SEC. 19. After the expiration of six months from the date of the first advertisement the Secretary of Commerce, with the advice of the Director of the Bureau of Standards, must make, or cause to be made, an impartial examination and test of all plans and specifications submitted, including those of the corporation. If the Secretary of Commerce shall find that any of the plans and specifications submitted are more practical or expedient and show greater factors of safety, endurance, flexure, lower cost of maintenance, and more efficient water seal than the plans and specifications of the corporation, and that responsible constructors will at a reasonable cost complete the work as provided herein, or that various parts of several plans and specifications can be advantageously incorporated into the final plans and specifications for the work, then such plans, or parts of plans, shall be substituted for those offered by the corporation: Provided, That such changes, modifications, or substitutions of the corporation's plans and specifications must be approved by the Secretary of War and the board, unless they, or either of them, can show good and substantial reasons for withholding their approval. The findings of the Secretary of Commerce and the ratings of each competitor must be made in writing and must be open to public inspection. The corporation must pay for the plans, or parts thereof, which have been approved and adopted and substituted for or incorporated with those offered by it, at the rate of 2 per centum of the cost of construction of such work or parts thereof: Provided, That for the purpose of determining the fee to be paid for the successful plans, or parts thereof, the entire cost of the work included in the advertisement shall be estimated at $30,000,000. All fees awarded to engineers or engineer organizations in the employ of the Government must be paid to the credit of the department in which they are employed.

SEC. 20. That for the purpose of testing the plans and specifications offered, the Secretary of Commerce may, in addition to the testing laboratories of the Bureau of Standards, employ such other laboratories as he and the corporation may jointly select, and the corporation shall pay the necessary expenses of the tests and examinations.

SEC. 21. Upon notice being served upon the Secretary of War by the Army and other Government engineers or the representatives of any State, county, municipality, any person or owner of property that is liable to injury, that any structure operated by the corporation is, or is liable to become, weak, dangerous, uncertain, or inefficient, the Secretary of War must, on receipt of the notice, and at the expense of the party making the request, have such structure examined, and if no such examination has been made by him for six consecutive months, he must make, or cause to be made, an examination of the dams, outlets, and locks operated by the corporation, at its expense, and if he finds there is reason to believe that any of them are unsafe or liable to become unsafe, or for other sufficient reasons (unless such danger is imminent) he must make, or cause to be made, an investigation by public hearing, or otherwise, to determine what repairs, replacements, or other work, if any, is required to make the structure safe and efficient. The corporation shall make such reasonable repairs as recommended by the Secretary of War within the time specified by him.

SEC. 22. The Secretary of War must file with the corporation a written report showing the result of his examination, a copy of which must be kept accessible to the public by the corporation and must be included in the annual report to Congress as provided in section 13 hereof.

Should the report show that any dam, outlet, or lock or lift operated by the corporation to be, or liable to become, dangerous, unsafe, or inefficient, the corporation must make such reasonable repairs or betterments as required to put or keep the structure safe and efficient. If such work is not done or undertaken by the corporation within the time specified in the report of the Secretary of War, he may cause such work to be done under his supervision, and which must be paid from the reserve fund held by the Secretary of the Treasury, as provided herein. Any interested party that may be affected by a failure thereof may at all reasonable hours inspect the dams, locks or lifts, or outlets operated by the corporation.

SEC. 23. The corporation must operate and maintain for the Government, and under the supervision of the Government directors, the nitrate plants now, or which may hereafter become, a part of the property, and commence refitting them to make the required fertilizer compounds as soon as the plans for the work have been approved by the Government directors.

SEC. 24. The corporation will make such alterations, additions, or changes in the nitrate plants or any part of the equipment or structures as may be necessary to produce the nitrate or other compounds required by the department directors.

SEC. 25. The corporation must furnish the Secretary of War copies of the plans and specifications of the proposed changes to be made in the nitrate plants to fit them to produce the compounds or other products required by the Government. Such alterations are to be so designed that the nitrate plants can be refitted to produce explosive compounds with the least delay and expense, and shall be approved by the Secretary of War.

SEC. 26. The corporation shall, with the approval of the Secretary of War, acquire for the Government by purchase or otherwise, a suitable site for an engine-driven power station to be located at or near locks and Dam Numbered 17, Black Warrior River, Alabama, with a connecting right of way for a transmission line to Muscle Shoals and the Waco Quarry near Russellville, Alabama. SEC. 27. The power station and transmission lines to be constructed by the corporation as provided in section 28 hereof, shall have a capacity of not less than thirty thousand horsepower and shall be built by the corporation according to plans and specifications furnished by it and approved by the Secretary of War. SEC. 28. The corporation must maintain and operate a research department in cooperation with the Agricultural and War Departments of the Government, for the purpose of developing processes for the fixation of atmospheric nitrogen and the manufacture of such fertilizer or other compounds as may be required by the Departments of Agriculture and War, the cost of research work to be charged to the operating expenses of the plant.

