begun to open up and let in young growth. The trees range from 22 feet to 4 feet in diameter, and are good quality. Extensive areas of this mature timber are scattered through the forest, and their heavier yield per acre and smaller amount of defect than the overmature young timber areas give them a high value from a logging cost standpoint. Stands of evenaged young growth timber also are found throughout the region.

The predominant western hemlock of Tongass National Forest is an excellent wood for a great variety of lumber uses and is superior to eastern hemlock as a pulping wood. It is the foundation of the extensive bleached and unbleached sulfite pulp industry of Oregon, Washington, and British Columbia. Much of the bleached output goes into rayon and cellophane. Sitka spruce supplies most of the present Alaskan sawmill requirements. It is manufactured into all the usual forms of lumber and into airplane stock. It is a good all-purpose pulping wood, comparing favorably with white spruce, the standard pulpwood of eastern North America. Western red cedar is used for siding and other high-grade lumber, shingles, and poles. It is also usable for sulfate pulp. Alaskan cedar is not extensively cut at present, but has a high value for specialized uses. It has a fine texture, is easy to work, takes a beautiful satin finish, and is extremely durable. Its pronounced cedar odor makes it valuable for clothes closets and cedar chests.

LOGGING METHODS

The climate in southeastern Alaska permits logging operations throughout the year, although most of the small logging shows now in operation confine their activities to about 10 months. A pulp mill would, of course, operate all year. One great advantage of the climate of this area is that there is no hazard of forest fires. Virtually none of the timber resource of the Tongass National Forest has been lost through fire. This gives the operator absolute assurance that the timber for which he contracts will be available when needed.

Logging methods required in Alaska are similar to those used in western Washington and Oregon. Machine logging with donkey engines and wire rope has proved most practical in moving logs. Most of the timber can be logged directly into tidewater for rafting. Flat rafts can be used in the protected waterways. Davis-type rafts are required in wintertime for tows in the wider, more exposed channels. The cost of towing sawlogs has been estimated by the Forest Service at 12 cents per 1,000 board feet per mile. Floating logging camps, easily towed from one logging site to another, are in general use. Donkey engines and other equipment are moved on scows or floats.

Virtually all timber manufactured in southeastern Alaska today is purchased from the national forest. The yearly cut is about 90 million board feet, less than one-twelfth the amount that could be cut without endangering a permanent supply. Most goes to lumber, some in the round for fish traps and wharf piling. Juneau, Sitka, and Ketchikan each has a modern electric-driven sawmill.

MANAGEMENT POLICY

The United States Forest Service administers the Tongass National Forest under a policy which permits development and maintenance of a permanent pulp and paper-manufacturing industry based on sustained yield. Productive forest land will be divided into pulp timber units, each of which will insure a

« PreviousContinue »