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defense, and would not have preserved nitrate plant No. 2 as a going concern. So sve decided, if we are going to have Government operation, let us not have a mockery, such as we feared we might have under the Norris bill, but let us have Government operation like that of the Post Office Department, like the War Finance Coriroration, like the Shipping Board, that has centralized authority. So \ve turned it over to a board of directors, which in turn would operate it through a general manager—one man. It is organized like an army. Here is the general manager, the commander in chief. The President of the United States appointed General Persliing to take the American Expeditionary Forces to France and be their general ruler, so as to get results. Everything under the head of electric; power comes up through the assistant manager for power. If it is a question of hydroelectric power or steam power, everything goes back through this organization Into the hands of the general manager through his successive subordinates. Suppose it is a matter of fertilizer. The production comes from the assistant manager for fertilizer. The sale of fertilizer comes up to the general manager.
It is a matter of sale at a fixed price, preference being given to the farmers and States authorized to sell to the farmers and next to States and then to mixers of fertilizers. The subordinate men are responsible to those above them, and they in turn are responsible to the assistant manager, and the assistant manager is responsible to the manager.
Now, gentlemen, we have heard the criticism time and time again that the Government can not succeed in this business. We are opposed to Government operation, and we have here followed a form of organization that was adopted in the War Finance Corporation. We have followed an organization such as was formed in the operation of the Panama Itailroad and the Panama Canal. We have followed, as suggested by the President's commission, the plan outlined in 1925, when he appointed a commission of experts, of which Senator Dial, of my State, was a member. These gentlemen laid down a proposition in entire harmony with the policy of this Congress from 1910, and they said if we could not get a private lease pursuant to the original terms they should do what? Organize a corporation, of which the Government should own 100 per cent of the stock, and put it into the hands of a board of directors of five men and let them operate it. Every one of the flve members of the President's commission in 1925 who reported in 1920 was in harmony with his colleagues on that proposition. They were n unit on that proposition, although they differed on other tilings. Curtis and McClellan filed a minority report on that proposition, but on the proposition to put it in the hands of five men of known business and administrative ability they were unanimous.
If you will read the speech of the gentleman from New Jersey, you would think we were a bunch of bolshevists. You would tliink we were a bunch of revolutionists. You would think we proposed to undermine the Constitution of the United States. Of course, the gentleman has made a nice speech, but he could have made it just as well without having ever read the bill. (Applause.]
The CHAIRMAN. The time of the gentleman from South Carolina has expired.
Mr. RANSLEY. Mr. Chairman, I yield 15 minutes to the gentleman from New York [Mr. Snell],
The CHAIRMAN. The gentleman from New York [Mr. Snell] is recognized for 15 minutes.
Mr. SNELL. Mr. Chairman and gentlemen of the House, I am not sure but that my good friend from South Carolina [Mr. Mcswain] can support the provisions of the substitute that I intend to offer to this bill. [Applause.]
I have been deeply interested in Muscle Shoals from the very first and have always followed this legislation. I greatly regret that there has not been presented to the committee some plan of private operation that was compatible with the original intent of Congress, that the committee could present here for our consideration. I think I might say right here that I am gravely disappointed that the business interests of the country, representing (he power companies and fertilizer companies, have not been more helpful in trying to solve this problem. [Applause.!
I think they are deserving of criticism in that they have not come forward with some concrete, constructive suggestion.
Furthermore. I think the people have a right to criticize us for our delay in solving this proposition.
I have stated several times on this floor that we certainly should do something at this session, and I have not changed my mind. Whether the bill that is passed is satisfactory to me or not, we now have a concrete proposition before us. and I propose that Congress express itself without further delay.
The Government has an investment as the result of the war of around $107,000,000 at Muscle Shoals. The question is what
will we do with that property to make the best economic use possible under present conditions. That is the only proposition before us.
And I am not going to stand here and blindly oppose the bill presented by the committee—and the committee has worked long, laboriously, and conscientiously on the proposition—without offering something that in my opinion will more fairly meet the economic thought of the majority of our jieople and according to my idea of Government.
If I understand correctly the bill presented by the committee, it definitely commits the Federal Government to the manufacture and sale of fertilizer in unlimited amounts—in unlimited places for all times, which is positively opposed to my theory of government. My bill authorizes at first experimental manufacture of fertilizers, and if successful, we can then go as far as Congress cares to appropriate the money. It sets aside 15,000 kilowatts or 20,000 firm horsei>ower to be used for this purpose, and provides for selling the balance to the highest bidder.
The committee's bill provides for an additional expenditure of from sisty to one hundred million dollars, regardless of the success of the enterprise, while my substitute does not call for any immediate expenditure but makes it permissible if the uiidertnking proves a success.
My substitute simply provides for using the property you now own at Muscle Shoals with as little economic waste as possible without controversy with individual States and in no way destroys any man's business or violates those fundamental principles of government that have made this country great and prosperous.
