mediately, and I hope you gentlemen can see your way free to excuse them after they say what you would like to have them say, as they have an emergency matter to attend to. We have associated with us on the Defense Commission Mr. Gano Dunn, who is one of my personal aides in charge of power matters as they affect the whole defense program. Mr. Gano Dunn is a well-known electrical and mechanical engineer and has for many years been president and is now president of the J. G. White Engineering Corporation of New York, one of the oldest consulting and constructing engineering firms in the country, which designed and built the present 60,000-kilowatt steam station of the T. V. A. at Muscle Shoals. Mr. Dunn was the power expert member of the Nitrate Commission of the War Department prior to the World War and at that time made studies of the Tennessee River with reference to its suitability as a source of power for the manufacture of nitrates. In the lawsuit-this will amuse some of you-in the lawsuit which Wendell Willkie and the Commonwealth & Southern brought several years ago to test the constitutionality of the T. V. A. Act, he hired Mr. Dunn's firm to represent him against the Government. Mr. Dunn has previously been opposed to the Government's policy of entering into competition with private utilities, but he now strongly is in favor of this request of T. V. A. purely from the standpoint of the emergency at hand and the interest of the national defense. I have been over this matter for approaching 3 weeks now, with Mr. Dunn and the members of our staff, and I am perfectly confident, gentlemen, that from the standpoint of our aluminum production to meet the aviation program which Mr. Knudsen is responsible for, and a great many other developments in the southeastern section, we must have this added power. Mr. WOODRUM. And you cannot get it from private industry ? Mr. STETTINIUS. We cannot, sir, and it cannot be delayed for reasons which Mr. Dunn will bring out in his testimony. Not weeks but days count now, from the standpoint of speeding this work up so that we can get the full effect of the spring floods 2 years hence. NATURE AND COST OF PROPOSED PROGRAM With that introduction, Mr. Chairman, I will let Mr. Knudsen tell you about it. Mr. WOODRUM. The program calls for the erection of a storage dam and hydroelectric power plant to be built on the Holston River, near Jefferson City, Tenn., at a total cost of $36,000,000; then for the installation of steam-electric generating facilities at a cost of $10,500,000; Wilson and Pickwick units, $5,300,000; transmission facilities, $14,000,000-making a total of $65,800,000. Now you are asking for $25,000,000 in 1941, $29,800,000 in 1942, and $11,000,000 in 1943. Mr. STETTINIUS. That is correct, sir. Mr. WOODRUM. And the Council of Defense has been over that thoroughly and regards it as necessary and important, and that time is of the essence? Mr. STETTINIUS. I do not think I can say "the Commission," but Mr. Knudsen, in charge of production and I from the standpoint of materials, and Mr. Dunn, having jurisdiction of the power to be supplied, all definitely unite in the conclusion that this expansion is justified and must take place to meet the production ahead. I think it would be very helpful if Mr. Knudsen could add a word, and then Mr. Dunn can answer as to the details. ALUMINUM REQUIREMENT FOR PLANES Mr. WOODRUM. Mr. Knudsen, we will be very glad to hear whatever you have to say to us. Mr. KNUDSEN. I am not a power man; I am a manufacturer. My interest in this project is purely to see that we get aluminum enough or duralumin enough to build the planes with. I suppose you know the average plane takes about 5 tons of this stuff. Mr. WOODRUM. Five tons of aluminum? Mr. KNUDSEN. Yes; that is the average, and my interest here in this project is to get aluminum enough for the planes, and the average quantity per plane is about five tons, meaning both in the frame itself and in the parts of the motor that are made of aluminum, such as the crankcase, pistons, and cylinder head. And in this area where the T. V. A. is located, that is outlined by the General Staff as area E. We have areas A, B, C, D, and E which are satisfactory to the General Staff for plant location purposes, being away from the shore, and in this area E, besides aluminum plants, we have some other plants projected, the actual location of which I am unable to give you at this time, because the sites have not been picked; but they are in this area E. So that there will be a call for power beyond what will be required for aluminum. Mr. WOODRUM. And you cannot get it from private industry? Mr. KNUDSEN. Well, I do not know; frankly, I am