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to authorize and facilitate such exchanges by bringing the lands within the scope of the act of March 20, 1922 (42 Stat. 465).

The basic conditions above described exist also in relation to the privately owned lands within and adjoining the extreme northwest corner of the Ochoco National Forest, except that immediate liquidation is not forced by the financial circumstances of the owners thereof. To fully safeguard the future of Prineville, and the dependent industries, a similar plan in relation to the other land is equally desirable, and probably will be consummated in due course of time. In substance, then, it is the general consensus of opinion that the entire timber resources tributary to Prineville should be managed in a unified way under sustained-yield principles, and under the general supervision and direction of the Forest Service. As circumstances permit, and as a further step in the unit plan, consolidations of ownership should be accomplished by exchanges under the act of March 20, 1922 (42 Stat. 465), or other acts of equal applicability. Accomplishment of this general program would be greatly simplified if the entire area involved were within the established boundaries of the Ochoco National Forest, as provided for in H. R. 9523, and may not otherwise be practicable. In the interim the program of organized fire prevention both within the national forest and the adjoining territory which is a part of the entity, will continue to be cooperatively conducted by the Forest Service, the State, and the private owners.

As described in the bill H. R. 9523, the total area proposed for addition to the Ochoco National Forest comprises 133,180 acres of land, of which 123,720 acres, over 90 percent of the entire area, is privately owned, 7,440 acres is public domain, and 2,040 acres is in State ownership. The land is almost entirely of the ponderosa pine type and only a very negligible part has any value for farm-crop production. All available information indicates that the permanent use of these lands for the continuous production of timber, plus such other uses as will be consistent with this plan, will result in the highest degree of social and economic benefit that can be foreseen at this time.

In addition to the timber and other values, the area described in the bill is an important part of the watershed of the Deschutes River which flows into the Columbia River above the Bonneville Dam, upon which the Federal Government has expended to date over $54,000,000, according to information received from the Bureau of Reclamation. There are also several smaller irrigation projects using water from streams which have their sources partly within the Ochoco National Forest, and partly within the area described in the bill. The Ochoco Reservoir on Ochoco Creek, about 6 miles east of Prineville, the largest of these projects, supplies water for approximately 8,500 acres of agricultural lands. The Peoples' irrigation project and the Central Crooked River project furnish water for approximately 2,800 acres of land. The maintenance of optimum stream-flow conditions, and the prevention of soil erosion and damaging floods is of vital importance to the people who are wholly dependent upon agriculture which in turn necessitates irrigation.

A secondary, but permissible, use of the area proposed for addition to the Ochoco National Forest, is that of livestock grazing, which is a necessary part of the local economy. Under proper management, reasonable use of the forest resources can be allowed without detriment to the major objectives of sustained yield forest management; consequently regulated grazing will be continued on the lands if given a national-forest status. Since almost 95 percent of the area is now in private or State ownership, the proportion of local grazing on lands in Federal ownership at this time is minor in volume and significance.

The area proposed for addition is a relatively narrow zone adjoining the present Ochoco National Forest and between it and Prineville, the forest headquarters. All parts necessarily are traversed with great frequency by the local forest officials. The additional cost of its administration should, therefore, be comparatively low. The fire-lookout system now maintained by the Forest Service covers all of the area to which could be readily extended all the other fire-protection and suppression facilities already organized and available. It is estimated that the addition of the area to the Ochoco National Forest would not increase the general administrative expenditures on that unit by more than $5,000 per annum. To offset the increased cost, there would be grazing fees, special-use fees, and ultimately receipts from the sale of timber which should eventually more than offset the increased cost of administration.

The people of Prineville, the local business and public-service organizations, the city officials of Prineville, the county court and other county officials of Crook County, and numerous State officials are reported to be strongly in favor of the legislation proposed by the bill.

along these lines. However, within the Blue Mountains, which lie immediately to the east and north of Prineville, there are large, virgin stands of merchantable ponderosa pine which, if properly managed under the well-known sustained-yield principle, ultimately should make it possible not only to maintain the present population, but to provide additional, permanent employment for possibly two or three times the present population.