Mr. QUIN. Mr. Chairman, will the gentleman yield?
Mr. SNELL. No; I regret I can not yield.
Mr. QUIN. The committee bill is based on the understanding that it can go into private business.
Mr. SNELL. While my bill proiwses limited Government operation, it is simply for the property we now own and which came to us as a result of the war, and it in no way commits us to that policy.
It is limited to a period of five years in the hope we can work out a permanent solution in that lime.
Now I want to give you a short analysis of the bill itself. I desire to explain rapidly the details and provisions of the substitute that I propose to offer.
Mr. TAYLOR of Tennessee. Mr. Chairman, will the gentleman yield there?
Mr. SNELL. Yes.
Mr. TAYLOR of Tennessee. I would like to know what disposition your plan makes of Cove ('reek.
Mr. SNELL. It makes no provision.
The first proposition is to utilize the power facilities at Muscle Shoals so as to produce the highest practicable annual revenue to the United States and to vise the annual revenues, or so much thereof as may be considered desirable, for the development of methods of nitrogen fixation in the interest of national defense and for the production and distribution of concentrated fertilizers and the promotion of their use.
That is the first proposition. Then section 2 authorizes the President, acting through the Secretary of War and the Chief of Engineers, to enter into a contract or contracts for the sale of iiower from Dam No. 2 and from the steam plant at nitrate plant No. 2 in the vicinity of Muscle Shoals in accordance with the policies outlined above, and under the conditions set forth in following sections, for a period not exceeding five years.
Section 3 provides that under the direction of the Secretary of War the cost of such operation and maintenance shall be taken from the revenue derived from the sale of power. Section 4 provides for the continuous output of 15,000 kilowatts, which shall be reserved for the Secretary of Agriculture for the manufacture of fertilizer under the conditions set forth hereafter. I have found on examination that it will be necessary to increase that reservation by a certain amount and may propose later to do that in the consideration of the substitute.
It also provides that contracts may be entered into for the sale of secondary power in such amounts as will not be necessary for the manufacture and development of the fertilizer proposition.
Section 5 is an administrative section, but it does provide that the Government may lease or build transmission lines, if it is not possible to get a reasonable bid for the power at the switchboard. That protects us so we can not be held up by the Alabama Power Co., which company now owns or controls all of the available transmission lines that lead to Muscle Shoals.
Section (> provides that the power shall In1 sold to the highest bidder, and that we shall get the most money possible out of it
Section 7-is another administrative section and provides for the load factors, and so forth, but that is not important here now.
Section 8 provides that if the President deems it, advisable and profitable they can enlaree the steam plant at Dam No. 2.
Sections 0 and 10 provide for tin- experiments in the manufacture of fertilizer through the Department of Agriculture.
1 think I had better read those sections completely to the committee so the Members will understand them:
Skc. 0. The President, through the Secretary of Agriculture. Is hereby authorized, within the limits of appropriations made by Conpress, to construct, maintain, and operate, ou the site of nitrate plant No. 1, an experimental and/or production plant or plants for the development of methods of nitrogen fixation and for the manufacture of fertilizer or fertilizer products in such quantities as he may deem advisable. For this purpose nitrate plant No. 1, including the steam power plant and all buildings, equipment, and dwellings in connection therewith, which he may desire, shall be transferred to the Secretary of Agriculture who Is hereby authorized to make such alterations, repairs, and additions as may be necessary, to carry out the provisions of this act, subject to the proviso contained in section 12.
Sec. 10. Subject to the instructions of the President, the Secretary of Agriculture is hereby authorized and directed to commence the manufacture of cyanamid by the use of one unit of nitrate plant No.
2 as soon as practicable, and to construct and operate such facilities as may be necessary to demonstrate the adaptability of this method of nitrogen fixation for fertilizer purposes. Tills plant shall be operated at the capacity of one unit for a period sufficient to determine whether or not fertilizer can be manufactured by this process at a cost favorably comparable with other processes, and whether a market can be established for Its use. If the cyauamid process proves to be successful, and production costs are no higher than those for other forms of fertilizers, the President, at his discretion, and as the market demands, may direct the Secretary of Agriculture to increase the production from nitrate plant No. 2, to the full capacity of such plant, or any suitable fraction thereof.
Section 11 provides for the disposition and sale of whatever fertilizer or nitrates is made by the Government.
Section 12 provides that the plants we own at the present time shall be kept in what is called good stand-by condition for use in time of war.
Mr. AKENTZ. Will the gentleman yield?
Mr. SNELL. For a short question.
Mr. AKENTZ. Are the terms "nitrogen" and "fertilizer" synonymous, or does the gentleman mean them as two different products 1
Mr. SNELL. They are two different products.
Mr. AKENTZ. The gentleman is using first one and then the other.
Mr. SNELL. Well, I am hurriedly running through this on account of my limited time, but I think the gentleman understands.
Mr. LOWREY. Will the gentleman enlarge on section 11, as to the disposition of fertilizer and nitrogen?
