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As shown on the summary statement presented here- | projects as part of the third supplemental defense power with, an appropriation of $136,100,000 is requested for program, 14 hydro generating units and 3 steam genthe fiscal year 1943. Of this amount, approximately erating units at other plants as parts of the second and $88,500,000 will be required to complete the emergency third supplementary programs, and extension of the Fort power-supply facilities started in prior years. In addition Loudoun Dam across the Little Tennessee River. to this $88,500,000, a considerable proportion of the The schedule for the completion of the Kentucky Dam balance is directly related to the defense emergency. and Reservoir has been advanced to provide for all five For example, the schedules for the completion of the generators to be in service in 1944 instead of in 1945. Kentucky and Fort Loudoun projects have been moved The estimates for the Pickwick Dam and Reservoir proforward a year to assure increased power supply for vide for part of the cost of a unit added under the third defense industries. Also, the expansion in phosphorus- supplementary program, those for the Wilson Dam and producing capacity provided in the estimates for fertilizer Reservoir for part of the cost of four additional units plant is necessitated by the emergency, as more than added under the second and third supplementary prohalf of the Nation's existing capacity is needed for military grams, those for the Wheeler Dam and Reservoir for part purposes and the balance for producing concentrated of the cost of two additional units provided for by the phosphates for shipments to the nations resisting aggres- third supplementary program, and those for the Gunterssion. The development activities program has also been ville Dam and Reservoir for part of the cost of one addisubstantially revised to meet emergency needs, and the tional unit provided for by the third supplementary estimates under general assets include provision of service program. facilities necessitated by the expansion of emergency The estimates for Hales Bar Dam and Reservoir addiactivities. In addition to the work contemplated by tions provide for continuation of navigation improvethe estimates presented herewith, the Authority is also ments and leak stoppage. Those for the Chickamauga engaged in modernizing Nitrate Plant No. 2 at Muscle Dam and Reservoir provide for part of the cost of an Shoals for the War Department and is aiding the Federal additional generating unit provided for by the third supWorks Agency in the construction of defense housing in plementary program, and those for the Watts Bar Dam

The estimates are described in some detail in and Reservoir for completion of the project as originally the following paragraphs.

planned and part of the cost of the addition of two more

units under the second supplementary program. Those NAVIGATION, FLOOD CONTROL, AND POWER PROGRAM

for the Fort Loudoun Dam and Reservoir provide for

part of the cost of completing the project as originally Supporting Statement No. 1 presents the actual and planned plus two additional generating units and a diverestimated costs under the asset accounts of the naviga- sion dam which will add the lower portion of the Little tion, flood control, and power program. The first section Tennessee River to the reservoir. of that statement covers the construction of the major The estimates for the Hiwassee projects provide for unified system projects. These projects include tho 4 completion of the Chatuge, Nottely, Ocoee No. 3 and on the Hiwassee River and its tributaries approved as a part of the second supplemental defense power program, unit at the Hiwassee Dam. The Cherokee Dam and the Fontana, South Fork of the Holston, and Watauga Reservoir will be virtually completed in 1942 at a saving

the area.

| of an

of $3,000,000 under the original estimate. The estimates It will be noted that although there will be several for the Fontana, South Fork of the Holston, and Watauga additional projects in operation in 1943, the estimate for projects provide for continuation of these jobs, approved common expense in that year is only 8 percent higher in the third supplementary program. The estimates for than in 1942. the Watts Bar Steam Plant include part of the cost of the fourth 60,000 kw unit, and those for the Sheffield

FERTILIZER PROGRAM Steam Plant provide for completion of the installation of an additional 40,000 kw unit, both provided for in the The increase in the estimates for asset accounts under third supplementary program.

the fertilizer program for 1943 over 1942 is more than The estimates for investigations for future unified accounted for by inclusion of $3,000,000 to start construcsystem projects are for continuation of activities which tion of a Gulf coast plant to manufacture calcium have heretofore enabled rapid and efficient expansion of metaphosphate. construction to meet emergency power needs.

