SUPPLEMENTAL RETIREMENT BENEFIT AND LIFE
                     	INSURANCE AGREEMENT

          	THIS AGREEMENT, made and entered into this l9th 
   day of February, 1988, by and between POTLATCH 
   CORPORATION, a Delaware corporation (hereafter referred to
   as "Potlatch") and RICHARD B. MADDEN (hereafter referred to
   as "Madden"):

          	Whereas the parties hereto have heretofore been
   parties to an employment agreement that they now desire to 
   terminate; and

           Whereas coincident with the termination of such
   agreement Madden will become a participant in the Potlatch
   Corporation Severance Program for Executive Employees, which
   provides severance benefits upon the occurrence of the same
   events that triggered the payment of severance benefits
   under the prior employment agreement; and

          	Whereas the employment agreement contains provi-
   sions regarding supplemental retirement benefits and life
   insurance that are to continue in effect and the parties
   hereto wish to record the terms of such provisions:

          	N o w,  T h e r e f o r e, the parties hereto 
   agree as follows:


                                                            Exhibit (10)(e)

<PAGE>
           1.	Supplemental Retirement Benefits.

          	(a)	Amount. Upon the termination of Madden's  
   employment with Potlatch, Potlatch shall pay to Madden, as
   supplemental retirement compensation, the amount by which
   the retirement benefits payable to Madden under the Potlatch
   Corporation Salaried Employees' Retirement Plan (the
   "Retirement Plan") are less than the benefits that would be 
   payable to Madden under the Plan if the Plan provided:

          	(i)	Retirement at or after age 60, without
      reduction of benefits;

         	(ii)	Retirement prior to age 60, with a
      reduction of benefits equal to five percent multi-
      plied by the number of years (and any fraction
      thereof) by which Madden is less than age 60 at
      the time benefits commence;

        	(iii)	Recognition of any Management Perfor-
      mance Award Plan awards payable with respect to
      award years 1987 and thereafter that Madden has
      elected to defer as if they had been paid cur-
      rently and constituted "Earnings" for purposes of 
      calculating Madden's Basic Benefit under Sec-
      tion 4(a) of the Retirement Plan;


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<PAGE>
         	(iv) Recognition of Madden's prior service 
      with Mobil Oil Corporation or any of its subsid-
      iaries or affiliates as if it were service with
      Potlatch;

          	(v)	Recognition of the period, if any, prior
      to April 27, 1989, with respect to which Madden 
      receives benefits under the Potlatch Corporation 
      Severance Program for Executive Employees as if it
      were service with Potlatch; and

         	(vi)	That benefits thereunder are payable
      without regard to the benefit limitations imposed
      on qualified plans by sections 401(a)(17) and 415
      of the Internal Revenue Code of 1986.

 The foregoing notwithstanding, the amount payable by Potlatch
 to Madden pursuant to this Section 1 shall be reduced by the
 amount of retirement benefits payable to Madden pursuant to
 the retirement plan of Mobil Oil Corporation (the "Mobil
 Benefit").  For this purpose, the Mobil Benefit shall be 
 converted to the same form and time of payment as the sup-
 plemental retirement compensation is payable to Madden 
 hereunder, using the actuarial assumptions appropriate to
 similar conversions under the Retirement Plan.


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<PAGE>
          	(b) Form and Time of Commencement of Payment.
 Madden's supplemental retirement benefits payable under the
 Agreement shall be paid in the form of a straight life 
 annuity commencing on the date his benefits are payable 
 under the Retirement Plan.

          	(c)	Effect of Madden's Death Following Termina-
 tion of Service or While Employed After Normal Retirement 
 Date. In the event of Madden's death following the termina-
 tion of his service with Potlatch or while employed by 
 Potlatch after his "normal retirement date" (as determined
 pursuant to the Retirement Plan), his surviving spouse shall
 be entitled to supplemental retirement benefits for life,
 provided that she and Madden had been married for a continu-
 ous period of at least five years immediately prior to
 Madden's death. The supplemental retirement benefits pay-
 able to Madden's surviving spouse under this Section l(c)
 shall be a monthly benefit equal to 50% of the amount of
 monthly supplemental retirement compensation payable to
 Madden hereunder at the time of his death plus the differ-
 ence between the amount of the Survivor's Pension, if any,
 payable to her pursuant to Section 20 of the Retirement Plan
 and the amount of the Survivor's Pension that would be
 payable to her under the Retirement Plan if: (i) such Plan
 recognized all non-deferred awards payable under the
 Management Performance Award Plan for award years 1987 and


