Numbers appearing in square brackets (ex. ) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.
Opened September, 2001
Oral History Interview with
December 1, 1994
by Raymond L. Geselbracht and Dennis E. Bilger
GESELBRACHT: Mr. Goldy let me ask you, how did you come into the Interior Department in Truman's Administration?
GOLDY: I had been over at the Labor Department as the Special Assistant to the Director of the United States Employments Service, it was then a Federal operation, Federally operated, during the reconversion from wartime to a peacetime manpower operation and it had been the field in which I had been working for a long time. And when I came out of the Navy, I went back into the position with the head of the Manpower program of the country, and frankly, I had become interested in how we could expand jobs in the United States instead of just stretching the existing job base so enough people could find jobs as they came out of the military service and we had our transition from war to peace. And on top of that we had--my wife and I had visited--she had lived there before--we had visited the Pacific Northwest and we had decided that that's where we wanted to go to live now that our military duty was over. And so we visited in the Northwest, met some people who were key in the Department of Interior, and they in turn introduced me to people in Washington, D.C. in the Department, and given the particular background that I had had in heading up a regional committee of various Federal agencies in other positions that I filled, I was offered a job in the Pacific Northwest by the Office of the Secretary where they were creating a field committee of the Interior Department agencies for the Colombia Basin.
The then Secretary of Interior, Julius Krug--"Cap" Krug--had come out of the TVA and his Assistant Secretary, C. Girard Davidson, had come out of the TVA, and they were very interested in creating a Colombia Valley Authority, an equivalent of the TVA for the Pacific Northwest and the Colombia Basin.
So I was set up--they felt they would have difficulty with the Congress in getting one approved just directly, but Secretary Krug felt there was absolutely no reason why they should not pull all the agencies--existing agencies--together in the Interior Department and at least have a coordinated program with respect to what they had control over. And I was hired actually to go to the Northwest and become the executive secretary of this interagency committee within the Department of Interior.
Well, we went out there and we found a house, rented one, and we were just about to settle down and undertake our duties, when I had a call from the Assistant Secretary, Mr. Davidson, who said that his assistant had departed for the State Department and he said, "Dan, you'll be out there in left field without a glove," he said, "if I don't have some assistant," he said, "we won't really be able to staff that and get it under way. You won't have anybody to really report to and things won't happen unless we do something about that." So, he said, "I want you to come back here to Washington, and," he said, "I want you to be my assistant until we can find somebody and as soon as we do you can go back out to the Northwest and do what you were hired to do."
So, we cancelled the lease on the house and we went back to Washington. And back in those days there were really two Assistant Secretaries in the whole Interior Department, and the way Cap Krug had it organized they each took turn running the Department. One of them ran it for two weeks and the other ran it for two weeks. They got all the mail from all the bureaus up there and we weren't called Deputy Assistant Secretaries at first, we were Special Assistants, but we were the only assistants they had, and there was one for each Assistant Secretary.
So, every two weeks I read all of the Department mail. Everything headed for the Secretary's signature would show up in my office. And it'd get stacked around the walls and piled up. Anyway, that's how I got introduced to the Interior Department.
We did have certain Bureau assignments as well. We had the Park Service and back in those days when I came in there was a General Land Office and a Grazing Service, we later while I was there, we put them together to become the Bureau of Land Management as it's known today. And we had the Geological Survey and we had some other--we had most of the land functions of the--other than Reclamation and Power. But we did have, we took turns--and also we had a kind of regional orientation and Assistant Secretary Davidson and I were oriented toward the Northwest and some of the other Western states.
GESELBRACHT: So, while you were in Washington, you didn't really specialize too much then did you. You handled everything.
GOLDY: Yes, I got quite an exposure to almost everything going on into the Interior Department, that's correct. And also, we handled other special assignments. For example, one of the assignments that came to the Secretary from President Truman when he was initiating the idea of a Marshall Plan, assistance program, for Europe to rehabilitate them after the war. The issue came up of America's capacity to produce resources to transfer to Europe. How much could we transfer, what were the limits of our ability to do that, and the Secretary of Interior was given the mission of looking at our resource base in the United States, and making a recommendation to the President of what could be transferred to Europe by way of assistance. And I was involved in that study as well. As a matter of fact, we got a commendation from the President for the work we had done on that. And that was my introduction--I was here, I got started in a sense with the Marshall Plan before it began over in the Interior Department, and as you know, later on I went to work in the Marshall Plan in Europe.
GESELBRACHT: We'd like today to try to evoke from you some things about your experience that will help our researchers to use your papers in the coming years and one of the issues in your papers that's very evident and that you've talked to me about today, is this matter of the Oregon and California lands issue. Can you describe, I guess, the genesis of that issue, both as an issue and how it came to your attention and how you got involved in it, and just what it all means.