The first item under these accounts provides for purThe item “Transmission and other electric plant" in- chases of phosphate-bearing land and mining rights cludes provision for necessary expansion of facilities for therein as tracts are discovered which warrant acquisidelivery of power to the Authority's customers; for inter- tion. During 1942 and 1943 it is planned to purchase connection of the existing system with facilities purchased reserves to replace sales made in 1940 to the Monsanto from other utilities, with new projects being built to supply Chemical Co. defense power, and with other utilities from which power The item “Plant and equipment” includes provision for for defense needs is being purchased or interchanged; a fused-rock furnace, a potassium metaphosphate furnace, and for the rehabilitation of purchased properties. The completion of a washing and agglomerating plant, 8 1943 estimate of $25,076,000 includes $5,070,000 for con- flotation plant, and miscellaneous improvements in 1943, struction of switchyards to serve the new generating in addition to the new Gulf coast plant. capacity to be under construction in that year, $19,324,000 The increase in fertilizer inventories in 1943 of $316,000 for expansion of the transmission system, and $682,000 is occasioned by the increase in plant capacity arising for prorated departmental and general administration. from the scheduled completion of a new calcium metaThe $19,324,000 includes $10,464,000 for construction of phosphate furnace in 1942 and by the necessity of stocktransmission facilities required for national defense and ing larger reserves of raw materials to insure continuous $8,860,000 for additions to provide for system reinforce- operation of the plant. ment and load growth other than those required directly The increase in the net expense of fertilizer operations by large industrial customers with defense contracts. It in 1943 is accounted for by the continued expansion of is contemplated that the proceeds of bond issues will be the test-demonstration program on a Nation-wide basis entirely obligated in 1942, and none of the work to be and by a small expansion of the small-scale research actirdone in 1943 will be financed from this source.

ities which have formed the basis for the past developThe estimates for 1943 include $215,000 for the pro- ment of this program. This expansion will enable some vision of facilities to be transferred, in return for mortgage initial studies to be made on nitrogen compound fertilizers

. liens, to municipalities and cooperatives for extensions to The 1943 estimates for "Experimental large-scale protheir systems, and for repayments on such liens already duction” will provide for the production of approximately outstanding of $162,000.

37,000 tons of phosphatic materials for the Authority's Power inventories will have to be increased by $66,000 test-demonstration program. The remaining capacity, in 1943, principally to provide the coal supply for the sufficient to produce 106,000 tons of superphosphate, will additional steam units, scheduled to go on the line in be reserved for the manufacture of fertilizers for the

Agricultural Adjustment Administration and Great BritSupporting Statement No. 2 indicates that in 1943 the ain or for the production of elemental phosphorus for the surplus before depreciation from navigation, flood-control, War Department.

War Department. The estimated net credit of $441,000 and power operations will reach $19,892,000, an amount in 1943 will be more than sufficient to absorb the deprenearly four times the net expense of all other operations ciation on fertilizer plant in service in that year. of the Authority.

The Authority's test demonstrations, conducted in The estimate for 1943 for navigation and flood-control experiment stations and under practical farming condioperations includes $110,000 for the study and develop- tions, become the basis for improved farm-management ment of river transportation and $8,000 representing the programs and soil-conservation practices. The increase cost of power furnished to the Corps of Engineers, United in the estimate for these activities in 1943 is accounted States Army, for the operation of the locks at the various for by an increase in the amount for fertilizer of $33,000 main river dams.

and an increase in other expenses of $65,000, to be used The estimated net income from power operations in principally for extension of cooperation with the States 1943 will provide approximately as great a return on the participating in the program. investment in power facilities financed from appropria- "Controlled soil and fertilizer investigations" comprise tions as the 5 percent earned in 1941, after providing a series of studies of the characteristics of new forms of for depreciation and the allocnted portion of common fertilizers and their effects on plant life and animal nutriexpense. The Authority's sales of power are at the tion. These investigations are accompanied by extensive point of exhausting the dependable supply, and the fertilizer tests on varying types of farms, directed by peradditional generating facilities scheduled for installation sonnel of the land-grant colleges. Use of the more highly in 1942 and 1943 will all be needed to meet the expected concentrated calcium metaphosphate is increasing as the demands of the area.

use of triple superphosphate decreases. It is anticipated The estimated total revenues show an increase of 75 that these test demonstrations will be initiated in eight percent in 1943 over 1941. In order to guard against a new States in 1942 and several additional States in 1943. dry year, allowances for unrealized revenues and increased Of the estimate of $545,000 for test demonstrations in production expenses of $2,000,000 are included in both that year, about four-fifths is for reimbursement of the 1942 and 1943.

expense of cooperating institutions,

that year.

