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fertilizer must raise the money and pay cash for it. That wide difference Is fixed In order to force them to pay cash. All this fertilizer for the first five years will be sold at cost, and after Hint :it 4 per cent profit. I Applause.]
Mr. HASTINGS. That is what I wanted to know.
The CHAIRMAN. The time of the gentleman from Georgia has expired.
Mr. RANSLEY. Mr. Chairman. I yield 10 minutes to the gentleman from Connecticut [Mr. Gi.ynn].
The CHAIRMAN. The gentleman from Connecticut is recognized for 10 minutes.
Mr. GLYNN. Mr. Chairman and gentlemen, in my opinion this is the most dangerous and vicious piece of legislation that I have known to be reported out by any committee of this House during the 11 years I have been a Member. [Applause.]
We are making history to-day, because it is for you gentlemen to decide whether or not you are going to depart from that time-honored practice of private Initiative and private enterprise which has brought prosperity to this great Nation.
Now. I realize that this bill is brought in under the whip and spur of what the committee believes to be public opinion. The members of the committee are all good friends of mine, and 1 have great respect for them. But because nothing has been done for years on the Muscle Shoals question, they said here, "The public demands that something must be done, and we are going to do something "; and they did.
The trouble with this whole Muscle Shonls proposition has been that back in 1910, when we were facing war and when it was necessary to look for a supply of nitrogen, they amended the public defense act to provide for the fixation of nitrate at Muscle Shoals, and the question came up. What are you going to do with it in time of peace? And the proponents of the bill and those who favored it said, "Oh, well, we will make fertilizer." So that act provided that the plant should be used for the purpose of making nitrogen in time of war and fertilizer in time of peace.
And now I want to say this, that to-day the Muscle Shoals property is neither a nitrate proposition nor a fertilizer proposition. It is neither. Why? When we went into the war and before we went into the war there was In this country no expert, not one—I do not think that statement will be disputed—there was not one who knew anything about the extraction of nitrate from the air or nitrate production, except by the cyanamide process. Germany did know something about it, but not much.
The older process was the cyanide process. But during the war Genunny made great strides In the production of nitrate from tlie process known as the Haber process, and to-day the best experts will tell you that the best and most economical process is the direct synthetic process kuowu as the improved Ilaber process.
Possibly the impression may have gotten out here that no nitrogen is made in this country by the direct synthetic process. The great du Pont Co.. by the investment of millions of dollars— I wish I had some of their stock—the great Du Pont Co., which was in a position to select the very best process, because it was a question with them of dollars and cents, are producing 25 tons of nitrate daily and intend to increase that amount to 100 tons a day, all by the improved Haber process.
Mr. ALMON. No part of that goes into the manufacture of fertilizer?
Mr. GLYNN. No. No port of that goes into the manufacture of fertilizer, because they are not making nitrate for fertilizer, but are making it for their explosives, and they need It. But every ton they make for explosives is releasing a ton that can be used otherwise for fertilizer and would go into fertilizer. The great allied chemical and dye corporation have an investment of millions of dollars. They are getting at the correct process. They are spending down at Hopewell, Va., $100,000,000 taken out of the surplus of the company. According to statements I have seen in a newspaper they have spent $4,500,000 in investigation, and they are choosing the direct synthetic process known as the Haber process.
Of course, gentlemen, I know that this is the era when we must do something for the farmer, and we must do something for him whether he wants us to do it or not; and when we have this Government plant, which they say is going to furnish cheap fertilizer for the farmer, after we have killed off a private industry in this country with an investment of $300,000,000, and when the smokeless chimneys stand like silent monuments above the dead fertilizer industry, then the Government business can go on and we can extend the field of our Government activities by making cheap farm implements for the farmer.
Mr. MOORE of Virginia. Mr. Chairman, will the gentleman yield?'
Mr. GLYNN. Yes.
Mr. MOORE of Virginia. At the existing freight rates, what would he the rate of distribution or transportation to destination of fertilizer from Muscle Shoals?
Mr. GLYNN. I can not answer that, question. I realize that the distribution would be limited. I realize that the farmer in Minnesota or elsewhere a thousand miles distant from Muscle Shoals in not going to be benefited at all. So I say the proposition is wrong.
In the direction of this corporation you are going to have five men, none of whom has a financial interest in a fertilizer proposition, and probably not one of them knows anything about the proposition. That is the way they select juries sometimes. They get men for juries who have no opinions. You are going to appoint a board of directors of five men, not one of whom has any interest in any fertilizer proposition, and you are going to leave it in their hands.
