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The Pacific Lumber Company, officially abbreviated PALCO, and also commonly known as PL, was one of California's major
logging Logging is the process of cutting, processing, and moving trees to a location for transport. It may include skidder, skidding, on-site processing, and loading of trees or trunk (botany), logs onto logging truck, truckssawmill A sawmill (saw mill, saw-mill) or lumber mill is a facility where logging, logs are cut into lumber. Modern sawmills use a motorized saw to cut logs lengthwise to make long pieces, and crosswise to length depending on standard or custom sizes ...
operations, located 28 miles (45 km) south of
Eureka Eureka often refers to: * Eureka (word), a famous exclamation attributed to Archimedes * Eureka effect, the sudden, unexpected realization of the solution to a problem Eureka or Ureka may also refer to: History * Eureka Rebellion, an 1854 g ...
and 244 miles (393 km) north of
San Francisco San Francisco, officially the City and County of San Francisco, is a commercial, Financial District, San Francisco, financial, and Culture of San Francisco, cultural center of Northern California. With a population of 827,526 residents as of ...
. Begun in 1863, PALCO was managed over most of the twentieth century by generations of the Simon J. Murphy, Sr. family, or managers chosen by the Murphys, from 1905 through 1985. Primary operations existed in massive log storage and milling operations at the historic
company town A company town is a place where all or most of the stores and housing in the town are owned by the same company that is also the main employer. Company towns are often planned with a suite of amenities such as stores, houses of worship, schoo ...
of
Scotia, California Scotia, formerly known as Forestville until 1888, is a census-designated place in Humboldt County, California. It is located on the Eel River along U.S. Route 101, southeast of Fortuna and north of San Francisco. Scotia has a population of 85 ...
, located adjacent to
US 101 U.S. Route 101, or U.S. Highway 101 (US 101), is a major north–south highway that traverses the states of California, Oregon, and Washington on the West Coast of the United States. It is part of the United States Numbered Highway Syst ...
along the Eel River. Secondary mills were located in nearby
Fortuna Fortuna (, equivalent to the Greek mythology, Greek goddess Tyche) is the goddess of fortune and the personification of luck in Religion in ancient Rome, Roman religion who, largely thanks to the Late Antique author Boethius, remained popular thr ...
and Carlotta. PALCO had extensive timber holdings exceeding well over 200,000 acres (890 km²) in the Redwood and Douglas-Fir forests of Humboldt County. For generations, it was one of the largest private employers in the entire region, appropriately known as the
Redwood Empire The North Coast of California (also called the Redwood Empire or the Redwood Coast in reference to the dense redwood forests throughout the region) is a region in Northern California that lies on the Pacific coast between San Francisco Bay and th ...
. The company was transformed into a wholly owned subsidiary of Maxxam, Inc for its two final decades. In January 2007 the company filed for bankruptcy protection. On July 29, 2008, the "Final Order" from US Bankruptcy attorney, Judge Richard Schmidt, led to the transfer of the assets of the bankrupt PALCO and all its subsidiaries to the
Mendocino Redwood Company The Mendocino Redwood Company (or MRC), is a California based forest products company, which operates one mill in Ukiah, with holdings of over , primarily in Mendocino County. Background This relatively new timber company owns and manages ten p ...
and the town of Scotia to Marathon Structured Finance. After 145 years as PALCO, the new company is known as the Humboldt Redwood Company. Some of the affected parties, including Bank of
New York Trust Company The New York Trust Company was a large trust and wholesale-banking business that specialized in servicing large industrial accounts. It merged with the Chemical Corn Exchange Bank and eventually the merged entity became Chemical Bank. History 19t ...
, filed an appeal and on September 29, 2009 the Court of Appeals for the 5th Circuit modified this judgment. However, the asset transfer and resulting companies were little changed by the modification and no other adjustments of any significance have occurred since.


Overview

The Pacific Lumber Company was started in 1863. Though it employed over 350 people in its final days in 2008, there were over 1,600 employees at the turn of the millennium. The company itself was a tourist attraction that once welcomed visitors for a tour of the (now permanently closed) largest
Redwood Sequoioideae, commonly referred to as redwoods, is a subfamily of Pinophyta, coniferous trees within the family (biology), family Cupressaceae, that range in the Northern Hemisphere, northern hemisphere. It includes the List of superlative tree ...
Mill ever constructed, which included an unusual hydraulic debarker. The quaint town adjacent to the mill is still open to public visits. Pacific Lumber has been at the center of multiple controversies since a hostile takeover by Maxxam, Inc. (of Texas), that was completed in 1986. The company maintains that it is still a sustainable operation, but its policies and practices bear little resemblance to those before 1986. 1999 saw the sale of thousands of acres of land to become the
Headwaters Forest Reserve The Headwaters Forest Reserve is a group of old growth Sequoia sempervirens, coast redwood (''Sequoia sempervirens'') groves in the Northern California coastal forests ecoregion near Humboldt Bay (United States), Humboldt Bay of the U.S. state o ...
. In that agreement, strict rules were put into place requiring the company to manage its holdings under more-restrictive practices. This in part led PALCO to file for bankruptcy in January 2007. By late in 2008 The Pacific Lumber Company ceased to exist.


