Evening Star Newspaper, April 4, 1930, Page 36

2k ; . I want to say that the dere- next most essential of fer- dmep;nment of our o:cv‘em 3 H Muocto i et “The President of the farmers of our Southern country fl * * ig further authorized to construct, E H"AI 5 BI IS "l l maintain and operate, at or on will not be greatly benefted by houses the of fertilizer under the . impro navigation, power d equipment and % :ere‘:e deal of power. However, of company, under the bill | 4ion, gy g SEF g Predicts’ Passage of Norris Proposal. hgresum the opinion that disclos- mres before the Senate lobby committee have made it impossible to accept the American Cyanamid Co.’s bid for Muscle Shoals, now before the House, Benator Kenneth D. McKellar, Demo- crat, of Tennessee, predicted in a radio address last night that Congress will again pass the Norris Government oper- ation bill and that the measure will be given President Hoover's approval. Speaking In the National Radio Forum, arranged by The Washington Star and sponsored by the Columbia Broadcasting System, Senator McKellar described in detail the various proposals advanced for operating Muscle Shoals and how it would be operated under the Norris bill. His address was broad- cast locally from Station WMAL. “The American Cyanamid Co.s bid, offered in the House, has no chance in the world for passage, in my judg- ment,” he said. Describes Worthington as “Lobbyist.” Senator McKellar described J. W. | Worthington, chairman of the executive committee of the Tennessee River Im- provement Association, which advocated the proposal of American Cyanamid for Muscle Shoals, as a “lobbyist in the interest of the various private interests here for many years.” Recalling that Worthington had been quoted as saying that President Hoover would not sign the Norris bill, Senator McKellar said, “I do not believe this lobbyist speaks for the President.” “I am absolutely convinced,” he as- serted, “that if the Congress passes this much-improved Norris bill at this session, the President will not with- hold his signature, but will promptly attach it.” The criticlsm that has been visited upon Congress for failing to dispose :“gdlucle Bhoals has not been just, he “If we had passed some of the bills that have been proposed for the private ownership and control of these plants, @ great injustice would have been done.” he declared, “an injustice that is not likely to be done now. Would Open Navigation. Under the Norris bill now in the Senate, he sald, navigation will be opened aiong the Tennessee River from Knoxville to its mouth; storage dams will be added to aid in flood relief of the lower Mississippi Valley: cheaper power will be furnished, together with Teduction of fertilizer costs, and the ‘whole property will be available to the Government in the event of national emergency. In addition, he said, the development should attract a great many manufacturers to the Mississippi Valley. hs:mmr McKellar's address follows, Ladies and gentlemen of my radio @udience: I have been asked by The Washington Evening Star. to talk to you about Muscle Shoals, the bill for the disposi- tlon of which is now being argued be- fore the Senate. Muscle Shoals is sit- uated on the Tennessee River a short Way across the Tennessee line in Ala- bama. The Tennessee River is one of the longest and largest rivers in the United States. The main river rises in Virginia, flows in a southwesterly direc- tion through East Tennessee by the ity of Knoxville, by the city of Chatta- nooga and then it dips down across the Alabama State line, running by the little eity of Decatur, Ala., and thence on to Muscle Shoals. Muscle Shoals is sur- ryounded by three beautiful little towns, Florence, Tuscumbia and Sheffield. From there, the river turns north again and flows all the way across Tennessee and Kentucky and empties into the Ohio River. Because of the shoals or rapids in this river, it has never been navigable because of Muscle Shoals and it has rapids both above and below Muscle Shoals. The purpose of building locks and dams on this river is two-fold. First, by the building of these locks and dams the river can be made navigable from Knoxville, in East Tennessee, some 600 miles to where the river empties into the Ohio and thence, of course, down the Ohio and down the Mississippi to the Gulf. For 50 years or more it has been the purpose of the Govern- ment by means of locks and dams to open this river up to navigation, but only since the advent of electric power has the purpose been two-fold. Since the discovery and utilization of elec- tric power and the great importance to our modern life of this great instru- mentality, it has become more important to build the dams for power pur- poses than it is even for navi- gation purposes. There are three dams necessary at Muscle Shoals in order to make the river navigable. ‘They are commonly referred to as Dams No. 1, No. 2 and No. 3. Dam No. 1 is farthest down the river, Dam No. 2 is the Wilson dam and Dam No. 3 is