I know that the assertion is made that this is not a question of the Government getting into business. They say the Government already is in business. I deny it. I deny that simply because dams were built down there at Muscle Shoals and because there are two obsolete plants down there that can not be modernized except with an additional investment of $10,000,000—I deny that is an excuse for us to go into a Government manufacturing plant. We have our national parks, and It may be said that because those parks have in them potential water power the Government is in business, and if that theory is followed out the time may come when it will be said we should start an automobile factory for the purpose of manufacturing cheap automobiles for the farmer. It is a dangerous precedent. It is a case of getting the camel's nose under the tent.
I know there are some men who favor Government ownership. If you favor Government ownership you ought to vote for this bill, but if you are opposed to Government ownership you should vote against this bill, and do it now. The time to stop and ponder is now.
Mr. FLETCHER. Will the gentleman yield?
Mr. GLYNN. I yield.
Mr. FLETCHER. I think the gentleman is making a fine contribution to the subject, but I would like to know what he would do with Muscle Shoals?
Mr. (.LYNN. It is purely and simply a power proposition.
Mr. FLETCHER. How would you disuse of it?
Mr. GLYNN. And if some of them had not felt they were tied up with this so-called dedication of power to l>e used for fertilizers in times of peace there would not be this trouble. At that time not a member of the Committee on Military Affairs and not a Member of Congress knew the best method of extracting nitrogen. I would consider it to-day simply as a power proposition, and that is all it is.
Mr. ALMON. Will the gentleman yield?
Mr. GLYNN. Yes.
Mr. ALMON. What would you do with the power?
Mr. GLYNN. I would sell it under the best terms I could make. I would sell it so we could get more for it, and as the gentleman from Alabama knows, they are paying 2.6 mills per kilowatt simply because they only have a lease at will, a lease from month to month, and I think the gentleman from Alabama will agree, and I think every member of the Committee on Military Affairs will agree, that we could get many times 2.6 mills per kilowatt-hour for a long-terra lease.
Mr. ALMON. With only one customer, the Alabama I'ower Co.?
Mr. GLYNN. There would be more customers than one. It is true the power Is now delivered to the Alabama I'ower Co., but transmission lines can be built, precisely as provided for in this bill, to deliver that power wherever we think it ought to go.
Mr. ALLGOOI). Will the gentleman yield?
Mr. GLYNN. Yes.
Mr. ALLGOOD. If it is purely a power proposition, what would you advise doing with the $80,000,000 or $85,000,000 tied up in the nitrate plants there?
Mr. GLYNN. There is no such amount tied up.
Mr. ALLGOOD. It is $67,000,000 and $14,000.000.
Mr. GLYNN. Oh, no.
The CHAIRMAN. The time of the gentleman from Connecticut has expired.
Mr. RANSLEY. Mr. Chairman, I yield 10 minutes to the gentleman from Tennessee [Mr. Hrix]. [Applause.]
The CHAIRMAN. The gentleman from Tennessee is recognized for 10 minutes.
Mr. HULL of Tennessee. Mr. Chairman, you can well imagine the surprise of the Tennesese delegation when virtually all the Members suddenly discovered that this bill had been reported out with the Cove Creek provisions in it, without any hearings and without any opportunity for a conference with our good friends constituting the Military Affairs Committee.
I do not rise to discuss any phases of this bill or to offer any contention that would interfere with the purposes of those who are seeking fertilizers under the bill or who are opposing fertilizers under the bill or who are seeking any other purpose, except in connection with the Cove Creek Dam provisions.
I desire to say to the membership of the House with all the emphasis and with all the earnestness of my nature, speaking, I think, for virtually each Member of my delegation, that so far as the Cove Creek provisions of this bill relate to the rights of Tennessee they do not in any sense constitute an exercise of valid Federal power, but instead they offer a most unjust and unfair discrimination against the highly valued rights of the State of Tennessee. [Applause.]
There are three methods, as you know, of developing power in this country. One is by the State itself; the other by a permit granted to private corporations by the joint action of the Federal and State authorities under the Federal power act; and the third method would be for the Federal Government itself to construct a dam primarily and essentially for navigation purposes, and any power resulting there might be commercialized. Those are tlie three methods.
In that connection I desire to remind the committee that prior to the World War there was no definite power policy formulated in this country. We had a few individual, sporadic instances of power development, through special acts of Congress granting to some local enterprise the right to construct a dam and use the power resulting. Occasionally a dam was constructed by the Government where power resulted, but, of course, essentially for navigation purposes.
Five decisions of the courts have trailed along, nfter a fashion, with the very partial and indefinite policy of Congress in so far as we had any water-power policy in this country prior to the war. Since then the Federal power act was enacted. That act recognized that the chief responsibility for power development in this country is on the States, and not on the Federal Government.
