Quinault Reservation but also on the other important timbered reservations of the Pacific Northwest.

For the record, there appears below a tabulation of the stumpage-to-log price ratios that have been in effect under the Taholah and Crane Creek contracts of the Quinault Reservation. Note that these are the ratios that are used in the quarter-annual adjustments of stumpage rates. An increase or decrease in the ratio has a corresponding effect upon the general level of all subsequent stumpage rates. Taholah unit-Stumpage-to-log ratios

The Department's position, with particular reference to the Quinault Reservation, may be summarized as follows:

1. The analysis of comparative stumpage prices in part II of the Federal timber sales policies report is little more than a process of placing the prices in parallel columns, to reveal the dollar or percentage differences in prices being received. As such it is not conclusive, because it ignores many factors that affect stumpage values. We followed the same analysis procedure, in testifying before the Subcommittee on Indian Affairs, merely to amend or correct the staff report procedure, and not because we accept the process as a demonstration of disparities in stumpage prices.

2. The timber stands on the reservation and on the national forest are by no means identical, because differences in topography and site result in widely different species composition and quality.

3. Western redcedar, which comprises about 50 percent of the volume on the Taholah and Crane Creek units and about 10 percent of the volume on adjacent national forest areas, has an adverse effect on the stumpage rates offered for all species.

4. Much of the difference in the average value received for all species on the reservation and the national forest is caused by the much larger proportion of high value Douglas-fir in the national forest sales. Douglas-fir comprises over 18 percent of the Forest Service timber sale volume and less than 1 percent on the Taholah and Crane Creek units.

5. Some of the difference in stumpage rates is a reflection of differing contract requirements, scaling practice and probably other factors that have not been given due consideration in the staff report.

The direct comparison of national forest and reservation stumpage prices, as it appears in the staff report and as amended in our analysis above, is a good point of beginning. But it ignores the many other factors affecting stumpage

values and is therefore no evidence that there is an unwarranted disparity between national forest and Quinault Reservation stumpage prices.

The Bureau of Indian Affairs believes that the Quinault Indians are being well served by the timber sale procedures being followed, and that the stumpage values paid to the Indians have been just and adequate in the light of timber conditions and market demand.

The third part of recommendation F-4 (a) states that the major objectives in planning the sales of Indian timber should be to obtain the maximum price and adhere to sustained-yield principles. These objectives fail to recognize the full range of obligations in the management of private Indian timber.

In addition to obtaining an equitable income for the Indian owners while maintaining the forest in a perpetual state of production, the management of Indian timber must also recognize the immediate financial needs of Indian groups and individuals. The requirements of forest management may necessitate decisions and actions that best serve the needs of the timber owners but which are not the most desirable from a purely technical standpoint.

The Quinault Reservation, on which nearly 98 percent of the land is allotted, provides an outstanding example of this human consideration in forest management. It is a problem recognized by the committee in other specific recommendations, which are covered elsewhere in this report.

Recommendation F-4 (b)

The question of so-called interest allowance has been subjected to intense scrutiny by the two subcommittees of the Senate Committee on Interior and Insular Affairs, and also by the General Accounting Office. It is an involved question, as revealed by testimony before the subcommittees and by an exchange of correspondence between the Comptroller General and the Secretary of the Interior. (See p. 79 of the appendix.)

These exhibits reveal the Comptroller General's tentative conclusion that the so-called interest allowance was improper, and that steps should be taken by the Secretary of the Interior to rectify the situation. At the Secretary's request, a conference was arranged between representatives of this Department and of the Comptroller to explore the question further.

The present status is revealed by the Comptroller General's letter of May 8, 1958, to the Secretary in which he states that action on the interest allowance on the two Quinault Reservation contracts may be held in abeyance pending the outcome of the pending case of Warm Springs Lumber Company v. Fred A. Seaton, Secretary of the Interior, et al., civil No. 9046, in the United States District Court for the District of Oregon. The Comptroller has suggested that consideration be given to the establishment of some arrangement such as bonding or an escrow fund, to assure reimbursement to the Indians involved in the event of a court ruling unfavorable to the Department's position in the pending case. This suggestion is being considered within the Department.

