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Using every part of the tree but the shade

by Jeff Gruber
| July 12, 2013 2:21 PM

 Through its roughly 120 years of existence, Libby has seen three economic transformations.  First, following its founding as a new town built near the just-arrived Great Northern Railroad, mining and the search for the ever-elusive mother lode occupied the energies of Libby’s early pioneers.  

Hope that Libby might become the hub of an inland mining empire rivaling Idaho’s silver valley and Butte’s “Richest Hill on Earth” never quite materialized as the gold, silver and lesser minerals were too sparse and remote to warrant serious attention. Probably, people selling mining stocks got richer than investors staking the Argonauts searching valiantly for the supposed next bonanza just awaiting discovery over the next mountain. 

The obvious exception, of course, was the discovery and development of vermiculite and its associated mineral pathogens in the Rainy Creek area, which operated as a world-class operation from the 1920s through its closure in 1990.   

1906 saw attention change to the plentiful timber covering the surrounding mountains in seemingly endless forests. Arrivals from Wisconsin established the Dawson Lumber, Co., and began shipping to outside markets via the Great Northern Railroad. Timber accessed by logging railroad was the only available raw material leaving the more remote timber stands to await development of the logging truck in the 1930s.   

In 1914, the mill now owned by the J. Neils Lumber, Co., was entirely rebuilt and the larger capacity sawmill operated until 1993, when Stimson Lumber, Co., purchased the Libby plant from Champion International, Corp., and operated only the plywood plant. The old-line sawmill and stud mill were sold at auction in 1994, dismantled, and ferried to new destinations. Stimson Lumber, Co., ran the Libby plywood mill for nine years until it, too, was shuttered in 2002. 

The closing of the plywood mill ended our storied milling industry, and with its demise, the third era of Libby’s economic history began. This new era, one as yet unnamed, and whose legacy is still being created, is marked by newspaper headlines proclaiming Lincoln County’s state-leading unemployment statistics, transient working class, school closures, and an eerie and unsettling quiet on Mineral Avenue spreading across the Libby valley.  

It wasn’t supposed to turn out this way. During the final hunger pangs of the Great Depression, plans were put in place to make the lumber industry a permanent foundation of our local economy.  

Since the beginnings of the lumber industry in the United States, hundreds of communities built around logging and milling have been abandoned when companies quickly harvested available timber until exhaustion and moved on to the next forest, the cycle being played out time and again. 

The J. Neils Lumber, Co., came west to Libby looking for new opportunities after their mill in Cass Lake, Minn., exhausted the surrounding forests. In Northwest Montana, the Neils family corporation acquired their third sawmill and began the quest to change history. No longer wanting to leave another shuttered mill and abandoned community in its wake, the Neils family pioneered sustained yield management plans for its timberlands. 

Instead of the usual clear-cut method of harvesting timber and selling cut-over lands or trading with the U.S. Forest Service for un-cut parcels, the company initiated a selective-cutting program. Only decadent and mature trees were harvested, usually 50 percent of the volume in a given timber stand.  Careful mill and logging studies showed removal of the larger trees allowed for greater growth of the remaining timber stands which would be re-entered and harvested again over time.  Basically, the Neils family settled in for the long-haul, forsaking short-term profits while creating a sound and sustainable forest-based economy in Libby and Lincoln County.   

This inventive plan captured the attention of the United States Congress, which passed Public Law 273 during the latter years of World War II. Designed to encourage cooperative management of private and government timberlands with the goal of permanency in an industry long viewed as dominated by cut-and-run corporations, the legislation was crafted with the goal of community stability in America’s rural areas.   

Locally, in 1947, the J. Neils Lumber, Co., negotiated with the Forest Service a 60-year cooperative management plan. Basically, the Neils, Co., would give up its right to rapidly harvest its 200,000 acres of timberland – something it had already done when it initiated its own sustained-yield program – and in return, the Forest Service would offer, without competitive bidding, the remaining needed timber to wood the local mill complex.  

In Libby, the plan was met with tremendous support, and groups were formed in support of the agreement and to work towards formal ratification. The Greater Libby Association was formed in part to lobby for ratification. An “organization of organizations for the betterment of the Libby community,” the GLA, as it came to be known, coordinated efforts and organized community meetings to test Libby’s support. “Overwhelming support” was given at the well-attended public meetings, and the plan continued to evolve.   

Outside of Libby though, the plan met fierce opposition and was never consummated. Why? Independent loggers and mill owners across western Montana protested against the perceived preferential treatment of the Neils, Co. Though the legislation of Public Law 273 was designed to stabilize rural, timber dependent communities like Libby, public outcry throughout the state led the Neils Company to abandon the endeavor.  