History


19th century

Pacific Lumber (or PL, as locals have known it for generations) began during the heat of the
US Civil War The American Civil War (April 12, 1861May 26, 1865; also known by other names) was a civil war in the United States between the Union ("the North") and the Confederacy ("the South"), which was formed in 1861 by states that had seceded f ...
in 1863 when A. W. McPherson and Henry Wetherbee purchased of timberland on California's Eel River at the rate of $1.25 per acre. Over the ensuing 20 years they added more partners and began significant logging by 1882, at the present main site and town, which was originally known as Forestville. By 1888, the company became the largest in Humboldt County, with 300 employees and lumber shipments exceeding annually. By this time the town name was changed to
Scotia Scotia is a Latin placename derived from ''Scoti'', a Latin name for the Gaels, first attested in the late 3rd century.Duffy, Seán. ''Medieval Ireland: An Encyclopedia''. Routledge, 2005. p. 698. The Romans referred to Ireland as "Scotia" aro ...
and it boasted a
Western Union The Western Union Company is an American multinational financial services corporation headquartered in Denver, Denver, Colorado. Founded in 1851 as the New York and Mississippi Valley Printing Telegraph Company in Rochester, New York, the co ...
telegraph station, church, post office, and school. In 1895, the company suffered a major setback as the entire town burned, suffering $400,000 in losses ($8,000,000 in today's terms). By that time, Simon J. Murphy, Sr. a Detroit business man and one of its first millionaires had consolidated his millions from Detroit and Southern California into PL. The Simon Murphy family, Stanwood Murphy and his direct descendants would be the controllers of the company for nearly a centuryNorth Coast Journal
''Scion''
retrieved February 10, 2008.
The way they took care of business was shown handily after the big fire as they chose to rebuild everything, despite the fact that insurance covered only 25% of losses.


20th century

Life during early 20th century lumbering is documented by the Neill family’s Photo Album, which features 292 photographs of the Neill family, townspeople, and daily life in the company town of
Scotia Scotia is a Latin placename derived from ''Scoti'', a Latin name for the Gaels, first attested in the late 3rd century.Duffy, Seán. ''Medieval Ireland: An Encyclopedia''. Routledge, 2005. p. 698. The Romans referred to Ireland as "Scotia" aro ...
. Images reflect everyday life and hardships, local residents and homes, vacations, trips into the surrounding forest, and Pacific Lumber Company’s mill and work operations, between the years of 1908 and 1913. The Neil Photo Album is available for viewing at Humboldt State University’s Special Collections. By 1905, Simon Murphy, Sr., originally of
Detroit, Michigan Detroit ( , ) is the List of municipalities in Michigan, most populous city in the U.S. state of Michigan. It is situated on the bank of the Detroit River across from Windsor, Ontario. It had a population of 639,111 at the 2020 United State ...
and later of
Whittier, California Whittier () is a city in Los Angeles County, California, and is part of the Gateway Cities. The city had 87,306 residents as of the 2020 United States census, an increase of 1,975 from the 2010 United States census, 2010 census figure. Whittier ...
, completed the process of gaining control of the company. Through the rebuilding of San Francisco after the
1906 San Francisco earthquake At 05:12 AM Pacific Time Zone, Pacific Standard Time on Wednesday, April 18, 1906, the coast of Northern California was struck by a major earthquake with an estimated Moment magnitude scale, moment magnitude of 7.9 and a maximum Mercalli inte ...
,
World War I World War I or the First World War (28 July 1914 – 11 November 1918), also known as the Great War, was a World war, global conflict between two coalitions: the Allies of World War I, Allies (or Entente) and the Central Powers. Fighting to ...
, and numerous floods on the Eel River, the company came into the modern age. By 1920 the company had 1,500 employees and of timberland. Beginning in the same decade, company management began participating in the preservation movement, primarily as a result of pressure from the
Save the Redwoods League Save the Redwoods League is a nonprofit organization whose mission is to protect and restore coast redwood (''Sequoia sempervirens'') and giant sequoia (''Sequoiadendron giganteum'') trees through the preemptive purchase of development rights ...
in San Francisco. Portions of prior PL holdings including the Rockefeller Forest, the world's largest remaining contiguous
old growth An old-growth forest or primary forest is a forest that has developed over a long period of time without disturbance. Due to this, old-growth forests exhibit unique ecological features. The Food and Agriculture Organization of the United Natio ...
Redwood Forest to survive, now comprises the core of
Humboldt Redwoods State Park Humboldt Redwoods State Park is a state park of California, United States, containing Rockefeller Forest, the world's largest remaining contiguous old-growth forest of coast redwoods. It is located south of Eureka, California, near Weott in ...
. Further developments included recycling of sawdust into the world's first Presto logs. In 1931, Stanwood Murphy became president of the company. His unique foresight led to a drastic change in practices from the industry standard of clear cutting to a "selective cut" system of logging. This meant that the company would limit cutting to a maximum of 70 percent of the mature trees in a stand, leaving the younger, most vigorous trees to hold the soil and seed a new generation of forest. He also instituted the concept of "sustainable yield," which directed planners to never cut more than the company's forests could replace by new growth in any year. These practices were hailed as revolutionary and he and his direct heirs ran the company in this manner for the next 55 years. By the 1950s, PALCO efforts to make Scotia a comfortable place to live and raise a family provided the following in the company town: affordable employee housing, stores, a school, a hospital, a skating rink, and a theatre. Under the Murphy family, the company implemented an employee pension plan, and provided free life insurance. By 1961, academic scholarships were also provided to students who were children of company employees. On December 17, 1975, common stock for the Pacific Lumber Company was listed on the
New York Stock Exchange The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District, Manhattan, Financial District of Lower Manhattan in New York City. It is the List of stock exchanges, largest stock excha ...
under the ticker symbol PL.