But the forest lands and resources nearest to Prineville, having been appropriated under various public land laws prior to the creation of the Ochoco National Forest, are now largely in private ownership. One of the largest owners in this locality is the Ochoco Timber Co. with an acreage of approximately 83,000 acres supporting over 1,000,000,000 board feet of merchantable timber. Of the total acreage owned by this company, 28,600 acres are within the boundaries of the Ochoco National Forest, the remainder west of, but immediately adjoining, the national forest. The privately owned lands within the boundaries of the national forest are intermingled with national forest lands, and the timber on privately owned forest lands is all within the Prineville working circle, a natural unit of timber operation. Due to that fact, the timber resources now in Federal ownership largely will be influenced by the use of intermingled or related privately owned timber. If both the privately owned and publicly owned timber is handled under sound unified plans and principles of management, sustained yield will be practicable, industry can be maintained, and the economic life of the dependent community cannot only be safeguarded but enlarged. If, however, the private timber is first harvested separately, and without regard to the permanency of the community, the capacity of the national forest stumpage thereafter to maintain a permanent economy equal to the potentialities of the entire unit will be greatly impaired, and its economic value may be greatly reduced. Hence, it will be greatly to the public interest, through a cooperative arrangement or otherwise, to bring about unified administration of both private and public timber resources.

About 2 years ago the Ochoco Timber Co. was in an acute financial condition which ultimately compelled it to resort to the provisions of section 77-b of the Federal Bankruptcy Act. To meet such a situation the company planned an early and complete exploitation of its timber holdings, partly by independent operation, and partly by sale to other operating nonowner companies. Its general plan was complete liquidation of its entire timber resources within the vicinity of Prineville in a period of approximately 10 years. If this plan were carried out it would defeat the concept of sustained-yield management, and Prineville, after a relatively brief period of excessive activity, would face a serious economic situation. Recognizing that fact, the people generally, and particularly the city officials, the county officials, interested agencies, and individuals have urged constructive action by the Federal Government to forestall the inevitable calamitous results.

Tentative negotiations with the Ochoco Timber Co., largest owner of private timber resources, developed an understanding that if the company could turn a part of its holdings into cash by sale to the United States, under the provisions of the act of March 1, 1911 (36 Stat. 961), thus placing it in a position to conduct its operations on the sustained-yield basis, the company in turn would enter into a formal agreement with the United States to so manage the remainder of its holdings as not only to avert the possibility of destructive liquidation but to contribute greatly to the type of forest-resource management obviously most to the public interest. The National Forest Reservation Commission, during several successive sessions, extending over a period of more than a year, considered the proposal in detail.

Subsequently, the proposal was reduced to a provision that if the United States purchased one unit of the company's holdings situated within the exterior boundaries of the Ochoco National Forest, totaling 20,985 acres and supporting 262,165,000 board feet of merchantable ponderosa pine for a consideration of $288,000, the company would enter into an agreement to manage its other related holdings, amounting to approximately 63,000 acres, under a sustained-yield agreement with the United States, thus guaranteeing the constructive management of about 83,000 acres of land ard almost 1,000,000,000 board feet of timber. This agreement was approved by the National Forest Reservation Commission on December 16, 1937, and is now in process of consummation.

The general plan is to further consolidate the national forest area through the acquisition, by excharge, of land owned by the Ochoco Timber Co. outside of the present boundaries of the national forest, as such lands are cut over under Forest Service managment by methods which will leave them in the best possible condition for future growth. The legislation proposed by H. R. 9523 is designed

to authorize and facilitate such exchanges by bringing the lands within the scope of the act of March 20, 1922 (42 Stat. 465).