The result is that the States must themselves agree to the location of a plant, to the procurement of the banks and the local properties, and in the distribution of the power that results from the plants.
In this provision, gentlemen, the rights and the benefits that accrue to Tennessee have been dug up, root and branch, and swept away.
You know out in the West the great forest reserves, which have never belonged to the States but to the Federal Government, when they are put in the permanent public domain, the States are given as a matter of equity 25 per cent of the license and other fees. When the royalties from oil on the public domain come forth the States, as a matter of equity and fair dealing, are given 50 per cent of them, I believe, and while the States are always ready to make their contributions to the Nation in the way of internal improvements, there are certain fundamental rights and properties that are peculiarly applicable to them, which, as a matter of fair dealing in every sense, ought to be retained.
Mr. JOHNSON of Texas. Will the gentleman tell us how far Cove Creek is from Muscle Shoals?
Mr. HULL of Tennessee. I am coming to that right now. I am sorry I only have 10 minutes.
Mr. Chairman, I want to refer to the basis of the claim of the Federal Government for the right to develop and commercialize power in contrast with the fundamental rights of the States. For example, in the beginning the States were the complete proprietors of all the banks and the beds and the water of the streams in this country, as much so as we are the proprietors of the clothes we wear. Finally, the States said to the Federal Government, " We will concede to yon the linked right to control and improve navigation in this country. You can come to the beds of our rivers and put up any dam that may be necessary to improve navigation."
Under this naked right, with no power given to use the water for any other purpose except navigation, Congress has drifted along without any challenge by the States, they being asleep, and has naturally gone a little too far in some of the special acts that have been passed.
Here is what belongs to the States, my friends. Here is a statement of the Alabama commission, and I desire to commend it to my good friends iu the Alabama delegation here who are now seeking to sweep away from Tennessee the very rights their State sets forth in this document:
Subject only to Uio authority of the United Slates relative to navigation and war purposes, the State of Alabama claims absolute title
to, and ownership, jurisdiction, and control of, that portion of Uk Tennessee River which is within the Slate of Alabama, its waters, banks, beds, and soils, including the power In the water and the value thereof, and all other property rights in anywise iacideut thereto or arising therefrom.
I hope my Alabama friends will not repudiate all of this fundamental doctrine when they come to vote on the amendment that will be offered here.
Now, Mr. Chairman, the States have certain rights, and all we are asking for Tennessee is this: We are willing that these great properties, that are worth $40.000.000, because you can get $2.000.000 a year, or 5 i>er cent on $40.000,000. in perpetuity, we are willing they shall be dedicated to the Nation in order that the Government may get a good return on its money that it will invest if it builds the dam. and a splendid profit in addition; but over and beyond that the State of Tennessee has four fundamental rights, and it asks recognition for the use of these rights and for the use of the property tliat it otherwise dedicates to the Nation:
The right to regulate this power as it would regulate power produced by any other agency.
The right to a voice in the distribution of this power.
The right to a voice in the making of charges for the 200.000 horseiwwer that will be furnished from this headwater to power projects below.
The right to impose taxes and water charges in connection with the power development.
Now, there are four rights that are literally swept away from Tennessee, and if this is to be made a precedent, gentlemen, all the States of the Union having developed water power may prepare themselves to turn over, root and branch, to the Federal Government in extra profits the proceeds of these four indispensable rights to any local community.
Mr. LINTHICUM. Does the gentleman think the constitutional right of navigation carries with it the right to manufacture fertilizer as proposed in this bill?
Mr. HULL of Tennessee, I would rather discuss that with the gentleman a little later. I am undertaking to present this one angle from the standpoint of Tennessee, which does not in anywise affect the contentions of gentlemen who are involved in these other controversies.
The CHAIRMAN. The time of the gentleman from Tennessee has expired.
Mr. MOHIN. Mr. Chairman, I yield five minutes to the gentleman from Alabama [Mr. Hill]. [Applause.]
Mr. HILL of Alabama. Mr. Chairman, it had not been my intention in the brief time of five minutes allotted to me to discuss the claims of Tennessee, but the gentleman from Tennessee [Mr. Hull] has rather challenged the Alabama delegation on this proposition.
I want to say to the membership of the House that as one member from Alabama—and I think I speak for the whole delegation—we feel this project is a great national project, that no selfish equation should enter into it, that it should be considered not from the point of view of Alabama, of Tennessee, of Georgia, of Kentucky, or of any other State of this Union, but rather from the standpoint of the benefit and the welfare of the whole country. [Applause.]
The gentleman from Tennessee has read from a report made by a commission in the State of Alabama. The Legislature of Alabama at its session last September specifically rejected that report when it refused to carry out the recommendations of that commission and enact any law whatsoever looking to the presentation of any claims at this time by the State of Alabama.