Recommendations F-5 and F-6

These questions were also covered at length in the investigation of Quinault Reservation timber sales by the Senate Subcommittee on Indian Affairs. The published record of that investigation, including Senate Report No. 971, 85th Congress, 1st session, and pertinent correspondence with the Senate Committee on Interior and Insular Affairs, is therefore made a part of this response, by reference.

These recommendations should be considered together since they are closely allied, and any discussion on a separate basis would require considerable repetition. They should also be considered in the light of this statement at page 63, part II, of the report on Federal timber-sales policies:

"One matter which came out in the testimony was the indifference of the Bureau of Indian Affairs to providing democratic self-government among the Indians. The Quinaielt Reservation is a good example.'

There should also be kept in mind the statement at page 79, part II, of the same report concerning the Indian Bureau timber-sale policy which, the staff had concluded, was a program favoring large sales:

"Official spokesmen for the Warm Springs Indians and individual spokesmen for Quinaielt and Colville tribal groups testified that this program does not meet with their approval. No Indians testified favoring continuation of large sales." We are in accord with the committee's recommendations to the extent that we shall continue to give serious consideration to the desires expressed by authorized representatives of tribal groups and by individual Indian timber owners.

30224-58-6

On December 2, 1957, the superintendent of the Western Washington Indian Agency addressed a newsletter to each Indian, whose name and address was known, who had an interest in tribal or allotted lands on the Quinault Indian Reservation, Wash. The letter called attention to a recommendation in Senate Report No. 971 to the effect that the Commissioner of Indian Affairs should furnish each allottee informative reports regarding timber sale operation on the reservation, and should encourage the election of management advisory boards from among the allottees. The letter encouraged the allottees to develop a representative organization, with which Bureau personnel could meet and discuss questions of mutual interest. This was the first of a series of newsletters that will be continued.

A meeting of allottees was held on February 16, 1958, and they appointed an interim committee as the first step to a more formal organization.

In the process of a recent adjustment of stumpage rates in two large sales on the Quinault Reservation, a meeting was held with this interim committee to discuss the proposed adjustments. Since this was the first of such consultations, and the allottee organization was still in the formative stages, the consultation was only partially successful. It is hoped that the allottees will be able, with the encouragement of Bureau personnel, to develop a workable organization to serve as their spokesman.

It must be recognized, however, that final decisions in forest management must rest with the Secretary of the Interior in discharging the Federal Government's responsibility as trustee of the Indian estate.

We cannot agree that the Bureau of Indian Affairs has been indifferent to providing self-government among the Indians. Great progress has been made in that direction, although there is admittedly a long path ahead. In accordance with expressed policy, the Bureau has for many years strived to evoke interest among the Indians in the management of their timber resources. This educational program has progressed to the point where we believe that all tribes who own enough timber to provide a relatively uniform annual harvest under sustained yield are on record favoring such programs. The educational process has been paying off.

The very fact that some complaints are being made, by tribal councils and individuals, indicates that this educational process has had a salutary effect. Not many years ago the general reaction of the Indians to discussions of forest manage ment was one of confusion and bewilderment, with the evident belief on their part that forest management is a responsibility of the Bureau. We are proud of the progress that has been made.

Some years ago action by the Indians was hardly more than agreement that a timber sale should be made. In recent years the Indians have participated more and more in the formulation of timber sale programs and management plans.

The tribal educational program is filtering through the Indian groups to the individuals to some extent. Changing conditions make it necessary to revise procedures when the need is indicated. Such revisions will be in the direction of more consultation with and greater participation by the Indians.

The staff report, part II, on pages 64 and 65, states that the Bureau can foster genuine constructive leadership in business management by the Indians. It speaks of eloquent testimony regarding deterioration of relationships between the Indians and the Bureau and cites as an example a letter dated September 15, 1955, addressed to the forest manager by the Quinault Tribal Council. It was inferred that the submission to the tribal council of a proposed_resolution implies or indirectly demands specific action which is desired by the Bureau.

