relative cost of obtaining items, such as pitch which is necessary in connection with the process; the cost of assuring the proper supply of condensing water; the cost of powerhouse construction-that all turns on a lot of considerations. I have not examined all the figures. I read them, examined them in terms of price analysis of the same general factors by representatives of the Federal Power Commisison force, and I should say that the differencs were of the order in which a different assumption could be used in arriving at a decision one way or the other. In other words, there are many instances where you could pick out items of that kind. Mr. TERRY. Do you have any criticism to make of the values that were placed upon the weighted items? Mr. OLDS. I have not been able to get underneath those, as far as the engineers' studies that underlie the decisions of the Defense Plant Corporation was concerned. Mr. TERRY. Is it your understanding that if they took into consideration the balancing of these figures it would finally work out that it would cost more, or less, to go to Lake Catherine? Mr. OLDS. I do not think they took all the things- Mr. PLUMLEY. What is the name of the lake? Mr. OLDS. Catherine; a reservoir formed by the Remmell Dam of the Arkansas Power & Light Co. in Arkansas. Mr. TERRY. There are two lakes; one is Lake Hamilton, named after Mr. Hamilton, the president of the company. Mr. OLDS. I think that the figures are so close to each other that the decision could be made based on whether this man's estimate is better than that man's estimate, and being the case I think the location of the plant should be related to the availability of water transportation, which is at Camden, so that the plant, the aluminum plant which will be constructed, and the alumina plant also, will have a competitive value after the emergency is over, after the supply of bauxite has been exhausted. NEED FOR COOLING TOWERS Mr. TERRY. Would the question of cooling towers come into the picture? Mr. OLDS. Yes. Mr. TERRY. At one place? Mr. OLDS. I think that Sanderson and Porter, consulting engineers, in their estimates went into the possibility of the necessity of cooling towers in the Camden location. That was on the assumption that to put the entire capacity of a single plant, 140,000-kilowatt plant, in one location, involved the suggestion that you could handle it by different plants, putting one plant further down the river. Mr. TERRY. And if you put up two plants, one would need a cooling tower? Mr. OLDS. The first plant would have a cooling tower; on the other hand, you have got to find a proper place for construction; and I understand that the Lake Catherine site involves precipitous terrain. Mr. TERRY. At Lake Catherine you have a high volume of water; does that assure a greater volume of water than the Ouachita ? Mr. OLDS. It would have a lesser volume of water, but the lake Is of sufficient magnitude; the available area would be enough to meet normal requirements, as I understand the situation. Mr. PLUMLEY. Where is Lake Catherine located, geographically? Mr. TERRY. Near Hot Springs, Ark. Mr. OLDS. Yes. Mr. TERRY. As far as you know, is the lake a natural lake? Mr. OLDS. I could not tell you that. There is plenty of land there, and I understand a considerable summer resort. Mr. TERRY. Do you know whether that is owned by the State, whether it is public land or privately owned? Mr. OLDS. Privately owned by the Arkansas Power & Light Co. Mr. TERRY. Do you know whether the Government, or those who will build the plant, have acquired any permanent water rights in Lake Catherine? Mr. OLDS. I do not know. I think the Government will build the plant. Mr. TERRY. Yes. How far is Camden from Lake Catherine; do you know? Mr. OLDS. I do not know the exact distance. I should say it is. between 60 and 100 miles. Mr. TERRY. Around 80 miles? Mr. OLDS. Yes. WATER TRANSPORTATION ADVANTAGES IN THE OUACHITA LOCATION Mr. TERRY. Do you know what would have been the advantages of the water transportation on the Ouachita River? Mr. OLDS. The advantage is you can barge bauxite up from the Gulf. There are two factors in the situation; one is the question whether this country shall put the pressure on its own bauxite deposits, which are relatively limited, which will exhaust them within a relatively short time, by Mr. TERRY. Well, if the Government brought bauxite, or if bauxite is brought from abroad-from South America-it would not be brought in barges, would it? Mr. OLDS. No; it would be brought in steam vessels and transshipped into barges and brought up the Ouachita