a short distance above Dam No. 2. By the erection of these three dams and the putting in of these locks, the river ;e'ccmu navigable up to Chattanooga, nn. Explains His Connection. My eonnection with Muscle Shoals: Muscle Shoals is only 150 miles from my home in Memphis. Ever since I have been in public life T have been in- tensely jnterested in the building of the dams there. Prior to the Great War private capital was not interested enough to build the dams for power g;rpuu and we could not induce the vernment to build them for any pur- pose. The Great War gave us our op- rtunity. Of course, every one knows it the air all around us is full of ni- trates and all intelligent people know that nitrates are necessary both for the manufacture of explosives in time of war and fertilizer in time of peace. Since time immemorial we have gotten our nitrates from Chile, where nitrate beds abound in the greatest profusion. ©Of course, in the war our only supply of nitrates from Chile could have been eut off and the United States was in & bad condition because she manufac- $ured no nitrates from the air at that time, but processes had been discovered by which, from the use of very great E:er. nitrates could be extracted from alr. So as soon as the war came on, or even when it was thought it might | come on, many suggestions were made | 8s to how our Government could get As a member of ouse, I introduced an amendment the Army reorganization act of 1916 roviding for an appropriation of $20,- ,000 to build a dam at Muscle Shoals for the manufacture of nitrates from the air at that place. When this bill to the Senate this provision was jected to principally by Senator ere was in & power site almost if not quite as good as the one at Muscle Shoals, and naturally he did not want Muscle Shoals provided for the bill. And therefore, under the terms of the act of 1916, the naming of uscle Shoals was stricken out of the act and President Wilson was authorized select the site for such dam and plant, and in the Summer of 1917 he selected Muscle Shoals as the place. It the provisions of this act %&‘Dlm No. 2 was begun and com- Now, my friends, you have heard for number of years that the Congress| to very much at fault for not di what is us and other uasefu! products. \ It will thus be seen that the Presi- dent of the United States has full au- thority now under this law of 1916 to manufacture fertilizer at this place for the benefit of the farmers and to dis- pose of the current under the act. He is just not exercising that power, that is all. Mr. Coolidge would never exer- cise that power and neither has Mr. Hoover exercised it. I take it that both President Coolidge and President Hoover have not belleved in Govern- ment operation of this plant, and not believing in it they have just not exer- cised the powers that the present law gives to them. I quote this law for the purpose of showing that the Congress has not been derelict and if there has been any dereliction it has been upon the part of the executive and not upon the part of the legislative branch of the Government. | But over and above all that, the pres- | ent law provides: “The plant or plants provided for under this act shall be constructed and operated solely by the Government and not in conjunction with any other industry or enterprise carried on by private capital.” Since the plant was completed in 1925 the Government has allowed the Alabama Power Co. to take so much of the current generated and which was only a small portion of it, as it desired, paying the Government about one-fifth of a cent per kilowatt for it. In thus turning this power over to the Alabama Power Co. for operation it seems to me that the Executive has violated the plain terms of the law. It has not been operated by the Government at all, but has been operated in conjunction with the Alabama Power Co. So if any blame attaches, it attaches to the Ex- ecutive and not to the Congress. Before talking about the various bills that have been introduced for the oper- ation of this dam, I want to tell what is there. Cost of the Dam and the Sieam Plants. The Government now owns dam No. and the steam plants at Muscle Shoals. These with various other im- provements have cost the Government up to this date about the sum of $140.