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COMMITTEE ON PUBLIC LANDS AND SURVEYS

ROBERT N. STANFIELD, Oregon, Chairman REED SMOOT, Utah.

KEY, PITTMAN, Nevada. PETER NORBECK, South Dakota.

ANDRIEUS A, JONES, New Mexico. RALPH H. CAMERON, Arizona.

JOHN B, KENDRICK, Wyoming. TASKER L. ODDIE, Nevada.

THOMAS J. WALSH, Montana. PORTER H. DALE, Vermont.

C. C. DILL, Washington. RIOL W. MEANS, Colorado.

HENRY F. ASHURST, Arizona. GERALD P. NYE, North Dakota.

INGHAM G. Mack, Assistant Clerk

SUBCOMMITTEE ON SENATE RESOLUTION 332

ROBERT N. STANFIELD, Oregon, Chairman RALPH H. CAMERON, Arizona.

JOHN B. KENDRICK, Wyoming. RICE W. MEANS, Colorado.

THOMAS J. WALSH, Montana,

11

HERRICK TIMBER CONTRACT, MALHEUR NATIONAL

FOREST, OREGON

FRIDAY, JANUARY 28, 1927

UNITED STATES SENATE,
COMMITTEE ON Public LANDS AND SURVEYS,

Washington, D. C. The committee met, pursuant to call, at 2 o'clock p. m. in the committee room, Capitol, Senator Robert N. Stanfield presiding.

Present: Senators Stanfield (chairman), Smoot, Norbeck, Cameron, Oddie, Jones of New Mexico, and Kendrick.

Present also: Mr. L. F. Kneipp, Acting Chief Forest Service, Department of Agriculture, and Messrs. Thomas P. Littlepage, E. W. Barnes, and F. M. De Neffe, representing Grant County, Oreg.

The CHAIRMAN. The committee will come to order.

The committee has met to-day, pursuant to the recess taken yesterday, for the purpose of taking up Senate Resolution 332, introduced at the request of the Oregon State Legislature and the County Court of Grant County, Oreg. I will read the memorial of the State legislature, as it will perhaps be enlightening to the members of the committee:

SENATE JOINT MEMORIAL 5

To the honorable Senate of the United States of America in Congress assembled: ,

We, your memorialists, the senate of the State of Oregon, the house of representatives concurring, respectfully represent and petition as follows, to wit:

Whereas on the 15th day of June, 1923, a contract was entered into by and between the United States Forest Service and one Fred Herrick, of St. Maries, Idaho, for the purchase by said Herrick of approximately 890,000,000 feet of timber situated in the United States forest reserve in Grant County, Oreg., known as the Bear Valley unit, Malheur National Forest; and

Whereas by the terms of said contract the purchaser agreed within a period of two years from the date of said contract to construct and complete ready for operation approximately 80 miles of common-carrier railroad to a point within said Grant County, Oreg.; and

Whereas by the terms of said contract the purchaser agreed within a period of two years from the date of said contract to construct and complete ready for operation a sawmill at Burns, Oreg., and to commence logging and milling operations by April 1, 1925; and

Whereas the citizens of Grant County, Oreg., recommended to and urged upon the United States Forest Service the necessity of entering into such a contract for the purpose of opening up said Grant County and developing a vast district of unlimited material wealth; and

Whereas it is changed by reliable citizens of Grant and Harney Counties that said Herrick has failed in the performance of his contract and has refused to carry out its terms, although extensions thereof have been granted; and

Whereas it is further charged by said citizens that further extensions of time will serve only to further delay the completion of said contract and the subsequent development of the natural resources of Grant County, and that prosperity of Grant County is dependent largely upon the cutting of the timber sold under said contract and the operations which will be incidental thereto; and

Whereas it is further charged by said citizens that an attempt is being made by said Herrick to secure a modification of said contract eliminating the clause therein contained providing that said railroad shall be a common carrier and that the elimination of said clause from said contract will enable said Herrick to bottle up the territory sefved by, said railroads and retard the development thereof, thereby enabling said Herrick to secure an unjustifiable advantage; and,

Whereas it is further charged by said citizens that the United States Forest Service has been negligent in enforcing the terms of said contract and has refused to cancel the same, and has been influenced to grant unwarranted extensions of said contract in so far as performance thereof is incumbent on said Herrick; and

Whereas it has been openly charged that said delay upon the part of said Forest Service has been due to alleged influence exerted by former employees of said service who are now associated with said Herrick: Therefore be it

Resolved by the Senate of the State of Oregon, the House of Representatives jointly concurring therein, That the Senate of the United States be, and it hereby is, memorialized to appoint a special committee to investigate the facts and circumstances surrounding the execution of the aforesaid contract and the granting of any and all extensions of time for compliance with the terms thereof, and particularly as to any modification in said contract concerning the commoncarrier clause therein contained; that said committee be authorized to recommend to the Department of Justice the institution of proper legal proceedings fully to protect the interest of the citizens of Grant County, the State of Oregon, and the United States of America if, upon investigation by said committee, it shall develop that said Herrick has failed to comply with the terms of his contract; and be it further

Resolved, That the secretary of state of the State of Oregon be, and he hereby is, instructed to forward a copy of this resolution to each Member of Congress of the United States of America, to the President of the United States Senate, and the Speaker of the House of Representatives; and be it further

Resolved, That the Oregon delegation in the Congress be, and they hereby are requested to use their utmost efforts to secure such investigation. Adopted by the Senate January 19, 1927.