I think the Alabama delegation to-day shares in the position of the Legislature of Alabama; certainly, the delegation from Alabama is here to-day as a unit supporting the Morin bill as it was reported from the Military Committee.
Now, gentlemen, what the Alabama delegation asks is this: That we pass this bill for the disposition of Muscle Shoals; a disposition which has been patiently awaited for 10 years, and at some subsequent date the Congress of the United States can and should enact a general law with reference to water power, defining the rights of the Federal Government anil the rights of the States; a law that will be uniform and will apply uoj; only to Tennessee and Alabama, but to all the States of the Union.
For the Congress to make an exception in this case, to grant everything that is asked for by the State of Tennessee, may set a dangerous precedent which will rise up in days to come to plague and trouble the Congress. We have a great program ahead of us authorized by the last Congress, when the last Congress authorized an appropriation of over $7,000,000 for a survey of the navigable streams of this country. That program looks to the development of the navigation of the great rivers of the country, and if we adopt a policy here to-day with reference to Tennessee, how do we know that we will not have to follow that policy with reference to other States of the Union wherever the Federal Government may go to build a dam for the improvement of navigation? There should be some law defining the rights of the States and the Federal Government, and that law should be uniform and ought not to be tacked on in the form of some kind of an amendment to this bill to take care of the rights of any particular State, whether that State be Tennessee or Alabama.
Mr. GAURETT of Tennessee. Does the gentleman think that law ought to be passed before the passage of this bill?
Mr. HILL of Alabama. No; this bill should be passed now. It is imperative that after a lapse of 10 years and no disposition having been made of the Muscle Shoals properties that this bill be passed here and now.
Mr. BROWNING. It is contemplated under this bill to build transmission lines all the way down to the gentleman's State. Is there anything selfish about that?
Mr. HILL of Alabama. I deny that that Is in the project or within the plan.
Mr. BROWNING. That is what the engineers' report says.
Mr. HILL of Alabama. No; that is not the fact. The engineers' report says that to get the maximum amount of power out of the river the different dams on the river must be interconnected, but, so far as carrying power from Tennessee Into Alabama is concerned, that proposition has not been projected or even thought of by the engineers or anyone else, so far as I know of. except by the gentleman from Tennessee.
Mr. TAYLOR of Tennessee. Will the gentleman move to strike out Cove Creek from the bill?
Mr. HILL of Alabama. No; I will not. I believe that Cove Creek is one of the great integral parts of Muscle Shoals, and of vital importance to the Government's properties there.
Mr. JOHNSON of Texas. How far is Cove Creek from Muscle Shoals?
Mr. HILL of Alabama. I do not know exactly, but about 300 miles. By the use of Cove Creek the primary power at Wilson Darn is doubled.
Mr. GARRETT of Tennessee. Why did not the committee include I)am 3?
Mr. HILL of Alabama. Let me say to the gentleman from Tennessee that I can not speak for the committee; but, as one member of the committee, 1 would be very happy to have Dam No. 3 included in the bill. If the gentleman will offer an amendment to this effect, I will vote for it. [Applause.]
The CHAIRMAN. The time of the gentleman from Alabama has expired.
Mr. RANSLEY. Mr. Chairman, I yield 10 minutes to the gentleman from New Jersey [Mr. Eaton].
Mr. EATON. Mr. Chairman, I can not understand how our Military Affairs Committee, composed as it is of able, conscientious, and experienced legislators, could be induced to bring before this House a bill dealing with a major matter of public interest, which is so hopelessly unsound and vicious from every American point of view. The only possible explanaticn seems to be that the committee, like the country and Congress, is sick and tired of the interminable Muscle Shoals delirium which has afflicted our country for almost 10 years, nnd in desperation tliey have at last shut their eyes and Jumped off into space, landing, without intention or desire on their part, in a bottomless morass of Injustice and economic absurdity.
Of all the wild and weird legislation introduced in the present session of Congress this Muscle Shoals bill caps the climax.
Without a single hour of public hearing before the committee this bill is brought in here on Calendar Wednesday with no opportunity for adequate debate. And this in spite of the fact that it involves the disposition of property which has cost the taxpayers of the country between one and two hundred millions of dollars and incidentally involves the absolute destruction of a great private industry, widely owned by American citizens and representing an investment of around $300,000,000.
I am opposed to this bill, among other reasons because it Is unsound in its economic premises and reasoning, unfair and un-American in its methods, and it embodies class legislation of the most dangerous kind.
The sections of this bill dealing with the disposition of power are bad enough, but its provisions for invading the fertilizer industry are infinitely worse.