- 000,000 and will probably cost much more when completed. Of course all this was not spent on the building of the dam. Nitrate plant No. 2 alone cost $67,000,000 and the other plants and improvements cost about $25,000,- 000, while the dam itself and the steam plant cost about $50,000,000 in round numbers. The Government has a large amount of property there. We bought sufficient land and bullt a town at nitrate plant No. 1, and another town at nitrate plant No. 2. We constructed over 48 miles of standard-gauge rall- road track on the property. We have 13 locomotive engines. There are & number of other kinds of cars and railroad equipment. At nitrate plant No. 1 we have 112 permanent houses. At nitrate plant No. 2 we have 186 permanent residences. The houses at the nitrate plants are fully equipped with every modern convenience. They have electric light, heating plants, run- ning water, bath rooms, and in every way modern. There is also & large water filtration plant. The towns are about 5 miles apart and are both capable of almost indefinite expansion. There are some five hundred other temporary houses. Altogether there are 30 miles of macadamized roads on this property. ‘There are 28 miles of sewers, 23 miles of water mains and 54 miles of electric light facilities. There is a furnished hotel of 100 rooms at nitrate plant No. 2. We own 4,200 acres of land on which these plants are built. It is said that there is over $2,000,000 of course this must have sadly deterio- rated in this time. ‘The amounts to about 100,000 and about 300,000 of secondary power for six months in the year. At times we have 1,200,000 horse- power. We have a steam power plant at nitrate plant No. 2 capable of pro- ducing 120,000 horsepower. All of the units have not yet been installed, only 0,000 horsepower being now installed. So it is seen that with the steam plant used in connection with the water plant at dam No. 2 there can be generated now all the year around considerably more than 200.000: electric horsepower. In any consideration of Muscle Shoals the dam and the nitrate plants should be considered separately, the dam hav- ing cost about $50,000,000 and is a wonderful property, probably worth several times it sum, while the ni- trate p mtmm,ooo_ipl?o he worth um: or nothing. : gures an these facts should be kept in mind. The Cyanamid Plants. It is claimed that both nitrate plants No. 1 and No. 2 are out of date and the processes are out of date and that neither nitrates for explosives or war purposes or nitrates for fertilizer pur- poses can be successfully manufactured in these plants. It is believed that the synthetic method of producing nitrates is much cheaper and takes vastly less electric power. I am inclined to think that this is 0 and that the larger part of money spent in nitrate plants 1 and 2 is that much money gone, and it amounts to the larger part of the cost of Muscle Shoals, some $§0,000,000. It must just be considered & war loss. On the other hand, the dam itself and the steam plants, of course, are far more veluable than the cost. They are prob- ably worth $200,000,000. tric Pl had been properly handled since it has been completed by the Government, as tmfiunt law 1x-equlred. "}w wt;:ld l;lu:: [ ly gone a long way toward pa; for itself by this time. Instead of that, it has been used by the Govenment merely as an adjunct of the Alabama Power Co. business. In other words, the Alabama Power Co. is the only company that has had a transn.ission line into the plant and whatever power it needs it gets from the Government under a 30-day con- tract, I believe at about two mills per kilowatt, or one-fifth of a cent. Of course, it takes only a very small por- tion of what is produced or can be pro- duced and the result is that it is pay- ing the Government a very small in- come. Indeed, I doubt if the purchase price from the Alabama Power Co. pays the cost of maintenance, all told. The Picture. So that the picture of this plant is this: Way down on the Tennessee River where it dips over into Alabama, right near the three thriving towns of Flor- ence, Tuscumbia and eld, has been constructed by the Government one of the greatest dams ever constructed any- where. ‘The actual value of this dam for power purposes is probably several times what it cost to eonstruct it. If the Government sold all the power gen- erated and even at one-fifth of a cent, it would make a splendid income on money ‘invesf d probably recoup its losses on the $ oo(r,'cr)go nitrate n?ln& History Since ‘Completion. In 1919, when our Repul & speech which he said that he was - ding any money on Musc! :that m’oonm” called | there was a liability instead - other | asset; that he did not believe in throw- trying to get Muscle Shoals make it appear at all Congress has been very duty in not passing a of Dam No. 2 and the erected there during want to say that the Con- been derelict in its duty ing good money after bad money, and 80 there was no appropriation made that year to continue work on the dam, Some time after this Henry Ford made lants and other property, having | SENATOR KENNETH D. McKELLAR. and he might have manufactured fertil- izer there as he promised to do, but, after a long consideration, he could not get the bill through Congress and final- 1y withdrew his offer, The only good that Ford's offer ever did in my judgment was that it fixed the mind of the country on the fact that Senator Smoot was mistaken about this being a lability instead of an asset and that the Government had a really splendid plece of property there. After the Ford offer was withdrawn the various power companies began to make strenuous efforts to get control of the plant by lease and for prac- tically no