trogen underlying this whole field, and to the phosphorus and potash problems in their connection with and relation to complete fertilizers.

We have done a good deal of work on such things as the oxidation of ammonia from whatever processes it may be produced.

We have done a great deal of work in connection with the study of the reactions and mechanism of fixation, as Doctor Woods said yesterday, looking forward to the question of a possible new fixation process in advance of any of those in the field.

We felt that our function was, more and more as the industry got under way, to engage in the working out of the newer things that were out beyond industry, that would be coming up in the next few years as proposed new processes.

That was where we were short in the war time, and we had not kept up with the purely scientific developments out beyond the industry.

When we were suddenly cut off from the other nations in connection with that matter we were handicapped in not being able to follow those things through as to their economic outcome.

We felt, with the industry once well started, both the cyanamide industry and the direct ammonia industry, as soon as it begins to grow on a large scale, the actual development of that in the plants can better be done by the plants themselves than it can be done by us in a smal laboratory, whereas the development of the possibilities of newer processes that may be coming along is very much more distinctly a Government interest-that is, a broad general interest that nobody is otherwise looking out for.

Mr. HILL. Do you know Professor Tour, of the University of Cincinnati?

Doctor COTTRELL. Yes.

Mr. HILL. Tell us something about him.

Doctor COTTRELL. Professor Tour was a member of the staff of the Fixed Nitrogen Laboratory.

Mr. HILL. Your laboratory?

Doctor COTTRELL. Yes; from the time it was organized, which was before my connection with it. Professor Tour left the laboratory and went back into teaching, into private life, shortly before I took charge of the laboratory.

He was active in this whole nitrogen fixation work under the War Department during the war as one of their officers, in connection with the Ordnance Department, in the development of the plants at the shoals, and afterwards came here to the staff of the Fixed Nitrogen Research Laboratory when that was formed, and was with that laboratory between two and three years.

Mr. HILL. He is one of the leading men in this air nitrogenfixation field?

Doctor COTTRELL. Yes; he is recognized as one of the leaders.
Mr. HILL. You look upon him as a high authority?

Doctor COTTRELL. Yes; I think Professor Tour would be considered as one of the leading authorities. He made trips to Europe right after the war, looking into the plants over there, and had much responsibility in connection with the development work both for the Army and later for the laboratory.

My understanding is that he has followed up this work since he has been at the university. In fact, I have talked with him on that out there at the university, although not very recently; within the last few years.

Mr. HILL. He is continuing this work at the university?

Doctor COTTRELL. So I understand.

Mr. HILL. I have here a letter that I want to get you to help me answer, because I have got to answer it, and I will tell you frankly, I can not answer it. I am going to read it to you. This letter comes from the Farm Bureau Federation in the State of Alabama. It says:

Hon. LISTER HILL,

AMERICAN FARM BUREAU FEDERATION,
Washington, D. C., March 10, 1928.

House of Representatives, Washington, D. C.

MY DEAR MR. HILL: Doctor Cottrell in his testimony before your committee on Thursday stated that in his opinion ammonia could be produced by synthetic processes at a plant cost of 4 cents per pound. The farmers do not concede that there is, thus far, any manufacturer's testimony that ammonia can be produced by any synthetic process at 4 cents per pound.

As an example of well-informed opinion on this subject, however, I inclose you a table taken from a report prepared by Professor Tour of the University of Cincinnati, and you will note that it is a table on the cost of ammonia using the water-gas ammonia process, which is the same process now employed at the du Pont plant at Charlestown, W. Va., and proposed, as we are informed, to be used also at the plant of the Allied Chemical & Dye Corporation at Hopewell, Va.

Please note and kindly call to the attention of the other members of your committee that Professor Tour estimates the cost of water-gas ammonia, in a plant the same size as nitrate plant No. 2, not at 4 cents but at 6.7 cents per pound. Our information is that ammonia is costing not less than 72 cents per pound and possibly 8 cents per pound at the du Pont's West Virginia plant Will you please ask Doctor Cottrell if he has, himself, actually seen a cost sheet of the operations of the du Pont plant?

However, in order to put to a test the fertilizer production proposed at Muscle Shoals under the Madden bill, I am willing to accept Doctor Cottrell's claim of 4 cents per pound as the cost of ammonia, plus 8 per cent profit as provided in the Madden bill, which would make ammonia sell for 4.32 cents per pound, f. o. b. nitrate plant No. 2.

Under the Madden bill the lessee proposes to make a concentrated fertilizer known as ammonium phosphate. To the farmer ammonium phosphate is merely a concentrated combination of the plant foods which he is accustomed to buy in the form of nitrate of soda and acid phosphate.

As purchasing agent for the Alabama Farm Bureau Federation I have been quoted ammonium phosphate (containing 13 per cent ammonia and 14 per cent phosphoric acid, a total of 61 per cent plant food) by Mr. W. B. Bell, president of the American Cyanamid Co., at $64.40 per ton, f. o. b. Warners, N. J., and I am attaching hereto Mr. Bell's letter quoting me this price.