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<PAGE>
 thereafter as "Earnings" for purposes of calculating the
 Survivor's Pension and (ii) such Plan permitted such nondeferred
 awards to be taken into consideration as "Earnings" for purposes
 of calculating both the Basic Benefit under Section 4(a) and the
 Survivor's Pension under Section 20 of the Retirement Plan. If
 Madden's surviving spouse is more than five years younger than
 Madden, the amount of supplemental retirement compensation shall
 be reduced to an actuarial equivalent on the basis applicable to
 adjustments made pursuant to Section 20(d) of the Retirement Plan.

          	(d) Effect of Madden's Death While Employed Prior 
 to Normal Retirement Date. In the event of Madder's death while
 employed by Potlatch prior to his "normal retirement date" (as
 determined pursuant to the Retirement Plan), his surviving spouse
 shall be entitled to supplemental retirement benefits for life.
 The supplemental retirement benefit payable to Madden's surviving
 spouse under this Section l(d) shall be a monthly benefit equal to
 the amount of monthly supplemental retirement benefit that would
 be payable to the surviving spouse hereunder if: (i) Madden's
 employment had terminated and he had commenced receiving
 supplemental compensation hereunder in the form of a straight life
 annuity on the day before he died and (ii) Madden and his
 surviving spouse had been married for a continuous period of at
 least five years immediately prior to Madden's death.



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<PAGE>
            2. Supplemental Life Insurance Benefits.

           	(a)	Amount. On or before June 1 of each year until
 Madden attains age 75, Potlatch shall pay to Madden an amount
 equal to the annual cost of providing an individual annual
 renewable term policy issued by Executive Life Insurance Company
 (or any other mutually agreed upon insurer) in the face amount of
 $250,000. The payments under this Section 2 shall not be deemed to
 be part of Madden's base compensation for any purpose and
 Potlatch's obligation to make such payments shall terminate upon
 the occurrence of any of the events described in (b) below.

           	(b)	Termination of Potlatch's Obligation. 
 Potlatch's obligation to make the payments described in this 
 Section 2 shall terminate upon the first to occur of any of the 
 following events: 

           	(i)	Madden's marriage to Joan F. Madden is 
       terminated by her death or otherwise;

          	(ii) Before attaining age 62, Madden voluntarily 
       resigns employment with Potlatch (or any successor 
       thereto) except under circumstances described in 
       Section 4(a)(iii) or (iv) of the Potlatch Corporation
       Severance Program for


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<PAGE>
       Executive Employees and within twelve (12) months following
       such resignation assumes or accepts a position as a senior
       executive in a corporation that is organized for profit
       and has annual sales or revenues in excess of $250 million; or

         	(iii)	Madden engages as an owner or employee in a
       business whose principal activities are in competition with 
       Potlatch or uses skills or information acquired at Potlatch
       relating to Potlatch business to assist others to compete 
       with Potlatch.

           	3.	Recognition of Prior Service for Certain Purposes.
 Madden's prior service with Mobil Oil Corporation or any of its
 subsidiaries or affiliates shall be recognized as service with
 Potlatch for purposes of all of Potlatch's employee benefit plans
 and programs other than plans that are qualified under section
 401(a) of the Internal Revenue Code of 1986, as amended.

           	4.	Nonassignability. No right or benefit under this
 Agreement shall be subject to anticipation, alienation, sale,
 assignment, pledge, encumbrance or charge, and any attempt to
 anticipate, alienate, sell, assign, pledge, encumber or charge the
 same shall be void.

                               -7-

<PAGE>
           	5. Arbitration. It is understood and agreed that any
 dispute, controversy, or question arising under this Agreement
 shall be referred for decision by arbitration in San Francisco,
 California, by an arbitrator selected by the parties hereto. The
 proceeding shall be governed by the Rules of the American
 Arbitration Association then in effect or such rules last in
 effect (in the event such Association is no longer in existence).
 If the parties are unable to agree upon such an Arbitrator within
 thirty (30) days after either party has given the other party
 written notice of its desire to submit the dispute, controversy or
 question for decision as aforesaid, then either party may
 apply to the American Arbitration Association for the
 appointment of an arbitrator or, if such Association is not then
 in existence or does not desire to act in the matter, either party
 may apply to the Presiding Judge of the Superior Court of the City
 and County of San Francisco, State of California, for the
 appointment of an arbitrator to hear the parties and settle the
 dispute, controversy or question, and such Judge is hereby
 authorized to make such appointment. The compensation and expenses
 of such Arbitrator shall be borne equally by the parties hereto.