GOLDY: Right. Well, the O&C Lands as they're known, Oregon and California were vested railroad grant lands. Those lands had been given to the Oregon and California Railroad to compensate them for building a railroad line from California into Oregon and what happened was they were given every odd section on each side of the railroad right-of-way extending up into the Cascade Mountains and the Coast Range in Oregon and they contained some of the best--probably the best forest lands in the whole United States. And there were terms and limitations put on the grant to the railroad. And they were supposed to sell these lands at certain price to settlers and other things, and they didn't do that, they recognized that the land had value for timber and so they started using it for other purposes.
The Federal Government, in effect sued--suits were filed and they reclaimed the land. The lands were revested back to the Government on the basis that the railroad had violated the terms of the grant. And so now here were lands, forest lands, very important lands, that had been on the tax roles of the counties. They had been private lands. The counties used them as a tax base and now they were back--they were Federal lands again. So the Congress, the President asked and the Congress decided to pass a law--I mean they enacted legislation special to the O&C lands setting up-- different from the National Forests--they had a different mission. Those lands were dedicated to providing a sustained flow of timber to the forest- dependent communities in that area, to support the communities, to be an economic base for them. And the distribution of the proceeds from those lands were different from the way the gross proceeds on the National Forest are distributed. And the counties in which these lands are located, we call them O&C counties in Oregon. They were entitled to 75 percent of the revenues from the lands and the Federal Government would have 25 percent except that in the years until the Federal Government was reimbursed for the costs of
reacquiring, revesting them, and the cost of the money that they had put into it administering them, managing them, the counties would get 50 percent and the Federal Government would get 50 percent.
Well, that's where the lands came from.
GESELBRACHT: When did that happen, when had the revesting occurred and all these regulations been developed?
GOLDY: The revesting occurred--the issues started around 1915 or so, and the actual revesting occurred, I'm not sure what the exact date was, around 1920 or '21 or '22 somewhere in there. What happened to all the--in the Pacific Northwest, which is the most forested area of the United States, the best timber and the most dense acreages, where the bulk of actually the greatest part of the U.S. Forests are located, until World War II most of the timber from there and elsewhere came from private lands. There wasn't much intense use of the National Forests or the O&C lands. Some sales, but not much.
Then came World War II and tremendous pressures developed on the forests. The supply of raw material to build barracks, to build all kinds of things, and for other construction and shipbuilding and what-not. And so the forests got more heavily used. After World War II, as everybody remembers, we had an enormous backlog--unfilled backlog of demand for housing in the United States. And as this demand asserted itself in the marketplace, the demand for wood accelerated enormously. And at this point, the Federal Government was under great pressure to increase the volume of sales from the National Forests and from the O&C lands.
Now, what happened--one other thing I should tell you about the O&C lands. Because they had been part of this. I mean they came from the railroad grant, and they were every odd section, they were checkerboard lands. Every even section was owned by some private party and these checkerboards meant that private ownership was interspersed with the Federal ownership, unlike the National Forests which tend to be more blocked up, solidly blocked.
Well, what had happened was that the private companies that owned the private checkerboard, the even sections, had developed--they put the roads in, they were harvesting the timber on their private lands and when the O&C timberlands were put up for sale, they had the roads, they had the only means of access, so they were the only ones that could bid on the timber. So it meant that the price of the timber was very low and the receipts to the counties were low and they--in effect the control of the timberlands, the O&C timberlands, were really in the hands of the private companies that had the checkerboard with them, rather than in the Government. The Government went through the motions of selling the timber by competitive bidding, but occasionally there were timber that would be soldenough of it was sold on occasion by actual competition in bidding so you could get some idea of what it was worth. The timber that was sold by competitive bidding went for something like three times or four times the price of what was sold at the appraised price and went just to the parties that had the checkerboard.
And this is the way things were going and finally the Congress passed something called the "sustained yield act" applying both to the National Forests and there was this sustained yield act also for the O&C lands. This was an amendment to the original O&C Act and it authorized the creation of what they called cooperative sustained yield agreements with private timber owners. And the idea was that the private timber owner if they would commit their lands to sustained yield management, which means that there'd be timber at in perpetuity, you wouldn't cut any more in any given year than what you could grow, so you'd have a perpetual yield that the Federal Government would commit to this agreement, a block of Federal lands, and would give the exclusive rights to this one company that committed its private lands to have exclusive right to bid on the Government timber. I should tell you one other basic fact that explains what happened and how I got into all of this.
