History of the O & C Lands: 1937 to 1990

Under the O&C Act of August 28, 1937, the policy of disposing of the lands was reversed. The lands were to be retained and Congress required management according to principles of sustained yield by enacting the requirement that lands classified as timberlands

“…shall be managed…for permanent forest production, and the timber thereon shall be sold, cut and removed in conformity with the principal [sic] of sustained yield for the purpose of providing a permanent source of timber supply, protecting watersheds, regulating stream flow, and contributing to the economic stability of local communities and industries, and providing recreational facilities…” 43 USC §1181a.

Congress further described its intentions in requiring sustained yield management of all O&C timberlands as follows:

“Only those lands classified as valuable for agricultural purposes will be open to homestead entry or purchase. Lands valuable for forage production will be devoted to grazing under adequate grazing regulations. All land classified as timber in character will continue in federal ownership and be managed for continued forest production on what is commonly known as sustained yield basis. Under such a plan the amount of timber which may be cut is limited to a volume not exceeding new growth thereby avoiding depletion of the forest capital. This type of management will make for a more permanent type of community, contribute to the economic stability of local dependent industries, protect watersheds, and aid in regulating stream flow.” Report to accompany H.R. 7618 75th Cong., 1st Sess. No. 1119 at 2.

The above-quoted report concludes that the O&C Act “establishes a vast, self-sustaining timber reservoir for the future, an asset to the Nation and the State of Oregon alike. All of which is financed by the Lands themselves.”

During the course of deliberations and hearings by Congress, AOCC expressed concerns about revenue sharing. The bill that was originally introduced required sustained yield management and provided payments of at least 50 percent of revenues to the O&C Counties, but there was no assurance that management would actually produce sufficient revenue to satisfy the Counties’ needs.  In response to the concerns of AOCC, the bill was amended as requested by AOCC to provide a guaranteed minimum harvest that would assure the necessary minimum revenue. The Act as passed requires that:

“timber from said lands in an amount not less than one-half billion feet board measure, or not less than the annual sustained-yield capacity when the same has been determined and declared, shall be sold annually, or so much thereof as can be sold at reasonable prices on a normal market.” 43 USC §1181a.

The system for distributing revenues from the O&C Lands was also restructured by the O&C Act. The concept of property tax equivalency as provided by the Stanfield Act was abandoned. Instead, the Counties were assured at least 50 percent of the revenues from the O&C Lands. Once certain amounts were reimbursed to the United States, the O&C Counties were entitled to up to 75 percent of all revenues from the O&C Lands. The remaining 25 percent would meet the costs of administering and managing the land.

Immediately following enactment, the Department of the Interior appointed Walter Horning as the Chief O&C Forester, which position had all the authority and more of the position that today is called the Oregon State Director for the Bureau of Land Management. Horning held the position for many years and he spearheaded implementation of the O&C Act. He wrote contemporaneously about that implementation process, and his writings are instructive:

“The land grant counties are in much the same position relative to the O. & C. lands as the beneficiary of an estate and the Federal Government is in the position of the trustee who manages the estate in such a way as to provide the maximum continuous income for the beneficiaries without depleting the capital. True, title to the property in this case is in the name of the trustee but the net income goes to the beneficiaries while the trustee retains 25% of the income for services rendered in managing the estate.

As systematic sustained yield management is gradually brought into operation generally over the entire area the county income from the lands will increase substantially until such time as the sustainable timber yield is all being marketed and may increase thereafter until stumpage values become stabilized at higher levels.” The Role of the Oregon and California Reinvested Land Administration in a Program of Logging for Continuous Production, Walter Horning, March 3, 1939, at pages 2-3.

Later in 1939, Horning further elaborated on the Department of the Interior’s understanding of the O&C Act:

“The O. & C. lands have on them about 50 billion board feet of valuable commercial forest which requires careful management and protection to insure a continuous supply of timber for the operation of more than a hundred sawmills and other industries whose employees are engaged in manufacturing lumber and a great variety of other forest products.

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The timber is being cut according to a plan which permits the annual cutting of 500 million board feet. With this rate of cutting, the present stand of timber will last for 100 years, at the end of which time, the areas where timber is now being cut will again have on them a crop of mature timber ready for cutting. This plan of management makes it certain that there will always be productive forests kept growing on the O. & C. lands.

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Congress in enacting the legislation of 1937 recognized that the disposal policy previously applied to these lands was unsound, unbusinesslike, and contrary to the public interest. The old policy accordingly was completely reversed and replaced by a plan which requires conservation of the forest resource through a logical plan of management. This plan, while providing for prudent use of mature timber, requires that timber-cutting shall be conducted in accordance with the principle of sustained-yield. All the lands best suited for the growing of timber will now be retained in public ownership and kept at work growing crops of timber. Continuous production of timber of commercial quality in the largest possible volume is the goal.” The O. & C. Lands, Their Historical Background and Present Administration,” Walter Horning, December, 1939, at pages 1, 3.