compensation. They re- vamped the Ford offer and bills were introduced to carry out their plans. Mr. Underwood vigorously worked for the water power companies’ progoul. but he could never get it through the Congress. The American Cyanamid Co., manufacturer of fertilizer and other things, became an applicant for it and, I beiieve, at one time got its bill through the House, but never got anywhere, And thus the years have passed by. First with Ford trying to get the property; next, the water power com- panies, third, the fertilizer com- pani In the meantime, the Presi- dent. in my judgment, disregarded the law under which the plant had been built and had virtually turned this over to the Alabama Power Co., contrary to that law. There was no reason why he could not have operated the plant at all times and sold the power and manufactured fertilizer, but he did not do it. and thereupon Senator Norris and various other gentlemen, introduced bills for the purpose of hav- ing the Government operate this plant as a manufacturing plant. Many such bills were, I think, introduced. At the last session of Congress Senator Norris succeeded in putting his bill for Gov- ernment operation through the Senate and it was adopted in the House, but President Coolidge vetoed it by a pocket veto. In this connection I would say that I had always sympathized with Senator Norris’ plan of having the Gov- ernment operate this plant, indeed, m: bill was almest identical: but in his bill, which passed a year ago, he included in it the building of Cove Creek Dam and dam No. 3 and made no provision for Tennessee’s rights in the bullding and tion of this dam, and, there- fore, I had to oppose it and did oppose his bill very vigorously. In the present bill, he has put in a section protecting Tennessee’s rights and I am a very strong advocate, therefore, of the pres- ent bill. Present History. ‘This brings me to the present situa- tion. Representative Wright of Georgia introduced a bill in the House to lease this property to the American Cyana- mid Co. and providing also for the bullding of Cove Creek dam and leasing that property to the American Cyana- mid ‘The argument for this bill was that the Government would get rid of the plant. That it was a millstone around the Government’s neck and that it ought to get rid of it. That the Government ought not to gv into the business of manufacturing fertilizer, and it should not go into the business with private companies. A considerable sentiment was built up for this bill. | Lobbyists and propagandists with all of distributing power in competition | kinds of money have besieged the Con- gress, as has recently been shown in the lobby investigation. In the mean- time Senator Norris reintroduced his bill for Government operation of its|or own plant. In my judgment, if the Congress were to approve the American Cyanamid Co.’s bid, it would cost the Government an enormous sum of money without any return whatsoever and would produce a scandal of major proportions. Indeed, after a careful examination of the American Cyanamid Co.’s bid, as shown in this bill, in my judgment it would e better for the Government to deliver a warranty deed to the American Cyanamid Co. on all these properties in fee simple without consideration and without limitation, let or hindrance. In other words, as I understand it, in the American Cyanamid Co.’s bid we virtu- ally do that with Muscle Shoals and then agree to build Cove Creek dam and dam No, 2 for the company &t & cost of some $40,000.000. As I see it the plan is a preposterous plan so far as the interests of the Government are concerned. Under present conditions I belleve it would ruin any Congressman or Senator who voted for it. ‘The Norris Plan. ‘The Norris bill provides for a Govern- ment corporation of three members to be appointed by the President and con- firmed by the Senate, one belonging to one political party and two to the other. and to these gentlemen are to be turned over the plants at Muscle Shoals, steam plants, nitrate plants and Wilson dam and a plant to be built at dam No. 3. just sbove Muscle Shoals in Alaba and also the great dam to be buflt Cove Creek, a little north of Knoxville. Under the terms of this bill, this cor- poration is to have & general manager and two assistant managers. One assistant is to conduct the fertil- izer business under the terms of this act, and these nitrate plants and all power necessary to conduct them for fertilizer purposes or to conduct new and up-to-date plants for fertilizer pur- poses. are turned over to the fertilizer managers. This first fertilizer plan as set out in the bill is not only feasible but it is the only feasible plan of securing cheaper fertilizer for the farm- ers of this country. I have no doubt that this organization will not only be able to make fertilizer out of nitrates secured from the air, but that it will soon bring down the price of fertilizers all over the country and in that way will do a great and permanent good. All