SEC. 29. During the time of construction the Secretary of War on behalf of the Government and the corporation shall each designate an engineer to represent it on the work, and shall be bound by the acts and decisions of such representatives.

SEC. 30. The corporation shall not be required to expend in the manufacture of nitrates or other fertilizers, compounds, or other products, any money other than that received from the sale of the products and power not required to operate the plant or amortize the investment.

SEC. 31. The corporation will commence the work authorized by this act within ninety days after it is given possession of the property located at Muscle Shoals, and it shall continue such work in a diligent, businesslike, and workmanlike manner until the work provided for under this act is completed.

SEC. 32. Whenever nitrates can be made at a profit, or when the cost of the same has been so reduced that the funds received from the sale of power, fertilizer compounds, or other products are not needed, in whole or in part, for financing such productions, as herein provided, the funds, or any part thereof, received from the sale of products made for the Government in excess of the maintenance, replacement, and operating charges shall be paid into the Treasury of the United States.

SEC. 33. The engineer representing the Government shall, on the 1st of each month, give the corporation an estimate of the work performed, material furnished, and expenditures authorized by this act and a statement of the amount earned by it during the preceding month and the amount due the corporation from the Government.

SEC. 34. The payments of the monthly estimate of the Government engineers are hereby authorized by this act, to be made monthly in cash by the Government unless it should issue bonds therefor. Then the corporation will receive such bonds, including accrued interest, in payment for any of the obligations incurred by operation of this act or contracts, in lieu of cash at the market value, at the option of the Government.

SEC. 35. The corporation shall have the right to sell, or exchange at its discretion, all worn, useless, or excess personal property, covered by the lease and not required to carry out the provisions of this act, and shall account for the proceeds of such sales as provided in section 32 hereof.

SEC. 36. That at any time the Secretary of War shall notify the board of the approximate amount of explosives that in his judgment will be needed by the Army and Navy, and it shall be the duty of the board to supply the Army and Navy with the amount of explosives so required; and in time of war, or at any other time when in the opinion of the President of the United States, war imminent, the President may take full possession of all of the property hereir described and use the same for the manufacture of explosives to be used by the Army and Navy; or, in such case, the President may, if he so elects, direct the board to cease, either in part or wholly, the manufacture of fertilizer, and to utilize said property to such extent as he may direct, in the operation of explo sives. Until such war is ended, or in the opinion of the President the dange thereof has passed, the said board shall operate said property in accordance with the direction and under the instruction of the President of the United States.

SEC. 37. After the completion of the works as provided in this act, the corporation will sell or use the hydraulic power generated by the plant, and for which it will pay the Government as part compensation for the lease 1 mili per horsepower-hour for the hydroelectric primary power generated with the river flow, the receipts of the sale of power to other consumers, exclusive of the 1 mill paid to the Government, to be used by the corporation to meet operating and other expenses.

SEC. 38. Within six months after the passage of this act, the Secretary of the Treasury is hereby directed to set apart an emergency fund of $1,000,000, to reimburse any reasonable expense incurred by the Secretary of War, or the corporation, for repairs or betterments made for the purpose of protecting the property of the corporation from immediate or imminent danger. Money so paid from the reserve fund must be returned thereto by the corporation, from its revenue, or Government funds in its possession. Payments from the reserve fund can be made only on vouchers signed by the board and approved by the Secretary of War.

SEC. 39. Government experts, inspectors, and accountants can at all reasonable times examine the books, papers, accounts, meters, equipment, and such other accessories of the plant necessary to satisfy them, whether or not the corporation is executing the lease in good faith and capacity.

SEC. 40. The appropriations necessary to carry out the provisions of this act on the part of the Government are hereby authorized.

SEC. 41. That all laws, and parts of laws, in conflict herewith be, and the same are hereby, repealed.

[H. R. 518, Sixty-eighth Congress, first session]

AN ACT To authorize and direct the Secretary of War, for national defense in time of war and for the production of fertilizers and other useful products in time of peace, to sell to Henry Ford, or a corporation to be incorporated by him, nitrate plant numbered 1, at Sheffield, Alabama; nitrate plant numbered 2, at Muscle Shoals, Alabama; Waco Quarry, near Russellville, Alabama; steam power plant to be located and constructed at or near Lock and Dam Numbered 17 on the Black Warrior River, Alabama, with right of way and transmission line to nitrate plant numbered 2, Muscle Shoals, Alabama; and to lease to Henry Ford, or a corporation to be incorporated by him, Dam Numbered 2 and Dam Numbered 3 (as designated in House Document 1262, Sixty-fourth Congress, first session), including power stations when constructed as provided herein, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of War is hereby authorized and directed, for and in behalf of the United States of America, to execute a contract or contracts within and in pursuance of the authorizations, powers, and limitations contained in this act:

For the purpose of carrying out the terms of this agreement, Henry Ford will form a corporation (hereinafter referred to as the company) with a capital stock of $10,000,000, or more, of which at least $10,000,000 shall be paid in, in cash, to be controlled by Henry Ford, which company will immediately enter into and execute all necessary or appropriate instruments of contract to effectuate this agreement.