Mr. SNELL. I will read section 11:
Sec. 11. The Secretary of Agriculture is hereby authorized to dispose of the fertilizer or fertilizer products manufactured at any of the plants hereinbefore mentioned. During the term of experimental oiK-ration the price of such products shall, if practicable, be so regulated Bo as to afford a return covering the cost of production Including a reasonable rate of Interest on the investment in plant and equipment, but in any event such as to insure their prompt disposal and use. Accurate records shall be kept so that the actual cost of producing fertilizer commercially under the methods followed may he determined at the conclusion of experimental operation. If production be continued as provided for in this act. the product shall be sold at rates sufficient to cover the entire cost of production, including interest at 4 per cent on the fair value to the facilities used.
Mr. LINTHICTJM. Will the gentleman yield?
Mr. SNELL. Yes.
Mr. LINTHICUM. Does the gentleman's bill put the Government into the manufacture of fertilizer just as the pending bill does?
Mr. SNELL. In a limited way it does provide for the manufacture of fertilizer by the Government.
Mr. LINTHICTJM. I had supposed the gentleman's bill was for the purpose of experimentation.
Mr. SNELL. It is for the purpose (n *-xperimentation. and then if the experiment proves successful they can go ahead and manufacture nitrates and also complete fertilizers.
Mr. OAKKW. Forever?
Mr. SNELL. No; for a period of five years. It is limited to five years.
Mr. CRISP. Will the gentleman yield?
Mr. SNELL. Yes.
Mr. CRISP. The gentleman said that the fertilizers under his bill were to be sold at cost plus 4 i>er cent on the investment. Does that include the total investment at Muscle Shoals?
Mr. SNELL. Well, that really does not mean very much during the period of experiments, but if we figure anything on the investment it would be on the power plant itself.
Mr. CRISP. About .$50.000,000.
Mr. SNELL. Forty-nine million dollars, to be exact.
Mr. ALLGOOD. Will the gentleman yield?
Mr. SNELL. Yes.
Mr. ALLGOOD. Does the gentleman's bill provide for fixed fertilizers?
Mr. SNELL. Yes; in a general way: but it does m>t go into all the details of manufacture and distribution, as is done in the committee bill. Those must be worked out later if it proves successful.
I can not say very much in the time I have remaining, but I want to suggest this: My bill simply provides for the use of property which the Federal Government owns at Muscle Shoals at the present time, with as little economic waste as ixmsible. I am not in favor .of any kind of Government ownership or operation, but the Government has this proi>erty and it is incumbent upon us as directors of this corporation to make some disposition of this property. I feel that the hill I have offered or intend to offer with some slight amendments could be made workable. It would take care of our property ; it would develop whether we are able to manufacture fertilizers to advantage or not and at the same time it would not be expensive. It does not call for any additional appropriations at the present time, and none will be needed unless it is developed that we can do this and do it successfully. Then Congress can make such appropriations as it sees fit.
Mr. WAINWRIGHT. Will the gentleman yield?
Mr. SNELL. Yes.
Mr. WAINWKIGHT. There will be $2,000,000 available in earnings from the dam almost immediately.
Mr. SNELL. That is so. There is at least $2,000.000 worth of surplus property there which my bill provides can be sold, and that amount can be used at the present time for the development of this work.
It seems to me this is a practical proposition and that it is a practical way to solve this problem. I hope the committee will give it careful consideration. [Applause.}
The CHAIRMAN. The time of the gentleman from New York has expired.
Mr. MORIN. Mr. Chairman. I yield 10 minutes to the gentleman from Michigan [Mr. James]. [Applause.]
Mr. JAMES. Mr. Chairman and gentlemen, one would imagine from the speeches made by the three members of the House Committee on Military Affairs, Mr. Ransley, Mr. FrothingHam, and Mr. Glynn, that they are in favor of private operation and that the fight in the committee was between private operation and Government operation.
We had only one private operation bill before the committee; and where was Mr. Kansley at that time, and where was Mr. Frothingham at that time? If Mr. Glynn had been here at that time, I am sure he would also have been against the Ford offer, and that was the only offer we had that provided private operation.
The gentleman from New Jersey [Mr. Eaton] stated he did not represent and had nothing at all to do with fertilizer companies. I wish the gentleman had stated whether he has any interest of any kind in any power company like the General Electric.
And one would imagine from the speech of the gentleman from New Jersey that he is also in favor of private operation. We have only one private operation bill before onr committee; was the gentleman from New Jersey in favor of that? The gentleman made bitter speeches against the offer of the American Cyanamid Co. The gentleman is for power and for power only.
Gentlemen, as a member of the House Committee on Military Affairs I have been engaged on the Muscle Shoals proposition for six years and my chief interest in it is not fertilizer. That comes second. I am not interested in power at all. What I am interested in, and have always been interested in. is (he matter of national defense, and that is the only reason the bill is before the Military Affairs Committee.
