For the above reasons the deepening of Humboldt Bay Harbor to permit larger ships to take on full cargoes would advance opportunities to market the full sustained-yield cut from the Six Rivers and Siskiyou National Forests. Sincerely yours, RICHARD E. MCARDLE, Chief. By EARL W. LOVERIDGE. Mr. SCUDDER. From a technical standpoint, and a technical standpoint only, can this project be deemed a new project. Each major development of a project is recognized as a new project, but it is hard for me to visualize Humboldt Harbor, which has been in operation since 1881, as being a new project. The light-draft ships that operated during World War I and shortly after were able to navigate but the larger ships that went into service prior to World War II and since cannot possibly operate from that harbor in its present condition. I am very much concerned regarding the economy of this area. In the last few years practically all of the large plywood and lumber operators have moved into the northern California district. Their only method of shipping is by a 1-track railroad that operates from San Francisco Bay district to Eureka, and trucking over a 2-lane highway between San Francisco and Crescent City, and the water facilities at Eureka. I am informed that the Canadian Government now has in operation 30 ships transporting lumber from the Canadian west coast to our eastern seaboard. Their ships operate for about $4 per thousand board-feet less than American shipowners can operate. This means with their lower shipping rates and lower labor cost we are apt to have a shutdown in our lumber industry because of this competition. This would throw tens of thousands of people out of employment. We must have proper facilities in order to compete with other sources of supply. If we have unemployment we have loss of taxes besides an outlay of public funds for unemployment insurance and relief, which is bound to follow. I feel that an exception should be made to the rule. It is a poor rule to which an exception cannot be made, especially where the economy of the country is concerned. The Army Engineers state that $410,000 would make this a firstclass harbor and guarantee year-round operations. I trust that this committee, in its wisdom, will provide the money which will guarantee its usability. We have the support of the engineers for this improvement. This project will increase the Federal income. We will build up the Federal income by the investment of a relatively small amount of money in this project, and we will also be sustaining our economy. Another thing which should be taken into consideration by the committee is that these ships must ply through the Panama Canal, and that means increased revenues for the Federal Government from the operation of the canal. I feel that an exception should be made to the rule in this case. I have had this project up with the Bureau of the Budget, with the engineers, and I have also been down to the White House. There evidently seems to be a tendency to say that there is a rule laid down that no new project will be started. The thing I would like to have this committee consider is that this is not really a new project. It is the extending of a project to make it usable under present conditions. I feel that an exception should be made to the rule. It is a poor rule to which an exception cannot be made, especially where the economy of the country is concerned. I have a telegram from the Humboldt Stevedore Co., which I would like to insert in the record. (The telegram is as follows:) Hon. HUBERT SCUDDER, House of Representatives, Washington, D. O.: EUREKA, CALIF., May 9, 1953. We understand that hearing on appropriation bill to deepen Humboldt Bay Harbor at Eureka, Calif., Public Law No. 549, is set for May 11, before House Appropriations Committee. Would appreciate anything you can do to help matters, as project vitally important to development this area. HUMBOLDT STEVEDORE CO., LTD., Gentlemen, I desire to present Mr. William H. Foss, the traffic manager of the A. C. Dutton Lumber Corporation of Poughkeepsie, N. Y. I should like to have him give you testimony from a company which has been operating for many, many years. In fact, I understand that this company took the first shipload of lumber through the Panama Canal. May I present Mr. Foss. Mr. DAVIS. We should be very pleased to have a statement from you, Mr. Foss. You may proceed, sir. Mr. Foss. Gentlemen, my name is William H. Foss. I am traffic manager of the A. C. Dutton Lumber Corp., of Poughkeepsie, N. Y., and vice president of Palantic Steamship Co., Inc., a wholly owned subsidiary of Dutton. Palantic serves Dutton as a contract carrier of its lumber from Pacific coast ports to Dutton terminals on the Atlantic coast via the Panama Canal. The Dutton interest in the development of west coast timber resources predates the opening of the Panama Canal. With the opening of that project in 1914, Mr. A. C. Dutton introduced the first cargo of west coast fir into the Atlantic coast market. Dutton cargoes have continued without interruption except for the two world wars to the present. I do not wish to repeat that which is contained in the brief just handed to each of you other than to present for your consideration a summary of the facts contained therein, and in addition thereto I should like to present statistics supplied by the National Forest Service which show the substantial revenue which will accrue to the benefit of the Federal Government and in lesser degree to the State and municipal governments through a sustained-yield cutting of the public-owned lands in the Six Rivers National Forest in northern California and in Curry County, Oreg. Indications are that stumpage revenue on Dutton volume alone will be sufficient to pay for the Humboldt Bay project as presently programed, and well over the amount necessary annually to provide proper maintenance. A loss of $102,000 over a 30-month period was occasioned by the insufficient water depth in Humboldt Bay to permit maximum loading of lumber with the result that partial cargoes were loaded and then the ships sent north to other ports to complete loading. But I am not stressing the loss to private interests as much as I am the loss to the area and to the Federal Government and to the Nation because this valuable timber remains locked up for lack of an effective outlet. These would have been full cargoes, and they will in future be full caroges, if the water in Humboldt Bay is made deep enough for maximum loading. The impact of the appropriation sought goes far beyond the deepening of Humboldt Bay to 40 feet on the, bar and 30 feet in the channel. It reaches back into an area of 6 million acres in Humboldt, Del Norte, Trinity, and Siskiyou Counties in northern California and Curry County in southern Oregon. A territory primarily tributary to Crescent City and Humboldt Bay containing 104.3 billion board feet of timber, over 80 percent of which is publicly owned. This timber cannot find an outlet in the absence of adequate rail service and the absence of a deep-water port to accommodate modern oceangoing vessels drawing from 27 feet 9 inches to 29 feet under full load. The escalating costs of ship operation-crew, salaries, cost of stevedoring, and assessorial charges leave no choice to the operators to load other than full cargoes. In summary, let us consider the facts in the order in which they present themselves. 