Late 20th century

By the 1980s, this huge lumber operation had absolutely no debt, holding a partially diversified portfolio that included a high-rise building in San Francisco and lucrative welding operation in the San Francisco Bay Area, all derived from the company's 100-year-plan based on sustained yield directed cutting and profits carefully spent to protect cash flow. These long-term plans consequently and purposely led to a relatively low profit annually, which unwittingly were about to make the company vulnerable to "new" acquisition practices from Wall Street. The last Murphy to manage the company under these circumstances, Warren Murphy, reflected on what it was like to run such a stable enterprise with sound environmental practices: "We were the good guys. It was fun, it was easy—it was a great life."


1985 hostile takeover

On September 30, 1985, the venerable Pacific Lumber Company, having maneuvered through more than a century of business peaks and valleys, was taken over as a result of stock purchases culminating on September 27, 1985. The Murphy family (the largest minority stock holders at the time) and countless previous stockholders, mostly company employees, were relieved of their stock as a result of a hostile takeover by
Charles Hurwitz Charles Edwin Hurwitz (born 1940) is an American businessman and financier known for his role in the 1980s savings and loan crisis, and his takeover of Pacific Lumber Company, a logging company active in Humboldt County, California. His other ho ...
and his Maxxam, Inc. corporation of Texas. On February 26, 1986, the day after the completed takeover, Warren Murphy resigned, turning over the company to John A. Campbell, a man who had been one of his executive vice presidents. However, despite indisputable changes in the tenor and management of the company, its last major holding of contiguous old growth forest was ultimately preserved as environmental groups and various auspices of government worked to seek a deal that inevitably led to the creation of the
Headwaters Forest The Headwaters Forest Reserve is a group of old growth coast redwood (''Sequoia sempervirens'') groves in the Northern California coastal forests ecoregion near Humboldt Bay of the U.S. state of California. Comprising about , it is managed by th ...
in 1999 in exchange for $480 million in taxpayer money.


Clearcutting introduced under Maxxam

Between a desire to turn a higher profit and the need to start paying off the debt incurred from acquiring Pacific Lumber, Hurwitz's Maxxam replaced the
sustainable growth Sustainable development is an approach to growth and human development that aims to meet the needs of the present without compromising the ability of future generations to meet their own needs.United Nations General Assembly (1987)''Report of th ...
policy of the previous owner-managers (primarily the Murphy family) with one of
clearcutting Clearcutting, clearfelling or clearcut logging is a forestry/logging practice in which most or all trees in an area are uniformly cut down. Along with Shelterwood cutting, shelterwood and Seed tree, seed tree harvests, it is used by foresters t ...
.