We built nitrate plant No. 2 for one thing, and that was in case of war we would have the nitrates necessary to manufacture munitions. This plant is capable of taking care of 14 divisions of the American Army.
I was for the Ford offer. It was the best offer we ever had. We would have had fertilizer manufactured there under the Ford offer.
I also happened to be on the Joint committee. During most of the time I was acting chairman of the joint committee of the House and the Senate, and we worked over there for about a month. We had up the matter of Government operation and we also had the offer of the American Cyanamid Co. I would like to have been for private operation, but there was no offer before the joint committee that I could vote for and coine out here on the floor and say that it adequately protected the United States. There was nothing of this kind in the American Cyanamid offer then, and there was nothing of that sort when we quit. We practically subsidized them with the entire Tennessee River, and they could stop manufacturing fertilizer after having about $1,500,000 on the dump, and then from that time on it became strictly a power proposition and there was no way of getting buck our property.
Before Mr. Madden introduced his bill the first time he talked with me about it. Before he introduced it the last time he came out to Walter Reed Hospital and asked me whether or not he should reintroduce the bill, because Mr. Madden had not forgotten the experience in his office just before we adjourned the last time. We tried for over a month to get Mr. Bell, of the American Cyanamid Co., to agree to the proposition that when it became a power proposition pure and simple and there was no more fertilizer, then we could get back our property. We could not get this amendment. We could not get any suggestion of this kind.
Finally, the men representing the Farm Bureau had the Idea that Mr. Madden and myself being good friends, if we were to meet in conference and he should say that we were wrong in asking for a guaranty, we might withdraw it. Mr. Madden listened to Mr. Bell and to myself, and finally he said to Mr. Bell, "There must be a guaranty in there so that when you stop making fertilizer we get back our property." He then made Mr. Bell the suggestion that when it became a strictly power proposition the contract would be rewritten for the unexplred time by three Justices of the Supreme Court. This was turned down, and as Mr. Bell said he could not agree to it, Mr. Madden said, "Although I sponsored your bill, why do you not withdraw your offer?"
Mr. Madden came out to see me again this time and asked me what I thought about relntroducing his bill, and I said, "That is all right, provided you will not be for the bill unless we can get the same kind of a clause we asked Mr. Bell for the last time." The bill was reintroduced with this understanding.
The day before we had Mr. Bell before us the last time, Mr. Madden called me over to his office and asked how we were getting along. I told him we were against the same proposition in 1928 that we were against in 1926 and in 1927, and that was the provision that we could not get back our property when they ceased making fertilizer. Mr. Madden told me then he had sent word to Mr. Bell several times that he ought to agree to an amendment of this kind.
There is practically not a man on our committee who wanted to be for Government operation, but we had no bill providing private operation that we dared come out here and face you gentlemen with. We could not come out here and say we had a bill providing for the manufacture of fertilizer when there was no section In the bill by which we could get back our property when they stopped making fertilizer, and neither could we be for the Norris bill because under that bill you would have fertilizer plants all over the United States. We wanted this confined to Muscle Shoals. Neither did we want to see the Department of Agriculture making fertilizer or experimenting in the making of fertilizer.
Under the Norris proposition you could have fertilizer plants all over the United States, and, as I have said, we wanted It confined to Muscle Shoals. Under the Norris bill, also, the fertilizer was to be made under the Department of Agriculture, and Senator Norris said that if the fertilizer was made down there under his bill it would be made under the direction of Doctor Cottrell.
Kvery time that Doctor Cottrell api>eared before our committee he said he was not In favor of the Government going Into any kind of business. It Is not a question of a tight between private operation and Government operation. It is a question whether you are going to be in favor of the Morin bill, the Norris bill, or the Snell bill.
You will not get any fertilizer under the Snell bill. It provides for 20,000 horsepower. Why, gentlemen, it takes 70,000 horsepower to operate one unit of nitrate plant No. 2 alone, to say nothing of what it is going to take to o|»erate nitrate plant No. 1. It takes $8,000,000 to $10.000,000 to put plants No. 1 and No. 2 into condition so it will operate with the requisite horsepower. There is nothing in the Snell bill that provides any money to fix up the plants.
Mr. Bell never claimed that he could operate plant No. 2 without putting in eight or ten million dollars. Is there anything in the Snell bill with reference to that? Not a word. It is a power proposition with no fertilizer in it. There can not lie any fertilizer in it unless there is a reasonable amount of horsepower and you give the money as we do in our bill.
It has been stated that the farmers are not for the bill. It Is truo the Farm Bureau is not for the bill. They say that under our bill there will be no fertilizer. The fertifizer "people say that if our bill passes it will materially hurt them. Who is the best judge as to whether we can make fertilizer or not—the representative of the Farm Bureau or the fertilizer people?
Gentlemen, as I said, I would like to have !>een for private operation, but there never has been a good private operation offer since that of Henry Ford, and finally we came to the same conclusion that John McKenzie. chairman of the President's committee, came to, and John McKenzie was neither a Bolshevist nor an anarchist. How many times have you seen him on the floor here saying, "We standpatters must stand together "? [Applause.]
