The committee will be especially interested in the portion of the statement which reports good progress in the making of additional large timber sales for more pulp operations in Alaska. Last March a contract was executed for a 3 billion board-foot sale which will bring additional industry to Wrangell. Last August & preliminary award for a long-term sale for 72 billion board-feet brought a newsprint mill for Juneau a long step closer. The Forest Service is actively working on another large sale, for possible advertising this fall, which if consummated would bring a pulp operation to Sitka.

May I request that this statement be received by the committee and incorporated in the committee records. I look forward to meeting with the committee when you get to Ketchikan.

Very truly yours,

STATEMENT OF A. W. GREELEY, REGIONAL FORESTER, REGION 10, UNITED STATES FOREST SERVICE

THE WORK OF THE UNITED STATES FOREST SERVICE IN ALASKA

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In Alaska the Forest Service is responsible for two large national forests. these two forests, which total just under 21 million acres in size, our action program is to manage these forest areas in accordance with the same broad principles of administering wild forest lands that have proved successful in the national forest regions in the continental United States. Keystones in the framework of policy for administering these areas are sustained yield of the resources and multiple use of the land.

The 2 national forests are the Chugach, which is 4,724,410 acres in size, and the Tongass, which is 61,016,666 acres in size. The Chugach National Forest is located adjacent to Prince William Sound and on the eastern part of the Kenai Peninsula. The Tongass National Forest includes the bulk of the panhandle of Alaska south of Glacier Bay National Monument. Of the total acreage of 20,741,076 acres, something under 5 million acres support timber stands that can now be considered commercially operable. On another 3 to 4 million acres are stands which are not operable by today's standards but which may become operable over the course of the next 20 or 30 years as the efficiency and effectiveness of logging methods increase. Of the remaining 12 million acres, something over half consists of mountaintops, glaciers, snowfields and other areas which are of virtually no use at the present time. The remainder of the acreage is muskeg, and stands of timber too sparse or growing at too high an elevation to be considered potentially operable.

There is practically no grazing by domestic livestock, and practically no areas suitable to support year-round livestock operations. Deer and bear exist on national forest areas in substantial number, and moose in some portions of the forests. Fur bearers are common.

There is a pattern of land use under permit similar to that found in national forests elsewhere. A total of over 1,100 special use permits are now in effect on the two national forests. There is also a pattern or recreation use, especially heavy in the portion of the Chugach National Forest between Anchorage and Seward.

Of special interest to the committee is the policy followed on the national forests in Alaska of eliminating areas from national forest status for homesites, and to facilitate community development. Over the past 10 years, a total of 107,372 acres have been eliminated from the 2 national forests for these purposes.

Another special policy for national forest operations in Alaska is the requirement that, with certain relatively minor exceptions, logs cut from national forests be given at least primary manufacture within the Territory.

Timber management activities

There is an active and rapidly growing forest industry in southeast Alaska which depends almost entirely on Tongass National Forest timber for its raw material. The committee is familiar with the long-continued efforts of the Forest Service to attract the pulp industry to Southeast Alaska. These efforts are now bearing fruit in a series of developments of great potential significance to Southeast Alaska. Prior to 1953 the forest industry of southeast Alaska consisted of four major sawmills and a number of small sawmills. Since that date the forest industry picture here has almost completely changed complexion. The House

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Interior and Insular Affairs Committee is justified in feeling a real sense of accomplishment for its share in bringing about this changed complexion.

In 1953 the new modern plywood plant of Alaska Plywood Corp. was brought into production in Juneau. And in late 1954 a long-established sawmill at Wrangell was reactivated and brought into production.

Also in 1954, the $50-million high-alpha cellulose pulp plant of Ketchikan Pulp Co. was brought into production at Ward Cove near Ketchikan. This plant is now producing at the rate of around 400 tons a day with operations stabilized and the plant working at a good level of efficiency. Ketchikan Pulp Co. is a joint venture of American Viscose Corp. and Puget Sound Pulp & Timber Co. It came into being as a result of its backers' willingness to establish a new enterprise based on a 50-year contract with the Forest Service for 1,500 million cubic feet of timber. One and one-half billion cubic feet of timber is roughly equivalent to 8,300 million board-feet of timber. This contract provides for redetermi

nation of stumpage rates at 5-year periods.