There has been long experience with the preparation of proposed resolutions, and varied methods have been attempted. Reaction by the same tribal council has varied. There has occasionally been resentment, as implied by the committee report, to the preparation of proposed resolutions, and the councils have sometimes stated they would prepare their own resolutions. In contrast, the question has often been asked by a tribal council why certain resolutions were not prepared by the Bureau, so as to be sure to include all the technical requirements for action, thereby relieving the council of considerable research. We often find the most practicable solution is to prepare resolutions and present them to tribal councils for their consideration and action. Many of the resolutions are considered without the presence of Bureau employees. The employees are always available for explanations, and many times are called in to meetings to discuss provisions of the proposed action.

The Commissioner, under date of April 12, 1956, prepared a memorandum to area directors and superintendents which expresses the views and policy of the Bureau in connection with Indian social and economic improvement. This

memorandum emphasizes the importance of proper and thorough consultations with the Indians regarding all their problems. Although not included with this report, copies of the memorandum are available.

Section 141.13, title 25, Code of Federal Regulations, authorizes the sale of Indian timber provided that consent shall be obtained from the Indians in general council or their authorized representatives for tribal timber. Allotted timber may be sold by the allottee with the consent of the Secretary of the Interior.

Consent for the sale of tribal timber is obtained prior to advertisement and after a discussion with the Indians. Executed contracts for the sale of tribal timber are signed by the authorized tribal representatives, prior to the approval of the contracts.

Allotment owners often arrange for the sale of their timber by executing powers of attorney authorizing the superintendent to enter into contracts for them. Occasionally an allottee may sign a contract himself.

In all cases, the Bureau attempts to follow the recommendations of the Indian owners, except when sound business or forest management requires that other procedures be used.

Part II of the report on Federal timber sales policies states that "official spokesmen" for the Warm Springs Indians testified that large-type sales do not meet with their approval. The record shows, however, that representatives of the Warm Springs Indians not only took an active part in development of the Twin Buttes sale, the largest made on the Warm Springs Reservation since 1949, but also recommended the acceptance of the high bid. Throughout the entire period the council members were most anxious that the sale be consummated.

The Bureau of Indian Affairs presented abundant evidence, at the hearings on Quinault timber sale policies, of the extent to which official representatives of the several tribes have been consulted in connection with the sale of their timber.

In part II of the report on Federal timber sales policies the statement is made that the Indian approaches his forest land as do many small and even some large forest-landowners, i. e., "interest in conserving the forest is often counterbalanced by an overpowering immediate need for money. This is true, to some degree, of the Indian in regard to the management of tribal land, but it is particularly true when applied to the timber on his own allotment. In many cases it is doubtful if any provision for consultation will be fully "meaningful" to the Indians where timber sales are concerned as long as the responsibility for sustained-yield management is placed on any branch of the Federal Government. The Bureau is, however, in complete agreement that the Indians should be encouraged to participate more actively in the business of managing their resources to the extent consistent with the discharge of the Bureau's trusteeship responsibilities.

Existing regulations provide for consultation with and participation by the Indians on several types of actions relating to forest management. Section 141.1 (c), title 25, Code of Federal Regulations, states that one of the objectives the management of Indian forests is the development of the forests by the Indian people for the purpose of promoting self-sustaining Indian communities, thus enabling the Indians to receive not only the stumpage value of their timber but also the available profits and labor from the development of their resources.

Section 141.12 of the regulations states that the policy of the Bureau is to encourage the development of Indian timber by the Indian people. It authorizes Indian logging and sawmill operations, subject to the consent of the Indians in general council, whenever appropriated or tribal funds are available. Section 141.13 requires the consent of the Indian owners to the sale of their timber.

Section 141.17 of the regulations provides for open-market sales to Indians without advertising for stumpage not exceeding $5,000 in value. This authority has been used in connection with the development of Indian forests by the Indian people.