The basic conditions above described exist also in relation to the privately owned lands within and adjoining the extreme northwest corner of the Ochoco National Forest, except that immediate liquidation is not forced by the financial circumstances of the owners thereof. To fully safeguard the future of Prineville, and the dependent industries, a similar plan in relation to the other land is equally desirable, and probably will be consummated in due course of time. In substance, then, it is the general consensus of opinion that the entire timber resources tributary to Prineville should be managed in a unified way under sustained-yield principles, and under the general supervision and direction of the Forest Service. As circumstances permit, and as a further step in the unit plan, consolidations of ownership should be accomplished by exchanges under the act of March 20, 1922 (42 Stat. 465), or other acts of equal applicability. Accomplishment of this general program would be greatly simplified if the entire area involved were within the established boundaries of the Ochoco National Forest, as provided for in H. R. 9523, and may not otherwise be practicable. In the interim the program of organized fire prevention both within the national forest and the adjoining territory which is a part of the entity, will continue to be cooperatively conducted by the Forest Service, the State, and the private owners.

As described in the bill H. R. 9523, the total area proposed for addition to the Ochoco National Forest comprises 133,180 acres of land, of which 123,720 acres, over 90 percent of the entire area, is privately owned, 7,440 acres is public domain, and 2,040 acres is in State ownership. The land is almost entirely of the ponderosa pine type and only a very negligible part has any value for farm-crop production. All available information indicates that the permanent use of these lands for the continuous production of timber, plus such other uses as will be consistent with this plan, will result in the highest degree of social and economic benefit that can be foreseen at this time.

In addition to the timber and other values, the area described in the bill is an important part of the watershed of the Deschutes River which flows into the Columbia River above the Bonneville Dam, upon which the Federal Government has expended to date over $54,000,000, according to information received from the Bureau of Reclamation. There are also several smaller irrigation projects using water from streams which have their sources partly within the Ochoco National Forest, and partly within the area described in the bill. The Ochoco Reservoir on Ochoco Creek, about 6 miles east of Prineville, the largest of these projects, supplies water for approximately 8,500 acres of agricultural lands. The Peoples' irrigation project and the Central Crooked River project furnish water for approximately 2,800 acres of land. The maintenance of optimum stream-flow conditions, and the prevention of soil erosion and damaging floods is of vital importance to the people who are wholly dependent upon agriculture which in turn necessitates irrigation.

A secondary, but permissible, use of the area proposed for addition to the Ochoco National Forest, is that of livestock grazing, which is a necessary part of the local economy. Under proper management, reasonable use of the forest resources can be allowed without detriment to the major objectives of sustained yield forest management; consequently regulated grazing will be continued on the lands if given a national-forest status. Since almost 95 percent of the area is now in private or State ownership, the proportion of local grazing on lands in Federal ownership at this time is minor in volume and significance.

The area proposed for addition is a relatively narrow zone adjoining the present Ochoco National Forest and between it and Prineville, the forest headquarters. All parts necessarily are traversed with great frequency by the local forest officials. The additional cost of its administration should, therefore, be comparatively low. The fire-lookout system now maintained by the Forest Service covers all of the area to which could be readily extended all the other fire-protection and suppression facilities already organized and available. It is estimated that the addition of the area to the Ochoco National Forest would not increase the general administrative expenditures on that unit by more than $5,000 per annum. To offset the increased cost, there would be grazing fees, special-use fees, and ultimately receipts from the sale of timber which should eventually more than offset the increased cost of administration.

The people of Prineville, the local business and public-service organizations, the city officials of Prineville, the county court and other county officials of Crook County, and numerous State officials are reported to be strongly in favor of the legislation proposed by the bill.

To correct two apparent typographical errors in the bill it is recommended that page 2, line 14, should be changed to read as follows: "clusive, sections 16 to 23, inclusive, and sections 26 to 36,".

