The Alaska daily empire., 1920-04-06

The Alaska Dispatch, in its issue of February IS. contained an arti- cle headed Pulp Mill Near Juneau Assured" This article quotes from a conversation had with Mr. John Rustgard, former United States At torney at Juneau. A portion of the article reads:
 MT. Rustgard pointed out that the Senate recently passed a power-site leasing act that, in his opinion, will give Alaska another industry-that of the manufacture of wood pulp and paper The act would give corporations or individuals a lease of 50 years on water rights. The withholding of this concession has for many years kept capital away from Alaska, because power sites could not be obtained for any great period of time.
 Only one obstacle lies in the path of heavy investment in the pulp industry in the North, in MT. Rust gards opinion. This is the conser- sation measures applied to Alaska forests, under which only grants to cut timber for a five-year period are obtainable. These, however, may be renewed through the forestry bu- reap of the Department of Agricul- ture. Investors have been timid in coming North for the pulp industry because of what they characterize the uncertainty of securing suffic- tent timber under the 5year grants. It is believed that suitable legisla- tion can be enacted that will permit Alaska spruce to compete with Brit ish Columbia in the pulp-making industry"
 l call attention to this article to correct the error in the statement in regard to the Forest Service only granting contracts for 5year per iods, while the facts are that the Forest Service is perfectly willing to enter into 25-year contracts with large pulp concerns, and in no case has suggested less than a 20-year contract for a large pulp mill; in one case of very large proposed mill a former Secretary of Agricul- ture agreed to approve a 40-year contract 1 call attention to this 5- year error for the reason that it's circulation has a bad effect upon the investing public, and that my good friend Rustgard may not have been properly quoted.
 The part of the contract which has probably led to the above error is a clause providing for the read justment of the stumpage rates at the end of every 5-year period which is similar to the 5-year ad- justment periods provided by the Rayalty Act of 1914 in British Col umbia.
 The Forest Service has never had any serious objections from the in- vesting public in regard to the num- Der of years determining the life of the contract, or in regard to the amount of timber covered by the contract. It has had some objection in regard to the clause providing for the adjustment of stumpage rates. Inasmuch, however, as this clause provides that any raise iii the stumpage price shall only be a small percentage of the increase in the price of similar raw material during the same period, and no in crease in the stumpage rate if there has been no advance in the price of similar material not under con tract, there does not appear to be anything of sufficient importance financially to keep the government and the investor from getting to- gether on this point if the investor is really in earnest about building plant. Owing to the fact that there are several pulp and paper mills operating in British Colum- bia, it is believed by some Alaskans that the conditions for the estab- lishment of pulp and paper mills are much more favorable in British Col umbia than in Alaska. This, how ever, is not true.
 The first demand for pulp leases in British Columbia was in 1901, and the statutes of 1901, Chapter 30, Sec. 6, provided for the leasing of certain pulp lands for a period of 21 years, with an annual ground rent of Pc. per acre and a royalty