Being confident that I can purchase this ammonium phosphate in quantities for $64 per ton at Warners, N J., I am going to use this round figure for the cost of ammonium phosphate at Muscle Shoals.

Allowing a selling price for ammonia of 4.32 cents per pound, as taken above, the selling price of 260 pounds of ammonia contained in a ton of ammonium phosphate would be $11.23. This leaves $52.77 for the cost of 960 pounds of phosphoric acid contained in a ton of ammonium phosphate, and this is a price on phosphoric acid of 5.49 cents per pound, or it is the same as buying 16 per cent acid phosphate at $17.50 per ton, but buying ammonia at 4.32 cents per pound is the same as buying Chilean nitrate at $15.55 per ton, whereas this season our farmers have been paying $47 per ton for Chilean nitrate on board ship at Mobile and about $17 per ton for our acid phosphate at the farmer's station. Surely, Alabama farmers can pay this small additional cost for acid phosphate in order to save $31.45 per ton on Chilean nitrate, of which they buy more than 60,000 tons annually.

The selling price of ammonium phosphate quoted by the American Cyanamid Co., however, includes the high cost of shipping cyanamid by rail from Niagara Falls to Warners, N. J., and of bringing phosphate rock from Florida to the same place, where both of these, materials are processed to form ammonium phosphate. Their Warners, N. J., price includes interest and amortization on their plant investment and suitable allowances for profit, patent rights, and depreciation.

We do not know what these allowances are, but we do know that at Muscle Shoals there would be cheap power, low freight on limestone, coke, and phosphate rock, no freight at all on cyanamide, no interest, amortization, or depreciation on nitrate plant No. 2, nor charges for patent rights, and a profit per ton of ammonium phosphate limited to 8 per cent.

As an example of the importance of these economies, especially the patent rights, your committee will remember that in the contract between the United States and the American Cyanamid Co. it was agreed that if the Government should operate nitrate plant No. 2 it should pay for these patent rights the sum of $30 per ton of nitrogen fixed, or $1,200,000 annually on the capacity of the plant.

Certainly with such opportunities for reducing the cost at Muscle Shoals ammonium phosphate can be sold at $55 per ton. Now, still using Doctor Cottrell's selling price of 4.32 cents per pound for ammonia, or $11.23 for the ammonia contained in 1 ton of ammonium phosphate, the price of the phosphoric acid in a ton of ammonium phosphate would be reduced to $43.77. This is 4.56 cents per pound for phosphoric acid, and when the farmer buys phosphoric acid at this price he is buying a ton of 16 per cent acid phosphate for $14.60.

We may expect. therefore, that with Muscle Shoals operated under the terms of the Madden bill that nitrate of soda must meet the competitor which is selling at $15.55 per ton, and acid phosphate must meet competition at $14.60 per ton. The saving per ton of nitrate of soda would amount to $31.45, or about 67 per cent of the present cost on board ship at Mobile, and this would be accomplished by a saving of $2.40 per ton or about 14 per cent below the present cost of $17 per ton for 16 per cent acid phosphate.

The

If Doctor Cottrell can show your committee that these figures are materially wrong we are willing to withdraw our contention that nitrate plant No. 2 should be operated as provided under the terms of the Madden bill. savings herein shown, however, are based upon a limitation of profit on the part of the manufacturer to 8 per cent, and no producer using the synthetic process, advocated by Doctor Cottrell, has agreed to limit his profits in this way, and without such limitation the fertilizer-buying farmers of the country can expect no saving at Muscle Shoals in their fertilizer bills.

I do hope that your committee will get Doctor Cottrell to explain in detail how the farmers of your and my State can ever hope to obtain these savings under his plan.

Yours sincerely,

Mr. EDWARD A. O'NEAL,

Washington, D. C.

EDWARD A. O'NEAL, President Alabama Farm Bureau.

AMERICAN CYANAMID CO.,

New York City, February 27, 1928.

DEAR SIR: In reply to your request, please be advised that the current price for 13/48 ammo-phos in substantial quantities is $64.40 per ton f. o. b. cars, and f. a. s. our plant, Warners, N. J.

Inasmuch as our capacity is sold out for some time to come, it would be necessary to know your desire as to dates of delivery before we could enter into a firm contract with you.

We shall be very happy to hear from you further on this subject.

Very truly yours,

W. B. BELL, President.

From report on cost of synthetic ammonia in America, December 24, 1926, by R. S. Tour, formerly a member of the technical staff of the Fixed Nitrogen Research Laboratory and also a member of the United States Nitrogen Commission that visited Germany in 1920]

[Production-40,000 tons N2 or 48,570 tons NH3 per year]

Direct operation (or prime cost):

Operating labor..

Raw materials (coke, 1.9 tons, at $7.50, $14.25; coal, 1.25 tons, at $4, $5; special

Maintenance supplies (repair materials, at $5.12; renewal parts, at $6.06)

I have got to send Mr. O'Neal an answer to that letter, and I would like for you to answer it for me, if you will.