River. Mr. TERRY. Would that be feasible, if the Ouachita Channel is not more than 6 feet? Mr. OLDS. It would be; yes. Mr. TERRY. It would be feasible at 6 feet? Mr. OLDS. It would be feasible; yes. Of course, there is a 9-foot channel, too. Mr. TERRY. Some place in Louisiana? Mr. OLDS. Up to Calion, Ark., I believe. Mr. TERRY. And then 6 feet? Mr. OLDS. And then 6 feet up to Camden. SUPERIORITY OF CAMDEN LOCATION Mr. TERRY. Your opinion was that in the long run, after this emergency is over, that on account of water transportation it would have been better to have been at Camden? Mr. OLDS. Yes; that is right. Mr. TERRY. The present location is nearer the bauxite fields? Mr. TERRY. Probably within about 20 miles of them? Mr. OLDS. 20 or 25 miles. Mr. TERRY. And it is also very much nearer the alumina plant which will be built near Benton, probably within 20 miles of that? Mr. OLDS. Yes. Mr. TERRY. Would the fact that the alumina and bauxite are much nearer the present location of the aluminum plant be an advantage over the Camden location which is farther away? Mr. OLDS. In the first place, I think it is a very definite question whether the alumina plant should be located off water transportation. Mr. TERRY. The alumina? Mr. OLDS. The alumina as well as the aluminum plant. I think that there is a definite possibility that the alumina plant ought to be located on water transportation so that it can be used for the reduction of imported bauxite after the exhaustion of the Arkansas bauxite. Mr. TERRY. Did you make a recommendation as to the location of the alumina plant? Mr. OLDS. We did not. Power did not enter into that question to so important a degree so we were not called upon. Mr. TERRY. You were not called upon? Who called upon you for recommendation on the aluminum plant? Actu Mr. OLDS. The main call I suppose came from the O. P. M. ally, at the same time, we had calls from several different quarters in the Federal Government, who were all concerned with this matter of plant location. DIFFERENCE IN COST BETWEEN PLANT LOCATED AT LAKE CATHERINE AND AT CAMDEN Mr. TERRY. Do you know, in the final analysis, the difference in cost between the Lake Catherine location and the Camden location? Mr. OLDS. As I say, I do not think that there are yet definite figures that would permit of an accurate statement on that, because we found, for instance, when the question was under discussion as to what the production cost of power and a gas-fired steam plant at Camden would be-a Government owned and operated plant-that there was a range of as much as 66 percent-50 to 66 percent-in the idea of what that power would cost, dependent upon the assumptions used by the person whose pencil was doing the figuring; and until I have got thoroughly under these figures and under all the details of these figures, and have them appraised by our engineers, I do not know to what extent there is special pleading involved in the figuring. One of our experts, who is now assisting Mr. Krug, in the O. P. M. Mr. TERRY (interposing). What do you mean by "special pleading in the figures"? Mr. ÖLDS. I mean it is very easy to, for instance, if you are going to determine what the cost of electric power is from a steam plant over a 25-year period, get a very low cost, if you assume that that plant can be expected to deliver power practically 100-percent-capacity factor for 25 years. It is an unreal assumption. No steam plant can do it no steam plant without reserves. But you can get a figure which is what I call a figure reached by statistical special pleading or engineering special pleading, which will give you a figure of something under 2 mills a kilowatt-hour. Mr. TERRY. You approve the use of the so-called sour gas in producing power for that plant, do you not? Mr. OLDS. Treated sour gas. Mr. TERRY. How? Mr. OLDS. Yes. It would be treated sour gas. Mr. TERRY. And they take the sulfur out of it? Mr. OLDS. Yes; that is right. Mr. TERRY. And then it is ready for use, for heat? COMPARATIVE COST, BETWEEN THE TWO LOCATIONS, OF GAS Mr. OLDS. Actually the gas supply, which is very important in the reduction of bauxite to alumina, as well as in the energizing of this power plant, can be obtained more cheaply at Camden than it can at the Lake Catherine or at the Benton location. Mr. TERRY. The idea is, as I understand it, to run a pipe line from the gas field in lower Arkansas to Lake Catherine. Mr. OLDS. That is as I understand it. Mr. TERRY. And I saw in the paper that would cost a thousand dollars a mile for 80 miles. That was in the paper a few days ago. That would be the cost of transporting