Putting the failed cooperative-harvest plan behind them, the J. Neils Lumber Company and the Kootenai National Forest continued to coordinate timber harvests with roughly 40 percent of the Neils’ needed volume coming from the company’s selective harvesting plan, and 60 percent coming from outside purchases, mostly Forest Service sales.  

The Neils family updated their mill to meet changing markets and timber availability. In 1949, the Neils’ built a large pole yard. This yard provided millions of treated power poles to the REA in fulfilling its mission to electrify rural America. 

In 1955, the J. Neils Lumber Company built a 50-million-board-foot-capacity sawmill in Troy.  Later, in 1958 a stud mill was built in Libby making 2X4s and 2X6s using the small-diameter timber that was difficult to manufacture in the main sawmill. 

The plywood plant was built in 1962, using the Western Larch and Douglas fir timber. Other operations at Libby included plants making grain doors; a box factory; fingerjointed lumber; Presto-logs; Stractan – a chemical derived from Western Larch chips; and the mill powerhouse, burning mill residue, provided 15 megawatts of electricity for the mill complex as well as the towns of Libby and Troy. In the United States, there has never been another more diversified milling operation with as wide- range of products made from the local forests.   

Other towns across Lincoln County established independent operations converting the remaining plentiful timber into different products marketed nationally and internationally. These small operations were located in the communities of Troy, Eureka, Fortine, and the Yaak. They, too, depended on the Forest Service for timber supply.  

 In 1949, an epidemic of spruce budworms infected the Kootenai’s forests. The Forest Service aggressively harvested the spruce timber to both help control and limit the infestation and to also harvest the timber before it deteriorated into an unusable condition.  

The years between 1950 and 1957, when the epidemic ran itself out, saw some of the highest logging totals ever seen on the Kootenai. Prior to the Spruce Budworm epidemic, Forest Service’s annual sales in the Kootenai averaged between 50 million and 70 million board feet per year. Volumes grew substantially, and 112 million board feet were sold by the Forest Service in 1953. By 1955, sales grew to 228 million board feet a year, a record amount until being eclipsed in 1986. 

Incidentally, this growth in resource utilization was followed by probably the greatest growth in Libby’s business community. New grocery stores, theaters, schools as well as improvements and additions to the Libby mill complex followed the growth in employment created by the herculean salvage effort. A smattering of headlines from the 1950s also paints an economic portrait contrasting with today’s grim news grabbers:  

July 19, 1951 – Only One Unemployed Man in Lincoln County.  

May 15, 1952 – Lincoln County Highest in Montana in Per Capita Wages

July 23, 1953 – 300 Bulldozers Busy on Kootenai National Forest

The 1980s saw another forest pest arrive and begin its wrath on Lincoln County’s forests. The Lodgepole Pine Beetle attacked the significant pine stands of the Kootenai, and once again the Forest Service addressed the onslaught by raising harvest levels to new highs. 

In 1987 the Kootenai National Forest sold 264 million board feet, an all-time record for the forest. Salvaging the diseased trees attracted new investment as Louisiana Pacific built a sawmill west of Libby to help process the increased salvage harvests. Though this mill was a temporary mill manufacturing only green lumber for transport to their main mill in Moyie Springs, Idaho, for drying and planing, the example shows what happens when timber is available for purchase by industry.  

The other harvested timber found its way to Libby’s St. Regis, later Champion International mills, and to other mills in Idaho and Flathead County. The high harvest levels enriched Lincoln County coffers, too, with the Forest Service’s 25 percent royalty payments adding significant income for county budgets.   

The increased Lodgepole Pine salvage harvests leveled off in the early 1990s, but instead of the Forest Service returning to their Allowable Sale Quantity (ASQ) of 150 million board feet yearly, the harvest levels began a precipitous drop. The period between 1993 and 2002 saw annual yearly sale volumes of only 70 million board feet, 80 million feet below the ASQ for the Kootenai National Forest. These reductions were a direct result of the Forest Service’s new management policies initiated under Department of Agriculture’s “Ecosystem Management” guidelines, emphasizing habitat and species restoration over timber production. The year 1993 also marks the timber industry’s beginning exodus from Lincoln County.  

Presently, Libby has no solid economic base from which to steward a functioning community.  Gone is the once strong and vibrant connection between land and community that allowed for the colorful and dynamic culture for which our town was once known. 

Along with the death of industry, we have also seen the death of our identity. The misplaced bull on the new sign at J. Neils Park memorializing one of our town fathers exhibits the latest death throe of our once-proud heritage. In Libby’s contemporary culture, with so few visible signs of our former economic foundation, who can blame one for mistaken identity?  

Next week I will describe the present management of the Forest Service here on the Kootenai and how it severely inhibits our community’s present and future economic growth.     

(This is the third of a five-part series of columns by Jeff Gruber analyzing the economic challenges facing Libby.)