The CHAIRMAN. The time of the gentleman from Michigan has expired. All time has expired, ami the Clerk will read.
The Clerk read the Senate bill, as follows:
8. J. Bo*. 40, 70th Cong., 1st Spss. Joint resolution providing for the completion of Dam No. 2 and the
steam plant at nitrate plant No. 2 In the vicinity of Muscle Shoals
for the manufacture and distribution of fertilizer, and for other
Rfxolrcd, etc., That the Secretary of War Is hereby empowered and directed to complete Dam No. 2 at Muscle Shoals. Ala., and the steam plant at nitrate plant No. 2, in the vic-lnity of Muscle Shoals, by installing in Dam No. 2 the additional power units according to the plans and specifications of said dam, and the additional power unit in the steam plant at nitrate plant No. 2: Proridrd, That the Secretary of Wnr shall not install the additional power unit In raid steam plant until, after Investigation, he shall be satisfied that the foundation of said steam plant is sufficiently stable or has been made sufficiently stable to sustain the additional weight made necessary by such Installation.
Sec. 2. The Secretary of Agriculture Is hereby authorized and directed, within the limits of appropriations made by Congress from the fund hereinafter provided for or from the Treasury of the United States—
(a) To construct, maintain, and operate experimental or production plants anywhere in the United States for the manufacture and distribution of fertilizer or any of the ingredients comprising fertiliser;
(b) To contract with commercial producers for the production of such fertilizers or fertilizer materials as may be needed in the Government's program of development and introduction in excess of that produced by Government plants. Such contracts may provide either for outright purchase by the Government or only for the payment of carrying charges on special materials manufactured at the Government's request for its program;
(c) To arrange with farmers and farm organizations for large-scale practical use of the new forms of fertilizers under conditions permitting an accurate measure of the economic return they produce;
(d) To contract with said farmers and farm organizations to pay the special costs and losses, if any, sustained by them as a direct result of such large-scale use of the new fertilizer or fertilizer practices during the initial or experimental period of their introduction;
(c) Whenever the Secretary determines thut it Is commercially feasible to produce any such fertilizer, It shall be produced In the largest quantities practicable, and shall be disposed of at the lowest prices practicable, to meet the agricultural demands therefor, and to effectuate the purposes of this act;
(f) The Secretary is authorized to make alterations, modifications, or improvements in existing plants and facilities and to construct and operate new plants and facilities in order to effectuate properly the provisions of this section.
Sec. 3. The Secretary of Agriculture in carrying out the purposes of this aet shall locale a fertilizer plant In the vicinity of Muscle Shoals In Alabama and there shall be turned over to him the nitrate plants together with the steam plant at nitrate plant No. 1 connected therewith mid such other buildings, houses, and shops there located as shall be necessary fur the Secretary uurt his employees in the construction and maintenance and operation of such plants; and, when such fertilizer plant is thus located and established in the vicinity of Muscle Shoals, all the power necessary for the requirements of said plant shall be supplied from said steam plant located at nitrate plant No. 2 or from Dam No. 2.
Sbc. 4. The Secretary of Agriculture Is authorized and directed to utilize nitrate plant No. 2 for experiments in the production of fertilizers by the use of the eyanamidc process, to determine whether it is r is not commercially feasible to produce fertilizers by such process. If the Secretary of Agriculture determines that it is commercially feasible to produce fertilizers by the cyauamidc process, then such plant shall be used for flip production of fertilizers by such process In the largest quantities practicable and the fertilizers Bo produced shall be disposed of at the lowest prices practicable, to meet the agricultural demands therefor find effectuate the purposes of this resolution. In the utilization of nitrate plant No. 2 the Secretary of Agriculture shall avail himself of power in the same manner as provided in section 8.
Skc. a. Revenue obtained from the sale of fertilizer or fertilizer materials shall be paid into the Treasury of the United States and shall become a part of the special fund hereinafter provided.
Sec. 6. The Secretary of War is hereby empowered and authorized to sell the surplus current not used In fertilizer operations and for operation of locks and other works generated at said steam plant and said daiu to State, counties, municipalities, corporations, partnerships, or Individuals, according to the policies hereinafter set forth, and to carry out said authority the Secretary of War is authorized to enter into contracts for such sale for a term not exceeding 10 years and in the sale of such current by the Secretary of War he shall give preference to States, counties, or municipalities purchasing said current for distribution to citizens and customers.
SRC. 7. It is hereby declared to be the policy of the Government to distribute the surplus current generated at Muscle Shoals equitably among the States within transmission distance of Muscle Shoals.