Protests and resistance

On May 24, 1990, a bomb planted in the car of
Earth First! Earth First! is a radical environmentalism, radical Environmental movement, environmental advocacy group that originated in the Southwestern United States. It was founded in 1980 by Dave Foreman, Mike Roselle, Howie Wolke, Bart Koehler, and Ron K ...
activist Judi Bari exploded, sending her and fellow activist Darryl Cherney to the hospital. Judi and Darryl were on their way to a music and speaking event on the
UC Santa Cruz The University of California, Santa Cruz (UC Santa Cruz or UCSC) is a public land-grant research university in Santa Cruz, California, United States. It is one of the ten campuses in the University of California system. Located in Monterey Bay ...
campus, part of an organizing tour for
Redwood Summer Redwood Summer was a three-month movement in 1990 of Environmentalism, environmental activism aimed at protecting Old-growth forest, old-growth Sequoia sempervirens, redwood (''Sequoia sempervirens'') trees from logging by northern California timb ...
, which sought to inform the wider public about the tragedy unfolding in the Redwood Empire. The explosion was a milestone of forest activism in the redwoods and elsewhere. The bomber was never identified. Oakland police and the FBI initially accused Bari and Cherney with transporting an explosive device under the driver's seat of her own car; but Alameda County prosecutors dropped the case for lack of evidence a few months later. A lawsuit filed by Judi against the FBI for violation of Constitutional rights was ultimately successful in 2002, vindicating Darryl and Judi, but coming five years after Judi's untimely death from breast cancer at the age of 47. On September 17, 1998, David Chain, an Earth First! activist was struck by a falling tree while trying to stop logging in Pacific Lumber property. He was killed instantly and died of massive head trauma. In response to his death, a Pacific Lumber Co. spokesperson said their logging crew did not see anybody in the area and were unaware of Chain's presence. Earth First! said that the loggers had been deliberately felling huge trees, in a perpendicular manner rather than downhill, in the protesters' direction. One of the protesters also noted that the tree fellers were fully aware that they were there, as the activists had been ''"yelling at them, walking towards them, telling them 'Don't fell this tree'"''. On a videotape supplied by Earth First!, Arlington Earl Ammons, the 52-year-old logger responsible for felling the tree that caused Chain's death can be heard shouting expletives and threatening the protesters.


Beginning of a new millennium

The company filed for bankruptcy protection in January 2007. A Texas bankruptcy court considered reorganization options early in 2008. On June 6, 2008 the judge preliminarily decided to confirm the Mendocino Redwood Company option for reorganization and signed the order on July 8, 2008. The company's bond holders attempted to appeal, but on July 24, the appellate court in Louisiana refused to hear the case. Timber note holders stated that this will mean the Mendocino Redwood Company/ Marathon plan will be able to go forward, and many agree that any future court will be unlikely to undo it.


Railroads

Pacific Lumber Company incorporated the Humboldt Bay and Eel River Railroad on 17 November 1882 to transport lumber from the Scotia sawmill to
Humboldt Bay Humboldt Bay (Wiyot language, Wiyot: ''Wigi'') is a natural bay and a multi-basin, bar-built coastal lagoon located on the rugged North Coast (California), North Coast of California, entirely within Humboldt County, California, Humboldt County, ...
for loading aboard ships. The railway was completed across the Scotia Bluffs to
Alton, California Alton (formerly, Hansen) is an unincorporated community in Humboldt County, California. It is located south-southeast of Fortuna, at an elevation of . Alton is located along U.S. Route 101 and State Route 36. The ZIP Code is 95540. The commu ...
on 20 August 1885 where connection was made with the Eel River and Eureka Railroad for the remainder of the distance to Humboldt Bay. Rails were extended southward up the Eel River from Scotia to bring logs into the sawmill.
Atchison, Topeka and Santa Fe Railway The Atchison, Topeka and Santa Fe Railway , often referred to as the Santa Fe or AT&SF, was one of the largest Class 1 railroads in the United States between 1859 and 1996. The Santa Fe was a pioneer in intermodal freight transport; at vario ...
merged the Pacific Lumber Company railway into their subsidiary San Francisco and Northwestern Railway on 15 May 1903, although Pacific Lumber Company retained the land underlying the right of way along with the timber rights and the ability to use the line for their logging operations. The railway became part of the
Northwestern Pacific Railroad The Northwestern Pacific Railroad is a mainline railroad from the former ferry connections in Sausalito, California north to Eureka, with a connection to the national railroad system at Schellville. The railroad has gone through a complex h ...
on 8 January 1907. Pacific Lumber Company built
flatcar A flatcar (US) (also flat car, or flatbed) is a piece of rolling stock that consists of an open, flat deck mounted on trucks (US) or bogies (UK) at each end. Occasionally, flat cars designed to carry extra heavy or extra large loads are mounted ...
s from wood and maintained a fleet of locomotives for moving logs from the woods into the mill and for switching cars for loading or unloading at the sawmill. Diesels replaced steam locomotives in 1955. Log trains of wooden flat cars ran to the Scotia mill until 1976 from a log deck in
Carlotta, California Carlotta is an unincorporated community in Humboldt County, California. It is located southeast of Fortuna, at an elevation of , about east of US Route 101 on California State Route 36. History Carlotta is named after Carlotta Vance, daught ...
. Company switchers were stationed at Scotia until Northwestern Pacific Railroad discontinued service.


