EXHIBIT B THE NATURE OF STUMPAGE The Forest Service, U.S. Department of Agriculture, which annually offers for sale more than $100 million worth of standing timber recognizes the fact that stumpage (standing timber) is only of value after it has been converted to marketable products. Its woods value is simply its final products value less the cost necessary to produce the final product. According to the Forest Service Handbook: "Stumpage is an unusual type of resource. In an unsevered state, stumpage is a part of the realty upon which it stands. The economic value of stumpage, however, is based upon its utility after severance and removal from the realty. The severed stumpage itself is usually considered as a salable commodity with a market value. This market value is an 'in place' value as the purchaser or owner must expend certain varying amounts to move the raw material to a point where it can be manufactured and moved into its eventual use * * * tracts of stumpage occur at varying distances from their point of eventual use although stumpage has some of the aspects of a commodity this commodity exists at varying locations with respect to its markets ***. Stumpage has some aspects of realty in that no two tracts are exactly the same. Since indentical transactions are practically nonexistent the value of stumpage must be determined tract by tract" (2423.11 Forest Service Handbook). FAIR MARKET VALUE *** An essential element in timber valuation, as conducted by the Forest Service or any other appraiser, is the determination of the conversion return-sales return less costs. Access and transportation are principal cost items. In a typical national forest timber appraisal the following costs are deducted from final product values in determining the appraisal value or "Market value" of the standing timber: Logging: Logmaking Stump to truck Log transportation-"Log transportation costs vary mainly with distance" Logging general administrative expense Development costs-"The most important development cost in a typical logging operation, is truck-road construction. Other development costs include expenditures for right-of-way, camps, landings, reloading facilities, and railroads, or other transportation facilities in lieu of truck roads" FSM 2423.51 (8). A similarly exhaustive list of manufacturing steps is used to determine costs: of manufacture and sale of the final product from the logs delivered to the mill may be considered a final product, consideration here is directed only at those costs inherent in converting standing timber to a marketable product. From the above listing and forest comments it is apparent that access road development and transportation costs are a major factor in determining the market value of standing timber. Fluctuation in these costs can greatly affect stumpage values. Clearly, the value of stumpage, dependent on the costs of removing it to the mill, can be greatly reduced as a direct consequence of a loss of existing access. Hon. EDMUND S. MUSKIE, NATIONAL HOUSING CONFERENCE, INC., Committee on Government Operations, Subcommittee on Intergovernmental Relations, U.S. Senate, Washington, D.C. DEAR SENATOR MUSKIE: I appreciate the opportunity to present the views of the National Housing Conference on S. 1681, the proposed Uniform Relocation Act of 1965, and on the relocation provisions of S. 1201, the proposed Fair Compensation Act of 1965. The National Housing Conference has been a consistent supporter of adequate relocation programs for families, individuals, businesses, and institutions which are displaced by public action. We long advocated the extension of the urban renewal relocation requirements and relocation payment provisions to the lowrent public housing program and to the federally aided highway program. We are, therefore, in agreement with the general objectives of S. 1681 and S. 1201 to extend relocation assistance to direct Federal property acquisition programs and to other federally aided programs. We would make the observation, however, that the only extensive experience with relocation payments has been under the urban renewal program and that such experience in our opinion has been generally satisfactory from the standpoint of the displaced persons, businesses, and institutions. We, therefore, recommend that any legislation broadening relocation assistance be generally consistent with the tested urban renewal provisions. We are in accord with the proposals to liberalize the time period for supplemental payments to low-income families unable to secure low-rent public housing or comparable housing and to make available below-market interest rates for home purchases by displaced families under FHA-insured financing. Sincerely yours, Senator EDMUND MUSKIE, NATHANIEL S. KEITH, President. EASTERN BAKING CO., INC., Cambridge, Mass., July 16, 1965. Chairman, Senate Subcommittee on Intergovernmental Relations, DEAR SENATOR MUSKIE: It has been called to our attention that, as chairman of your subcommittee, you are studying bills which relate to establishing uniform legislation on the subject of relocation costs. We are taking the liberty of enclosing a copy of a communication to Messrs. Robert Weaver and William Slayton. Obviously, the