Skc. 8. In order to place the Secretary of War upon a fair basis for making such contracts and for receiving bids for the sale of such current, he is hereby expressly authorized, either from appropriations made by Congress or from funds secured from the sale of such current, to construct, lease, or authorize the construction of transmission lines within transmission distance in any direction from said Dam No. 2 and said steam plant: Provided, That if any State, county, municipality, or other public or cooperative organization of citizens or farmers, not organized or doing business for profit, but for the purpose of supplying electricity to Its own citizens or members, or any two or more of such municipalities or organizations, shall construct or agree to construct a transmission line to Muscle Shoals, the Secretary of War is hereby authorized and directed to contract with auch State, county, municipality, or other organization, or two or more of them, for the sale of electricity for a term not exceeding 15 years, and in any such case the Secretary of War shall give to such State, county, municipality, or other organization ample time to fully comply with any local law now in existence or hereafter enacted providing for the necessary legal authority for such State, county, municipality, or other organization to contract with the Secretary of War for such electricity: And iiroeMeii further. That any surplus power not so sold as above provided to States, counties, municipalities, or other said organizations, before the Secretary of War shall sell the same to any person or corporation engaged in the distribution and resale of electricity for profit, he shall require said person or corporation to agree that any resale of such electric power by said person or corporation shall be sold to the ultimate consumer of such electric power at a price that shall not exceed an amount fixed as reasonable, just, and fair by the Federal I'ower Commission; and in case of any such sale If an amount is charged the ultimate consumer which is in excess of the price so deem^l to be Just, reasonable, and fair by the Federal I'ower Commission, the contract for such sale between the Secretary of War and such distributor of electricity shall be declared null and void and the same shall be canceled by the Secretary of War.
Sec. 9. The money received by the Secretary of War for the sale of Bitch current, after deducting the cost of operation, maintenance, depreciation, and the cost of constructing transmission lines, if any, shall be paid Into the Treasury of the United States, and the same shall be segregated and set aside as a special fund for developing, manufacturing, and Introducing Improved fertilizers and fertilizer practices for the purpose of reducing the cost and increasing the efficiency and use of fertilizers on American soils.
Skc. 10. Both the Secretary of War and the Secretary of Agriculture shall report in detail to Congress, on the llrst Monday in December of each year, their operations under this Joint resolution.
Skc. 11. In order that the Secretary of Agriculture may not be delayed In carrying out the program authorized herein the sum of $10,000,000 is hereby authorized to be appropriated for that purpose from the Treasury of the United States.
Sbc. 12. The Government of the United States hereby reserves the right, in case of war, to take possession of all or auy part of the property described or referred to in this act for the purpose of manufacturing explosives or for oilier war purposes; but, if this option is exercised by the Government, It shall pay the reasonable and fair damages that may be suffered by uny partv whoso contract for the purchase of current is thereby violated.
Mr. BYRNS. Mr. Chairman, a parliamentary inquiry.
The CHAIRMAN. The gentleman will state it.
Mr. BYRNS. As I understand it, the substitute will not be considered section by section?
The CHAIRMAN. No; the House refused unanimous-consent request of the gentleman from New York, and this is Oul- amendment.
Mr. ABERNETHY. Assuming there are Members of the House who would like to vote for the Senate bill kuowu as the Norris bill; how can that be accomplished?
The CHAIRMAN. The Clerk will report the committee amendment, and if that is voted down, then the question comes up on the Senate bill.
Mr. LINTHICUM. A parliamentary inquiry.
The CHAIRMAN. The gentleman will state it.
Mr. LINTHICUM. Have we a right to amend the different sections of the committee amendment?
The CHAIRMAN. Does the gentleman desire to offer an amendment to the Senate bill?
Mr. UNTHICUM. No; to the committee amendment.
The CHAIRMAN. The gentleman can offer amendments to" the committee amendment after It has been reported to the House.
Mr. CRISP. Mr. Chairman, a parliamentary Inquiry.
The CHAIRMAN. The gentleman will state It.
Mr. CRISP. Is not this the parliamentary situation? The original Senate bill was read under the flve-rainute rule and would have been open for perfecting amendments to any section. None have been offered. Now the House committee substitute It to be read through in Its entirety and then it is open, any part of it. to perfecting amendments? When that has been perfected a motion will come to substitute the House committee amendment for the original Senate bill. If the committee does substitute the House amendment for the original text of the Senate bill, that displaces the Senate bill. Those who prefer the original Senate bill will vote down the substitute and that leaves the original Senate text before the committee for its consideration.
The CHAIRMAN. Yes: if the committee amendment is voted down, then the question will arise on the Senate bill.
The Clerk read the committee amendment, as follows:
Strike out all after the resolving clause and insert:
"That for the purpose of maintaining and operating the properties now owned by the United States in the vicinity of Muscle Shoals, Ala., in the interest of the national defense and for agricultural and industrial development, and to aid navigation and the control of destructive flood waters in the Tennessee River and Mississippi River Basins, there Is hereby created a body corporate by the name of the 'Muscle Shoals Corporation of the United States' (hereinafter referred to as the corporation I. The board of directors first appointed shall be deemed the incorporators, and the incorporation shall be held to have been effected from the date of the first meeting of tl» board. This act may be cited as the 'Muscle Shoals act of 1928.'