Soil inventory mapping had been completed by the end activities in the denuded Ocoee No. 3 watershed. The of 1941 in 41 counties covering 13,352,320 acres. Of the greater part of the estimate of $125,000 for forestry reestimate of $111,000 for this item in 1943, $86,000 is for sources surveys and management planning is to provide reimbursement of the expenses of the Bureau of Plant for forest-products utilization research, intended to be a Industry and the land-grant colleges.

basis on which new industries may be developed. “Transportation studies relating to fertilizer distribu- Forestry activities on private lands have so far resulted tion” comprise, for the most part, investigations of the in the planting of about 90,000,000 trees. The increase most economical routing of fertilizers.

in the estimate for this work in 1943 will enable the Au

thority to aid in the improvement of methods of manageRELATED PROPERTY OPERATIONS PROGRAM

ment of the 6,000,000 acres of farm wood lots in the area.

These activities also include erosion control in the badly This program covers activities on its lands which are not directly related to the Authority's major objectives. | eroded Copper Basin, which is part of the watershed of the Estimates for the assets used in this program are contained

Ocoee No. 3 project, and cooperation with other agencies in in the "General assets" section of the Budget.

educational work in the field of forest protection. The increase of $17,315 in the estimates for "Reservoir

The estimate for nursery operation is a net figure, after area operations” in 1943 is primarily accounted for by the crediting the cost of trees used on the Authority's land. increased expense of agricultural readjustment around

The two nurseries operated by the Authority have an reservoirs as the Cherokee, Watts Bar, and new Hiwassee

annual productive capacity of 25,000,000 trees. projects are placed in operation. The estimate for de

Under “Tree and tree crop research” 1,237 demonstravelopment of recreational facilities for 1943 of $115,900

tions have been started in 51 counties, designed to acwill provide such items as boat docks, swimming areas, and quaint the public with improved plant materials, methods,

and techniques. picnic and vacation parks where the greatest demand has arisen on recently completed reservoirs.

The estimates for development of mineral resources

reflect a concentration of effort on materials most imporAs is shown on Supporting Statement No. 5, the Au

tant to national defense, such as olivine as a source of thority expects to realize a small net income from the operation of recreational facilities in 1942 and 1943. The magnesium, alumina from clays, vermiculite, chromite, greater part of this income will be realized from operations | alumina plant will be in operation in 1943, but pilot

and manganese. It is hoped that a commercial scale in the Norris area.

Under “Reforestation and erosion control on reservoir plant operations and research should be continued in lands” some 37,000 acres have been reforested to date and

any event in order to perfect refinements in the process. plans are made for the protection, management, and

The increase for other mineral research in 1943 is largely development of the 300,000 acres on the margins of the explained by the fact that in that year the investigations lakes which are in forest.

on certain other minerals should reach the pilot-plant "Fish and game readjustment investigations” are

stage. The estimate for research with the Bureau of directed toward the restocking of the lakes with fish

Mines provides for cooperation at the Norris ceramic

laboratory, transferred to the Bureau by the Authority. which are suited to the new environment and the rehabilitation of native game resources interfered with by this program contribute to the solution of the major

The public health activities which comprise a part of the impoundment of the reservoirs.

Operation of villages at completed projects will result, health problems of the area and are conducted in close it is estimated, in 1943 in a net income before depreciation cooperation with other Federal, State, local, and private of $40,699, more than double the net income for 1942. agencies. The largest part of this increase will, it is anticipated, be

The larger portion of the estimate for cooperative derived from the villages in the Muscle Shoals area.

health work and public health studies is to provide for The estimates totaling $24,160 for maintenance of cooperation with State health departments in maintaining national defense properties provide for continuing routine adequate measures in areas contiguous to the major repairs of Nitrato Plant No. 1 and the unused portion of unified system projects to safeguard the health of employPlant No. 2.

ees and to prevent exaggeration of local problems. The increase in 1943 is accounted for by the greater number

of these projects. DEVELOPMENT ACTIVITIES PROGRAM

Medical malariology and biological studies develop Through contributing to the improvement of the means for improving the practices used to combat malaria general economy of the region by the discovery and both in this area and elsewhere. Stream sanitation studies development of new uses for basic resources and methods have assumed greater importance as the industrial defor increasing income, this program has already proved its velopment of tho region is accelerated. importance as a backlog to the area's ability to aid in "Čooperative agricultural industries development” connational defense. The total estimate for 1943 is the same sists of the introduction of improved processing and maras the estimate for 1942.