not familiar with that. Mr. STETTINUS. I think Mr. Dunn can answer that. Mr. KNUDSEN. The power people will have to tell you about that. I can only testify as to the manufacturing end. Mr. O'NEAL. How long will it take to get into production with the money being asked for? Mr. KNUDSEN. That is something Mr. Dunn will have to answer. Mr. WOODRUM. Do you mean power production or aluminum production? Mr. O'NEAL. I mean with the money spent that is proposed here, how quickly will it bring results? Mr. DUNN. The steam will be ready in 18 months and the hydro in 24 months, provided you take prompt action; but there is a trigger action in this and, if the appropriation is not promptly provided, then there may be a whole year's delay, because you will miss the spring floods in filling the reservoir and with an empty reservoir you cannot get power even if your machinery is all installed. Mr. O'NEAL. I know you have looked into the possibility of more rapid development along that line, but I understand at Grand Coulee there is a vast amount of power to be developed, and that can probably be developed in less time than here. Is that correct, or am I incorrectly informed? Mr. WOODRUM. How about letting Mr. Knudsen finish his statement first, and then ask questions? Mr. O'NEAL. I thought he had completed his statement. Mr. WOODRUM. What else do you want to say about that? Mr. KNUDSEN. I do not know of anything else. Mr. WOODRUM. That is the whole story? Mr. KNUDSEN. Unless you want to ask me something. Mr. WOODRUM. I would like to ask you this general question, if you do not mind: How is the general work of the Defense Commission coming along? Is everything going satisfactorily? Mr. KNUDSEN. Well, you are a better judge of that than I am because, naturally, I have only been here a month and the time has been spent in getting the schedules for the requirements both of the A schedule, which covers the money appropriated here last month, and the B schedule which is coming up on the Hill here to Congress either this afternoon or tomorrow. We are trying to plan our work so that we can place all the contracts we have got money for now and at the same time we study the capacity or try to study the capacity so that we can handle the second program either with contract authorizations or with cash. Mr. WOODRUM. But you are finding cooperation, are you, in your work? Mr. KNUDSEN. Yes, sir; absolutely. We have nothing to complain about. Mr. WOODRUM. There is no holding back or failure to cooperate on the part of anybody that retards your work? Mr. KNUDSEN. No, sir. We try to work through the existing agen cies and act there purely on the basis of our experience to give them our judgment of what is right and what is wrong. Mr. WOODRUM. Referring to aluminum, the proposition is to build another aluminum plant there near this power? Mr. KNUDSEN. About that, Mr. Stettinius can tell you. We have split our work this way, that he brings the material up to the siding and then I cut it up; so that there is a straight division of our work. Mr. WOODRUM. He has to bring this aluminum up to you before you can make planes out of it; is that the idea? Mr. KNUDSEN. Yes, sir. Mr. LUDLOW. Is this power needed entirely for the production of aluminum? Mr. KNUDSEN. No, sir. Mr. LUDLOW. You are going to use it for other purposes, too? Mr. KNUDSEN. Some of them for munitions, some for other things for powder. Mr. LUDLOW. But the major part of it would be for aluminum? Mr. KNUDSEN. That is the thing I am mostly interested in at the moment, because in planes that is the important item; that is the major item in a plane. Mr. TABER. To what extent are you shy of your supply of aluminum or aluminum-factory capacity that can be operated by the industry existing now? Mr. KNUDSEN. I think there are some others here, sir, that will give you that information. Mr. TABER. Then all you are giving us is a sort of picture indicating that you feel that we need more aluminum capacity? Mr. KNUDSEN. Yes, sir. Mr. TABER. That is all you are giving us right now? Mr. KNUDSEN. That is all I can give you. Mr. TABER. And how much, in detail, you are not prepared to discuss with us? Mr. KNUDSEN. Except knowing that it takes 5 tons on the job, on the average. Mr. WOODRUM. All right; thank you, Mr. Knudsen. Mr. STETTINIUS. Mr. Chairman, in order to clarify the picture, let me say that Mr. Knudsen was not avoiding a discussion of production. Production is in our division, not in his division, and we are completely responsble for the aluminum study, and we have facts and figures on any question you may wish to ask with regard to aluminum. Mr. WOODRUM. Do you want to give them to us now, or will Mr. Dunn do