"BOARD OF DIRECTORS AND OFFICKRS
"SBC. 2. (a) The board of directors of the corporation (hereinafter referred to as the board) shall be composed of five members, not more than three of whom shall be members of the same political party, to be appointed by the President, by and with the advice and consent of the Senate, and when at least three directors shall have been confirmed any one of such three or more shall call the first meeting of said board, and at such meeting the board shall organize by electing a chairman, vice chairman, and other officers, agents, and employees, and shall proceed to carry out the provisions of this act.
"(b) The terms of office of the members first taking office after the approval of this act shall expire as designated by the President at the time of nomination, one at the end of the first year, one at tlie end of the second year, one at the end of the third year, one at loo end of the fourth year, and one at the end of the tifth year, after the date of approval of this act. A successor to a member of the board shall be appointed in the same manner as the original members and shall have a term of office expiring five years from the date of the expiration of the term for which his predecessor was appointed.
"(c) Any member appointed to fill a vacancy in Hie board occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed for the remainder of such terra. .
"(d) Vacancies in the board so long as there shall be three members in oflice shall not impair the powers of the board to execute the functions of the corporation, and a majority of the members in office shall constitute a quorum for the transaction of tbe business of the board.
"(el Each of the members of the board shall be a citizen of the United States, and shall receive compensation at the rate of $50 per day for each day that he shall be actually engaged in the performance of the duties vested in the board, to lie paid by the corporation us current expenses, uot to exceed, however. l.r>0 days for the first year after the date of the approval of this act, and not to exceed 100 days In any year then-after. Members of the board shall be reimbursed by the corporation for actual expenses (including traveling and subsistence expenses) incurred by them while in the performance of the duties vested in the board by this act.
"(f) No director shall have any financial Interest In any publicutility corporation engaged In the business of distributing and Belling power to the public nor In any corporation engaged in the manufacture, mixing, selling, or distribution of commercial fertilizers, or any ingredients thereof, nor shall any member have any interest in any business that may be adversely affected by the success of the Muscle Shoals project as a producer of eoncentiated fertilizers.
"(g) The board shall direct the exercise of all the powers of the corporation.
"(h) All members of the board shall be persons that profess a belief in the feasibility and wisdom, having in view the national defense and the encouragement of interstate commerce, of producing fertilizers under this act of such kinds and at such prices as to Induce the reasonable expectation that the farmers will buy Raid fertilizers, and that by reason thereof the corporation may be a self-sustaining and continuing success.
"Sec. 3. (a) The chief executive officer of the corporation shall be a general manager, who shall be responsible to the board for the efficient conduct of the business of the corporation. The board shall appoint the general manager, and shall select a man for such appointment who has demonstrated his capacity as a business executive. The general manager shall be appointed to hold office for 10 years, but he muy be removed by the board for cause, and his term of office shall end upon repeal of this act. or by amendment thereof expressly providing for the termination of his office. Should the office of general manager become vacant for any reason, the board shall appoint his successor as herein provided.
"(b) The general manager shall appoint, with the advice and consent of the board, two assistant managers who shall be responsible to him, and through him, to the board. One of the assistant managers shall be a man possessed of knowledge, training, and experience to render him competent and expert In tbe production of fertilizer. The other assistant manager shall be a man trained and experienced in the field of production and distribution of hydroelectric power. The general manager may at any time, for cause, remove any assistant manager, and appoint his successor as above provided. He shall immediately thereafter make a report of such action to the board, giving In detail the reason therefor. He shall employ, with the approval of the board, all other agents, clerks, attorneys, employees, and laborers.
"(c) The combined salaries of the general manager and the assistant managers shall not exceed the sum of $5U,'XX) per annum, to be apportioned and fixed by the board.
"Sec. 4. The authorized capital stock of the corporation shall be $10,000.000, which U hereby subscribed by the United States and shall be paid in as the same shall b* made available by law, upon the draft of the corporation upon the Secretary of the Treasury in amounts of $100,000 or multiples thereof, and as the same shall be paid in shall be charged upon the books of tbe corporation as paid-in capital stock.
"Sec. 5. Except as otherwise specifically provided in this act, the corporation—
"(a) Shall have succession in its corporate name.
"(b) May sue and be sued in its corporate name.
"(c) May adopt and use a corporate seal, which shall be judicially noticed.
"(d) May make contracts, but only as herein authorized.
"(e) May adopt, amend, and repeal by-laws.
"(f) May purchase or lease and hold such personal property as it deems necessary 6r convenient In the transaction of Its business, and may dispose of any such personal property held by it.
"(g) May fix the compensation of such officers, empl03'ees, attorneys, and agents as are necessary for the transaction of its business, define generally their duties, require bonds of them and- fix the penalties thereof, and dismiss at pleasure any such officer, employee, attorney, or agent, and provide a system of organization to fix responsibility and promote efficiency.