SEC. 2. The company shall complete for the United States, subject to the approval of the Chief of Engineers, United States Army, Dam Numbered 2, its locks, power house, and all necessary equipment, all in accordance with the plans and specifications prepared, or to be prepared, or approved by the Chief of Engineers, United States Army, and progressively install the hydroelectric equipment in said power house adequate for generating approximately six hundred thousand horsepower, all the work aforesaid to be performed as speedily as possible at actual cost and without profit to the company, It is understood that the necessary lands and flowage rights, including lands for railway and terminal connections, have been or will be acquired by the United States. SEC. 3. The company will lease from the United States Dam Numbered 2, its power house, and all of its hydroelectric and operating appurtenances, except the locks, together with all lands and buildings owned or to be acquired by the United States connected with or adjacent to either end of the said dam, for a period of one hundred years from the date when structures and equipment of a capacity of one hundred thousand horsepower are constructed and installed and ready for service, and will pay to the United States as annual rental therefor, 4 per centum of the actual cost of acquiring land and flowage rights, and of completing the locks, dam, and power-house facilities (but not including expenditures and obligations incurred prior to May 31, 1922), payable annually at the end of each lease year, except that during and for the first six years of the lease

period, the rentals shall be in the following amounts and payable at the following times, to wit: Two hundred thousand dollars one year from the date when one hundred thousand horsepower is installed and ready for service, and thereafter $200,000 annually at the end of each for five years.

SEC. 4. The company will further pay to the United States during the period of the lease of Dam Numbered 2, $35,000 annually, in installments quarterly in advance, for repairs, maintenance, and operation of Dam Numbered 2, its gates and locks; it being understood that all necessary repairs, maintenance, and operation thereof shall be under the direction, care, and responsibility of the United States during the said one hundred year lease period; and the company, at its own expense, will make all necessary renewals and repairs incident to efficient maintenance of the power house, substructures, superstructures, machinery and appliances appurtenant to said power house, and will maintain the same in efficient operating condition.

SEC. 5. At all times during the period of the lease of Dam Numbered 2 the company will furnish to the United States free of charge, to be delivered at any point on the lock grounds designated by the Chief of Engineers, United States Army, electric power to an amount necessary for the operation of the locks, but not in excess of two hundred horsepower.

SEC. 6. As soon as the release of suitable construction equipment and labor forces at Dam Numbered 2 will permit, or at an earlier date if desired by the company, the company shall construct and complete, subject to the approval of the Chief of Engineers, United States Army, for the United States, Dam Numbered 3, its lock, power house, and all necessary equipment, all in accordance with plans and specifications prepared and to be prepared by the Chief of Engineers, United States Army, or by the company, at its option, and approved by the Chief of Engineers, United States Army, and progressively install the hydroelectric equipment in said power house adequate for generating approximately two hundred and fifty thousand horsepower, all the work aforesaid to be performed as speedily as possible at actual coast and without profit to the company, it being understood that the necessary lands, flowage rights, and rights of way shall be acquired by the United States through an agent to be named by the company.

SEC. 7. The company will lease from the United States Dam Numbered 3, its power house, and all of its hydroelectric and operating appurtenances, except the lock, together with all lands and buildings owned or to be acquired by the United States connected with or adjacent to either end of the said dam, for a period equal to the lease term of Dam Numbered 2 and its hydroelectric power equipment thereat as stated in paragraph 3 hereof, in order that said respective lease terms of the two dams and the hydroelectric equipment thereat shall expire at the same time, the said period to begin from the date when structures and equipment of a capacity of eighty thousand horsepower are constructed and installed and ready for service, and will pay to the United States as annual rental therefor, 4 per centum of the actual cost of acquiring lands and flowage rights, and of constructing the lock, dam, and power-house facilities, payable annually at the end of each lease year, except that during and for the first three years of the lease period the rentals shall be in the following amounts and payable at the following times, to wit: One hundred and sixty thousand dollars one year from the date when eighty thousand horsepower is installed and ready for service, and thereafter $160,000 annually at the end of each year for two years. Dams Numbered 2 and 3 shall be included in the lease.