The fertilizer industry in this country represents a total investment of around $300,000,000. This branch of American private enterprise since the war has suffered acutely, its losses aggregating many millions of dollars. Under the provisions of this bill the privately owned fertilizer industry of the United States will suffer complete destruction at the hands of the Gov
ernment which is sworn to .protect every citizen in his rights and property.
Under the provisions of this bill the entire property at Muscle Shoals is turned over to a corporation financed by the taxpayers of this country with a free gift of a working capital of $10,000,000.
This corporation takes title to the whole Muscle Shoals property absolutely without cost to itself. It is empowered to operate the plant by the eyanamide method, which, as is well known, has been superseded by much more effective and cheaper methods of nitrogen fixation.
The new corporation is further empowered to construct other plants and use any other methods it may approve and to buy raw materials not made at the plant.
In arriving at its prices to be charged the consumer for its products the corporation is to figure no interest on the immense original investment made by the taxpayers of the whole country in the plant; no interest on its capital stock for the first five years; no taxes, insurance, rentals, depletions, or amortization charges. All of these items have to be figured as cost in, the private manufacture of any product.
The corporation in the manufacture of fertilizer is relieved from paying any power charge, but has placed at its disposal surplus power worth $2,000,000 a year.
Any of this surplus power which is not used in the manufacture of fertilizer, the corporation is empowered to sell and to credit the Income from this excess power to fertilizer Income, or, in other words, to reduce the cost of its fertilizer by this amount.
The bill also authorizes the corporation under certain conditions to distribute free of charge to favored farmers from 5 to 15 per cent of its products.
The corporation is authorized by the bill to go into the Patent Office and seize the patent rights and secrets of private citizen and use them as it sees fit, leaving the citizens, who at great expense have secured these patents, under the unwarranted necessity and expense of taking court action in order to receive any remuneration for their property thus seized.
Mr. GARRETT of Tennessee. Does not the gentleman believe that that section containing the patent proposition is possible of enforcement?
Mr. EATON. No; and we are about to enact it into law with, a lot of other impossible things.
The management of this extraordinary enterprise is placed, in the hands of a board which is only permitted by the bill to give half of its time to its functions in connection with the fertilizer corporation.
At this point the inevitable dictator is introduced in the person of a general manager who really has the supreme authority.
Last, but by no means least, the bill provides that " any person who shall receive any compensation, rebate, or reward or who shall enter into any conspiracy, collusion, or agreement, expressed or implied, with intent to defraud the corporation or to defeat its purposes shall on conviction thereof be fined not more than $25,000 or imprisoned not more than 15 years or both."
That provision alone ought, to defeat this bill in its entirety. Here is a Government corporation set up to compete with and to destroy by unfair competition the business of private citizens. And any private citizen who seeks "to defeat the purposes of this Government corporation" is to be fined $25,000 or imprisoned for 15 years.
This proposal, gentlemen, is offered to the American Congress in this year of our Lord 1928. Certainly the dictators of the Russian proletariat ought to come over here for a few lessons in tyranny.
I hold no brief for the fertilizer industry as developed by private enterprise in this country. I am not connected with it in any way except as a customer, but I am not willing as a Member of this House to sit silently by and see this industry confiscated and destroyed by action of our Government, which was created for the express purpose of guaranteeing this and all other industries and persons in the rights belonging to every American citizen. I believe the farmers of this country would be the first to protest against such legalized robbery and oppression. Our farmers want and need good and cheap fertilizers, but they can ill afford to obtain these fertilizers by agreeing to the acceptance of a governmental principle and practice under which their own property and the property of any other private citizen could be confiscated at the will of a Federal bureaucracy. [Applause.]
The fundamental fallacy which has bedeviled the Muscle Shoals proposition from the beginning is the idea that it was created for and belongs to one class of our people. As a war measure it was perfectly legitimate for the President of the United States to be authorized by Congress to build a plant for the production of war munitions at Muscle Shoals. But It was entirely beside the mark at that time and under those circumstances to hitch to a strictly war measure provisions for the manufacture of any article for the exclusive use of any class of our people in times of peace.
The Muscle Shoals property was not built by the money of any one class. It belongs as much to the pottery worker on the banks of the Delaware; to the apple grower on the banks of the Columbia; to the textile worker on the banks of the Merrimac, as it does to the farmer adjacent to the Tennessee River. The plant at Muscle Shoals was not built by western money, northern money, southern money, or eastern money. It was built by American money. It belongs to all the people of all the country. It can not and must not be made an instrument of tyranny, oppression, and confiscation directed toward any class or section of our people.
This bill puts the United States Government sqnnrely into the power business and into the fertilizer business. Both proposals are contrary to the genius of our political and economic institutions nnd are fraught with serious menace to the prosperity and progress of our people.
