POTLATCH CORPORATION DEFERRED
                  COMPENSATION PLAN FOR DIRECTORS

                            APPENDIX A
                      RETIREMENT STOCK UNITS

     1. Establishment and Purpose.
    	This Appendix A to the Potlatch Corporation Deferred
Compensation Plan for Directors (the "Plan") is effective
December 31, 1996. Its purpose is to provide benefits to
Directors who participated in the Potlatch Corporation Directors'
Retirement Plan (the "Retirement Plan"), which is being terminated
on that date. This Appendix A is a part of and shall be
administered in accordance with the terms of the Plan except as
otherwise provided in this Appendix A. Capitalized terms that are
used but not defined in this Appendix A shall have the same
meaning as in the main text of the Plan.

     2. Conversion of Retirement Plan Benefits to Stock Units.
    	In connection with the termination of the Retirement Plan,
the present value of each Director's Retirement Plan accrued
benefit shall be calculated as provided in Section 14(a) of the
Potlatch Corporation Salaried Employees' Retirement Plan, giving
each Eligible Director credit for the lesser of ten years or
actual years of service upon reaching mandatory retirement age.
The present value shall be converted into Stock Units by dividing

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                                                 Exhibit (10)(g)(i)

<PAGE>
the present value by the Value of the Corporation's common stock on
December 31, 1996. The resulting Stock Units ("Retirement Stock
Units") shall be credited to a special account for each Director
under this Appendix A.

     3. Vesting of Retirement Stock Units.
    	If a Director has completed at least 10 years of service as a
Director on December 31, 1996, then the Director's Retirement
Stock Units shall be fully vested as of such date. If a Director
has completed fewer than 10 years of service as a Director on
December 31, 1996, then only the amount of the Retirement Stock
Units attributable to actual service as a Director shall be vested
as of December 31, 1996. The balance of the Director's Retirement
Stock Units shall vest in equal installments on each December 31
thereafter until the Director completes 10 years of service as a
Director or retires from the board, whichever is first. If the
Director's service terminates before the Director is fully vested in
his or her Retirement Stock Units, the nonvested Retirement Stock
Units shall be forfeited.

     4. Payment Election.
    	On or before December 31, 1996, each Director who is credited
with Retirement Stock Units shall file an election on the prescribed
form indicating the Year in which payment of the Director's vested
Retirement Stock Units shall commence; provided, however, that
payments shall commence no earlier than the date

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(a) all units are vested, or (b) board service terminates, and no
later than the Year following the Year in which the Director attains
retirement age. The election shall specify whether payment is to be
made in a single lump sum or in a series of approximately equal
installments over a period of years specified by the Director (but in
no event more than 15 years). If a Director fails to file an election
concerning payment of the Director's vested Retirement Stock Units,
payment shall be made in accordance with the Director's most recent
deferral election pursuant to the Plan, or if the Director has no
prior deferral election, payment shall be made in a single lump sum in
January of the Year following the termination of the Director's service.
Until payment, the Director's Retirement Stock Units shall be
credited with Dividend Equivalents in the same manner as other Stock
Units under the Plan. Payment of vested Retirement Stock Units shall
be made in cash in the same manner as other Stock Units under the
Plan.

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               DIRECTORS' DEFERRED COMPENSATION PLAN

          DEFERRAL ELECTION FOR RETIREMENT PLAN STOCK UNITS

To:  Secretary - Potlatch Corporation

     Pursuant to the terms of Appendix A of the Potlatch
     Corporation Deferred Compensation Plan for Directors, I 
     hereby elect to receive payment of my vested retirement plan
     stock unit special account as follows:

     (1)  Date Payments to Commence:

          __ Payment of my deferred compensation retirement
             plan stock units special account shall begin
             January, ______ (year).

             Note: This date may be no earlier than the date
             (a)all your units are vested or (b) your Board
             service terminates, and no later than the year
             following your 72nd birthday.

     (2)  Method of Payment:

           Payment of my deferred compensation retirement plan 
           special account shall be made in cash as follows:

          __ Lump sum; or

          __ ______ annual installments (not exceeding 15).


     ____________________        __________________________
           (Date)                  (Director's Signature)

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                                                     12/5/96