HENRY L. CORBETT,

President of the Senate. Concurred in by the house of representatives January 20, 1927.

JOHN H. CARKIN,

Speaker of the House. Copies mailed to each Member of Congress to-day.

Sam A. KOZER,

Secretary of State. The CHAIRMAN. I also submit for the record resolutions of the county court of Grant County, Oreg., and of the Grant County Stock Association relating to the same subject.

(The resolutions referred to are here printed in full, as follows:)

RESOLUTION

At a regular meeting of the county court, Grant County, Oreg., sitting as a court for the transaction of county business and duly called and held at Canyon City, Grant County, Oreg., on Saturday, the 4th day of December, 1926, at 10 o'clock a. m., at which meeting there were present Orin L. Patterson, county judge, and George Yokom, county commissioner, being a quorum of the said county court, following resolution was unanimously adopted:

“Whereas on the 15th day of June, 1923, a contract was made and entered into by and between the United States Forestry Service and Fred Herrick, of St. Marys, Idaho,

for the

purchase by said Fred Herrick of certain timber situate in United States Forest Reserve in Grant County, Oreg.; and

“Whereas it was provided in and by said contract that the purchaser on or before two years from the date of said contract, to wit, on or before June 15, 1925, should, in addition to a railroad from Crane, Oreg., to Burns, Oreg., construct and complete ready for operation a railroad from Burns, Oreg., to Seneca, Grant County, Oreg., and should also complete ready for operation & sawmill at Burns, Oreg., all according to the detailed specifications set forth in said contract; and

“Whereas the purchaser was, by the terms of said contract required to deposit a bond in the penal sum of $50,000, conditioned upon the faithful and strict performance by said purchaser of the terms of said contract; and

"Whereas prior to June 15, 1925, the time of the performance of said contract was extended for one year, to wit, until June 15, 1926, and said contract was in other respects amended and modified, among other things to provide that the terminus of said railroad so to be constructed was not required to be at Seneca, where said railroad would connect with an established highway from Canyon City, built by Grant County and Bureau of Public Roads at great expense for a connection with said railroad; but at a point one mile southwest thereof, and said modifications were made without any notice to the citizens of Grant County; and

“Whereas the purchaser wholly failed to perform the terms and conditions of said contract of June 15, 1923, as extended, and wholly failed to complete said railroad or sawmill prior to June 15, 1926; and

"Whereas by an agreement made and entered into June 19, 1926, an extension of time was granted to the purchaser as follows: For the completion of the grade from Burns to Seneca, September 15, 1926; for the completion of the railroad in operating condition from Burns to the timber, December 15, 1926; for the completion of the entire sawmill plant at Burns, Harney County, Oreg., ready for operation, March 1, 1927; for beginning cutting and removing of timber, January 1, 1927; and

"Whereas it was further provided by said agreement of June 19, 1926, that the bond for $50,000 deposited with the original contract of June 15, 1923, should be forfeited and the amount thereof retained by the United States Forestry Service as liquidated damages; that $50,000 in Liberty bonds should be forthwith deposited as guaranty of the performance of the terms and conditions of said extension agreement of June 19, 1926; and

“Whereas the said purchaser has failed to complete the grade from Burns to Seneca by September 15, 1926, or at the time of the adoption of this resolution, and has not progressed with said work in such manner as to make it possible that said railroad will be in operating condition on December 15, 1926, and has wholly failed to proceed with the construction in good faith of the sawmill at Burns, Harney County, Oreg., so as to render it possible that said sawmill will be completed on March 1, 1927, or at any time prior to March 1, 1928, if active construction on said sawmill were commenced forthwith; and

"Whereas more than three years and eight months have elapsed since the execution of the original contract and the purchaser has wholly failed to comply with the terms and conditions thereof in good faith; and

"Whereas Fred Herrick Lumber Co. was thereafter organized under the laws of the State of Oregon for the purpose of conducting operations under the said contract of June 15, 1923, and the incorporators and present officers of the said Fred Herrick Lumber Co. are Fred Herrick and Messrs. Girard and Globucher, employees of the United States Forestry Service at the time the timber included in said contract was offered for sale, and it is apparent that the unusual privileges extended to the purchaser and the leniency shown in reference to the violation of the terms of said contract have been due to the connection with the purchaser of said former employees of the United States Forestry Service; and

“Whereas the prosperity of Grant County, Oreg., is in a large measure dependent upon the cutting of said timber and the operations which will be incidental thereto; and

"Whereas the said Grant County and all property owners therein are seriously damaged by the existing conditions: Now, therefore, be it

"Resolved, That the representatives of the State of Oregon in the Senate and House of Representatives of Congress be requested to demand a complete investigation of the original advertising of said timber for sale by the United States Forestry Service in August, 1922, the contract of June 15, 1923, and any and all extensions thereof, and of the activities of the United States Forestry Service, and any and all present or former employees thereof, in connection with this matter, and that a copy of this resolution be sent to Oregon's delegation in Congress."

ORIN L. PATTERSON, County Judge.
GEORGE YOKOM, Commissioner.

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