Locomotives


Environmental issues

Under pressure from environmental activists, the company considered selling 6,000 acres (24 km²) of mostly old growth
redwoods Sequoioideae, commonly referred to as redwoods, is a subfamily of coniferous trees within the family Cupressaceae, that range in the northern hemisphere. It includes the largest and tallest trees in the world. The trees in the subfamily are a ...
for $300 million to protect the
marbled murrelet The marbled murrelet (''Brachyramphus marmoratus'') is a small seabird from the North Pacific. It is a member of the family Alcidae, which includes auklets, guillemots, murres and puffins. It nests in old-growth forests or on the ground at hig ...
,
spotted owl The spotted owl (''Strix occidentalis'') is a species of true owl. It is a resident species of old-growth forests in western North America, where it nests in tree hollows, old bird of prey nests, or rock crevices. Nests can be between high a ...
, and other old growth dwellers. As required by regulatory authorities, buffer zones have been further developed around rivers to prevent
erosion Erosion is the action of surface processes (such as Surface runoff, water flow or wind) that removes soil, Rock (geology), rock, or dissolved material from one location on the Earth's crust#Crust, Earth's crust and then sediment transport, tran ...
and maintain animal habitats, but the Eel River, the region's major waterway, has been considerably damaged as a result of more than 150 years of logging activity, not all of which is the result of PALCO operations. In 1999 PALCO agreed to American activist
Julia Butterfly Hill Julia Lorraine Hill (born February 18, 1974), best known as Julia Butterfly Hill, is an American environmental activist and tax redirection advocate. She lived in a -tall, approximately 1,000-year-old Sequoia sempervirens, California redwood tre ...
's requests to create a buffer zone around a 600-year old-growth redwood named
Luna Luna commonly refers to: * Earth's Moon, named "Luna" in Latin, Spanish and other languages * Luna (goddess) In Sabine and ancient Roman religion and myth, Luna is the divine embodiment of the Moon (Latin ''Lūna'' ). She is often presented as t ...
in exchange for leaving the tree, as she had been living in it for just over two years. Though someone vandalized the tree during the process, it survives to the present. In 2003, the Company was sued civilly, by the District Attorney of Humboldt County, for fraud and violations of the California Business and Professions Code. The suit was predicated on the allegation that PALCO had affirmatively represented that its timber operations would have a similar environmental impact across all of its land holdings, when in fact there were wide variances and effects on differing watershed environments. The suit was ultimately dismissed by a California Superior Court Judge, but was later appealed to the California Court of Appeal. In January 2008, the California court of Appeal for the 1st district upheld the trial court's dismissal of the litigation, and the suit is for all practical purposes over. During the pendency of this litigation MAXXAM filed for Bankruptcy. Reports indicate that the family that owns the GAP Stores who are already investors in timber lands in Mendocino county, just south of Humboldt county have submitted a proposal to take over PALCO to the Bankruptcy court in Corpus Christi, TX. Environmentalists hailed the move as being a vast improvement on the increased logging approach by Charles Hurwitz and MAXXAM.


Notes


References

* Harris, David. ''The Last Stand: The War between Wall Street and Main Street over California's Ancient Redwoods''. San Francisco: Sierra Club Books, 1997. .


External links


North Coast Journal
��at least 380 articles on the developments within and surrounding PALCO.
San Francisco Chronicle
��multiple stories and editorials related to PALCO.
Pacific Lumber's environmental record

Critique of PALCO's environmental program
{{DEFAULTSORT:Pacific Lumber Company * Companies based in Humboldt County, California Defunct California railroads Logging railroads in the United States Defunct companies based in California Predecessors of the Northwestern Pacific Railroad Railway companies established in 1863 Railway companies disestablished in 1903 American companies established in 1863 Defunct forest products companies of the United States 1863 establishments in California 1903 disestablishments in California American companies disestablished in 2008 2008 disestablishments in California