There are two other reasons equally fundamental with those I have advanced why this bill should be defeated by this House.
The first of these reasons is that the power proposals of the bill are bound to inflict serious and permanent injury upon the future economic development of the South.
I venture to direct my remarks especially to the Members of this House who are fortunate enough to represent the people of our Southland. I have always been an admirer and lover of the South. It has been a fixed conviction of my mind since childhood that one of the greatest blunders if not one of the gravest crimes in American history was the way the reconstruction of the South was handled after the Civil War. Yet in spite of artificial difficulties created by prejudice and passion the brave men and women of the South girded themselves for the well-nigh hopeless task of reconstruction in the midst of desolation and ruin almost unparalleled, and in 60 years they have lifted themselves by their own genius and courage and intelligence steadily upward from the abyss until to-day they stand at the threshold of a golden age beckoning the whole South toward an economic achievement and a social prosperity and happiness which will make a new epoch in the glorious history of our great country.
It has been my privilege to study at first hand economic conditions in practically every Southern State. Especially in those States capable, because of their geographic position, of being served with power from the Tennessee River. It is a striking fact that from 1914 to 1925, as shown by a recent report of our Department of Commerce, manufacturing in these southeastern States increased 203 per cent, while in the country as a whole it increased only 159 per cent. In 1925. the value of the manufactured products in the States of Alabama, Tennessee, North and South Carolina, Georgia, and Florida was over $305,1100.000 more than in 1923. While the South has in the past based its economic progress largely upon its agriculture and its agriculture in too many cases took the form of a onecrop enterprise, the great new economic force now developing through the South lies in the increase of manufacturing.
A few years ago I spent an entire winter studying the textile industry in southern Virginia and North and South Carolina. I found there an industrial development which in conditions of labor, in relations between employer and employee, in ideals of management, in housing conditions, and in most of the things that make life worth living compares favorably with any similar group that I have seen anywhere either in this country or in Europe.
I was struck especially with two aspects of the labor situation. One was the remarkable service which the textile industries of these States are rendering the country by bringing out of their mountain isolation great numbers of good citizens and giving them opportunity to mingle with the general current of our national life in and through the industrial centers.
And I was equally impressed by the fact that most of these great southern textile industries are located some distance from the larger centers of population. The effect of this upon the lives of the workers and the general level of social well-being can hardly be overestimated. There is one county in North Carolina—the county of Gaston, represented by the distinguished and able Member of this House Mr. Bulwinkle— which, in my judgment, is as nearly a model county as can be found anywhere in this country. It constitutes a great industrial community, but without congestion of population and with all the advantages of town and country combined.
What is the fundamental secret of this magnificent industrial awakening of these Southeastern States? To any un
prejudiced mind the answer is absolutely unavoidable. TbU industrial progress is due to the remarkable development of hydroelectric energy on the rivers of the South by private enterprise and private capital. Reports from the Geological Survey show that the output of power in the six States of Georgia, Alabama, Tennessee, North and South Carolina, and Florida increased from 3,828,000,000 kilowatt-hours in 1923 to nearly 7,000,000,000 kilowatt hours in 1U27. This is an increa-* of over 78 per cent, as compared with an increase of 48 per cent of the Nation as a whole. And, contrary to all traditions and teachings of the proponents of political ownership and operation, this power is among the cheapest and most efficient in the world.
These facts constitute a sufficient reason why every Member of this House from the Southeastern States of this I'uiun should vote to defeat the bill now under consideration. The Tennessee River constitutes the greatest single undeveloped natural asset of the South to-day. On the river from Musk Ip Shonls to Cove Creek there can be developed a power output of 4,000,000.000 kilowatt-hours a year. The introduction <>f this enormous reservoir of power into the economic aud social resources of the Southeastern States will in itself insure an era of progress and prosperity never before achieved in this section.
I trust that the Representatives of this favored section of our country will not deem it an impertinence on my part if I venture to suggest that they approach the Muscle Shoals project from this new point of view, dealing with it as an asset of all of the Southern States rather than as a problem in politics to be solved here in Washington. The political mind runs in one groove, the economic mind in another. The problem of Muscle Shoals and the Tennessee River affects profoundly a great section of our country and through it the general level of prosperity and progress in the Nation as a whole. It is the duty of the economic-minded men of the South who have built up this great fabric of public service in the electric industry and in the other industries, including agriculture, and of the political leaders of that section to get together and work out a plan for the development not only of Muscle Shoals but of the whole Tennessee River which will be economically sound and at the same time in tune with the fundamental principle of our social and political institutions. This I am sure can t>e done and will be done, but the surest wny to prevent the doing of it will be to put upon the statute books this inadequate and amazing law. The passage by this Congress of this bill will do more to deprive the citizens of the South of the enormous benefits accruing from the full development of the Tennessee River than any or all other causes combined.