           	Arbitration shall be the exclusive remedy for the
 settlement of disputes arising under this Agreement or for the
 breach thereof. The decision of the Arbitrator shall be


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<PAGE>
 final, conclusive, and binding on all interested persons and no
 action at law or in equity shall be instituted by either party
 other than to enforce the award of the Arbitrator.

           	6.	Entire Agreement; Amendments in Writing. This
 Agreement contains the entire agreement between Potlatch and
 Madden on the subject matter contained herein and supersedes
 all prior agreements, understandings or commitments on this
 subject, whether oral or written, including, but without
 limitation, that certain Employment Agreement between Potlatch
 and Madden dated March 29, 1971, as subsequently amended,
 that certain Employment Agreement between Potlatch and
 Madden dated February 21, 1975, as subsequently amended,
 that certain Employment Agreement between Potlatch and
 Madden dated February 20, 1976, as subsequently amended, and
 that certain Employment Agreement between Potlatch and
 Madden dated March 1, 1981, as subsequently amended. No
 amendments, modifications, or supplements to this Agreement
 may be made except by a writing signed by both Potlatch and
 Madden.

           	7.	Governing Law. This Agreement shall be interpreted
 under and pursuant to the law of the State of California.



                               -9-


<PAGE>
	           8.	Binding Effect. This Agreement shall be binding upon
 the heirs, executors, and administrators of Madden and the
 successors and assigns of Potlatch.

            9.	Communications. All communications and notices
 pertaining to this Agreement shall be in writing and shall be
 deemed given if delivered by hand or mailed with postage prepaid
 and addressed:

            (a)	If to Potlatch, to:

                Potlatch Corporation 
                One Maritime Plaza 
                San Francisco, CA 94111 
 
                Attention: Secretary  

            (b) If to Madden, to:

                P. O. Box 1153
                Newell Road
                Ross, CA 94957

           	IN WITNESS WHEREOF, the parties hereto have caused this
 Employment Agreement to be executed the day and year first above
 written, and Mr. F. T. Weyerhaeuser has



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<PAGE>
 affixed his signature pursuant to authority granted by the
 Board of Directors of Potlatch.

                                       POTLATCH CORPORATION

                                       By /s/F. T. Weyerhaeuser
                                          F. T. Weyerhaeuser, Chairman
                                          Executive Compensation and
                                          Personnel Policies Committee



                                          /s/Richard B. Madden




                               -11-

<PAGE>
                    AMENDMENT TO EMPLOYMENT AGREEMENT

        	THIS AMENDMENT, entered into as of the first day of
    January, 1992, by and between POTLATCH CORPORATION, a
    Delaware corporation ("Potlatch") and RICHARD B. MADDEN
    ("Madden"),

                         W I T N E S S E T H:

        	WHEREAS, Potlatch and Madden have entered into an
    employment agreement dated as of February 19, 1988 (the
    "Agreement"); and

        	WHEREAS, the Agreement contains provisions regarding
    supplemental retirement benefits, and Potlatch and Madden
    desire to amend such provisions:

        	NOW, THEREFORE, Potlatch and Madden agree that subsec-
    tions 1(a)(i) through (vi) of the Agreement shall be
    replaced by the following:

             	(i)	Recognition of any Management Performance Award
         Plan ("MPAP") awards payable with respect to award years
         1987 and thereafter that Madden has elected to defer as if
         they had been paid currently;

            	(ii)	That the average percentage under the MPAP which
         was recognized in Madden's "Average Monthly Earning" had
         been 100% of the "Standard Bonus;"

           	(iii)	Recognition of Madden's prior service with Mobil
         Oil Corporation or any of its subsidiaries or affiliates
         as if it were service with Potlatch; and

            	(iv)	That benefits thereunder are payable without
         regard to the benefit limitations imposed on qualified
         plans by sections 401(a)(17) and 415 of the Internal
         Revenue Code of 1986.

        	IN WITNESS WHEREOF, the parties hereto have caused
 this Amendment to Employment Agreement to be executed as
 of the first day of January, 1992.

                                            	POTLATCH CORPORATION


                                             By /s/ F. T. WEYERHAEUSER

                                             
                                               /s/Richard B Madden
                                               Richard B. Madden