The start of these two new industries has marked the long-awaited beginning of a new era in forest products manufacture in the Territory of Alaska.

And the march onward continues. In June of 1954 the Forest Service made a preliminary award for a 3 billion board-foot sale near Wrangell to the Pacific Northern Timber Co. of Wrangell. The sale contract, which was executed by the company last March, calls for the construction of a sawmill prior to December 31, 1957, and the construction of a pulp-manufacturing plant of at least 80 tons daily capacity prior to December 31, 1962. Members of the Interior and Insular Affairs Committee were instrumental in helping Pacific Northern Timber Co. find a way to acquire a plant site, partly on tidelands, near Wrangell. This, too, is a 50-year sale with provision for determination of stumpage rates at 5-year periods and other features that are similar to the contract with Ketchikan Pulp Co.

A third large pulp-timber sale was started on its way last August with the preliminary award of a 50-year contract for 7,500,000,000 board-feet to GeorgiaPacific Alaska Co. This timber-sale contract calls for the construction of a plant for the manufacture of pulp prior to July 1, 1951. This company has now posted $100,000 in cash and negotiable securities which would be forfeited in event of failure to qualify for final award and execute the contract. The company is investigating sites in the immediate vicinity of Juneau for its planned newsprint mill. The size of plant contemplated, and the rate of cut contemplated, will make this proposed Juneau operation comparable in size and amount of employment to the operation of Ketchikan Pulp Co. at Ketchikan,

Still another large pulp-timber sale is now under active consideration by the Forest Service. Alaska Lumber & Pulp Company, Inc., an Alaska corporation which is a wholly owned subsidiary of a Japanese corporation, is actively interested in establishing a pulp operation at Sitka. This company has had engineers and foresters making the necessary preliminary investigations and has now developed firm plans for a high-alpha cellulose pulp operation comparable in general design and manufacturing process to that at Ketchikan. It is the Forest Service expectation that the details of this timber sale will be completed in time to permit the start of advertising this fall. This sale proposal involves a 50-year contract, and a total volume of 5,250,000,000 board-feet.

It is hard to appreciate the full significance of these recent developments in their potential impact on the economy of the Territory. The population of Ketchikan has increased by well over 4,000 people since the pulp mill came to Ketchikan. (Some estimates state a figure much larger than this.) There is every reason to suppose that these other developments will have a similar effect on the population of the communities where the plants will be located. And of course that means more service industries, and tax income, and also school problems, transportation problems, public utility problems, and road problems. Whenever the proposed Sitka sale is successfully consummated, the Forest Service in southeast Alaska will have reached the stage of needing to get several years' experience with pulptimber operations before further determinations can properly be made about the specific place for possible additional industry. We have previously talked about five major pulp installations in southeast Alaska. That may well prove to be the desirable pattern. But the caution flag must wave just now because the total volume of timber which is either committed or must be held in reserve comes fairly close to totaling the volume that can now be classed as commercially operable. These 4 large contracts total about 24 billion feet, for a 50-year supply. A reserve to support existing industry for the same length of time should be not less than 6 billion feet. A 30- to 50-year supply must be held in reserve so that there will be timber to support industry at the end of this

first 50-year period. It is certain that future developments in utilization and harvesting of timber will permit some increase in the rate of harvest. So will future growth on these stands after a sizable acreage has been cut over and the old-growth stands are replaced by vigorously growing young stands. But it is most difficult now to make adequately supported decisions about where and in what amounts such additional industry can be placed. Consequently, it is necessary that there be a period of time now when the Forest Service here, and also the forestry industry here, get some experience with operations in pulptimber stands before efforts are made to decide how much additional capacity can be supported, and where it can best be located.

