convince anyone that there was something radically wrong with the manufacturing of this lumber.

I also desire to call your attention to another bad feature of these operations, and this is one which no bureau is to blame for, but the responsibility must be placed on the act itself, and that is the method and manner of selling the product of this mill. Under the present law the lumber must be sold by sealed bids and to the highest bidder for cash, and as the law is at present interpreted and enforced the purchaser must pay for this lumber before it is removed from the yard. This method eliminates the retail yards throughout the country from purchasing any of this product, and the statistics will show the money made by the manufacturing of lumber comes largely from the prices received from the retail dealers. The method as it now exists limits the sale of the government product to what are known as "scalpers," and they pay from $2 to $4 per thousand feet less than what the retail yards pay. Or, in other words, it excludes the retail buyer from coming to Neopit or sending in his orders for the purchase of carload lots and mixed carloads, and paying for this timber from thirty to sixty days after delivery.

PURPOSE OF THE AGREEMENT OF JANUARY 22, 1908.

While no information has been furnished me directly or indirectly by your department or any other branch of the Government as to the purpose under

lying the agreement entered into on January 22, 1908, by the Departments 3772 of Interior and Agriculture whereby these operations were to be con

ducted by the Bureau of Forestry, yet I find in the files of the Neopit office a copy of the Shawano County Advocate of December 1, 1908, which copy is herewith inclosed and marked " Exhibit C," in which will be found a statement over the signature of E. A. Braniff, forest officer in charge of logging and lumbering operations on the Menominee Reservation, which sets out in detail the object of this agreement, to wit:

"The admirable purpose of the act of March 28, 1908, under which the Forest Service is conducting lumbering operations, requires that three main results be secured, namely: The enterprise must be a financial success; it must do something for the Indian; and it must reproduce the forest."

In regard to the results obtained I think very little need be stated at this time as to the first proposition of the act, as the records themselves, and this report in particular, will clearly show that the Bureau of Forestry failed in its purpose to make the enterprise a financial success, as a loss has been sustained of over $700,000.

As to the second proposition of the act to do something for the Indian, I need only refer you to the copy of the letter of Mr. Gifford Pinchot, former Forester of the Bureau of Forestry, dated December 22, 1908, addressed to the Commissioner of Indian Affairs, a copy of which is herewith inclosed and marked "Exhibit D," in which the former forester, who at that time was the head of the bureau which had charge of these operations, admits the failure of the Forest Service to accomplish the second purpose as outlined in Mr. Braniff's letter to the editor of the Shawano County Advocate:

"The Forest Service has been compelled to do a very large and very difficult piece of work this past summer in a short period and under conditions which required the greatest energy and resourcefulness of its men. The condition on the reservation when the Forest Service men took charge was such as to call for emergency measures unless a heavy financial loss was to fall on the tribe. The service men have kept the work going and have accomplished the heavy task put upon them. In their efforts to save the tribe as a whole from heavy financial loss they have had, and probably will have in the future, little time to consider the characters and needs of individual Indians, and in this feature their work has fallen short of complete success. It is also true that many of the Indians were prejudiced against the Forest Service officers by the representations of the former Indian agent, who resigned, and of the former superintendent of logging, who was removed, and by certain Indian contractors who were profiting at the expense of the tribe under the former administration."

The records at the Neopit office, as well as information furnished me by the Indians and whites, clearly show that nothing has been done for the Indian either to educate him as a skilled workman, to induce him to labor and save his money as many of the white men do, or to fit him for full citizenship by inducing him to imitate the white men who had been placed in charge of these operations to convince the Indians that their timber could be cut into logs

and manufactured into lumber and sold on the reservation at a greater profit than had come to them from their former logging operations. The Indians themselves tell me that the manager for the Bureau of Forestry mistreated them and gave them practically no opportunity to learn anything in connection with these operations, and certainly the example set by the management as to promoting an enterprise that would be a financial success to the Indians has clearly convinced these wards of the Government that the balance of their trust funds, as well as the stumpage on their reservation, is in grave danger of becoming a total loss to the members of their tribe. These men are worried as to the present outlook, and it is my opinion that they have good reasons to be worried, as I am satisfied that if a proper inventory is taken at the close of business for the year 1910 and the property of the Menominee project depreciated on the same basis as any lumber company would depreciate its property under similar circumstances, the Indians will have sustained a loss of from $100,000 to $200,000 for the year of 1910. This is due largely to the following causes:

1. The present indebtedness incurred by the former management.

2. The impossibility of obtaining good grades of lumber on account of the location of the yard.

3. The impossibility of getting any good lumber from the logs as cut under the present system.

And in connection with the latter reason I desire to state that this is a very serious matter, and it should, in my opinion, if the manufacture of lumber is continued at this plant in the future, be properly laid before Congress and the act amended so as to eliminate the system of marking trees for cutting on this reservation. Under the present law the Bureau of Forestry, through its representatives, and many of these men are young and inexperienced, no timber can be cut into saw logs except those trees marked by the forest officers, and I find that these men are marking only such trees that are crooked or defective in some other manner, and that the large and mature 3773 trees which would make the better grades of lumber are left standing

on the land, and an examination of the lumber yard will convince anyone that the Neopit mill can not manufacture any good lumber out of the logs cut from the trees marked by the officers of the Bureau of Forestry, and owing to the great competition in the hard-wood business in the State of Wisconsin it is a physical impossibility under such a system for the Neopit mill to manufacture hard-wood lumber from said logs at a profit to the Indians.

