SecProbe.io

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Mail Stop 4561

      					October 17, 2005

Ralph M. Davisson, Esq.
Vice President and General Counsel
Potlatch Corporation
601 West Riverside Avenue, Suite 1100
Spokane, Washington  99201

Re:	Potlatch Holdings, Inc.
	Registration Statement on Form S-4
      Filed September 19, 2005
      File No. 333-128403

	Potlatch Corporation
	Annual Report on Form 10-K
	Filed February 25, 2005
	File No. 1-05313

Dear Mr. Davisson:

      We have reviewed your filings and have the following
comments.
Where indicated, we think you should revise your documents in
response to these comments.  If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure.  After
reviewing this information, we may raise additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Registration Statement on Form S-4

General

1. Please provide us with your analysis of why the proposed
transaction does not constitute a "Rule 13e-3 Transaction" within
the
meaning of Rule 13e-3(a)(3) of the Exchange Act.  Alternatively,
please tell us which, if any, of the exceptions provided in Rule
13e-
3(g) is applicable to your transaction.  Provide a detailed
analysis
of the factual basis supporting any claimed exemption.

2. We note your disclosure on page 25 that, while many other REITs
derive substantial portions of their cash flow from leases or
other
contracts providing for relatively stable payments, your cash flow
and ability to maintain or increase the initial dividend rate will
be
substantially dependent upon the market price for timber in your
operating regions and market prices for your manufactured
products,
and such prices have historically been volatile.  Please revise
your
disclosure on pages 3 and 43 to include this information.  In
addition, tell us how you reconcile this volatile cash flow with
your
intent to pay regular quarterly dividends.

3. Refer to TIPSheet No. 86, the internal communication sent to
Potlatch Corporation employees on September 19, 2005, which was
filed
under Rule 425 of the Securities Act.  We note your statement
that:
"The company expects its annual dividend, post REIT conversion, to
be
approximately $76 million, or $2.60 per share, as compared with
the
current annual dividend of $.60 per share...Following the S&P
distribution, the $76 million annual dividend will be spread
across a
greater number of shares (which cannot yet be calculated),
therefore
the annual per share dividend amount will be less than $2.60."
Please revise your disclosure throughout the prospectus, including
pages 3 and 43, to clarify that the annual per share dividend
amount
will be less than $2.60.  In addition, please confirm whether this
distribution would come from operating cash flows from the REIT.

4. We note that you will transfer the assets and operations of
your
non-REIT qualifying businesses to one or more newly formed
subsidiaries that will elect to be treated as a taxable REIT
subsidiary following the REIT conversion.  Based on your
disclosure
on page 68, it appears that over 85% of your net sales derived
from
assets that will be transferred to one or more wholly-owned
taxable
corporate subsidiaries.  Please tell us your estimate of the value
of
the assets to be held by the company once it has qualified as a
REIT.
In light of the 20% asset limitation imposed on REITs (i.e., the
aggregate value of all securities of taxable corporate
subsidiaries
owned by you may not be greater than 20% of the value of the
REIT`s
total assets), please revise your disclosure in the summary and
throughout the prospectus to delineate how you will meet the 20%
asset limitation test.

5. Please provide us with copies of any graphics, maps,
photographs,
and related captions or other artwork including logos that you
intend
to use in the prospectus.  Such graphics and pictorial
representations should not be included in any preliminary
prospectus
distributed to prospective investors prior to our review.

Questions and Answers about the REIT Conversion, page 1

6. Please refrain from using the term "dividends" in this section
and
throughout the prospectus since the payment of dividends implies
the
existence of current and accumulated earnings and profits.  Since
the
company has never operated as a REIT, there is no assurance it
will
have current or accumulated earnings and profits, and the
distributions made to stockholders may constitute, in part, a
return
of capital.  Instead, please use the term "distributions."

What happens in the REIT conversion? - page 1

7. We note that the restated certificate of incorporation will
contain restrictions on the ownership of Potlatch Holdings common
stock primarily to facilitate compliance with the REIT rules and
otherwise to address concerns relating to capital stock ownership.
Please expand your disclosure to clarify what you mean by "and
otherwise to address concerns relating to capital stock
ownership."