For the reasons given this Department believes the enactment of the legislation proposed by H. R. 9523 would be wholly desirable and in the public interest; hence it recommends that the bill with the minor amendments suggested, receive the approval of your committee and of the Congress.

This matter was referred to the Bureau of the Budget, as required by Budget Circular 344, and the Acting Director thereof advised the Department of Agriculture, under date of March 17, 1938, that there would be no objection by that office to the submission of the foregoing report to the committee.

Sincerely,

H. A. WALLACE, Secretary.

DEPARTMENT OF THE INTERIOR,
Washington, April 7, 1938.

Hon. RENÉ L. DEROUEN,

Chairman, Committee on the Public Lands,

House of Representatives.

MY DEAR MR. DEROUEN: I have received your request for a report on H. R 9523, to add certain lands to the Ochoco National Forest in Oregon. Similar legislation is pending in S. 3312, on which this Department has submitted a favorable report.

The area involved amounts to approximately 132,800 acres. The records of this Department show that the title to nearly 126,150 acres has passed from the Government, and the inclusion of these nonpublic lands in the description is evidently for the purpose of placing them in the national forest in order that they may become subject to the national forest consolidation law of March 20, 1922 (42 Stat. 465), as amended.

The lands, which are practically all within a grazing district, adjoin the national forest on the south and west. The public lands amount to only about 6,650 acres lying in scattered tracts, of which 1,200 acres are embraced in outstanding oil and gas prospecting permits and 80 acres are now a part of the national forest. A report has been received from the field which discloses that while there are some grazing lands, the area also embraces privately owned timber lands, and that there is local sentiment which considers the benefits which would be derived from placing these timber lands within the national forest above the benefits to be derived from grazing. In view of this fact, and because of the small amount of public land involved, this Department would be practically precluded from effecting exchanges within the area in an effort to block it out for use as a grazing unit. I will therefore interpose no objection to the addition of the public lands to the national forest in the manner proposed.

There is a discrepancy in the description of the lands in T. 14 S., R. 19 E., in lines 13 and 14 on page 2 of the bill, which is evidently intended to include all lands in the township not now within the national forest. The correct description of such lands is sections 4 to 9, 16 to 23, and 26 to 36, inclusive.

In response to a request made in connection with S. 3312, the Bureau of the Budget advised that it had no objection to the presentation by this Department of such a report as it deemed appropriate.

Sincerely yours,

OSCAR L. CHAPMAN,

Acting Secretary of the Interior.

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75TH CONGRESS HOUSE OF REPRESENTATIVES 3d Session

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REPORT No. 2104

COMPENSATION FOR THE CARETAKERS OF FEDERAL PROPERTY IN CUSTODY OF THE NATIONAL GUARD

APRIL 7, 1938.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. FADDIS, from the Committee on Military Affairs, submitted the following

REPORT

[To accompany H. R. 9721]

The Committee on Military Affairs to whom was referred the bill (H. R. 9721) authorizing the disbursement of funds appropriated for compensation of help for care of matérial, animals, armament, and equipment in the hands of the National Guard of the several States, Territories, and the District of Columbia, and for other purposes, having considered the same, submit the following report thereon with the recommendation that it do pass.

Section 90, National Defense Act, as amended, authorizes among other things

* and for the compensation of competent help for the care of matériel animals, armament, and equipment of organization of all kinds, under such regulations as the Secretary of War may prescribe.

The bill under consideration permits the States, under regulations to be prescribed by the Secretary of War, to enlarge the scope of duties of these caretakers, and to permit not to exceed 10 percent of the amount allotted to each State, to be used as payment to clerks.

The original intent of the National Defense Act in providing caretakers for Federal property in the hands of the National Guard of the several States, was for the purpose of assisting the States in its preservation. Experience has shown that a certain amount of clerical help is necessary in the maintenance of inventories and records of this property. The purpose of this bill is to provide such clerical help from the caretaker personnel authorized in the National Defense Act. The letter of April 2, 1938, from the War Department follows.

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