present $25,000 limitation is unrealistic for our company, and puts the burden of urban renewal upon us, rather than upon the public. In our particular instance, even the $100,000 limit now being considered would not be sufficient. While we are in the minority, insofar as cost of relocation is concerned, the principle of inequality and inequitability of not being paid in full by local and Federal agencies involved in the same. If these urban renewal projects are in the best interests of the public, why should they not bear the full costs of these programs. There have been many relocation injustices performed in the name of progress, and we feel that a study of this relocation problem is long overdue. We extend our thanks for your interest in this problem, and earnestly hope that it receives your utmost care and attention, so that a means may be arrived at whereby companies such as ours, who have made major contributions to the Nation's economy, be compensated in full for just and reasonable costs of being involuntarily relocated. Your truly, Mr. ROBERT C. WEAVER, HERBERT J. CHERNIS, President. EASTERN BAKING CO., INC., Cambridge, Mass., July 16, 1965. Administrator, Housing and Home Finance Agency, Washington, D.C. DEAR MR. WEAVER: Eastern Baking Co., Inc., is in the midst of a proposed urban renewal site in the city of Cambridge, Mass., which site, it is contemplated, will be cleared for the NASA project. My company will be in jeopardy of remaining in operation due to the financial losses it will suffer because of the present relocation limitation of $25,000 allowed by the Federal Government. We have been located for the past 15 years in a fireproof, concrete, first-class building and have expensive bakery machinery. During these years, we have installed numerous types of gas, water, air, power distribution lines, etc., as our facilities expanded. It certainly is grossly unfair for my company to absorb the excess over $25,000 to make this urban renewal project possible. It is also discriminating to compensate in full those companies whose moving expenses are within the $25,000 limit, while our company is suffering a loss. We have the additional cost of maintaining a duplicate operation in a new plant while we are dismantling and moving our existing manufacturing plant. The many costs of starting up a new plant with a new labor force, waste, and inefficiency, etc., are not included in moving expenses. It seems quite unfair to have to bear these expenses and then not be fully compensated for the actual moving expenses. We strongly urge you to review the $25,000 limitation and change this policy to fully compensate for all reasonable relocation costs and expenses. Such a change would enable future important urban renewal programs to be effected with a minimum of justifiable opposition from displaced persons or companies. Yours truly, HERBERT J. CHERNIS, President. Senator EDMUND MUSKIE, AUSTIN-HASTINGS CO., INC., Cambridge, Mass., July 16, 1965. Chairman, Senate Subcommittee on Intergovernmental Relations, Washington, D.C. DEAR SENATOR MUSKIE: The two bills which the subcommittee, of which you are chairman, is now considering, which relate to the legislation of an equitable method for the payment of moving expenses for relocation costs in urban renewal, is of vital concern to us. Austin-Hastings Co., established in 1845, has three specially constructed warehouses in the proposed NASA site area. These efficient structures, together with a modern office, cover an area of almost 2 acres and represent 120 years of growth serving New England. Presently, these buildings contain our normal inventory of about 7 million pounds of steel and machinery: tubing, tool steel, stainless steel, electronic alloys, high-temperature alloys, sheet metals, machine tools, metalworking equipment; metals used for missiles, aircraft, satellites, and defense industries, as well as the basic steel for industry. This steel is mostly stacked in racks with pigeonhole space for each size, grade, or analysis. In the event we would be forced to move we would, under the present $25,000 limit on moving expenses, suffer considerable financial loss. We do not believe that it would be possible to move 10 percent of our inventory for $25,000. While the actual cost of moving cannot be determined at this time since we do not know how much time would be allowed, as well as many other considerations, we can say, without detailing the factors upon which the figure would be contingent, that the cost to Austin-Hastings would be as high as $500,000. The $25.000 limitation would be, at any rate, entirely inadequate. The fact that smaller firms will be able to have their costs of moving paid in full, while we who are large will have to pay these costs ourselves, is not equitable and is a great injustice to us. The removal of the $25,000 limitation, and the imposition of even a $100.000 limitation would not provide the necessary assistance to us. We feel that the only fair method would be to be paid these costs in full by the Federal Government and the local community. We, therefore, urge that the $25,000 limitation be removed and that there be no artificial limitation, so that there would exist a basis for