What is a taxable REIT subsidiary? - page 2

8. Please expand your disclosure to briefly describe the asset and
income limitations imposed on REITs and taxable REIT subsidiaries.
In light of the fact that it appears the majority of your income
generating assets are being transferred to your TRS, please
discuss
how these asset and income limitations will impact your business
operations going forward.

Why do we intend to become a REIT? - page 2

9. We note one reason you are proposing the REIT conversion is
"expected reduced costs of capital and more attractive equity
currency."  Please expand your disclosure to briefly describe what
you mean by reduced costs of capital and more attractive equity
currency.

10. We note the list of reasons on page 2.  Please expand your
disclosure to briefly discuss the basis for your belief that these
benefits will occur.  For example, please explain how you expect
to
increase dividends as a REIT when it appears the majority of your
income-producing assets are being transferred to your TRS and why
you
believe you will receive a higher stock market valuation as a
result
of increased cash flows.

What will I receive in connection with the REIT conversion? - page
3

11. We note that you plan to make a special E&P distribution
payable
at the election of each stockholder, in cash, shares of Potlatch
Holdings stock or a combination of both.  Please expand your
disclosure to provide an estimate, based on the current number of
shareholders, of the amount of cash and the number of shares each
shareholder would receive on a pro-rata basis if every shareholder
elects to receive cash.  In addition, please briefly discuss the
source of cash for this distribution.

12. Please provide us with a form of the election you intend to
use
to solicit shareholders regarding the E&P distribution prior to
its
use.

What are some of the risks associated with the restructuring? -
page
4

13. We note your disclosure on pages 20 and 43 that you anticipate
that most of your income in the foreseeable future will consist
primarily of net capital gains.  Please discuss how this will
impact
shareholders` potential to receive distributions from Potlatch
relative to other REITs that principally earn ordinary income and
are
required to distribute 90% of such income.

Summary, page 10
14. We note your statement that the reader should carefully read
this
entire proxy statement/prospectus and the other documents to which
this proxy/statement refers.  Please revise the introductory
paragraph to identify the "other documents."

Historical Data Per Share, page 17

15. Please tell us how the annual dividend of $3.10 per share is
consistent with the dividend payments shown on page 15, which
indicate that stockholders received $2.95 per share in 2004.

Risk Factors, page 19

16. Please revise your risk factor subheadings so that each one
conveys the specific risk to you.  Currently, some of your
subheadings merely state a general risk or a fact about your
business.  We note the following examples:

* "Our cash dividends are not guaranteed and may fluctuate," page
20

* "Certain of our business activities are potentially subject to
prohibited transactions or corporate level tax," page 22

* "Legislative or other actions affecting REITs could have a
negative
effect on us," page 23

* "An investment in our common stock involves other tax issues,"
page
23

* "Inability to obtain governmental approvals and third party
consents may have a material adverse effect," page 24

* "Changes in production costs may adversely affect our results of
operations and cash flow," page 26

* "The market for hybrid poplar lumber is uncertain," page 27

Please revise throughout to identify briefly in your captions the
specific risks to you that result from the facts or uncertainties.
Potential investors should be able to understand what the risk is
and
the result of the risk as it specifically applies to you.

Risks and Effects of the Merger and the REIT Conversion, page 19

If we fail to qualify as a REIT or fail to remain qualified as a
REIT..., page 19

17. We note your disclosure that you will need to transfer your
non-
qualifying REIT assets to one or more TRSs and that these non-
qualifying REIT assets consist principally of your various
manufacturing facilities and the related businesses and
operations.
Please expand your disclosure to briefly describe the related
businesses and operations.

As a REIT, we will be limited in our ability to fund dividend
payments..., page 20

18. We note that it appears that a majority of your revenue
generating operations and assets are being transferred to the TRS.
We further note that your ability to receive dividends from the
TRS
is limited by the rules with which you must comply to maintain
your
status as a REIT.  As a result, it would appear that dividends
would
be limited to income generated only from the Resource segment of
your
current operations.  Please expand your disclosure in this section
and on page 43 to clarify that the majority of your current income
is
generated from operations and assets being transferred to the TRS
and
that only a portion will be available to be distributed to
shareholders.  In addition, please quantify the portion of your
historical operations that will be conducted under the TRS rather
than at the REIT level.
19. Please expand your disclosure to clarify that your TRS` after-
tax
net income is available for distribution, but is not required to
be
distributed to you and that income that is not distributed to you
by
your TRS will not be subject to the REIT 90% distribution
requirement.

