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have to be held, and starting with that basis, that particular value will be used for the separation or partition of the property under election. Of course, the appraisers started with that sort of valuation, and by their own methods reduced it to within the terms of this assumption that we have to proceed under.

Mr. WOLF. Do you think it would be desirable for the committee to have the entire figure and the device used in arriving at the realization value before it?

Mr. SHANKLIN. We will be very glad to present that to the committee when it is available. It is not yet available.

Senator NEUBERGER. I understand that.

I would like to ask Mr. Wilcox a question, because we are discussing the value of this timber right at this point.

It is my understanding that Western Timber Services were employed by the Management Specialists to conduct the appraisal; is that true?

Mr. WILCOX. Yes, sir; that is true.

Senator NEUBERGER. Do you as forester with the Management Specialists agree generally with the outcome of that appraisal or not? Mr. WILCOX. Mr. Chairman, in answer to that question, I should point out that any appraisal is an expression of opinion. The Western Timber Service personnel have expressed their opinion in reports. My views differ substantially from theirs, but my views are my own opinion which, as I said, are not in agreement.

Senator NEUBERGER. You are a trained forester with wide experience on Indian lands, so it is much more than an offhand view?

Mr. WILCOX. Let us go back to Mr. Weyerhaeuser's statement in the October hearing at Portland.

At that time Mr. Weyerhaeuser indicated that the liquidation value of the property would probably be worth less than 50 percent of the full retail value of the timber. That was an expression of an opinion which indicated a very substantial discount. The Western Timber Service discount is not nearly as great as that.

My own views come somewhere between the two.

Senator NEUBERGER. In other words, if I interpret you correctly, you believe the Western Timber Service's appraisal of the timber places too high a value? Am I correct or incorrect?

Mr. WILCOX. My own opinion is that the Western Timber Service opinion is substantially higher than my opinion.

Senator NEUBERGER. To me, this is a very significant thing for the whole future of this reservation, because again, if I am not mistaken, you probably have had more experience on the Klamath Indian land than almost any forester in recent years. Would that be a fair statement? Or as much experience, let me say, so that I don't exaggerate.

Mr. WILCOX. Well, sir, I believe that my experience on the reservation is as broad as anyone's at the present time.

Senator NEUBERGER. That has always been my understanding on visits that I have made to Klamath Falls. So if you, from this vast experience, have reached this conclusion regarding the Western Timber Service's appraisal, does this not make it highly unlikely that any private purchaser is going to bid on these 11 blocks at the value placed on it by Western Timber Service?

Mr. WILCOX. It is my opinion that there will probably be no bidders from private industry on any of the blocks when they are put up and given a chance to bid on them.

Senator NEUBERGER. That is your opinion?

Mr. WILCOX. That is my opinion.

Senator NEUBERGER. I would say that is one of the more significant statements we have had in the entire hearing, if not the most significant statement.

Mr. WOLF. Mr. Wilcox, if you were the appraiser and you were not required to go on the basis that the timber would be sold within the time limit provided in section 6 (b) of the act, in other words, if you were asked to appraise it on a basis of orderly liquidation, would your estimate rise or fall?

Mr. WILCOX. If a substantially longer period of time were allowed for the sales, the value per thousand board-feet of timber would be substantially higher. However, being paid out over a longer period of time, that value would have to be discounted to a present value to be truly comparable, and in my opinion would not be too substantially different than the value which the Western Timber Service has.

Senator NEUBERGER. Let me ask you this, Mr. Wilcox.

If your statement is correct, that Western Timber Service has set so high a figure that no private purchaser will bid on these 11 blocks, is it your opinion then that the United States Treasury would be asked to pay too high a price to add this timber to the national forest?

Mr. WILCOX. Mr. Chairman, may I qualify that slightly?

The fact that the Western Timber Service estimated value is higher than my own estimation of value is not necessarily the sole basis why private operators cannot bid a realization price and practice sustained yield management.

We have the Weyerhaeuser statement itself, which specifically states in very simple terms that it is not possible for private operators to pay a liquidation price and operate with sustained yield management

restrictions.