1. Timber resources in the Puget Sound and Columbia River area are diminishing. 2. The search for new sources of timber supply has led to exploration of the resources of Siskiyou National Forest in Curry County, southern Oregon, and the Six Rivers National Forest in northern California. 3. The surveys of the National Forest Service and the California. Range and Experiment Station indicate the availability on a sustained-yield basis of over 154 million board feet per year in perpetuity. 4. This vast source of virtually untouched timber exists solely because of the lack of adequate transportation. 5. Branch rail lines servicing this area are separated by 226 miles of mountainous territory. 6. A deep-water harbor does not exist to provide an outlet by sea between San Francisco and Coos Bay, a distance of about 400 miles, or roughly the same as the distance from Portland, Maine, to the Delaware Breakwater. I have prepared a sketch map which shows the ports located on this 400-mile stretch on the Atlantic coast as compared with the absence of ports for a similar stretch on the Pacific coast. 7. Humboldt Bay properly developed is the logical outlet by sea for timber in this area. Humboldt Bay, as it presently exists, does not have sufficient water over the bar or in the channels to provide proper access for oceangoing vessels loaded to full capacity and drawing 27 feet 9 inches to 29 feet. The escalating costs of operating vessels, crew wages, cost of stevedoring, and accompanying port charges leaves no choice to the operators but to demand that full cargoes be carried. 8. Evidence clearly indicates that in the time of war or national defense that the authorities will look in increasingly large measure to timber sources tributary to Humboldt Bay. 9. It is further acknowledged that this facility must be developed in peacetime if it is to be of value in times of national emergency. In conclusion the point I would like to make is that this is not a venture that will benefit only private interests. The big timber land lords are the Federal Government, the State and county governments, and the stumpage revenues will accrue to them. This is a project in perpetuity in the sense that there will be a sustained yield because the Federal Government does not sell the land but only sells the trees and retains complete control which is invariably accompanied by a process of reforestation while the process of self-liquidation continues. Appendix A is attached hereto which will show that on the basis of Dutton's business alone the Government will receive through stumpage rights the cost of the Humboldt Bay project. In addition the net profit to the Government on Dutton business in perpetuity should average at least $300,000 a year. There are not many projects that are self-supporting and on as broad a basis as this one. You will find in nine tables accompanying my statement the mathematical proof that this is a splendid financial deal for the Government. The tables show that the Government during the first 40 years will make a profit of $674,000 per annum, based on a revenue of $5 per 1,000 feet (an approximate actual figure based on actual sales, and a cost to the Government of 62 cents per 1,000 feet). Timber consultants advise that the timber behind our Crescent City operation including Siskiyou National Forest in Curry County, Oreg., is 80 percent Government-owned. We plan ultimately to operate at the rate of 120 million feet annually. Therefore, 96 million feet (80 percent of 120 million) at a stumpage rate of $5 per thousand— less 62 cents per thousand (cost of road construction and betterment amortized over the net recoverable volume) or $4.38 per thousand would indicate $420,480 per year accruing to the Federal Government in perpetuity. This substantial source of revenue is indeed unusual particularly when considered in its relationship to the project which we are presently considering together which carries an initial cost of $410,000, and $49,500 in annual maintenance. I know this committee gets many assurances on the subject of selfliquidation, but here you have a situation where the timber supply to the north is rapidly wearing out; you have figures from Government sources showing that in northern California, and there alone, is a huge remaining stand of timber; you have a substantial company which has proved its faith in the matter by a substantial investment of approximately $3,350,000, and you have a deep-water port which sorely needs development anyway because no other is practically available. In addition, you know that the Government will derive income because no timber can be cut without payments to the Government. I submit that this takes the present case out of the usual category of cases. California needs this; the Federal, State, and local governments need the revenue; the Nation needs the lumber. The Dutton Corp. is merely the instrument for performing the physical service. (The appendixes referred to are as follows:) APPENDIX A Table 1 indicates Six Rivers National Forest by county, acreage total being 1,408,368 acres. Table 3 shows the acreage by districts established in the Six Rivers National Forest. Table 5 establishes old-growth timber volume (ready to cut) by working circles, the yearly allowable cut in each working circle during the first 40-year cycle. Table 6 shows the working circle summary and an allowable cut of 154 million feet of Government timber and 26 million feet of private timber. (The Table 8 shows the cost to the Government of primary access roads. timber itself finances these roads and such costs are paid for in the price received for the timber in the first cutting cycle of 40 years.) Table 9 shows these costs applying to the first cycle of 40 years in the terms of thousand feet of timber available. The average cost (column 7) is 62 cents' per thousand feet. The price which the Government has been receiving is about $5 per thousand feet. On the basis of an allowable cut of 154 million feet, the earning to the Government after expenses for roads have been deducted would be $674,520 per year.-154 million feet, at $4.38 ($5 less 62 cents). 1 1 Lands are not national forest but are Government-owned, acquired by purchase under the Weeks Act, and are administered by the Forest Service. NOTE.--All lands have primary watershed values and are managed accordingly. 1 The Forestry Department is unable to furnish figures which would be representative of 1953 costs. The figures appearing in the above tables were prepared in 1946. However, the increase in road-building costs have been equaled, if not exceeded, by the increase in stumpage. Government timber sales in this area have increased in cost, ranging from $8 to $16 per thousand feet. 28690-53-pt. 2-3 |