It may be true in theory that the position taken by the Bureau of Forestry is correct and that these trees should be cut, but as applied to a practical proposition it can not be accomplished with a profit to the Indians. If some plan were adopted whereby all of the large trees on these lands, together with the defective trees, were taken and cut into saw logs, then undoubtedly enough good lumber would be obtained to offset the poor grades so that on the whole lumber could be manufactured and sold at a profit.

As to the third purpose of this agreement as stated by Mr. Braniff-the reforestation of this reservation-I have very little comment to make thereon, for the reason that this is a matter which should be better understood by the experts of the Bureau of Forestry than the average layman; but I have recently been advised by one of the most prominent lumbermen in the Northwest, who is connected with many lumbering operations which might be classed as being close to the former Forester of the Bureau of Forestry, in which the said lumberman stated in substance as follows:

"That a few years ago Mr. Pinchot was of the opinion that reforestation was practical in the Northwest, but Mr. Pinchot has changed his mind in recent years, and while he has never publicly made such a statement he admitted to said lumberman that reforestation was not practical in the Northwest."

This statement was made by the lumberman in the presence of myself and one or two other persons, and, if necessary, the name of the lumberman will be furnished; although I prefer to refrain from mentioning his name, as no doubt he would not feel like being quoted in a matter of this kind, and I simply make the statement believing in the integrity of said lumberman, for the purpose of showing that the former Forester undoubtedly has become convinced, as practically all of us have who have resided in the Northwestern States for years, that practical reforestation is impossible in these States. By that I do not mean that trees can not be made to grow, but the whole scheme is impractical and can not be accomplished at a financial profit to anyone.

CONCLUSION.

The act of June 28, 1906, was a failure and did not accomplish the purpose for which it was enacted, and the only benefit that might be said to have been obtained from the passage of said act was the practical demonstration that the business committee of the Menominee Indian tribe, when permitted in a large measure to handle their own affairs, proved themselves incompetent and guilty of entering into fraudulent contracts with themselves.

The act of March 28, 1908, commonly known as the La Follette Act, was a vicious piece of legislation and has resulted in a loss to the Indians up to and including October 31, 1909, of over $700,000, and if operations are continued under said act without the same being amended the balance of the tribal funds of the Menominee tribe, as well as the stumpage on their reservation, is in grave danger of being a total loss. This act should be repealed if the rich heritage of the Menominee Indians is to be held for their benefit, and this act has resulted in convincing the Indians of the Menominee Reservation, as well as the citizens of the State of Wisconsin who are competent from a business training to pass judgment, that the Bureau of Forestry has shown itself to be incompetent to cut and manufacture this timber at a profit to the Indians or with credit to themselves; and it is yet to be proven and determined that the Government, through any of its departments, can manufacture and sell timber or any other merchandise at a profit, and if it is the desire of the Government to demonstrate that it can do so they should do it at the expense of all the people and not of these ignorant, helpless Indians, who are the wards of the Government and should be protected.

In closing I would respectfully refer you to the logging operations under the Morris Act in Minnesota and the logging operations under what is known as the Odanah plan in the State of Wisconsin, and suggest that you make a careful comparison of these several operations, and I am satisfied that you will be convinced that the operations under the Morris Act has:

1. Been a financial success to the Indian.

2. That the supervision of these operations has been conducted by the Department of the Interior without scandal, with credit to the department, and with the minimum cost to the Indians.

3774 3. That the Indians as a whole have confidence in this plan and have been taught in a measure how to log timber of this class on their reser

vation.

As to the Odanah plan you will find that the operations have been a financial success to the Indians; that the Indians have been taught not only how to work in the logging camps, but have also become skilled workmen in the manufacturing plant located on their reservation; and that a large percentage of these Indians are now living as white men live, own their own homes, and have become self-supporting.

These plans should be considered together with the Menominee project, and in my opinion the matter should be squarely placed before Congress in the near future if the property of the Menominee tribe is to be preserved and the most made thereof.

Very respectfully,

S. J. COLTER, Chief Eighth Field Division.

Mill supplies....

Pinchot dam.