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Governor HEINTZLEMAN. So I said that this preliminary permit does not give the company, the aluminum company, any right to put in any dams. It is just a permit to protect their priorities while they are making their power examinations.

Now, it may take from 3 to 4 or 5 years to make the examinations on a project of this size, and something like we have been talking about here might be worked out. If not, and we still wanted to use that stream for power development, it seems to me that we might use a few millions of dollars to improve other salmon streams in that vicinity. The south coast of Alaska is full of salmon streams, and many of them have obstacles and obstructions to the passage of fish. Their

improvement might make up all or part of the loss from Copper River.

Senator ANDERSON. This is sort of a strange question, because you probably cannot answer. But I was going to say:

How long would it take to get that two or three million dollars back by the revenues that would come out of one of these sites? We realize that it would flow back very quickly.

Governor HEINTZLEMAN. Very quickly, indeed.

Senator ANDERSON. Not only to the State but to the Federal Government in the various taxes that the Federal Government imposes. This is one place where you could spend $2 million with one hand and get back many, many millions. Because again, is it not true, Governor, that in the case of the Copper River site, if the development finally comes, it would not come out of the Treasury of the United States, but it will come out of ordinary commercial financing ?

Governor HEINTZLEMAN. I believe that is correct.

Another thing about these large power sites for aluminum processing is that excess cheap power would be available for the processing of local minerals. Some minerals we find on the south coast of Alaska can't be mined now, because they are too far from smelters. Maybe some of you have heard about the large deposits of nickel and iron ore on the south coast of Alaska that look so extremely promising. The only thing they need is cheap power.

Senator JACKSON. Is it not true that power is the key to the unlocking of the resources in the area that you have referred to?

Governor HEINTZLEMAN. That is right, power is an extremely important feature.

Senator ANDERSON. One question, somewhat off the line. Is it not true that the military have requirements for enormous blocks of power, and the development of cheaper power out of the Susitna River near Anchorage would probably very quickly repay the Government in just the difficulty it has in the generating of current for its own needs?

Governor HEINTZLEMAN. That may prove correct. As you know, we have another power site in interior Alaska called the Rampart site on the Yukon River, which runs into tremendous figures in capacity; 2 million kilowatts, or 212 million kilowatts, of year-round power. That, of course, is far up in the interior and more isolated part of Alaska.

Senator CORDON. I never saw the water that would flow after it is frozen. Tell me about that.

Governor HEINTZLEMAN. We would have a very high dam on the Yukon River. There might be 4 or 5 feet of ice on the surface, but you would have water, maybe 300 feet deep underneath it.

This is another site I would like to see brought under the control of the State. Certainly if I had anything to do with it, when the time came for selecting the State land under this hundred million acre clause, I would try to take in the Rampart power site as something for the future.

Senator CORDON. There is a record, is there not, in the Interior Department with respect to the power-site withdrawals in Alaska, where they are identified as to area and location?

Governor HEINTZLEMAN. Yes.

Senator ANDERSON. You said something, Governor, a moment ago, that interested me very much. You said, "If I had anything to do with the selection of this hundred million acres," various things could be done. That is the very point that I get to: that somebody who is up there, who is the Governor of that area, who is long experienced with it, who becomes a citizen of a new State, would have far better judgment, it would seem to me, in the selection of these areas than if this committee or a department a long ways away such as the Department of the Interior began to make these allocations. It is not often that the Governor of an area

would have been 35 years up in that area as a representative of the Government agencies that would carry him around through the area. And it would be my thought that we would be well advised to let the State pick out the things that would do it some good. And I said to the chairman of this Committee on Territories one day that I would like to see a show-cause order issued.

Now, I am not a lawyer, but I know a show-cause order could not be issued. However, my intent was this, that the people of Alaska could say: "We would like to have this area," and mark an area on the map. And the Governor, if he had it tucked away in some particųlar, special, reserve other than the forests, might have to show why he had it tucked away. All I was trying to do was make sure that the new State could select, as you have said, and I think very wisely said, the Rampart site, and protect the Copper River site, and protect these great areas, that' finally would make Alaska a worth-while State.

Senator CLEMENTS. Governor, I think it is fair to say that in my judgment that was the view of all the members of the committee that were in Alaska last year. The statement made by the Senator from New Mexico could be concurred in by all.