Senator NEUBERGER. Mr. Shanklin, what do you think about this? This is the $64 question that has been raised by Mr. Wilcox, or $64,000 question, or even $121 million question. What do you think about this? Mr. SHANKLIN. Are you asking whether I have an opinion as to the price tag?

Senator NEUBERGER. Yes; do you think that the Western Timber Service's appraisal is too high?

Mr. SHANKLIN. I do not think I can express an opinion in this sense. The Management Specialists, after considerable review, hired reputable appraisers, and that appraisal is now under review. It has not yet been accepted by the Secretary of the Interior.

Senator NEUBERGER. Let me get this straight.

Will you advise the Secretary on this, whether or not to accept this appraisal?

Mr. SHANKLIN. We are at the present time awaiting a report from the Management Specialists on this appraisal.

Senator NEUBERGER. In other words, the Management Specialists have not accepted the appraisal.

Mr. SHANKLIN. The detailed checking has not yet been completed. I was discussing the matter with Mr. Wilcox earlier. We are hoping that the detailed checking can be completed by the middle of February. I expect that it will be, and that the final report of the Management Specialists will be in the hands of the Secretary at least by that time, if not prior to that time.

Again we are confronted with this sort of situation, as Mr. Wilcox indicated, the Western Timber Service's opinion.

The Weyerhaeuser Timber Co. have expressed an opinion openly, too. Mr. Wilcox has an opinion. I should imagine if you asked eight reputable timber appraisers that they would all have different opinions.

Senator NEUBERGER. That is very well, but when this appraisal is approved by the Secretary, it ceases to be an opinion; it is an obligation on the Treasury of the United States if either one of these bills passes. Is that not correct. Mr. SHANKLIN. That is correct, under the Department bill. I am not so certain that that is true with your bill, sir. I believe that requires another appraisal.

Senator NEUBERGER. I think in effect S. 2047 perhaps may require a little more negotiation, but I think in effect the appraisal accepted by the Secretary of the Interior from the Management Specialists would prevail under S. 2047, too.

That is my opinion, and we are talking about opinions, but I believe that is the case with S. 2047. But there comes a point when this Western Timber Service appraisal ceases to be an opinion, as you have described it, and, in effect, as you say, is a measurement of the obligation on the United States Treasury.

Let me ask you this, first off, because we are certainly uuder the gun as to time: How long will this review take after it comes from the Managament Specialists and goes to the Secretary. I cannot convene the subcommittee to pass finally on these bills until we know the price tag.

Mr. SHANKLIN. I do not think the review will take very long, Mr. Chairman.

Senator NEUBERGER. I think the subcommittee has a right to have on the record, Mr. Shanklin, your opinion of this $117 million price on the timber.

Mr. SHANKLIN. For the record, Mr. Chairman, it will be my recommendation to the Secretary that after the discrepancies have been taken out of the appraisal, which will change it a bit, I am told, that we recommend to the Secretary he accept the realization value."

Senator NEUBERGER. In other words, that you accept the Western Timber Service's appraisal which we have been discussing? Mr. SHANKLIN. The realization value.

Senator NEUBERGER. You say after the discrepancies have been. taken out. How do you expect that to alter the appraisal?

Mr. SHANKLIN. I am not certain whether it is upward or downward. Maybe Mr. Wilcox will help us at this point.

I understand they have found some mathematical errors which will increase or decrease the value by a half-million dollars roughly. Senator NEUBERGER. That is comparatively little in the total size.

Mr. WILCOX. Yes, sir; it will be a relatively small percentage of the total value. There are some minor details that are being cor

rected.

Senator NEUBERGER. I think it is very significant that this material be available to the subcommittee and the full committee and the Senate, because we have a situation here where Mr. Wilcox, with his very vast and long experience on the Klamath Reservation, believes, in effect, that the Western Timber Service's appraisal may be too high.

But you are going to recommend to the Secretary that this be accepted after various adjustments have been made so that mathematical accuracy is obtained.

Mr. SHANKLIN. And a full report will be made available to you, Mr. Chairman, and to any committee of Congress, a complete report will be available.

Senator NEUBERGER. The full report will also be available to the Indians, I assume.

Mr. SHANKLIN. To the Indians concurrently.