These regulations authorizing the development of reservation timber resources by the Indian people, and requiring the consent of the Indian owners for the sale of timber, inherently provide for consultation with and participation by the Indians. The proposed revision of the regulations, now under review for approval, retains or strengthens these provisions.

The degree to which the Indians have been consulted regarding timber sales has been described above in some detail. It is evident from these facts that the Bureau has attempted to present full information on forestry matters to tribal councils and to individual Indians through the tribal councils. How meaningful an explantion of legal or technical matters can be to persons not familiar with the specific subjects is perhaps open to question. Efforts are constantly being made

to promote a clear understanding of forestry policies and procedures among the interested Indians. The extent to which such consultations are meaningful is also dependent upon how successful the individual Indian is in subjugating his personal interest for income to the interests of the tribe as a whole, and to the objectives of conservative management on his own allotment.

After the Indians and the Bureau have mutually agreed on the terms and conditions of the original sale of timber, subsequent consultations are held regarding the adjustment of stumpage rates on active contracts. The policy has been to provide an opportunity for tribal councils to endorse, or disagree with, proposed rate changes before final rates become effective. It is hoped that the organization of Quinault allottees, now being formed, will provide a more direct contact with them.

Other actions affecting timber sales contracts, including contract modifications, extensions of time, relief from minimum cutting requirements, etc., are usually discussed with tribal councils before the contemplated actions are taken. Records of such consultations are available in the minutes of many council meetings and in council resolutions.

The Bureau, through its agency staffs, attempts to keep the Indians informed on all phases of the management programs. Requests for information are frequently received both from tribal councils and from individual Indians, and these are acknowledged as promptly and as fully as possible. In most of the timber sale contracts the relative value of the tribal timber resource far exceeds that of the allottees' timber resource, and expressions by the tribal governing bodies have been assumed to reflect, in a general way, the attitude of the individual, because in many cases they are the same. A notable exception is found on the Quinault Reservation, where efforts are now being made to create a spokesman group for the allottees.

The general timber sale regulations, which are made a part of every timber contract, require that all records of the purchaser's operations be open to inspection at any time by officers designated by the Commissioner of Indian Affairs and that the information so obtained will be regarded as confidential. On page 16, part II, of the report on Federal timber sales policies, it is stated that the Warm Springs Indian Tribal Council was denied access to appraisal information, despite the fact that it needed the information to protect property interests of the Indians, and was unable to lodge an effective protest against a proposed stumpage rate change. In October 1953, an attorney for the Warm Springs Indians requested that information in the annual financial statements of the purchasers of timber on the Warm Springs Reservation be made available to the tribal council for use by its consulting foresters and attorneys. This request was denied on advice of the Solicitor, Department of the Interior, who held that the United States is not bound to reveal information which it has received under a guaranty that it would be kept confidential. All other information available to the Bureau was made available to the tribal representatives.

Recent stumpage adjustments have been based primarily on the measurement of trends in product values and production costs. Information used in establishing the trends is obtained from reports in trade journals, industry association publications and similar sources generally available to all interested persons. Other factors may influence the general trends of stumpage values in a particular area. The analysis of these factors requires the use of sound professional judgment. Financial statements submitted by the purchasers of similar timber on the reservation are used as a check on local factors. Personnel of the Bureau exercise their best judgment and utilize the best information available in making adjustments of stumpage rates. While the Bureau is quite willing to make available to the Indian tribal councils the published reports used in analyzing trends of costs and product values, it believes that information supporting a contention that stumpage rates should be either higher or lower should be based on independent analyses of the available data. Any new information presented by either the Indians or the purchaser is carefully analyzed before firm new rates are established.

We do not believe that any preliminary studies of possible stumpage rate adjustment should be released for general information. Such action could have the effect of committing the approving officer before he himself has reached a final conclusion.

Excellent examples of business participation by the Indians are present on the Klamath, Warm Springs, Umatilla, Yakima, and Colville Reservations, in the States of Oregon and Washington, where the Indians finance all or part of the forest management activities with tribal funds. The tribes are reimbursed