Doctor COTTRELL. I will be glad to take it and see what I can do with it.

Memorandum reply by Dr. F. G. Cottrell to Mr. Hill' question regarding letter of Mr. Edward A. O'Neal to him dated March 10, 1928, together with report of Prof. R. S. Tour and letter of Mr. W. B. Bell therein referred to. Mr. O'Neal's letter commences by contrasting the figure of 4 cents a pound for gaseous ammonia given by me as what such plants as the large ones now building in this country could be expected to produce it for when in full operation, with a figure of 6.7 cents arrived at through detailed estimates in a report of Professor Tour, dated December 1926. Professor Tour has now published this same report with slight revisions and modifications in the February and March, 1928 issues of Chemical and Metallurgical Engineering, and in so doing has already revised his figures downward some 5 per cent, making it 6.33 in place of 6.7 and even this revision I am inclined to think lags far behind the trend or rate at which research and experience in the synthetic nitrogen industry in this country and elsewhere is steadily reducing the costs to be expected from these and similar plants when finally in full operation. However, the chief difference between Professor Tour's and my figure lies in the fact that his report is evidently based on liberal average estimates of what any reasonably capable technical organization locating its plant amid average conditions could surely and safely expect to do at the first trial. The figure I have named, on the other hand, could not be guaranteed in general to practically anybody locating his plant almost anywhere but represents what

it is firmly expected can and will be reached in the plants most economically located, engineered, and operated, and as such gives a basal figure at least for competition with which anyone going into the business must eventually reckon. Without attempting to discuss all Professor Tour's figures in detail citation of one or two items will sufficiently illustrate the difference in our points of view. Professor Tour places the initial cost of an apparently quite definite design of plant at approximately $15,000,000, corresponding to my estimate of from $8,000,000 to $10,000,000 with less definite commitment as to design. While Professor Tour's plans apparently represent a good standard layout along conservative lines pretty generally followed in the past few years, I believe the technical groups now in the forefront of the industry both in this country and abroad are in position to reach the lower costs I have indicated in their new construction.

A still simpler more definite illustration of the very wide margin for disadvantageous contingencies of location, etc., adopted in the Tour estimates is to be found in his assumed prices of $4 per ton of coal and $7.50 per ton of coke which are fully double what these prime requisites can be bought for if the plant is strategically located with respect to their supply. The same general trend running through the estimates undoubtedly accounts for the difference in our figures.

The remainder of Mr. O'Neal's letter is essentially an argument for acceptance of the cyanamid company's offer as embodied in the Madden-Willis bill on the grounds that under the provisions of the bill it would be possible for the American Cyanamid Co. to manufacture and sell f. o. b. Muscle Shoals 13/85 ammo-phos at a lower price than nitrogen and phosphoric acid can now be purchased in that region in the form of Chile saltpeter and acid phosphate.

That the cyanamid company or any other lessee under the same contract could do this has never been particularly questioned as far as I know. The chief criticism of the bid is its lack of either enforceable guaranty or strong incentive for the company to make the largest possible output of fertilizers at the cheapest possible price which is the avowed object of the plan as a whole and for which the bill grants the company sweeping and very valuable concessions which would not otherwise have received a moment's serious consideration.

There is undoubtedly still room for lessening the cost of fertilizers to the American farmer. But probably only the smaller part of this can come from further economies in the actual fixing of atmospheric nitrogen, and the very intensive world competition now developing in this industry can safely bo counted on for at least some years to come to do everything in the matter of large scale fixation that will be economically justified or feasible. Our Government's main opportunity for constructive service to agriculture in the field is on the laboratory and distinctly small scale plant side, and as an informtion and technical coordinating center in the industry. In this country the larger part of the possible reduction in cost to the farmer must eventually come from a mutual change by both fertilizer industry and farmer to the production and use of more highly concentrated fertilizers with the consequent diminution in both transportation and handling of useless waste materials now costing the farmers millions of dollars a year.

Any program at Muscle Shoals or elsewhere calculated to have an appreciable effect on the Nation's fertilizer problem as a whole must be sufficiently flexible to take into account all these elements and adopt itself to a multiplicity of local conditions including freight rates.

Computations of special cases based on more or less fragmentary or incomplete data such as the one Mr. O'Neal presents for discussion are interesting and even useful in a general qualitative way when multiplied and compared among themselves, but considering the gaps and uncertainties that any one of them leaves in the quantitative picture of the essential problem before us I feel it is too much like fighting windmills to attempt their detailed critical analysis within the confines of such a discussion as the present.

Mr. HILL. Doctor, in your cost figures of 4 cents a pound for ammonia by the synthetic process, how much per pound of ammonia at 4 cents was allowed for patent rights?

Doctor COTTRELL. There is nothing there included definitely. That is simply a figure as to what it may be gotten for.

Mr. HILL. You make no allowance for patent rights?