Senator NEUBERGER. I think this has been very significant testimony. Do you believe, Mr. Shanklin and Mr. Lee, that Mr. Wilcox is correct in his postive prediction that there will be no bidders forthcoming under this appraisal?

Mr. SHANKLIN. I do not know. His prediction may be 100 percent right.

On the other hand, I have a personal feeling that here is an opportunity for private industry to demonstrate what they have been telling us publicly for some time, that they can manage private lands on a sustained-yield basis. It is barely possible that we might have some bidders. I do not know.

Senator NEUBERGER. Mr. Wolf has one other question.

Mr. WOLF. Mr. Shanklin, is it the Department's major purpose to assure that the price set by the Secretary is fair to the Indians, or do you have some other considerations that are more paramount in your mind than that?

Mr. SHANKLIN. That certainly is a fair assumption, Mr. Wolf. However, my major purpose is not necessarily in this field at all. I mean I was not asked to review the appraisal in the sense in which you are asking the question.

Mr. LEE. I would like to add to that answer.

I think the Secretary has consistently stated that our first obligation was to see that the Indians were treated fairly in this question and he stated that yesterday, he has consistently instructed his staff to that effect, and I think the Department is taking every step necessary to protect the rights of the Indians.

Senator NEUBERGER. And we agree with the Secretary in that respect.

I would just like to ask both Senator Quiring and Mr. Epps just one further question before we turn to Senator Morse.

As you know, I am the only member of this committee from the State of Oregon. We realize our State is most preoccupied with this problem and the most involved. Mr. Epps has presented a letter from the Governor definitely in favor of S. 2047. Senator Quiring has said that the legislative interim committee has endorsed S. 2047 but is not necessarily hostile to S. 3051.

That is a fair summation of your stand, is that correct?

Mr. QUIRING. That is correct.

Senator NEUBERGER. I would like to ask each of you separately this question.

If it seems to be, after consultation with my colleagues on the subcommittee, that S. 2047 cannot be adopted, would it be your impression that I should favor S. 3051, or should permit the existing termination to run its course?

What would be your opinion first, Senator Quiring, as chairman of the Oregion legislative committee?

Mr. QUIRING. I would feel this way: If you feel that S. 2047 could not be passed and you could see it or would look into the matter of making certain changes that I feel are necessary in S. 3051, I feel it would not harm Oregon to support that bill, but I would definitely see to it that there were some changes made in it that would correct some discrepancies.

Senator NEUBERGER. Do you think within the next week you can give me a letter setting forth the views of yourself and the interim committee setting forth what specific changes should be made in S. 3051?

Mr. QUIRING. I believe we can do that. We will call a meeting of our committee immediately upon our return home and we can get a letter back within 10 or 12 days.

Senator NEUBERGER. Mr. Epps, what is your answer?

Mr. EPPS. I agree substantially with what Leander has said. Senator NEUBERGER. What if it appears, and there is a great deal of money at stake as we know from the appraisal figure submitted, that there is unlikely to be passage of either. S. 2047 or S. 3051 in the Senate, then what course would you recommend?

Mr. QUIRING. Jump off the highest bridge, I presume.

At this time I would not want to venture an answer. I am still hoping that either one of these bills will prevail.

Senator NEUBERGER. Mr. Epps, what would your answer be?

Mr. Epps. I would ask for postponement for about 100 years. Senator NEUBERGER. Thank you very, very much. We certainly appreciate both of you gentlemen coming so far to be with us.

We feel this is a very healthy indication of the interest of our State. Mr. QUIRING. Thank you very kindly, sir.

Senator NEUBERGER. I want to apologize to Senator Morse for delaying him, but I know he shares my desire to show every courtesy to our visitors who have to return very quickly to our State.

I want to express appreciation to Senator Morse for coming here and wish to express my further appreciation to him for the great cooperation he has shown and the great assistance he has been in helping to solve this thorny problem.

Senator Morse.

STATEMENT OF HON. WAYNE MORSE, A UNITED STATES SENATOR FROM THE STATE OF OREGON

Senator MORSE. Mr. Chairman, you have not delayed me at all. I expected to be here during the beginning of the session. I was down. getting a passport for an Oregon farmer, but we could not find any birth records.

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