the gas from the gas field to the Lake Catherine location. DISTRIBUTION OF ENERGY FROM GRAND RIVER DAM I saw in the paper the other day, Mr. Olds, that the Grand River Dam which was erected on the P. W. A. loan and grant had been taken over by the Federal Works Administration, and that the power would be distributed by one of the Government agencies. Do you know by whom that will be distributed, the power of the Grand River Dam authority? Mr. OLDS. I do not know whether any decision has been made on that or not, but I assume that at least a portion of it would be distributed by the R. E. A. or its cooperatives-R. E. A. cooperatives. As I understand it, they already have a contract for a certain portion of the Grand River power output. Mr. TERRY. The R. E. A. has? Do you know whether or not the contracts that have been outstanding there with private power companies, if any, will be abrogated when the Government takes it over? Mr. OLDS. I do not know what decision will be made. They are revocable for defense purposes on 6 months' notice. QUESTION WHETHER OFFICE OF PRODUCTION MANAGEMENT IS ASSUMING POWERS OF OTHER AGENCIES (See p. 165) Mr. COLLINS. Mr. Olds, you indicated earlier in the testimony, if I understood you correctly, that O. P. M. had set up within its own organization a set-up similar to the Federal Power Commission, is that correct? Mr. OLDS. It seems to be in process of setting up. That is, it is building up a staff. For instance, it is beginning to duplicate some of our work in gathering facts in connection with this southeastern situation. Mr. COLLINS. And if that were consummated it would gradually take over the duties and responsibilities of the Federal Power Commission during this emergency? Mr. OLDS. So far as the defense. Of course, the Federal Power Commission has definite legislative authorization in section 202 (c) of the Federal Power Act and section 311, for its defense-power work. I would assume, unless some order superseded that, that that authority would hold. Mr. COLLINS. Do you know to what extent O. P. M. has done that with other governmental agencies? Mr. OLDS. I have not investigated it completely. As I understand the intent of Executive Order 8875, which set up S. P. A. B. to preside over priorities, the intent was that the O. P. M. would be the coordinating agency, but would utilize existing authorized governmental agencies within the terms of their authority. Mr. COLLINS. And is it your opinion that they have overstepped the power that they have under that Executive order? Mr. OLDS. I think it is very questionable, the policy they are following, whether it conforms with that-what I understand to be the intent of that order. ADAMS PLANT, NIAGARA FALLS Mr. PLUMLEY. Mr. Olds, you referred to the electrical power set-up in the metropolitan area in New York. Am I correctly informed that the original Adams plant at Niagara Falls has been reopened? Mr. OLDS. Yes, Sir; operating, getting all the capacity out of it that they can. Mr. PLUMLEY. By whom was it reopened? Mr. OLDS. It was reopened by the company on authorization from the Federal Power Commission. Mr. PLUMLEY. To what extent will the power generated there meet or supply or undertake to meet and supply any deficiency in the power? Mr. OLDS. It won't meet the entire deficiency. The first authorization of Congress, based on an exchange of notes with Canada, agreeing to an additional diversion of 5,000 cubic second-feet, made possible-well, they originally expected to get about 64,000 kilowatts of power out of it. Actually, because of the condition of the equipment and various other limitations they did not get as much as they expected. Probably when they install some additional equipment they will get more, but that power was all immediately taken up, allocated, to companies like the Carborundum Co., the Vanadium Co., and Union Carbide, and other of those big defense plants at Niagara Falls, and the allocations fell short of what those companies wanted or needed for the expansion in defense production that was being asked of them. I do not know whether the Senate has finally acted on a further exchange of notes with Canada for the use of 7,500 cubic second-feet. I saw it was reported out by the Foreign Relations Committee. That additional diversion, however, will add only about 30,000 kilowatts probably of continuous power to that available to the Niagara Falls area, and that will all be needed to carry a load of the Union Carbide subsidiary, the Electro Metallurgical Co., which will have to be dropped by Ontario Hydro because of the pressure of defense load in |