"(h) The board shall require that the general manager and the two assistant managers, the secretary and tbe treasurer, the bookkeeper or bookkeepers, and such other administrative and executive officers as the board may see fit to include, shall execute and file before entering upon their several offices good and sufficient surety bonds, in such amount and with such surety as the board shall approve.
"(i) Shall have all such powers as mny be necessary or appropriate for the exercise of the powers herein specifically conferred upon the corporation, Including the right to exercise the power of eminent domain.
"Sec. 6. The corporation is authorized and directed— "(a) To hold, maintain, operate, and develop to the fullest extent all the properties hereby transferred to it for the purpose of producing and selling nitrogen and nitrogen products for agricultural and military uses, and for the purpose of selling any surplus electric power &r. hereinafter specified, and to construct, maintain, and operate such addi
tional plants and facilities upon such properties now owned by the United States at or near Muscle Shoals, Ala., on It considers necessary for such production and sale.
"(b) To manufacture, distribute, and srll fertUlicn, and/or any essential Ingredient thereof, and/or any by-products of such manufacture.
"(c) Upon the requisition of the Secretary of War or tbe Secretary of the Navy to manufacture for and sell at cost to the United States explosives and/or their nitrogenous content.
"(d) Upon the requisition of the Secretary of War the corporation shall allot and deliver without charge to the War Department Bo much power as shall be necessary In the Judgment of said department for Dm In operation of all locks, lifts, and/or other facilities in aid of navigation.
"(*) To produce, distribute, and sell olectrle power. •* lK-jvin particularly specified.
*'(f) To establish, maintain, and operate laboratories and experimental plants, and to undertake experiments for the purpose of enabling the corporation to furnish nitrogen products for military and agricultural purposes in the most economical manner and at the highest standard of efficiency.
"(g) The board shall have power to request the assistance and advice of any officer, agent, or employee of any executive department or of any independent office of the United States, to enable the corporation the better to carry out its powers successfully, and tbe President shall, if in his opinion the public Interest, service, and economy so require, direct that such assistance, advice, and service be rendered to the corporation, and any Individual that may be by the President directed to render such assistance, advice, and service shall be thereafter subject to the orders, rules, and regulations of the board and of the general manager.
"POLICY AS TO DISTRIBUTION AMI SALE OF SURPLUS POWER
"Sic. 7. (a) It is hereby declared to be the policy of the Government to utilize the Muscle Shoals properties for fertilizer purposes in time of peace, and no electric power shall be considered surplus so long as it can he profitably used in the manufacture of fertilizer.
"(b) Surplus electric power sold by the corporation to the consuming public shall be sold to States, counties, municipalities, corporations, partnerships, or individuals at the best prices obtainable having in view the fair and equitable distribution of the power. The corporation shall have the authority to acquire, by construction or otherwise, transmission lines for the distribution of its power, or may sell power at the plant to those who have or will provide facilities for its distribution.
"(c) The board shall operate the steam plants so that power derived from said steam plants may be used in connection with hydroelectric power produced at any dam or dams under the possession and control of the corporation, so that the secondary power from the variable »nd fluctuating volume of water In the river may be converted into prime or firm power.
"POLICY AS TO PIRTILI7.IRS
"Sec. 8. (a) It is hereby declared to be the policy of the Government to distribute the fertilizer manufactured at Muscle Shoals equitably among the States. Territories, and possessions of the United States.
"(b) The selling price of fertilizers and nitrogen products produced and sold by the corporation shall be fixed from time to time by the board. Sales through intermediaries shall be under contracts through which the maximum prices to the ultimate consumer shall be stipulated. The basis for the determination of the prices to be charged by the corporation shall be all charges properly attributable to the production, marketing, and distribution of the particular product, Including interest at the rate of 4 per cent per nnnuui, but only on money hereafter paid in as capital stock and then Interest only after the first five-year period.
"(c) It shall be the purpose of the corporation to provide plant food in abundance for agriculture and to users of commercial fertilizer at as reasonably low cost as possible, and net profits derived from the sale of surplus electric power us provided by this act shall be used toward that end for the first flve years of the life of the corporation. No nitrogen products of the corporation shall be sold for use outside of the United States, her Territories and possessions, except to the United Stall's Government for the use of its Army and Navy or to its allies in case of war.
"(d) The board shall soil the fertilizers, or the fertilizer Ingredients, produced under the authority of this act for the first five years of operation at actual cost, and all sales shall be for cash in advance free on hoard the cars at Muscle Shoals. Preference shall be given In sales, distribution, and shipments to the purchases by farmers, groups of farmers, and farm organizations for the use of members, then to States and State agencies for resale to farmers, and the demands of these two groups having been satisfied, to private manufacturers, mixers, and merchants of fertilizers.
"After the first flve years of operation under this act, then the board shall manufacture and sell fertilizers at cost plus 4 per cent additional, and all profits arising by reason of said addition and, for the second