From a butte rising out of placid lowlands in the Willamette Valley, the foothills of the Cascades are visible to the east through the dawn's haze. Mount Hood, the state's highest peak, presses against the eastern skyline like an ensign of splendor. To the west is the sprawl of the Coast Ranges, low-lying and veined by black ridges.

The stunning scenery has been here since glacial times. For much of Colman McCarthy this century, the forests of Oregon, and those of all the Pacific Northwest where the Douglas firs rose like jeweled masts, have allowed man to have it both ways. They provided peacefulness and money. But no longer the latter.

Economically, Oregon is the nation's third most depressed state. The timber economy, says Bob Packwood, the state's junior senator, "has gone from bad to worse to disastrous" in only the past few months.

Half of Oregon's sawmills have closed or curtailed operations. Since 1979, 22,000 of Oregon's 90,000 wood-related jobs have been lost. Companies and jobs have vanished because the demand for timber and wood products has decreased beyond anyone's expectation.

In the home-building years of the 1970s, housing starts averaged more than 2 million annually. Now with high interest rates, they are less than a million. In the good years, federal timber contracts for more than $300 per thousand board feet were common. New contract bids are now well under $200. That means, according to the U.S. Forest Service, that as much as 90 percent of federal timber in western Oregon isn't sellable at break-even prices, much less profitable ones. The wood remains uncut.

It is hard for the rest of the country to think of Oregon as a disaster area. The state's romanticized image of outdoor hardiness was bolstered by citizens whose practical environmentalism meant that bottle bills could be passed as readily as dirty rivers could be cleaned. Its progressive politicians, from the late Sen. Wayne Morse to Rep. Jim Weaver, have been ambidextrians who, on the one hand, sought a balance between the state's economy and the environment and, on the other, warned against exploiters who cared for neither.

Six years ago, Weaver was criticized by the timber industry as a shrieking alarmist when he said, "We are in danger of losing our natural resource base . . . . If we cut down our trees thoughtlessly, then later on we may be dependent on someone else for trees . . . . This is madness. But we're doing it through shortsightedness and greed."

Only three years later, a study by the Library of Congress reported the effects of Forest Service mismanagement and industry overcutting. In federal forests in Oregon and Washington, tree cutting exceeded growth by as much as 60 percent.

Conservationists fear that the pressure of the severe recession may overwhelm the need for intelligent timbering. They speak of forests that could support jobs, wildlife and recreation being replaced by lands that are no more than outdoor-tree factories. On a recent visit to Mount Angel, Andy Kerr of the Oregon Natural Resources Defense Council speculated about the forest-factories of the future envisioned by industry managers intent on quick growth and immediate profits: "The trees are going to be the same age, same height, even-spaced Douglas fir. The native forest we now have is anywhere from 100 to 1,000 years of age, with Douglas fir, cedar, hemlock, chinquapin, maple and oak. It is diverse forest. The forests of the future are simplistic. They are not nice places for recreation. They don't have the wildlife value."

Three months ago, Georgia-Pacific, a timber giant, moved its corporate headquarters from Portland to Atlanta. For activists like Kerr, for whom Georgia-Pacific represents the irresponsible cut-and-run style of timbering, the departure was the final insult: In the midst of Oregon's economic bleakness, a corporate forester says its loyalties are to more important values than to human beings caught in hard times. A company spokesman defended the move by stating that three-fourths of the company's business is east of the Rockies.

No doubt it is. But the move is part of the pattern. Strip-mine companies rip open Appalachia and then go west to the Great Plains. Timber corporations exhaust the Northwest and head for the Southeast. When explained by the companies, the shifts sound like the height of civic responsibility. Except that the wastelands and the people left behind without jobs say otherwise.