My final reason for asking that this proposed legislation he defeated is to be found in the general economic development of our country. We are the most prosperous people in the world. We have the highest level of comfort, the widest distribution of wealth ever achieved by any society since time began. The one great modern problem which agitates every society is the determination, which is perfectly just and right, on the part of the masses of men to secure adequate participation in the economic resources of the world. In the achievement of this hiKh purpose civilization has chosen organized industry as its chief instrument. And the center and front of organized industry is the power plant.
In America under private enterprise, backed by private capital, using organized industry us the chief instrument, we have gone further in spreading the ownership of property among the masses of men than any society that ever existed. And in this salutary process we are under enormous obligation to the electric industry. The electric industry of the United States made possible entirely by the wonderful development of cheap and adequate power by private initiative, enterprise, and capital, is the greatest single social service of a material kind ever rendered any people in the history of the world.
To meet an urgent and ever-increasing public demand, it has grown so rapidly as to outgrow public understanding. As a result there are doubtless some parts of the business which need readjustment. But these adjustments can never be brought about by putting the Federal Government into the power business. The average American has too much sense to burn down a fine bam in order to kill a weazel or two.
Modern Industry as the chief instrument of civilization now confronts a choice between methods. One is the Old World method of putting government first and the citizen last. The other is the American method of putting the citizen first and making the Government, which is his own creation, his servant rather than his master. One of these methods must eventually prevail throughout the world. Of the first method, Russia is the supremo example. Of the second method, America is the supreme example.
Time will not permit me to give to the House the facts which prove beyond peradventure that in facing this strictly modem problem America has consciously or unconsciously hit upon the best possible solution, which is to increase the ownership of the Nation's wealth among the masses of men, rather than to concentrate all power and all wealth in the hands of the Government.
My final objection to the bill now before the House is that it introduces into the economic development of America a principle which has its origin not in America but in the Old World, a principle which has never been successful and never can be. A principle which contravenes the foundations and ideals of our Government and which, if enacted into law, will surely slow down our progress and diminish our prosperity.
This bill puts the Government into business and puts the private citizen out of business. In that proportion the Government becomes strong, the citizens weak. To that degree the power of the Government increases, the rights of the citizens are diminished.
If we must go outside America to find some solution for the Muscle Shonls problem, why go to Russia? Russia is a country larger than <mr own, with a larger population, with a lorger history, with equal or greater natural resources. But the people of that unhappy country know nothing of political freedom nor of economic prosperity in the American sense. No Russian has ever drawn a tree breath on Russian soil, and the great communistic experiment now going on in that country, up to the present time at least, has resulted in social chaos and individual distress.
If we must go outside our own country to find principles for the solution of our problems at Muscle Shoals and elsewhere, why not go to some country which is better off thnn we are? Where can we find such a country? Our answer is, Nowhere. We are the most favored people in the world. It behooves us not lightly to turn aside from those principles, methods, and ideals which have brought us thus far upon the way of peace, prosperity, and happiness.
I hope this House will kill this bill. Not simply because the committee has failed over long and weary sessions to ilnd some solution to the problem but because the bill is inadequate, unjust, un-Auiericau. Let us sweep the decks clean of our prejudices and preconceptions and passions, and recognize this as an American problem, to be solved in an American way. To this end I would suggest that we ask the President of the United States before the next session of Congress to call a conference of legislators, economists, farmers, industrial workers, leaders in the power industry, and any others qualified to make a contribution. By man-to-man discussion such a conference would reach a new understanding of the facts and factors involved and work out a plan which when submitted by rlie proper committee to this Congress can be acted upon with enthusiasm and unanimity, just as we solved the difficult alienproperty matter. Thus and thus only can we reach a solution of the whole question of political versus private ownership of public services by the application of principles that are just, that are permanent, and, above all, that are American. [Applause.]
Mr. MORIN. Mr. Chairman. I yield 15 minutes to the gentleman from South Carolina [Mr. McSwAiN].