SEC. 8. The company will further pay to the United States during the period of the lease of Dam Numbered 3 $20,000 annually, in installments, quarterly in advance, for repairs, maintenance, and operation of Dam Numbered 3, its gates and lock; it being understood that all necessary repairs, maintenance, and operation thereof shall be under the direction, care, and responsibility of the United States during the said one-hundred year period; and the company, at its own expense, will make all necessary renewals and repairs incident to the efficient maintenance of the power house, substructures, superstructures, machinery, and appliances appurtenant to said power house and will maintain the same in efficient operating condition.

SEC. 9. At all times during the period of the lease of Dam Numbered 3 the company will furnish to the United States, free of charge, to be delivered at any point on the lock grounds designated by the Chief of Engineers, United States Army, electric power necessary for the operation of the said lock, but not in excess of one hundred horsepower.

SEC. 10. For the purpose of enabling the Government to create and provide a sinking fund to retire the cost of Dam Numbered 3 at the end of the lease period, the company will, at the beginning of the fourth year of the lease period, and semiannually thereafter for the remaining term of the lease, pay to the United States Government the sum of $3,505; and for the purpose of enabling the Government to create and provide a sinking fund to retire the cost of Dam Numbered 2 at the end of one hundred years, the company will at the beginning of the seventh year of the lease period, and semiannually thereafter for the remaining term of the lease, pay to the United States Government the sum of $19,868.

SEC. 11. The company agrees to purchase from the United States, and the United States will sell the following properties, namely:

(a) All of the property constituting nitrate plant numbered 2 (as officially known and designated), including lands, power plants, buildings, material, machinery, fixtures, equipment, apparatus, appurtenances, tools and supplies, and the right, license, and privilege to use any and all of the patents, processes, methods, and designs which have been acquired and may be transferred or assigned to a purchaser of nitrate plant numbered 2 by the United States, together with the sulphuric acid units now in storage on the premises.

(b) All of the property constituting nitrate plant numbered 1 (as officially known and designated), including lands, power plants, buildings, material, machinery, fixtures, equipment, apparatus, appurtenances, tools, and supplies, and the right, license, and privilege to use any and all of the patents, processes, methods, and designs which have been acquired and may be transferred to a purchaser of nitrate plant numbered 1 by the United States, but the company shall not be obliged to operate nitrate plant numbered 1 as an air nitrogen fixation plant.

(e) All of the property constituting the Waco Quarry (as officially known and designated), including rights of way and buildings, material, quarry tracks, machinery, railroad tracks, appurtenances, tools, and supplies.

SEC. 12. As the purchase price for the foregoing plants and properties to be conveyed to the company by the United States, the company will pay to the United States $5,000,000 in five installments as follows: One million dollars upon the acceptance of this offer, and $1,000,000 annually thereafter until the purchase price is fully paid, with interest at the rate of 5 per centum per annum on deferred payments, with the privilege of anticipating any or all such payments possession to be delivered upon payment of the first of said installments, and deeds of conveyance to be delivered when full payment for said property has been made. Each of said deeds shall refer to or contain the provisions of this offer, and said deeds shall be so drawn as to make such provisions covenants running with the land.

SEC. 13. This proposal contemplates and it is agreed that the purchase price for the property aforesaid shall not be diminished by reason of depreciation due to use or wear of buildings, machinery, and equipment or to the action of the elements, nor shall any claim be made for losses or in diminution of quantity of tools and supplies due to upkeep and maintenance during the period between the date hereof and the date of delivery of possession of said property; it being further understood that no inventory of the property need to be taken, but that due care will be exercised by the United States in preserving and safeguarding the aforesaid real and personal property intact until possession thereof passes to the company. If any part or parts of the aforesaid plants necessary for proper operation of same have been removed by the United States, said parts or part shall be returned when possession of said plants passes to the company. Deeds of conveyance of real property shall warrant the title to be good and unencumbered, but in accordance with and subject to the provisions set forth in paragraph 12 hereof.

SEC. 14. Since the manufacture, sale, and distribution of commercial fertilizers to farmers and other users thereof constitute one of the principal considerations of this offer, the company expressly agrees that, continuously throughout the lease period, except as it may be prevented by reconstruction of the plant itself, or by war, strikes, accidents, fires, or other causes beyond its control, it will manufacture nitrogen and other commercial fertilizers, mixed or unmixed, and with or without filler, according to demand, at nitrate plant numbered 2 or its equivalent, or at such other plant or plants adjacent or near thereto as it may construct, using the most economical source of power available. The annual production of these fertilizers shall have a nitrogen content of at least forty thousand tons of fixed nitrogen, which is the present annual capacity of nitrate plant numbered 2. If during the lease period said nitrate plant numbered 2 is destroyed or damaged from any cause, the company agrees to restore such plant, within a reasonable time, to its former capacity and further agrees: