LETTER FROM SECRETARY OF TREASURY TO CHAIRMAN SMITH

TREASURY DEPARTMENT, Washington, April 5, 1926. MY DEAR MR. CHAIRMAN: Under date of March 18, Secretary Mellon addressed to you a letter giving his views on H. R. 9826, being the bill to cover the Boulder Dam project on the Colorado River. In commenting on the fiscal policy in the original bill Secretary Mellon suggested a more flexible method of handling than the bond issue provided in the original bill, and at your request I am herewith submitting a draft of the legislation carrying out the suggestion made by Secretary Mellon in his letter of March 18.

The purpose of this suggestion is to create a fund which will be charged with the cost of construction, plus interest during construction, and into which all revenues from the project will flow, and from which appropriations for operation and maintenance will be made. The fund will also be charged with current interest, and any net earnings of the project, after operation, maintenance, and interest, will be returned to the Treasury and used for debt reduction. The Treasury is given complete flexibility in handling the financing by the United States of the cost of the project.

If Congress adopts the project, the suggestions I have made are quite workable from the Treasury's standpoint.

Very truly yours,

GARRARD B. WINSTON, Acting Secretary of the Treasury.

Hon. ADDISON T. SMITH,

Chairman Committee on Irrigation and Reclamation,
House of Representatives.

TENTATIVE SUBSTITUTE FOR SECTION 2 OF H. R. 9826

SEC. 2. (a) There is hereby established a special fund to be known as the Colorado River dam fund " (hereinafter referred to as the fund "), and to be available, as hereinafter provided, only for carrying out the provisions of this act. All revenues received in carrying out the provisions of this act shall be paid into, and expenditures shall be made out of, the fund, under the direction of the Secretary of the Interior.

(b) The Secretary of the Treasury is authorized to advance to the fund, from time to time and within the appropriations therefor, such amounts as the Secretary of the Interior deems necessary for carrying out the provisions of this act, except that the aggregate amount of such advances shall not exceed the sum of $125,000,000. Interest at the rate of 4 per cent per annum accruing during the year upon the amounts so advanced and remaining unpaid shall be paid annually out of the fund.

(c) Moneys in the fund advanced under subdivision (b) shall be available only for expenditures for construction and the payment of interest during construction upon the amounts so advanced. No expenditures out of the fund shall be made for operation and maintenance except from appropriations therefor.

(d) The Secretary of the Treasury shall charge the fund as of June 30 in each year with such amount as may be necessary for the payment of interest on advance made under subdivision (b) at the rate of 4 per centum per annum accrued during the year upon the amounts so advanced and remaining unpaid, except that if the fund is insufficient to meet the payment of interest the Secretary of the Treasury may, in his discretion, defer any part of such payment, and the amount so deferred shall bear interest at the rate of 4 per cent per annum until paid.

(e) The Secretary of the Interior shall certify to the Secretary of the Treasury at the close of each fiscal year the amount of money in the fund in excess of the amount necessary for construction, operation, and maintenance, and payment of interest. Upon receipt of each such certificate, the Secretary of the Treasury is authorized and directed to charge the fund with the amount so certified as repayment of the advances made under subdivision (b), which amount shall be covered into the Treasury to the credit of miscellaneous receipts, and shall be available for the purposes specified in subdivision (g).

(f) In order to make the advances to the fund, the Secretary of the Treasury may, if he deems advisable, exercise the authority granted by the various Liberty bond acts and the Victory loan act, as amended and supplemented, to issue bonds, notes, and certificates of indebtedness of the United States, and any bonds so issued shall be disregarded in computing the maximum amount of bonds authorized by section 1, of the second Liberty bond act, as amended.

(g) The Secretary of the Treasury is authorized and directed to use, upon such terms and conditions as he may prescribe for the payment, redemption, or purchase, at not to exceed par and accrued interest, of any bonds, notes, or certificates of indebtedness of the United States, the money covered into the Treasury under subdivisions (e) in repayment of the amounts advanced.

ACT AUTHORIZING THE APPOINTMENT OF COMMISSIONERS
[Public-No. 56-67th Congress]

An act (H. R. 6877) to permit a compact or agreement between the States of Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming, respecting the disposition and apportionment of the waters of the Colorado River, and for other purposes

Whereas the Colorado River and its several tributaries rise within and flow through or from the boundaries between the States of Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming; and Whereas the territory included within the drainage area of the said stream and its tributaries is largely arid and in small part irrigated, and the present and future development necessities and general welfare of each of the said States and of the United States require the further use of the waters of said streams for irrigation and other beneficial purposes and that future litigation and conflict respecting the use and distribution of said waters should be avoided and settled by compact between said States; and

Whereas the said States, by appropriate legislation, have authorized the governors thereof to appoint commissioners to represent said States for the purpose of entering into a compact or agreement between said States respecting the future utilization and disposition of the waters of the Colorado River and of the streams tributary thereto; and

Whereas the governors of said several States have named and appointed their respective commissioners for the purposes aforesaid and have presented their resolution to the President of the United States representative requesting the appointment of a behalf of the United States to participate in said negotiations and to represent the interests of the United States: Now, therefore,

on

Be itenacted, etc., That consent of Congress is hereby given to the States of Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming to negotiate and enter into a compact or agreement not later than January 1, 1923, providing for an equitable division and apportionment among said States of the water supply of the Colorado River and of the streams tributary thereto, upon condition that a suitable person, who shall be appointed by the President of the United States, shall participate in said negotiations as the representative of and for the protection of the interests of the United States, and shall make report to Congress of the proceedings and of any compact or agreement entered into, and the sum of $10,000, or so much thereof as may be necessary, is hereby authorized to be appropriated to pay the salary and expenses of the representative of the United States appointed hereunder: Provided, That any such compact or agreement shall not be binding or obligatory upon any of the parties thereto unless and until the same shall have been approved by the legislature of each of said States and by the Congress of the United States. SEC. 2. That the right to alter, amend, or ropeal this act is herewith expressly reserved.

Approved, August 19, 1921.

COLORADO RIVER COMPACT, SIGNED AT SANTA FE, N. MEX., NOVEMBER 24, 1922

The States of Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming, having resolved to enter into a compact under the act of the Congress of the United States of America, approved August 19, 1921 (42 Stat. L., 171), and the acts of the legislatures of the said States, have through their governors appointed as their commissioners: W. S. Norviel for the State of Arizona, W. F. McClure for the State of California, Delph E. Carpenter for the State of Colorado, J. G. Scrugham for the State of Nevada, Stephen B. Davis, jr., for the State of New Mexico, R. E. Caldwell for the State of Utah, Frank C. Emerson for the State of Wyoming, who, after negotiations participated in by Herbert Hoover, appointed by the President as the representative of the United States of America, have agreed upon the following articles.

ARTICLE I

The major purposes of this compact are to provide for the equitable division and apportionment of the use of the waters of the Colorado River system; to establish the relative importance of different beneficial uses of water; to promote interstate comity; to remove causes of present and future controversies; and to secure the expeditious agricultural and industrial development of the Colorado River Basin, the storage of its waters, and the protection of life and property from floods. To these ends the Colorado River Basin is divided into two basins, and an apportionment of the use of part of the water of the Colorado River system is made to each of them with the provision that further equitable apportionments may be made.

46

(e) The term "Lee Ferry" means a point in the main stream of the Colorado River 1 mile below the mouth of the Paria River. (f) The term upper basin " means those parts of the States of Arizona, Colorado, New Mexico, Utah, and Wyoming within and from which waters naturally drain into the Colorado River system above Lee Ferry, and also all parts of said States located without the drainage area of the Colorado River system which are now or shall hereafter be beneficially served by waters diverted from the system above Lee Ferry.

(g) The term "lower basin means those parts of the States of Arizona, California, Nevada, New Mexico, and Utah within and from which waters naturally drain into the Colorado River system below Lee Ferry, and also all parts of said States located without the drainage area of the Colorado River system which are now or shall hereafter be beneficially served by waters diverted from the system below Lee Ferry.

(h) The term "domestic use" shall include the use of water for household, stock, municipal, mining, milling, industrial, and other like purposes, but shall exclude the generation of electrical power.

ARTICLE III

(a) There is hereby apportioned from the Colorado River system in perpetuity to the upper basin and to the lower basin, respectively, the exclusive beneficial consumptive use of 7,500,000 acre-feet of water per annum, which shall include all water necessary for the supply of any rights which may now exist.

(b) In addition to the apportionment in paragraph (a) the lower basin is hereby given the right to increase its beneficial consumptive use of such waters by 1,000,000 acre-feet per annum.

(c) If, as a matter of international comity, the United States of America shall hereafter recognize in the United States of Mexico any right to the use of any waters of the Colorado River system, such waters shall be supplied first from the waters which are surplus over and above the aggregate of the quantities specified in paragraphs (a) and (b); and if such surplus shall prove insufficient for this purpose, then the burden of such deficiency shall be equally borne by the upper basin and the lower basin, and whenever necessary the States of the upper division shall deliver at Lee Ferry water to supply one-half of the deficiency so recognized in addition to that provided in paragraph (d).

(d) The States of the upper division will not cause the flow of the river at Lee Ferry to be depleted below an aggregate of 75,000,000 acrefeet for any period of 10 consecutive years reckoned in continuing progressive series beginning with the 1st day of October next succeeding the ratification of this compact.

(e) The States of the upper division shall not withhold water, and the States of the lower division shall not require the delivery of water, which can not reasonably be applied to domestic and agricultural uses.

(f) Further equitable apportionment of the beneficial uses of the waters of the Colorado River system unapportioned by paragraphs (a), (b), and (c) may be made in the manner provided in paragraph (g) at any time after October 1, 1963, if and when either basin shall have reached its total beneficial consumptive use as set out in paragraph (a) and (b).

(g) In the event of a desire for a further apportionment as provided in paragraph (f) any two signatory States, acting through their governors, may give joint notice of such desire to the governors of the other signatory States and to the President of the United States of America, and it shall be the duty of the governors of the signatory States and of the President of the United States of America forthwith to appoint representatives, whose duty it shall be to divide and apportion equitably between the upper basin and lower basin the beneficial use of the unapportioned water of the Colorado River system as mentioned in paragraph (f), subject to the legislative ratification of the signatory States and the Congress of the United States of America. ARTICLE IV

(a) Inasmuch as the Colorado River has ceased to be navigable for commerce and the reservation of its waters for navigation would seriously limit the development of its basin, the use of its waters for purposes of navigation shall be subservient to the uses of such waters for domestic, agricultural, and power purposes. If the Congress shall not consent to this paragraph, the other provisions of this compact shall nevertheless remain binding.

(b) Subject to the provisions of this compact, water of the Colorado River system may be impounded and used for the generation of electrical power, but such impounding and use shall be subservient to the use and consumption of such water for agricultural and domestic purposes and shall not interfere with or prevent use for such dominant purposes.

(c) The provisions of this article shall not apply to or interfere with the regulation and control by any State within its boundaries of the appropriation, use, and distribution of water.

ARTICLE V

The chief official of each signatory State charged with the administration of water rights, together with the Director of the United States Reclamation Service and the Director of the United States Geological Survey, shall cooperate, ex officio

(a) To promote the systematic determination and coordination of the facts as to flow, appropriation, consumption, and use of water in the Colorado River Basin, and the interchange of available information in such matters.

(b) To secure the ascertainment and publication of the annual flow of the Colorado River at Lee Ferry.

(c) To perform such other duties as may be assigned by mutual consent of the signatories from time to time.

ARTICLE VI

Should any claim or controversy arise between any two or more of the signatory States: (a) With respect to the waters of the Colorado River system not covered by the terms of this compact; (b) over the meaning or performance of any of the terms of this compact; (c) as to the allocation of the burdens incident to the performance of any article of this compact or the delivery of waters as herein provided; (d) as to the construction or operation of works within the Colorado River Basin to be situated in two or more States, or to be constructed in one State for the benefit of another State; or (e) as to the diversion of water in one State for the benefit of another State, the governors of the States affected upon the request of one of them, shall forthwith appoint commissioners with power to consider and adjust such claim or controversy, subject to ratification by the legislatures of the States so affected.

Nothing herein contained shall prevent the adjustment of any such claim or controversy by any present method or by direct future legislative action of the interested States.

ARTICLE VII

Nothing in this compact shall be construed as affecting the obligations of the United States of America to Indian tribes. ARTICLE VIII

Present perfected rights to the beneficial use of waters of the Colorado River system are unimpaired by this contract. Whenever storage capacity of 5,000,000 acre-feet shall have been provided on the main Colorado River within or for the benefit of the lower basin, then claims of such rights, if any, by appropriators or users of water in the lower basin against appropriators or users of water in the upper basin shall attach to and be satisfied from water that may be stored not in conflict with Article III.

All other rights to beneficial use of waters of the Colorado River system shall be satisfied solely from the water apportioned to that basin in which they are situate.

ARTICLE IX

Nothing in this compact shall be construed to limit or prevent any State from instituting or maintaining any action or proceeding, legal or equitable, for the protection of any right under this compact or the enforcement of any of its provisions.

ARTICLE X

This compact may be terminated at any time by the unanimous agreement of the signatory States. In the event of such termination, all rights established under it shall continue unimpaired.

ARTICLE XI

This compact shall become binding and obligatory when it shall have been approved by the legislatures of each of the signatory States and by the Congress of the United States. Notice of approval by the legislatures shall be given by the governor of each signatory State to the governors of the other signatory States and to the President of the United States, and the President of the United States is requested to give notice to the governors of the signatory States of approval by the Congress of the United States.

In witness whereof the commissioners have signed this compact in a single original, which shall be deposited in the archives of the Department of State of the United States of America and of which a duly certified copy shall be forwarded to the governor of each of the signatory States.

Done at the city of Santa Fe, N. Mex., this 24th day of November, A. D. 1922.

Approved:

HERBERT HOOVER.

W. S. NORVIEL.

W. F. MCCLURE. DELPH E. CARPENTER, J. G. SCRUGHAM. STEPHEN B. DAVIS, Jr. R. E. CALDWELL. FRANK C. EMERSON.

If Congress adjourns without doing anything, the Alabama Power Co. will continue to be the sole beneficiary of this great development.

The fertilizer people say the Government ought not to make fertilizer there. Why? After the war was over the officers of the Government tried to get the fertilizer industry of this country to take over this development. They scorned the idea. The power people would not take any interest in the dam and would not take any steps to complete it. The fertilizer people said:

We will not have anything to do with the Muscle Shoals nitrate plant. It is of no value. The entire plant there is obsolete.

The country has been flooded for two or three years with propaganda to the effect that the cyanamide process for the fixation of atmospheric nitrogen is obsolete. I knew this was not true, but I wanted first-hand information to give you when Congress convened, and I went over into Canada last summer and visited a plant exactly like the one at Muscle Shoals, using the same process. It is not so large and is not as good a plant, but it has been in operation continuously since 1909, doing a good business and paying the stockholders satisfactory dividends.

I have secured information in regard to plants in Germany and other European countries using the same kind of process. They also have plants using the synthetic process, and all the plants in Germany and in the other European countries that were built for war purposes are now being used for the benefit of agriculture, and so successfully that there is no longer any importation of Chilean nitrates into those countries. On the contrary, they have become large exporters of nitrates and fertilizers, and the American farmer to-day is buying fertilizer imported into this country from Germany.

The plant at Muscle Shoals is the only air-nitrogen plant in the United States. There is but one other on the Western Hemisphere, and that is at Niagara Falls, in Canada. The cyanamide plant at Muscle Shoals is the only one anywhere that is not in operation.

There is not a single dollar of private capital invested in the United States in the manufacture of air nitrogen for the benefit of agriculture. The great plant in West Virginia and the great plant under construction at Hopewell, Va., using the synthetic process, are not expected to manufacture one pound of nitrogen that will be used in the manufacture of fertilizer. It will be used for explosives and for other industrial pur

poses.

A similar plant across from Niagara Falls is making nitrogen and selling some of it to the fertilizer mixers in America for 7 cents a pound-pure nitrogen-and they are paying 20 cents a pound for nitrogen from Chile. They put it all together, mix it up, and sell it to the poor farmer and get as much for the 7-cent cyanamide nitrogen as they do for the 20-cent nitrogen. This is one illustration of how they are treating the farmer.

They say this method is obsolete. Let me tell you what is obsolete and antiquated. It is the method of the fertilizer industry in this country. That great and good man, Milton Whitney, up to a short time ago Director of the Bureau of Soils of the Department of Agriculture, in the hearings on the Ford offer, said that the great trouble with the fertilizer industry in this country is that it is antiquated and out of date. They are nothing but a lot of fertilizer mixers. They buy every pound of nitrogen, every pound of potash, every pound of phosphate, mix it up, and send it to the farmers. They get nearly all of their nitrogen from Chile, and the first payment is $12.53 to the Chilean Government as an export duty. They have to pay the freight rates on this for 6,000 miles, and then what does the farmer get? He gets 16 per cent of nitrogen and 84 per cent of dirt. I can get dirt down in my country for $5 an acre, but under this scheme they are paying the enormous price of $64 a ton for Chilean dirt and passing it on to the farmers. What does this amount to? Eleven million dollars is what the hard-worked and distressed farmers of the Nation are paying to this foreign monopoly.

If this Morin bill brings about competition with anybody, my friends, it will be competition not with private American capital but competition with a foreign monopoly, the Chilean Nitrate Corporation. [Applause.]

These people do not care. It seems the National Fertilizer Association does not care. So long as they can get it imported into this country and pass the cost on to the farmer it is all well and good.

They complain about Muscle Shoals being so far away. Six thousand miles from here is where they are getting it now, but they say it would be terrible for the American farmer to have to pay freight on a little nitrogen from Muscle Shoals, Ala.

Muscle Shoals is as well located as the Government could place it. It is probably nearer the center of that part of the country using the most fertilizer than any other place, and it is also well located from the standpoint of national defense. It is a long way from the Gulf and the Atlantic coasts, and if a foreign enemy should ever undertake to invade this country, Muscle Shoals is well fortified.

In 1916 we enacted a law to build this plant for two fundamental purposes, one to make explosives in time of war and the other to manufacture fertilizer for the benefit of American agriculture in peace times.

What will happen if it stands there idle? If we get into another war 40 or 50 years from now, standing idle or in a stand-by condition, costing the Government $300,000 a year for maintenance, it would be rusted out and obsolete.

The fixation of atmospheric nitrogen is a comparatively new science, and it is one that is being improved on from day to day, and unless you put the plant into operation during peace times it will be of no value for national defense.

Everybody agrees that the Government must keep it, and under the Morin bill we simply provide for the organization of a Government-operated corporation. The President appoints five directors, with the consent and approval of the Senate. They appoint a manager and an assistant manager. They are selected by the President and report to Congress every year, and it will be operated just like a private corporation, except in private corporations the directors are appointed by the stockholders and report to the stockholders. If this bill passes and President Coolidge succeeds in finding five business men qualified to do the job, there is not any reason why it should not be a great success.

If it is not, Congress can discontinue it in a year. If it is a success, everybody will be satisfied. We have been trying for eight years to have private operation. Many bills have been offered here. We passed the Henry Ford bill through the House for private operation. All offers for private operation have been rejected. It is now Government or nothing.

Let me remind you that this same fertilizer lobby was here lobbying against the Henry Ford offer. That was for private operation. So you see it is competition they are opposed to and it makes no difference whether it is Government operation or private operation. They do not want anybody to go into the fertilizer business at Muscle Shoals. They are afraid they will make a better grade of fertilizer and that it will reduce their prices.

Why are they so concerned about Government operation? If these fertilizer companies were taking any interest in building nitrate plants in the United States to relieve the distressed farmers of the country of the burden of the foreign Chilean monopoly there would be less justification for the Government operating the plant. So long as they take no steps to get for the farmer a better and cheaper grade of fertilizer we are justified in operating our own plant. Congress said in 1916 that this was for the purpose of making fertilizer in peace time, and we are only doing just what Congress directed in 1916 should be done.

Now this fertilizer lobby is making a great plea for the poor farmer who can not pay cash for his fertilizer. You all remember the way they sell fertilizer to the farmer who can not pay cash. They charge him about $8 a ton more on time between planting and gathering the crop and 8 per cent interest in addition. Now they come and make a great appeal for the poor farmer that can not pay cash. They complain because the Government proposes to give away 5 per cent of the product for experimental purposes. They do not think that is right.

You see this fertilizer lobby hanging around here. There were so many in the gallery the other day they called it the fertilizer gallery. [Laughter.] They were here in crowds; and Charles J. Brand, the leader of it, was formerly a director of the bureau of markets in the Department of Agriculture, and it is said they had to abolish that department to get rid of him. That was one of the most valuable bureaus we had in the department.

When the roll was called the other day and it was decided to adjourn and give them another week's time for the lobby to work against the bill, this fertilizer crowd all scattered and clapped their hands and Brand jumped up and said, "Come on, boys, meet me at 283, the Mayflower Hotel." It is said they have almost a whole floor there, at that magnificent and expensive hotel, although they say they are losing money. The enormous expense of this lobby will no doubt be passed on to the poor farmer.

The SPEAKER pro tempore. The time of the gentleman has expired.

Mr. ALMON. Mr. Speaker, I ask for 15 minutes more.
The SPEAKER pro tempore. Is there objection?

There was no objection.

Mr. ALMON. Mr. Speaker, there are three bills to be voted on next Wednesday afternoon. I think we have plenty of votes to pass the Morin bill if the friends of the farmer will come here and remain and stay on the job until the last roll is called. I have been voting for farm relief ever since I have been a Member of this House. I voted for the McNary-Haugen bill in 1924 and again in 1926 and again in 1928. I voted for the irrigation projects. Your arid lands needed water. Almost every section of the country is now needing and buying fertilizer and is calling for a better grade and cheaper fertilizer in order to replenish the soil.

You all ought to be interested in this, because agriculture is the basic industry of this country. When that prospers all the people prosper. When that suffers the whole citizenry suffers with it. The Norris bill passed the Senate providing for Government operations through the Department of Agriculture, carrying $10,000,000. The idea of turning a great industrial plant like this over to a Government bureau. That bureau changes every four years, and sometimes the Secretary of Agriculture has been changed oftener than once in four years.

There is another bill, the Morin bill, providing a real Government operating corporation. After that bill had been reported a few days ago our good friend Mr. SNELL, from New York, chairman of the Rules Committee, now in the chair, put in a bill providing for Government operation by the same bureau and for experimentation. Air nitrogen has long since passed the experimental stage.

I do not know who wrote my friend SNELL'S bill. Of course, as the chairman of the Committee on Rules he has not the time to write such a bill as that. It takes an expert. If Tom Martin, the president of the Alabama Power Co., or some other power company attorney, did not send it to Mr. SNELL, then I have made a very poor guess. There is not a pound of fertilizer in it. If my friend Mr. SNELL'S bill ever passes, there will not be a pound of fertilizer made, and the $47,000,000 of the people's money that went into that dam and the power house will go into the hands of the Alabama Power Co. for all time, and they will continue to put these prices on the people. They have not reduced the prices on power one penny since they began buying power at 2 mills per kilowatt from the Government at Muscle Shoals. I live within 5 miles of that dam, and I pay as much for power as anybody down in Mobile, or anywhere else in that section of the country.

I do not know whether we get that power. It goes into the system. They tell the Public Utilities Commission of Alabama that they can not reduce their rates by reason of getting this power at 2 mills per kilowatt-hour, and if this Congress adjourns without passing some legislation, they will continue to reap the benefits of it. They take only a small part of the capacity of the plant and the balance runs to waste.

I am very fond of my friend SNELL. He came down to Muscle Shoals at my invitation. I told the folks down there what a great and good man he was, and what a power he had in the House. They all got interested. I had my colleague Mr. BANKHEAD to come up to meet his chairman of the Rules Committee. We met Mr. SNELL at the depot of my home, Tuscumbia, with a brass band and gave him a great banquet. We also gave him an old-fashioned southern barbecue, and he said that he was entertained with hospitality that no other people could extend like the southern people. He made a speech. Iintroduced him, of course. I told what a great man he was, and what a power he was in the House. I told them that he could come up here and do anything that he wanted to about Muscle Shoals. Mr. BANK HEAD indorsed all I said about Mr. SNELL and added some. [Laughter.] He made a great speech. He, of course, told my friends and neighbors what an able and influential Congressman they had. [Applause.] He made a real agricultural speech, a farmers' speech, and I believe my friend is interested in the farmer. He made a great speech to this effect: "Now, this thing has been dragging along too long. If I had known how it was going, I would have come down here earlier. It is a shame and a disgrace. It is a reflection on Congress that this plant is not put into operation and that that power is not sold for what it is worth."

Mr. MOORE of Virginia. Could the gentleman tell us what else Mr. SNELL said?

Mr. ALMON. He said, "I am in favor of private operation of this plant. I think the Government ought to lease it, and if we can not get a satisfactory lease, then I am in favor of Government operation." [Applause.] I reminded him of that when this Morin bill came up, but he said, "Oh, I meant the right kind of Government operation." [Laughter.] The question is whether this bill is right or whether his bill is right. Mr. WRIGHT. Is the Snell bill a fertilizer bill?

Mr. ALMON. No; it is a water power bill, pure and simple. There is not an ounce of fertilizer in this bill. The bill under consideration was sent here by a Committee of Twenty-one, headed by my friend Mr. MORIN, of Pennsylvania, chairman of the great Committee on Military Affairs. Let me read the names of the members on that committee: There is Mr. MORIN, of Pennsylvania, who is the chairman; there is Mr. FRANK JAMES, of Michigan; Mr. WURZBACH, of Texas; Mr. REECE, of Tennessee; Mr. SPEAKS, of Ohio; Mr. WAINWRIGHT, of New York; Mr. FURLow, of Minnesota; Mr. JOHNSON, of Illinois; Mr. HUGHES, of West Virginia; Mr. HOFFMAN, of New Jersey; Mr. QUIN, of Mississippi; Mr. FISHER, of Tennessee; Mr. WRIGHT, of Georgia; Mr. GARRETT, of Texas; Mr. MCSWAIN, of South Carolina; Mr. BOYLAN, of New York; Mr. HILL, of Álabama; and Mr. CHAPMAN, of Kentucky-18 of the good and strong men of the House. The most of these 18 members who wrote this bill have given this subject 8 years of faithful and efficient study. Colleagues, stand by your committee. [Applause.] They have turned down all of these private bills on the grounds that they did not protect the interests of the Government. I want all of you gentlemen to be here on next Wednesday afternoon and stay here and pass this bill. [Applause.]

I see from the propaganda that is being resorted to by the opposition of this measure that the bill does not have the approval of the representatives of certain farm organizations. That may be true, but it does not mean that if the farmers themselves had an opportunity to know just what this bill means they would not indorse it almost unanimously. The legislative representatives of the farm organizations opposing this bill do not represent the views and best interest of the farmers themselves. Some of these representatives say they are opposed to Government operation. I did not favor Government operation of Muscle Shoals until I found it was that or nothing. What does the farmer care whether his fertilizer is made by the Government or a private corporation provided he gets it cheaper and a better grade or quality in a concentrated form, and saves millions of dollars in freight rates on fertilizer containing only about 12 per cent plant food. This bill simply means that the Government is to make fertilizer at Muscle Shoals and sell it direct to the farmers and farm organizations at actual cost of production, and without interest on the Government investment for the first five years, and then only 4 per cent per annum on money hereafter paid in as capital stock. Chile nitrate costs $47 per ton. Same amount of nitrate in cyanamide can be produced at Muscle Shoals for $23.56, with power that Government is now selling Alabama Power Co. for $3.35.

I wonder how any Member of this House, especially one representing an agricultural district, could defend his vote against this bill. I would dislike very much to undertake to defend such a vote before a constituency of intelligent farmers such as I represent, and such as my colleagues from agricultural districts represent. We owe it to ourselves, to the Government, and to the farmers of America to pass this bill. This same power and fertilizer lobby was here six years ago opposing the Ford bill which provided for private operation at Muscle Shoals. Examine the hearings on the Ford bill and your letter files, of you who were here at that time, and you will find that they were making the same claims. That is that Ford would put them out of business. The power monopoly feared Ford as a competitor. They knew that he would demonstrate to the public that the people were paying extortionate and unreasonable prices for power. The Fertilizer Trust did not want Ford as a competitor in the fertilizer business. They knew that he would reduce the price of fertilizer and make a better grade. So it is not Government operation but competition that they fear and oppose. [Applause.]

Mr. Charles J. Brand, secretary-treasurer National Fertilizer Association, has flooded the Members of Congress with publications for the past 30 days. One of his complaints is that under the Morin bill fertilizer is to be sold for cash, and that would inure to the detriment of the poor man who can not pay cash. They charge the man who buys on time about 15 per cent more than for cash, and 8 per cent interest additional. No doubt many farmers who buy on credit now would be able to pay cash if they could get the fertilizer for about one-third less than existing prices. As a further evidence of their interest in the farmer they object to that part of the bill which authorizes the Government to donate to the farmers 5 per cent of the products of the plant for experimental purposes. I wonder if they object to what the Government is doing in the way of furnishing farmers information through agricultural yearbooks, farmers' bulletins, and assistance rendered through the Bureau of Animal Industry in teaching farmers how to treat their livestock and improve the breeds. Is it not just as im