that? Mr. STETTINIUS. Mr. Dunn can give them, or I can easily get them on the telephone, if necessary. USE OF BONNEVILLE POWER Mr. O'NEAL. Mr. Chairman, I would like to ask one or two questions of Mr. Dunn first. I want to ask about Bonneville as well as Grand Coulee. I understand that the generators at Bonneville can increase their power facilities, and Grand Coulee, as I understand, can increase their facilities in the near future. Mr. DUNN. Mr. Chairman, answering the first of Mr. O'Neal's questions, he is exactly right about it, and before we recommended this large block of power for T. V. A., we sought other places where we could get the power. We found a very good supply at Bonneville, and we are planning to take 60,000 kilowatts from there before we take this increase from T. V. A. Mr. O'NEAL. You can make more speed, then, by T. V. A. than at Grand Coulee? Mr. DUNN. Yes, sir. PROSPECT OF GETTING POWER FROM PRIVATE COMPANIES Mr. LUDLOW. Did you develop the prospect of getting it from private companies? Mr. DUNN. Yes, sir. Mr. LUDLOW. And ineffectually? Mr. DUNN. Yes, sir. Mr. LUDLOW. What was the problem, then? Mr. DUNN. No one company system can furnish it. It would have to be furnished by transmission lines coming in from several different companies. It would be a good deal more expensive than the present power from T. V. A. There would be long delays in negotiating such a supply, and we have got T. V. A. right down there where the main plant of the Aluminum Co. is. Now, it is good management, when you want to increase a manufacturing plant and a power supply, to increase an existing manufacturing plant at an 245544-40-2 existing power supply. They are both there right together in the Tennessee Valley. We found no other place as favorable as T. V. A. for this large block of power increase; and, as Mr. Knudsen said, it is not only for aluminum but for other national defense projects as well. The increase, in our opinion, is justified on the aluminum alone, but almost every day now there is some new national-defense demand for power directed in the region of the Tennessee Valley. For instance, since we first investigated this, there has been a contract signed with the Du Pont people for a powder plant, the Tennessee Powder Co. which requires 7,000 kilowatts, and this is already being increased to 14,000 kilowatts. There are other plants where the increased power for national-defense needs, besides this aluminum need, is going to add up to almost the full capacity that we are here recommending for aluminum. Besides this there is the normal growth in the demands for power by the municipalities that are already located in the Tennessee Valley and are being supplied. You cannot limit or cut off that growth; it would disturb the industrial and social conditions if you did. Of the increase that we are recommending, 50,000 kilowatts goes to supply the growth of what is already connected up with T. V. A. Does that answer your question? Mr. LUDLOWw. Yes. LETTER IN RE INCREASE IN POWER CAPACITY OF T. V. A. Mr. WOODRUM. Now I want you to start off in your own way and give us what the picture is, and then we will ask you questions. Mr. DUNN. We did not expect to come before this committee. We were under the impression when the President had sent in a recommendation several weeks ago, at the time the matter was before the Senate, that his recommendation would be approved. Before we approved this increase in power, I was asked by Mr. Stettinius to write him all the reasons that led us to approve the increase, and I have here a letter which was not intended to be presented to this committee, nor for publication, but as I read it over I rather think it is the best presentation of the case that we could make, especially as it was made as an interoffice explanation of the purpose in hand. I would like to put it in the record, if you will allow me. Mr. WOODRUM. All right, sir. Mr. DUNN. It is dated July 1, 1940, addressed to Mr. Stettinius, from Gano Dunn, and the subject is entitled Justification of approval of 300,000 kilowatts increase in power capacity of the Tennessee Valley Authority. It would bore you to have me read that letter in full, and therefore I will only take up the high spots in it, if you wish. Mr. WOODRUM. Yes; and put the whole letter in the record, if you will. (The letter referred to is as follows:) MEMORANDA FOR E. R. STETTINIUS, JR. MONDAY, JULY 1, 1940. From: Gano Dunn. Subject: Justification of approval of 300,000 kilowatts increase in power capacity of the Tennessee Valley Authority. In response to your request of June 24, Mr. Raynor and I have prepared a documented chronology of the Tennessee Valley Authority power increase |