We intend that the special E&P distribution will be a taxable
dividend..., page 22

20. We note your disclosure that a stockholder that receives its
portion of the special E&P distribution entirely in the form of
shares would be treated for federal income tax purposes as having
received a taxable dividend.  Please expand your disclosure to
clarify that the stockholder may have to sell shares or otherwise
obtain funds to pay the income tax in connection with the special
E&P
distribution.

The extent of our proposed use of TRSs may affect the price...,
page
22

21. We note that, following your election to be taxed as a REIT,
you
intend to conduct a portion of your business activities through
one
or more TRSs.  Please expand your disclosure to quantify this
portion.

Our management has never operated a REIT, page 22

22. Please expand the risk factor to describe the risks to
investors
or to your business.

An investment in our common stock involves other tax issues...,
page
23

23. Please revise to provide a separate risk factor for each risk
described.  To the extent these risks are not material or have
been
described in other risk factors, please consider deleting this
risk
factor.

Inability to obtain government approvals and third party
consents...,
page 24

24. We note that you will be required to obtain governmental
approvals and third party consents in order to transfer your
manufacturing operations and related assets to the TRS in
connection
with the REIT conversion.  Please expand your disclosure to
identify
the material government approvals and third party consents that
you
will be required to obtain.  In addition, please expand your
disclosure to discuss the specific amendments or renewals, if
material, you will need to obtain in connection with your credit
facilities prior to the REIT conversion.

Risks Related to Our Business, page 25

We do not insure against losses..., page 28

25. We note that you do not maintain insurance for any loss to
your
standing timber from natural or other causes.  Please tell us
whether
you have historically experienced any material losses from your
standing timber.

Other Risks Affecting Our Business and Operations, page 29

We are dependent on key personnel, page 29

26. Please expand your disclosure to identify the members of your
senior operating management team.

Voting and Proxies, page 32

27. Please provide us with screen shots for each of the screens a
stockholder could view during the online voting process.
Alternatively, please provide a password so that we can view the
voting website.

28. Please revise the disclosure under "Revoking your proxy" to
clarify whether stockholders can revoke or change their votes
online
or by telephone.  If so, briefly describe the procedures for doing
so.

Background of the REIT Conversion and the Merger, page 35

29. We note your disclosure on page 35 that the feasibility of
converting to a REIT was discussed by Potlatch`s board in 2002 and
2003 as part of its strategic review of Potlatch`s business.
Please
expand your disclosure to describe the discussions by the board
with
respect to the feasibility of converting to a REIT.  The
disclosure
should include the nature and substance of the discussions.

30. We note that Potlatch engaged Goldman Sachs and Deloitte
Touche
in 2004 to further evaluate and advise Potlatch regarding the
possible conversion to a REIT.  Please revise to include all the
information required by Item 1015 of Regulation M-A with respect
to
written presentations and analyses prepared by Goldman Sachs and
Deloitte Touche.  Refer to Item 4(b) of Form S-4.  In addition,
please provide us with all written materials prepared for the
board
and management in connection with the proposed REIT conversion.

31. We note on September 16 and 17, 2005, the board met to
consider
the REIT conversion.  Please expand your disclosure to identify
all
individuals who attended or participated in the meeting.

32. Please disclose whether the board considered any alternative
tax-
efficient strategies.  If not, briefly explain why.

Our Reasons for the REIT Conversion and the Merger, page 37

33. We note that, at the September 2005 board meeting, management
presented its evaluation and recommendation to the board regarding
the proposed REIT conversion and representatives of Goldman Sachs
reviewed advantages and disadvantages of a REIT conversion.  We
further note your statement on page 36 that, during the course of
these presentations, the board reviewed information with respect
to
the positive and negative factors identified below.  Please revise
to
clarify, if true, that all the advantages and disadvantages
reviewed
by Goldman Sachs in the September 2005 meeting are detailed in
this
section or revise to include them.

34. Please re