Recreation and land activities

Completion of the Anchorage-Seward Highway in 1953 as a fully modern surfaced highway has brought pressure for use of land on all of the Kenai division of the Chugach National Forest in a way that has never existed before. It is commonplace for weekend usage to exceed 10,000 people. In response to this very heavy pressure of recreation use, the Forest Service has been undertaking to expand existing campgrounds or build new campgrounds and to build connecting roads. Special use permits have recently been issued for the construction of two new resorts in the Kenai Lake area, and expansion onto national forest land of a third, with construction of those resorts well along. The pattern of land use and recreation development in the Kenai division has become fairly well crystallized now, and the program of the Forest Service in this area is to expand facilities and provide for meeting increased needs just as fully as possible. New summer home groups have been approved within the last year, and surveys of additional summer home groups are underway or scheduled. So are surveys for extensions of additional roads in the area, to open up more of that spectacularly beautiful country for recreation use.

A parallel program on a smaller scale is being followed in the rest of the region where recreation pressure exists adjacent to the existing communities.

Forest research

The Research Branch of the United States Forest Service operates an Alaska research center at Juneau. This office is charged with responsibility for forest research on national forest lands and on other forest lands, also. Personnel assigned to this center are doing research in forest management and forest entomology, and are engaged in the Alaska portion of the nationwide forest survey. Now is an especially critical time for an adequate research program to be vigorously pushed. The start of extensive pulptimber cutting operations presents new problems and new phases of old problems. We know how to get natural reproduction under most circumstances, as an example, but we are a little less certain of the effect on soil-water-plant relations of the methods of cutting that will assure natural reproduction. Effects, if any, on stream flow and fish are of great importance in southeast Alaska,

Administrative organization

The Alaska region of the Forest Service has a different organization pattern than do the other Forest Service regions. The two large national forests are not handled as separate administrative units. Instead, each is split into two smaller units called divisions, under the charge of a division supervisor. Division offices are located in Ketchikan, Juneau, Cordova and Seward. Two of the divisions are further subdivided into ranger districts. The regional headquarters is located at Juneau.

Statistical summary

The timber cut during fiscal year 1954 totaled 70,283,000 board-feet, and rose to 182,483,000 board-feet during fiscal year 1955. Receipts during fiscal year 1955 amounted to only $23,045.34. However, there was deposited in the Treasury to the credit of the Tongass National Forest special fund the amount of $584,962.46. Total deposits to the Treasury showed an 80-percent increase over fiscal year 1954. The Tongass special fund was established in response to Public Law 385 of the 80th Congress, known as the Tongass Timber Act. As of September 1, 1955, the total deposits accumulated in this special Treasury account amounted to $1,969,147.79. This fund is now increasing at a rate of over half a million dollars a year, and the rate of increase will go up as these new sales come into production.

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At the start of the present fiscal year there were 1,142 special-use permits in effect, authorizing use of national forest land for residences, cabins, homesites, water transmission and other rights-of-way, camps, and the like on some 48,300 acres and some 300 miles. Also, there were 160 executed Department of Interior oil leases covering some 209,300 acres, and 33 Federal Power Commission licenses covering 628 acres and 37 miles. The number of recreation visits during the most recent year for which estimates were made totaled some 370,000.

Mr. O'BRIEN. The next witness will be Mr. Max W. Penrod of the Alaska Native Service.

STATEMENT OF MAX W. PENROD, ALASKA NATIVE SERVICE

Mr. PENROD. Mr. Chairman and members of the committee, my name is Max Penrod. I am here to represent the Alaska Native Service in the absence of the area director, Mr. William Olsen who is out of the Territory at this time and who, I understand, will be joining the committee in their hearings and will be available to elaborate more completely upon some of the points you perhaps would like to know about. I have here a prepared statement outlining in general the functions and the operation of the Alaska Native Service. About 3 or 4 pages of it is of a general nature and with your permission in the interest of time and possibly of giving you a more complete picture, I would like to read the first 2 or 3 pages.