As the pressure grew for timber and wood to beat the housing requirements and the demand for enough, more and more companies, smaller companies, independent companies, not just a few big giants who'd gone out there and had bought up a lot of timber land at very low prices after they'd cut out of the areas in the Middle West and they came to the West and Northwest. More and more independent companies, small independent companies came along, and these companies, unlike the old ones that had been there, the big ones, were
interested in installing the latest technology for harvesting and for processing and manufacturing timber into wood products. And they got much of their technology from the Scandinavian countries who had advanced technology in cutting and conserving the timber. And the new technologies meant that you could get a lot more production, yield, lumber, out of the given input of logs and raw material.
Now, these companies that installed the latest technologies would build new mills, small mills, with the latest technology. They were much more efficient than the big old companies. But they needed access to the public timber in order to have the raw material for their mills. And so they began competing very vigorously for the timber that was going up for sale. But more and more of them were blocked on their access because they couldn't get on the roads, and more and more of them were blocked by the fact that the companies that had the checkerboard on the O&C lands, or were working in close relationship with the Forest Service management, the resale foresters and the supervisors of the National Forest, were kind of given special preference when the timber came up for sale.
Well, the way I got into all this, I was back in Washington as the Deputy Assistant Secretary and my turn on the mail, I had all the mail one two-week period, and along with the mail that came in there was a stack of papers that were almost as high as this desk wrapped in red tape, literally, it was all wrapped up in red tape and tied at the top and this came from the Bureau of Land Management. And it was the Mohawk--proposed Mohawk Sustained Yield Cooperative Agreement under which the Bureau proposed for it to give a 99 year lease, exclusive right to cut a big block of O&C lands, timber lands, in the Mohawk drainage near Eugene. I mention Eugene, Oregon because this is an area where a lot of the new mills have been located, down in the valley and around Eugene and a little further down by Roseburg and so forth, and a lot of the new mills had come in there and these mills had better technology and they wanted to compete.
Well, the Fisher Lumber Company owned some of the checkerboarded lands and they'd come up with a proposed cooperative sustained yield agreement and the Bureau looked at it and said, "Well, this is exactly what we had in mind. We're going to give them an exclusive right to do this." And what happened was that an enormous howl went up, cry went up,
from the independent mills, the mills that had come in with new technology and wanted to compete and they were joined by labor who wanted--whose jobs were in jeopardy if they couldn't get access to timber, the companies they worked for, and other groups also. The counties were concerned about the fact that under appraised prices you didn't get as much for the timber as you did when you competed. So there were a whole group of people, recreationalists were opposed to locking up Federal timber lands under the exclusive control of a company for 99 years.
Well, there were enormous numbers of letters of protests that had come into the Bureau headquarters in Washington, but the Bureau had already made up its mind that it wanted to do this and so it just piled the letters up and that's why the stack of papers that came up in my office were so high, because here was on top the Bureau recommendation to go ahead with the agreement and just said "sign here" to the Secretary and agree on it, approve it, and everybody had initialed it, signed off on it, the Bureau had recommended it, but in this enormous pile of papers were all of these protests from people locally.
When I saw this, I read through it, and I went in first to the Assistant Secretary and I said to Davidson, I said, "Jebby Davidson," I said, "here is one that the Bureau recommends I don't recommend. I think we'd better take a good careful look at this before the Secretary signs it." So he and I went in to see the Secretary and I explained to the Secretary, and I pointed out, "I said, "All of the groups that are supportive of President Truman and of this Administration, are opposed to it. The people that are for it are a few large companies that are solidly opposed to the Administration--just about everything that the Administration is doing." I said, "I think what we ought to do is take a good careful look at what the protests are about." And the Secretary said, "Well, how do you propose doing that?" I said, "I think we ought to just don't approve it now but we'll go out and hold a hearing in the area. We'll go to Eugene hold a hearing, let everybody come in and present their case." The Secretary said, "Fine." So, the Assistant Secretary, Mr. Davidson, and I went out to Eugene, Oregon to hold hearings on this. And the hearing was scheduled to be held in the largest auditorium at the University of Oregon in Eugene.
GESELBLRACHT: This was in 1950?
>GOLDY: No, this was actually in 1947. We went there to Eugene and we went to this hall where we'd hold a hearing and there were about two thousand people outside that couldn't get in the hall. I mean it looked like all of the Willamette Valley had shown up there to participate in this hearing. So, we realized that we'd have a riot on out hands if we tried to conduct the hearing that way, and the only thing we could do was, we inquired, we stopped everything and we inquire, found the biggest theater in downtown Eugene, the biggest theater that would hold the most people, and so we adjourned and we reconvened the hearing down in the theater. All of the people still couldn't get in, but that theater was jammed to the rafters with people. And we, of course, we listened to them, and they presented their grievances. That's when we began to hear all about this, and it wasn't just the cooperative sustained yield agreement. It was clear that the grievances went far beyond that to the fact that people tried to compete and they went through the motions of competitive bidding, but they weren't really selling it in competitive bidding. And the people were saying that the timber wasn't being sold the proper way, it wasn't being harvested, that too big a proportion of the wood that they were selling was being left in the woods to rot. They were only high grading it, taking out the few big trees in the stands. Why? Because they didn't have the proper equipment in the mills to cut these smaller type timber, so there was a tremendous amount of waste, there was an enormous amount of criticism.