As implementation approached its 10-year anniversary, Horning wrote at length about the steps that had been taken to achieve the purposes and intent of the O&C Act:

“The new policy, outlined in the Act of 1937, specified that the timber on the grant lands should be sold, cut and removed in conformity with the principle of sustained yield—that is, the annual cut was to be approximately the same as the annual timber growing capacity with cutting methods designed to provide adequate natural seed sources and to preserve established young growth—all for the purpose of, “providing a permanent source of timber supply, protecting watersheds, regulating stream flow, contributing to the economic stability of local communities and industries and providing recreational facilities —“.

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To carry out the new policy and requirements of the Act of 1937, the O. & C. Revested Lands Administration was organized in 1938 as a division of the General Land Office of the Department of the Interior with a headquarters office in Portland and administrative district offices in Salem, Eugene, Roseburg, Coos Bay and Medford.”

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In order to determine the average annual allowable cut on a permanent or sustained yield basis, the first big job of the new agency was to make an inventory of the O. & C. timber resources. The first step in planned management of any type is to determine what one has to manage. Basically, to determine how much timber can be cut annually on a sustained yield basis, the forester must know how much merchantable timber he has on hand. He must next determine the quantity by age class of second growth timber available, how much net growth is being produced, and the potential future productive capacity of this second growth timber. With such knowledge he can then determine the time required to bring the second growth timber to merchantable size, and the volume which will reach that size from year to year. The merchantable timber must be made to last at least for the period of 100 years required for the older second growth to reach merchantable size. Dividing the known present merchantable volume by this number of years will then give approximately the sustained yield annual cut.

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The cutting of O. & C. timber is so regulated that, by the time the present supply of merchantable timber is all cut, the new crop of second growth will then be available in which to continue, permanently, the cutting of the same or a larger average annual volume.

According to the best information available at the time of the passage of the Act in 1937, the grant land timber amounted to 50 billion board feet of merchantable timber of all species. One hundred years was assumed as the period necessary to produce a tree of merchantable saw-log size. Dividing 50 billion by 100 gave 500 million board feet as the temporary allowable cut on a sustained yield basis. This amount was specified in the Act to be the standard allowable cut pending more complete surveys.

Studies since 1937 indicate an allowable annual cut, during a regulatory period of 40-50 years, of approximately 600 million board feet. Such a regulatory period is necessary in order to effect a better balance of age classes of timber so as to have equal amounts of second growth coming into merchantable size each year or each cutting period. It is estimated that the future potential allowable cut, following this regulatory or transitional period, may be increased to approximately 660 million board feet per year.

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The Act of 1937 authorized reclassification of the lands to determine as accurately as possible which lands were truly agricultural and which were true forest lands.

Reclassification survey work was started in December, 1938, and continued until the reduction of personnel, due to the war, forced temporary suspension of the activity. The survey consisted of two parts: An inventory of the forest resources, especially on lands previously given a faulty agricultural classification; and a classification and segregation of the lands other than timber lands—especially those lands which might best be suited for agricultural use. Results, to date, show approximately 2,446,000 acres of true forest land and 125,000 acres of non-commercial forest land. The remaining 19,000 acres include agriculture land and areas requiring special treatment because of important scenic and recreational values.

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With timber cutting stabilized at a volume closely approximating the volume that can be cut as a perpetual yield, the counties are sure of substantial revenues. In other words, they enjoy a sustained yield of funds for the support of all institutions supported by county government, including schools. The amount received by the counties under this arrangement runs as high as taxes; even higher than taxes in years of high timber prices. By virtue of this plan the O. & C. lands are a permanent tax base which does not shrink as timber cutting proceeds. The counties in effect receive an income tax based on a stabilized income.

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“Contributing to the economic stability of local communities and industries—” is a primary and mandatory function of the O. & C. Administration as provided by the Act of 1937.” Timber Forever, Perpetual Sustained yield Forestry on the Revested Oregon and California Railroad Grant Lands and the Reconveyed Coos Bay Wagon Road Grant lands in Western Oregon, Walter Horning, 1946, at pages 12, 14-17, 26, 36-37.

Horning was very successful at developing the resources and implementing the O&C Act as Congress had directed. A 1976 letter from Herbert Haglund, Chief, BLM Division of Resources, to Ray Doerner, President of AOCC, listed the “allowable cuts” (in 1000s bf) for each of the early years under the O&C Act:

1937-1944:            500,000

1945:                      606,700

1946-1953:            645,700

1954:                      657,200

Revenue generation from timber sales was enhanced by increasing timber values over the period. By the end of 1952, the repayments due to the United States were satisfied, and the O&C Counties were eligible to receive 75 percent of the revenues generated. The Counties began to receive their full 75 percent share of revenues in 1953. After 1953, varying amounts to which the O&C Counties were otherwise entitled were retained by the federal government with the cooperation and support of the O&C Counties under annual Department of the Interior Appropriation Acts. After 1960, the O&C Counties received 50 percent of the revenues. The Counties voluntarily “plowed back” a third of their entitlement (25 percent of total revenues) to pay for improvements on O&C Lands and ensure the forests’ future productivity. For Counties, the plowback funds were an investment made with an eye towards future returns.