The Alaska Native Service is that organizational part of the Bureau of Indian Affairs which carries on the Bureau's activities for the entire Territory of Alaska. The area office which is responsible to the Commissioner of Indian Affairs for the overall direction, coordination and control of authorized Bureau activities is located at Juneau, Alaska. The office of the area director prescribes objectives and approves programs designed to accomplish these objectives; exercises general direction and control over field operations and prescribes standards of performance; is responsible for appraising the effectiveness of programs in operation and recommending modifications to secure greater economy and efficiency in operation and to accelerate progress in achieving objectives of the Indian Service; cooperates with public and private, Indian and non-Indian agencies in carrying out the policies and objectives of the Bureau; integrates Indian service plans and programs with Territorial and other Federal

agency programs.

Specifically the ANS operates the following programs:

1. Education of native children-Eskimo, Aleut, and Indian-in 84 day schools
and 2 boarding schools.

2. Development of resources for the benefit of the natives of Alaska.

(a) Extension and range management including reindeer, gardening, and

small industries.

(b) Credit-canneries, native stores, individual loans, arts and crafts.

(c) Realty and general trustee services.

3. Social Welfare.

4. Construction, repair, and maintenance of buildings and utilities.

5. Communication-operation and maintenance of radios.

6. Law and order.

7. Seattle liaison office and MS North Star.

8. Administration.

(a) Office of the Area Director.

(b) Budget and Finance.

(c) Personnel.

(d) Property and Supply.

For the fiscal year 1956 the ANS has been allotted to date a sum of approximately $4,666,059 broken down about as follows:

643, 400

18, 716

54, 726

(a) Construction_.

Social welfare.

Construction, repair, and maintenance of buildings and utilities.

(b) Repair and maintenance.

Communications 1.

Law and order__

Seattle liaison office and North Star 2

Administration

Total

4, 666, 059

1 About 35,000 is allotted from "Repair and maintenance for communications." The Seattle office and North Star are almost self-sustaining as these operations are financed by funds collected for shipment of freight for the native-owned and operated stores, for other Government agencies, non-Federal activities, and from other miscellaneous earnings of ANS facilities. About $575,000 has been programed for the operation of the Seattle office and North Star this fiscal year.

About $200,000 in additional funds for general administration are contributed by the program activities. The programs must also bear the expenses for rent of office space and utilities.

The ANS employs approximately 650 persons of whom about 150 are seasonal wage-board employees. From 60 to 75 employees including seasonal are headquartered in Seattle and on the North Star, but the remainder are scattered all over Alaska from Wrangell in southeastern Alaska to Atka on the Aleutian chain to Wales, westernmost point on the continent, to Point Barrow and Barter Island on the Arctic Ocean, and as far east as Eagle near the Canadian boundary. Over a dozen employees are headquartered at day schools on Nunivak, Nelson, St. Lawrence, Kind and Diomede Islands, located in the Bering Sea. The ANS serves a total population of about 35,000 natives in Alaska, approximately 4,000 Aleuts; 16,000 Eskimos; and 15,000 Indians, spread over an area estimated at one-fifth the size of the United States.

DIVISION OF ADMINISTRATION

The problems of terrain, weather, periods of almost no daylight, isolation, remote location, lack of transportation and communication are great. The cost of transportation and shipment of supplies and equipment is tremendous. Shipment on the MS. North Star relieves this problem somewhat but not wholly.

The transportation expenses of employees recruited in the States is now paid by the Government from place of residence in the States to the post of duty in Alaska and return provided the employee remains 2 years. There is no authority under law, however, for the payment by the Government of transportation of employees recruited within Alaska and this makes recruitment of residents of Alaska extremely difficult and creates an unhealthy situation. This is particularly hard on the native people whose source of income is limited. To present the problem briefly, we can pay the transportation of an employee and his dependents from Maine to any point in Alaska and return, but we cannot pay the transportation of a native person from Juneau to another location in Alaska. A bill was introduced, H. R. 614, by Delegate Bartlett designed to remedy this situation but favorable action so far has not been reported.