other private ownership bills have provided for the experimentation and manufacture of fertilizers. But what a foolish thing it would be for the Gov- ernment to expect a private company already engaged in the fertilizer busi- ness to bring about a system of manu- facturing cheaper fertilizers for far- mers. It is such a silly idea that it seems to be preposterous. It would be | like caging a rabbit in a briar patch. Of course, the farmers would never get anything out of it if it were turned over to a private company. But this Government corporation, looking to the interests of all the farmers, will in my judgment, find a cheaper plan for pro- ducing nitrates and it is certain that fertilizers will be made cheaper. This is especially true because just a few miles away in the middle part of the State of Tennessee, is a vast and un- limited supply of phosphate rock, the Bond Bread.” by itself You sometimes hear that some other loafis ““as good as When people want to speak in the highest terms of anything, they say that “it is as good as gold.” Of course, it is not as good as gold unless it is gold, and no bread can be as good as Bond Breadunlessitis Bond Bread. After all—zbere is no bread like Bond The bome-like loaf an offer for the dam and plant, a very small '::e;( b':: Mr. m.mum the atten! coun! even nnufler!orltnndltvmfldmm & small W on the money invested course, this will have all the power it desires for fertiliger Eurpuu In other words, the Narris follows the . original act in holding to make nitrates for explosives in time o f war, but in peace time dedicated first 8. Ef: ‘manufacture of fertilizers for the farmers of thc country. Power. course, of the main considera- = h:g: the chief consideration i ltml.l\‘::creflshuh, at dam No. 3 and |ing e l]l“ u;l‘del 1 e wer. ‘The bill prot or & 'o? the power business. fimm plant over to & Government corpora- tion in m;fl:utmem. affords the way by which the building of Muscle Shoals nd dam No. 3 and Cove Creek dam will do the people of the country d'hfl 07" ‘M"'lfi plants, the ee of 3 “e;t::“uufi'l:ce. I wish to quote section f the bill* 10"& i.:hhmby declared to be the policy of the Government to distribute the surplus power generated at Muscle Shoals equitably among the States within transmission distance of Muscle hoals.” ? on‘m again I quote from section 11 of i e bill: “That if any State, county, munici- pality or other public or co-operative organization of citisens or farmers, not organized or doing business for profit, but for the purpose of supplying elec- tricity to its own citizens or members any two or more of such munici- palities or nizations, struct or agree to construct a transmis- costs them considerably less than one- fifth of a cent to luce and not over tribute it. They a extraordinary therefore, making municipalities or Counties of even the States, these or- | {hc oty 0 foasoR of the damming of the water at dam No. 3. friends, if the Norris bill bring about (1) naviga- the Tennessee River froi Creek and get the power of the Gove ernment and build their local trans- mission themselves and thereby | tion greatly reduced the their citisens. After buying this from the Government, these tions can employ a com) tribute it or they can pul own distributing company and in either rices will be reduced enor- have no doubt if this bill goes into effect and is properly carried out by the executive, the price oa current in M.mni ‘Ten- bly nou‘ t‘:u m"l; - wer Cosf people of 3 To my mind, it is price of power to Torsge dams. that Wil M- very Sk sf ams aid very mucl in flood relief of the lower Mississip, (3) It will be of tremendous aid to Alabama, 'x“ennemee and all :ll:: much cheaper lronr for all those who ive in transmission dis- it will reduce these plan (4) It ought to attract manufacturers verywhere to come to this m"flllv. (:; It will no doubt h’hll! manufacture of only | for the farmers. (6) It have been done—an injustice that is not likely to be done now. The American Cyanamid Co.s bid, offered in the House, h‘;: no chance in out_upon recent investigation mldel;‘ylthe Senate . | lobby committees have shown beyond doubt that it is utterly impossible for the Cyanamid bill to pass. The Norris Government operation bill has already passed both Houses. It will pass again and I believe that President Hoover will sign it. I can't imagine what ex- cuse he could give for not signing it. I saw in the papers yesterday a state- ment by Col. J. W. Worthington to the effect that the President would not sign this bill. Col. Worthington has been a in the interest of the various Iprlute interests here for many years. I do not believe that this lobby- ist speaks for the President of t:: vinced that It the Congress Som e B ol much improved Norris bill at this ses- sion of the Congress that the President will not withhold his signature, but will promptly attach it. Grhe PALAIS ROYAL G STREET AT ELEVENTH TELEPHONE, DISTRICT 4400 Saturday! 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