keting methods for crops which contribute the most to Of the estimate of $250,000 for general mapping, shown increased

increased farm income and soil conservation. The as the first item on Supporting Statement No. 6, $242,000 processes being developed should serve to assist in the is for the continuation of topographic mapping of the alleviation of post-emergency problems. eastern section of the valley on a scale of 1:24,000. This The Authority's interest in cooperative research, the work is performed in cooperation with the Geological first item in this section, arises from the many relationSurvey. By the end of 1943, aerial photographs will ships between cooperative organizations and various have been made of 22,100 square miles, and reproduced phases of its programs. To the next item, “Developmaps will be available for 11,500 square miles.

ment of new processes and markets for farm products, The increase of $58,000 in the estimates for 1943 for the Authority has assigned 10 employees, but 60 other valley-wide forestry development and erosion control is persons are engaged in this work as members of the staffs accounted for by developments directed toward reducing of cooperating institutions. By 1943 the Authority's the impact of post-emergency problems, and by increased | quick-freezing process will have reached the commercial

stage, and income from it will offset any expense incurred. expansion in operations occurring in this area has created In that year emphasis will be given to vegetable-oil seed serious congestion with respect to the makeshift service and livestock products.

facilities now in existence, most of which were built Rural electrification education becomes increasingly over 20 years ago. important as power is made available to an ever-increas The road improvements are needed to handle traffic ing number of farms in the area. The effectiveness of the increases brought about by the defense activities in the last of the activities in this group, “Development of farm area, to permit present roads near the munitions plant equipment,” has been demonstrated by the installation to be closed, and to replace a deteriorated overpass at by farmers, at their own expense, of equipment developed the entrance to Reservation No. 2. A new main artery by the Authority, such as sweetpotato curing houses, should be built to serve the chemical plant, garage, and walk-in refrigerators, irrigation systems, and hay driers. harbor.

The 1943 estimates for general activities for the develop The principal railroad improvements would consist of ment of the valley provide for continuation of studies and new yards and other new trackage and adjustments to research concerned with the broad aspects of the proper the present system. A new chemical building providing use, conservation, and development of the region's re 90,000 square feet of space is needed for offices and sources, emphasizing the promotion of the general welfare laboratories to house increased personnel and to accomof the area. The first of these activities listed on Sup- modate those being crowded out of space which is being porting Statement No. 6, "Transportation and industrial given over to production. economic studies,” includes investigation of the industry Warehouses, shops, and docks are planned for erection of the area and its potential growth,

particularly as related on the shores of Fleet Harbor to provide facilities for to water transportation and the utilization of electric power, reservoir, and property operations. The new power.

garage

is designed to replace an old structure which is The second activity for which an estimate is presented now in an unsafe condition. for 1943 consists of cooperation with the Coordinator of The estimates for Norris and other properties provide Defense Housing, seeking to reconcile the emergency con for minor and routine equipment replacements and struction of dwellings with the long-range development of plant alterations. the area so that these dwellings will have the maximum By 1943 additions to general equipment to serve the permanent utility. Studies of local government em- greatly enlarged construction activities will have been phasize investigations of changes in financial status and completed and funds will be required only for the purchase other problems resulting from the programs of the Author- of replacements of wom-out units. A small reduction is ity, as well as the opportunities arising from them. anticipated in general inventories in 1943.

During the current year, community planning assistance The 1942 estimate for the continuing fund and unallotted will be rendered to 18 communities affected by the Au balance includes the $1,000,000 reserved for emergencies tbority's construction activities, and 5 other areas under section 26 of the Tennessee Valley Authority Act. affected by other defense activities. Under the last item in this group, covering defense contract assistance, the

MAJOR DEFENSE SERVICES FOR OTHER FEDERAL AGENCIES Authority keeps posted as to the productive potentialities of plants in the area and aids in disseminating information

The Authority is constructing a synthetic ammonia on products not now made there.

plant and rehabilitating the ammonium nitrate section of Nitrate Plant No. 2 for the War Department. This

work is estimated to cost $9,425,000. In 1943 these The estimates for general asset accounts, Supporting facilities are scheduled to produce 108,000 tons of amStatement No. 7, total $2,975,000 for 1943. Of this monium nitrate at an estimated cost of $5,616,000. total, $2,199,000 is for related property plant and equip The Authority has also constructed in the Muscle ment, and most of this amount is for service facilities Shoals area 250 defense houses for the Federal Works urgently needed in the Muscle Shoals area. These Agency at a cost of $875,000, and the Authority will facilities include road and railroad improvements, labora-operate this housing for that agency. In addition, tories and other facilities for the chemical plant, and new design and site acquisition services have been furnished warehouses, shops, docks, and a garage. The great other defense housing projects.

GENERAL ASSET ACCOUNTS

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