Governor HEINTZLEMAN. There is another thing in connection with these selections of land. A hundred million acres, of course, is a perfectly tremendous area. We all realize that. That is as large as the whole of the 2 States of Washington and Oregon combined, or just exactly as large as the State of California alone. That would be quite a job for the State to administer. Even the selection of them is quite a job. But there again, if I had anything to do with it, I would use part of that 100 million acres to get control of

land up there that has the right geological structure for petroleum. We have these enormous areas in Alaska which do have right structures for petroleum. In fact, in many cases we know there is petroleum there, because we see oil seeps on the ground, on the surface.

Now, most of you know there is about 48 million acres of land lying in the Arctic Slope north of the Brooks Range that has been withdrawn. A little more than half of it is a Navy oil reserve. A little less than half of it, is reserved through an Executive order, by the Interior Department. We know that it has oil. We also know that it

has very extensive gas deposits. One of the gas deposits in the eastern part of that area is something that I want to have investigated right now. It is the Umiat region, where petroleum engineers say there are many billions of feet of natural gas.

Now, you see, on those withdrawals, the State will want to be able to move in. We don't want somebody else to get in there ahead of us.

So I emphasize again the great need of giving the State the prior right to select land on these areas that have already been withdrawn. They are extremely valuable and we want to hold them intact, so that they can be leased to some outfit which can really develop them properly.

Senator ANDERSON. That is why I am hopeful that you will help us select language to make sure that the State does have a priority in the selection of these areas. There is no question but what that area from the Brooks Range north is probably filled with lots of minerals. In addition, it may have many other possibilities up there.

Senator CORDON. Now, back to our national forests, if you have covered that statement. Can you tell us what the maximum sustained yield potential of the national forests is, in board feet?

Governor HEINTZLEMAN. These national forests on the south coast of Alaska contain in the neighborhood of 80 billion board-feet of timber, perhaps a little more than that. And the studies of tree growth that we have made indicate that we could take off, on a sústained-yield basis, about a billion board-feet a year. Senator CORDON. Would it be an 80-year cycle?

Governor HEINTZLEMAN. We figure on an 80-year cycle. We could grow trees of commercial size in less than that, but they grow so much faster between about the 60th and the 80th year, that where you have a lot of timberland the longer period increases the output per acre per year.

Senator CORDON. Is there any trouble about natural reproduction where there is a proper cutting practice?

Governor HEINTZLEMAN. We haven't encountered any trouble at all up to the present time. But the big timber cutting contracts which we are figuring on letting, and the one we have let to the Ketchikan Pulp & Paper, contain a provision that a portion of the stumpage value of every thousand board-feet of timber logged will be set aside by us, and used to plant up any areas which for any reason fail to catch in natural reproduction. So we are assured of the money to keep the land fully productive.

Now, this billion board-feet of timber if made into newsprint paper would give us about a million tons of such paper per year.

Senator ANDERSON. Has there not been a shortage in newsprint paper ?

Governor HEINTZLEMAN. I should say it is the most important thing this country needs from the paper standpoint, and we have cheap power which is essential for the development of newsprint paper.

Senator ANDERSON. It is all there. You have just got to get the thing started properly. Is that not correct !

Governor HEINTZLEMAN. Yes. So in connection with this possible outfit of a million tons of paper, we want a substantial amount of that to go into newsprint. It takes a lot of capital. It takes a lot of

workmen. The timber is excellent for that purpose. And, as you say, we have the water power as well as the timber. And the timber comes in the right proportions of spruce and hemlock for good newsprint.

Senator CORDON. What is the fact as to whether you have saw timber that could take care of the needs?

Governor HEINTZLEMAN. I figure about 15 percent of the output of timber will go into saw timber and plywood. The rest of it, I think, will be more valuable for pulp.

Now, as most of you know, we have succeeded in getting a large pulp mill started in Alaska. Ketchikan will come into production next June. It involves an investment of $50 million in plant alone. I am working and the Forest Service is working with another concern for the establishment of a large newsprint plant in Juneau. We have cheap water power in the vicinity that could be developed.

Senator CORDON. The plant that is there now would produce pulp which would be sent elsewhere to be made into newsprint?