Well, after the hearing Mr. Davidson and I went back to Washington and we reported to the Secretary about the hearing, and again I had initiated all this and the Secretary said, "Well, Dan, what do you recommend?" I said, "Well, what I recommend Mr. Secretary, is number one that you don't approve this. Number two that you free me up from my duties as Deputy Assistant Secretary so I'm not working eighteen hours a day trying to figure out what to do with all this stuff coming up from the Bureaus. I'd like to be freed up and spend some time really probing, getting into this issue and coming up with a new program for you to deal with this very important, valuable set of timber lands."
Now, I should interject right here why this was so--this was all in one state the O&C lands. Why was it so terribly important to the Interior Department. Well, aside from the fact that it was an enormous issue up there, which was a political problem, and part of the political problem was that the senior Senator from Oregon was a Guy Cordon, and he was at that
time chairman of the Interior--the Senate Interior Committee, and he was also chairman of the Interior Appropriations Subcommittee. So he was Mr. Interior in the U.S. Senate and he was from Oregon. And he had come--before he had become Senator, he got to be Senator by being the Executive Secretary of the O&C Counties Association. He had come right out of the O&C Counties, that's how come he had gotten to be Senator. That's how important those timber lands were.
But the timber lands were important to the Interior Department for another reason, very important reason. You remember that all of the public lands had been in the Interior Department until during Teddy Roosevelt's administration, there was the great Teapot Dome scandal, and Secretary of Interior Fall had also been accused of selling timberlands off improperly and there were these scandals.
GESELBRACHT: Harding's Administration.
GOLDY: Yes. During the Harding Administration, right. And so when Teddy Roosevelt came along he took--remember Gifford Pinchot had worked for him over at the Department of Agriculture, and what they did was they carved out of the public domain, the public lands, the forest reserves that had not--areas that were forested that had not already been put in some kind of a reserve, and that's when they created the National Forest System and the U.S. Forest Service under Gifford Pinchot. And they took it out--all those lands--out of the Interior Department and put it over in Agriculture Department and that was a permanent black mark on the reputation of the Interior Department. It was a stigma that said, in effect, "The Interior Department cannot be trusted with these very valuable timber lands of the United States because they might be abused and mismanaged, and fraud and abuse occurred. So, every Secretary of Interior after that, has as one of its primary purposes in life, to redeem the Interior Department and get the National Forest moved back over to the Interior Department to be melded with the Bureau of Land Management. By this time it was a bureau, General Land Office and Grazing, which had the bulk of the acreage in the West, but much of it grazing lands, and other types of lands, Federal lands and that sort of thing, but had these very valuable O&C timber lands in Oregon. So, managing the O&C timber lands properly was a key objective of the Interior Department if it was to have any hope of
doing just what I'm talking about getting the Forest Service moved back over into Interior.And indeed, what happened was I did write a new program. I consulted very heavily with the Forest Service, U.S. Forest Service in developing the Program. I should explain to you that I'm an economist by background and much of my work had been done on manpower and human resource problems, as you know, and I'd been used to urban areas and it wasn't until I joined the Interior Department for the reasons that I said. I wanted to find out how you could create jobs from resource development, that I became acquainted with all this. And what I did not--what I didn't know about forestry was legion. I was no forester by background and profession. So I had to learn a tremendous amount about forestry and how it worked and what good Silva culture practices were and what the economics of it was and its relationship in sustaining the communities and something about the technology in the mills and marketing and all that sort of thing. And I did intensive--the Secretary was nice enough to free me up to do that, and I worked with the Forest Service and I worked with everybody that I could talk to where I thought I could get educated, and we developed a whole new program.
Now, I must say what we did was we did not rule out Cooperative Sustained Yield Agreements at that time, but we did recognize in the program the absolute necessity of solving the problem so that the new technologies could come into being and the mills could compete. And what we did was we turned down the Cooperative Sustained Yield Agreement with the Fisher Lumber Company. We did not approve that. We didn't rule it out permanently, but we indicated that there were a whole series of problems that had to be resolved before we would do it. Such as, and this is very important for what President Truman did later. One of the conclusions I came to was that unless companies competed for the timber, unless there was some competition, if you gave--there was no incentive to improve their mills,