compensating firms for moving which would be equitable to all. Yours very truly, A. B. KETTLE, Executive Vice President and General Manager. STATEMENT OF CHESTER W. HARTMAN ON S. 1201 AND S. 1681 S. 1201 and S. 1681 are very impressive attempts to handle the Federal Government's responsibilities in the complex and growing field of residential and commercial displacement necessitated by public land takings. In view of the multiplicity of agencies involved, uniform standards and practices become a virtual necessity. And in view of our increasing knowledge about the impact of forced displacement and relocation-economic, social, and psychological-policies and programs are needed which minimize the deleterious effects we have seen in the past and which provide adequate restitution and services to compensate for those things which must unavoidably be taken. I am particularly impressed with the guidelines for policy contained in section 101 of S. 1201, which reflect intimate knowledge and understanding of the dynamics of land taking and compensation processes, as experienced by those whom they have affected in the past. I have only a few specific suggestions for changes in the proposed legislation: (1) In sections 6(c) and 8(b) of S. 1681 (and corresponding sections of S. 1201) I wonder if it wouldn't be a good idea to permit contracts for relocation assistance services to be entered into with responsible nonprofit private organizations, such as settlement houses and social agencies. In Boston, the most effective relocation job done to date (the Castle Square urban renewal project) was undertaken by a settlement house, under a contract made with the Boston Redevelopment Authority. In the field of low-rent housing, we seem to be moving in the direction of allowing certain private agencies to be the operating body at the local level for federally assisted programs, and it might make sense to allow for this possibility in the field of relocation assistance, too. (2) Section 8(a) (2) (D) of S. 1681 (and the corresponding section of S. 1201) deals with the key problem of assuring the availability of relocation housing for those displaced. This is, of course, central to the issue of adequate relocation. Given the shortage of decent, low-rent housing in most areas and the impact of many public programs in reducing the available supply, it becomes critical to ascertain whether rehousing resources are indeed available. It may be that services, moving expenses, and other forms of assistance are quite secondary to this basic problem of housing supply (this is a point that came through most clearly in the recent report on relocation by the Advisory Commission on Intergovernmental Relations). Thus, the statutory requirement of "assurance that there are or are being provided" [emphasis added] decent housing within the financial reach of displaced families may be inadequate to handle the real problems of relocation. What is involved here, of course, is the question of timing. The manner in which public improvement programs are carried out usually results in extensive displacement well before whatever housing is to be used for relocation purposes actually becomes available. This gap in timing may refer to public housing turnover, construction of 221(d) (3) housing or other resources. For example, in a Boston urban renewal project currently underway, many hundreds of 221(d)(3) units will eventually be built, but only 160 are already open for occupancy. The eviction of site residents, however, has been proceeding at a rapid pace, and some 1,900 households have already been moved out. time, the figures on available housing and actual need will be brought into some sort of balance, but this is not very helpful to the families that must have adequate relocation housing at the moment they are forced out of the former homes. Nor is "temporary relocation" any real answer, because in practice such a thing rarely exists. In short, the standard that accepts housing that is "being provided" (which can mean anything from units under construction to those which are no more than a gleam in a developer's eye) as sufficient to meet the problems of relocation does not reflect the same kind of sensitivity and awareness of realities that underlie most of the other provisions in these bills. In (3) In section 112(c) of S. 1201, I would strongly urge that the effective implementation date of those standards and the relocation payments and assistance referred to be placed much earlier than January 1, 1967. What we now know about the serious and unjust effects of displacement, as reflected in the provisions of these two bills, seems to me to demand a sense of urgency. Thousands of individuals and families will continue to receive unjust treatment in the next year and a half if we wait until 1967 for implementation of those provisions. I would just like to add a particular word of praise for the provisions aiding businesses damaged by relocation-the lump sum compensation payments for nonsurviving businesses, the manpower retraining services, and the unemployment compensation eligibility-and for the specific provisions giving additional financial aid to displaced families; the increase in relocation adjustment pay |