Governor HEINTZLEMAN. The Ketchikan pulp, I should have explained will be of extremely high grade and will be shipped to eastern United States and go into rayon, cellophane, and nitrocellulose products. But this plant we are working on for Juneau is a newsprint mill. We laid out enough timber for the plant so that it could operate on a sustained-yield basis of not less than 750 tons a day or perhaps as much as 900 tons or a thousand tons if we stretched it a bit-and 900 to 1,000 tons would be as large as any newsprint plant anywhere. If a newsprint plant in Alaska was to be a factor in the market, it would have to be a big one. Such a plant would cost between 75 million and 80 million dollars. It is just in a discussion stage now, but it looks promising.

Senator ANDERSON. You have other discussion stages on pulp mills; for instance at Sitka.

Governor HEINTZLEMAN. We have another one at Sitka. That would be for the production of high grade chemical pulp for rayon and cellophane. At the present time a Japanese concern is very much interested in that project. I would like to call attention to the fact that it would not involve either shipping the raw materials to Japan or the employment of Japanese workmen here. It would have to be an American

corporation staffed with Americans. Senator CORDON. American labor!

Governor HEINTZLEMAN. American labor. The thing the Japanese would get out of it would be an assured supply of pulp and some lumber from a sawmill associated with the pulp mill. The Japanese formerly obtained much of their timber supply from Manchuria and some islands to the north of Japan, but they lost those sources of supply in the war. They say they have to manufacture or die—that is the way they expressed it to meto sustain their 85 million population. And the industry, they want to revive and expand, which was so important to their economy before the war, is rayon. They must find a source of pulp for it. Their own forests are well protected and well looked after, but these are simply not extensive enough to take care of their needs. I cannot see any objections to a project of this kind. The timber unit will be put up for bid, however, and any American company can compete in the bidding.

Senator ANDERSON. When the Senator, here, and I flew from Ketchikan to Juneau, we stopped off at one of the points where you have future possibilities in the town of Wrangell.

Senator CORDON. I hope the members of the committee who were fortunate enough to have made that trip or other trips will get in over their heads into this discussion and present the information and the questions that they have as a result of an on-the-ground look-see.

Senator ANDERSON. We thought, Governor, or rather got the impression, that you had worked out or discussed at least in these long years the possibility of at least five good pulp sites.

Governor HEINTZLEMAN. Yes. That is correct. But I thought that three of them would be about the most we would want to have developed at this time.

Senator ANDERSON. Ketchikan and Sitka are probably the most important ones now.

Governor HEINTZLEMAN. That is right. We ought to wait for the others to see how these three work out. Things sometimes do not work out in practice as they have on paper.

In connection with Wrangell, Senator, we are working now for the placing of a large sawmill there.

Those are the principal new timber projects we have in mind.

Now, as you said, this national-forest land is available for many different purposes. And with the provision that is written in this bill, that 3712 percent of the gross receipts from the national forests are to go back to the State, and with the general provisions of law which call for the national-forest areas to share in forest-highway funds, and with the amount of money the national forests of the United States and Alaska get for secondary roads, with the amount of money that is spent in Alaska, in connection with the administration of the forests, I think, and I am not talking as a bureaucrat or as a member of the Forest Service, but as the Governor of Alaska

Senator CORDON. It is rather clear to me that you are talking as the Governor of Alaska.

Senator CLEMENTS. You are talking as the Governor of Alaska, but with the experience of one who has been in one of the Bureaus for a long time.

Governor HEINTZLEMAN. I think these national forests should be kept retained. I believe that it is best for the State. I don't believe that you are going to find anybody in the State that is any more interested in getting development in national forest areas of southeastern Alaska than the members of the Forest Service who are right there, and myself, who have been up there for years trying to bring these natural resources into use.

I would suggest that the national forest be kept intact.

Now, I estimate that at the end of 10 or 15 years—I figured it out again the other day-the net amount the State would get yearly by owning the land would be less than what it is getting under the present system in the form of roads and all of the other things mentioned above. And remember, as I said, in addition to this return from timber, the Forest Service provides recreational facilities, picnic areas, and other things for the use of the public.

Tracts have been laid out around towns to make them available for the expansion of the towns. You have seen hundreds of these home

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