Mr. McSWAIN. Mr. Chairman and gentlemen of the committee, we thank the distinguished and learned gentleman from New Jersey [Mr. Eaton] for this magnificent tribute to the progressive spirit of the new South, but I wish you to note that it has no relevancy or relation whatever to the subject under discussion. The distinguished gentleman bottomed what argument he did make upon the proposition that the mistake was made 12 years ago when the National Government coupled the proposition of national defense with the proposition of fertilizer at Muscle .Shoals under section 124 of the national defense act. I submit to your fair and square judgment, as the representatives and keepers of the safety of this Nation in peace and in war, that one of the wisest projects ever inaugurated in the interest of national defense was that in 1916, whereby we provided for an adequate domestic supply of nitrogen, because without nitrogen we are absolutely helpless from the point of view of national defense. Without nitrogen our magnificent battleships are but floating ornaments. Without nitrogen every cannon and every gun and hand grenade is absolutely useless, silent, and harmless. During the World War our sole supply of nitrogen came from Chile, and it took not only $5~iO.UOO.OOO of our money to pay for it. more than $12 of which on every ton was paid as royalty to the Chilean Government, amounting to $97.000,000, but it also took 20 per cent of our shipping tonnage to transport it from Chile to American shores. One ton out of every five of our American shipping was devoted to the transportation of this single element of nitrogen alone. What would happen in the event of war? What might happen if the enemy got possession of the seas
and drove our transports from the seas? We would be absolutely helpless. Every student of national defense for the last generation has announced it as an undisputed proposition that we must have a domestic supply of nitrogen. Not only that, but if enemy airplanes were to bomb our locks at the Panama Canal and destroy them so that our transports could not get through, our battleships and cannon and rifles would be utterly idle and useless.
What situation do we find? We find that here in the supply of nitrogen in time of war we have an element that is desirable, useful, and indispensable in time of peace to preserve life itself in the production of vegetation as food for man and beast. The next war, gentlemen, will use more nitrogen than the last one. Every war throughout history has employed an increasing amount of nitrogen. During the Revolutionary War, for seven long years we did not use as much nitrogen in our black gunpowder as did the American Army at the single battle of St. Mihiel. That one battle used more nitrogen than seven years of war under Washington. Not only that, but the 110 days' fighting of the American forces in France consumed 500,000 pounds more of nitrogen than did all the Union Armies during the four years' war with the Southern States. What, will happen in the next war? They did a little bombing a few months ago of a concrete bridge by airplanes in North Carolina and then and there used more nitrogen in a matter of experiment to see what would be the effect of bombs on a single concrete bridge than was used by the Union Army at the Battle of Gettysburg. We have to have it inside of our own country and not outside in order to defend our Nation's very life itself. The $700,000,000 we are spending every year on the Army and Navy to defend ourselves is worse than money thrown away unless we have a domestic, interior supply of nitrogen. [Applause.]
The national defense act, representing the wisdom of the Congress of 1016—and you remember what was in the mind of the Congress in 1916—said that since we must have the nitrogen for war purposes, and since it is useful in time of peace, let us tie the two together; and that is what they did. That is what this Congress has insisted shall be done from that minute to this.
The joint congressional committee appointed by the joint resolution of the House and Senate provided that the two should be tied together, and every action of the Military Affairs Committee that has had this under consideration since 1922 has insisted that the two should be tied together in order that the power, which is highly desirable on the part of many private interests, may be a sort of subsidy to carry the fertilizer end of the project, the nitrogen end. the national-defense end along with it. Gentlemen, would we not be very happy if we had a navy yard that was self-sustaining, if we had a fleet that was self-sustaining, if we had an Army that was self-sustaining? Here is the indispensable arsenal, here is the very life, the very nerve, the heart of the whole scheme of national defense, aud under the proposition now before us is to be self-sustaining and not to cost the taxpayers of the Nation in the end a single cent. We, the committee, wanted private operation; but, gentlemen, there was but one bidder before us, and we could not compel him to take it, and he wanted it on his own terms, and we were not willing to lease the plant on the bidder's own terms just to get the name of private operation. I do not believe you gentlemen would have favored it. I am quite satisfied that the three gentlemen who now uphold this bill here were opposing with all their vigor the proposition before the committee to lease the Muscle Shoals project to that single private bidder.
Mr. FROTHINGHAM. Does not the gentleman remember that they voted for the Madden bill?
Mr. McSWAIN. Yes; as against this committee bill; but was not the gentleman opposed to the Madden bill until it was put up as against this proposition?
Mr. FRpTIIINGHAM. I did not have any chance to show any opposition until the vote came.
Mr. MrSWAIN. I withdraw the charge.
Mr. FROTHINGHAM. And then with certain amendments which the gentleman was trying to get and everyone was trying to get.
Mr. McSWAIN. I tried to put them on. The able and distinguished gentleman from Massachusetts, of course, never disclosed his hand, and I say that I was wrong in that regard. I think, however, that if it came to a vote on its face, without being in contrast with this proposition, he would have voted against the offer, because I know his general attitude, which is fair and square. But we were forced to the matter of some sort of Government operation. We say that the proposition that came from the Senate was like a bag open at both ends.
This Senate bill would not have produced fertilizer, and it would not have contained those essential elements of national