The O&C Act has been interpreted many times by the courts as making timber production the dominant use for the O&C Lands. The other uses for the lands identified in the O&C Act are secondary uses, to be achieved through sustained-yield management. The O&C Lands are unlike most other federal lands, which are managed under multiple-use mandates where all possible uses are to receive equal consideration in the planning process. The O&C Act provides for a dominant use, timber production, not unlike legislation setting aside other lands for particular purposes such as wilderness, parks, scenic areas or historic preservation.

In 1976, Congress itself recognized the unique mandates of the O&C Act when it passed the Federal Land Policy and Management Act (FLPMA). FLPMA redefined the management direction for nearly all lands in the United States under the jurisdiction of the BLM, making almost all of them subject to a multiple use mandate under which all uses receive equal consideration. The telling exception are lands managed under the O&C Act. Congress specifically preserved the dominance of timber production on the O&C lands by adopting section 701(b) of FLPMA, which says that “[n]otwithstanding any provision of this Act [FLPMA], in the event of conflict with or inconsistency between this Act and the . . .[O&C Act and Coos Bay Wagon Road Acts], insofar as they relate to management of timber resources, and the disposition of revenues from lands and resources, the latter Acts shall prevail.”

The courts have been likewise clear. In a case involving a dispute over access to timberlands made difficult because of the checkerboard pattern of private and public ownership which is characteristic of the areas which include the O&C lands, the Ninth Circuit said:

“In 1937, Congress declared that these lands were to be managed as part of a ‘sustained yield timber program’ for the benefit of dependent communities. * * * In order to protect watersheds and maintain economic stability in the area, long-term federal timber yields were guaranteed by limiting the maximum harvest to the volume of new timber growth.” United States v. Weyerhaeuser Co., 538 F2d 1363, 1364-65 (9th Cir. 1976) (Emphasis added; citation omitted).

A few years later the same Court, in resolving a dispute over the allocation of revenues under the O&C Act, noted that

“In 1937 Congress passed the O&C Sustained Yield (or McNary) Act, 50 Stat. 874, 43 U.S.C. §1181a, which provided that most of the O&C lands would henceforth be managed for sustained-yield timber production.” In Skoko v. Andrus, 638 F2d 1154, 1156 (9th Cir. 1979).

The 9th Circuit Court of Appeals again emphasized the dominance of timber production over secondary uses, such as recreation, in a 1987 case:

“The provisions of 43 U.S.C. §1181a make it clear that the primary use of the reinvested lands is for timber production to be managed in conformity with the provision of sustained yield, and the provision of recreational facilities as a secondary use. No duty is thereby established to provide for recreational use.” In O’Neal v. U.S., 814 F2d 1285, 1287 (9th Cir. 1987),

A 1990 opinion of the 9th Circuit identified the overriding purpose of the O&C Act is to provide the O&C Counties with revenues through the sale of timber:

“The purposes of the O&C Act were twofold. First, the O&C Act was intended to provide the counties in which the O&C land was located with the stream of revenue which had been promised but not delivered by the Chamberlain-Ferris Reinvestment Act . . . .

*** The counties had failed to derive appreciable revenue from the Chamberlain-Ferris Act primarily because the lands in question were not managed as so to provide a significant revenue stream; the O&C Act sought to change this. *** Second, the O&C Act intended to halt previous practices of clear-cutting without reforestation, which was leading to a depletion of forest resources.” Headwaters, Inc. v. BLM, Medford Dist., 914 F2d 1174, 1183-84 (9th Cir. 1990) (citations omitted, emphasis added).

In Headwaters, the 9th Circuit made clear that timber production and harvest was the way Congress intended to achieve the goals of a sustained revenue stream to the counties and support of local economies and industries. In responding to the plaintiffs’ argument in that case that the O&C lands should be managed for the discretionary protection of owl habitat, the court stated that:

“Nowhere does the legislative history suggest that wildlife habitat conservation or conservation of old growth forest is a goal on a par with timber production, or indeed that it is a goal of the O&C Act at all.” Headwaters, 914 F2d at 1184.

Following passage of the O&C Act, the Secretary initially managed the O&C Lands to provide for timber harvests consistent with the statutory mandates of the O&C Act. Starting in 1959 the BLM began selling an average of more than 1.1 billion board feet of timber from the O&C Lands every year for the next 32 years.   The revenues from such timber provided substantial benefits to the O&C Counties as contemplated by the O&C Act. Expressed in current value dollars, revenue sharing with Counties from the O&C Lands averaged about $134 million dollars annually, divided between the 18 O&C Counties according to a formula that takes into account the value of land and timber in each County in 1915.

The era of implementing the O&C Act according to its terms came to an end soon after the decision in the Headwaters case. The Northern Spotted Owl was listed under the Endangered Species Act in 1990, and that action ushered in the modern historic period of controversy and conflict over management of the O&C Lands.