MMT MUSCLE SHOALS THURSDAY, MAY 22, 1930 HOUSE OF REPRESENTATIVES, The committee met at 10.30 o'clock a. m., Hon. Bertrand H. Snell (chairman) presiding. The CHAIRMAN. We have met this morning to consider a rule for the consideration of Senate Joint Resolution 49. Mr. Ransley is the chairman of the Military Affairs Committee, and we will be glad to hear what he has to say in regard to this matter. STATEMENT OF HON. HARRY C. RANSLEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA Mr. RANSLEY. Mr. Chairman, the Committee on Military Affairs of the House have drawn a bill to give the right to three eminent citizens appointed by the President to accept bids for Muscle Shoals properties. I say "bids," because it is really in the plural. The members of the subcommittee of five, who were appointed by myself to draw up this bill-three of them are present and, with your permission, I will call upon Mr. Stafford to make a short explanation of the bill. The CHAIRMAN. I do not think it is necessary to go into all the details of this bill. What we want to discuss here this morning is just in a few words what your bill does and what your idea is relative to consideration of it on the floor. As far as I know, although I have not canvassed every member of the committee, there is going to be no opposition to giving you a rule for the consideration of this bill on the floor at a very early date. STATEMENT OF HON. WILLIAM H. STAFFORD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WISCONSIN Mr. STAFFORD. Mr. Chairman and gentlemen, in a word, this bill differs from the bill that has been up for consideration in the last Congress and prior Congresses, known as the Madden bill, and in this Congress known as the Madden-Wright bill, in that it does not provide a legislative lease for the Muscle Shoals properties, but provides for a board of three members to be appointed by the President, without confirmation by the Senate, to enter into and accept proposals for the letting and the demising of these properties, in part or in whole, with the authority limited to them to enter into such leases by December 1, 1931. 1 It goes further and lays down certain principles that the board must follow in the drafting of the lease. Our subcommittee, which was appointed by Mr. Ransley, the acting chairman of the Comnittee on Military Affairs, believed we were acting as a committee of stockholders representing the people of the United States and that we, as a legislative body, the Congress of the United States, were ill fitted to enter into a lease. It has been represented that one reason why Mr. Henry Ford withdrew his proposal of a lease was because of the unfavorable conditions that were attached to his proposal in the Senate of the United States. We have here what we believe is a workable provision, and the members of the subcommittee have high hopes that a lease will be entered into by this board, under the supervision of the President, and that it can be consummated within the period of time limited. We did not look with favor upon the resolution reported by the Senate, popularly known as the Norris resolution, because we were given to understand such a resolution would not be received favorably by the administration, and furthermore it provides for Government operation of this property. Under the terms of the Norris resolution, as the subcommittee views it-I think I speak within measured bounds--it might not provide for 1 ounce of fertilizer being produced. The bill that we have drafted would require the properties adapted for the manufacture of fertilizer to be utilized by the production of a certain amount of fertilizer in certain stated times, and in increasing amounts thereafter. It safeguards the interest of the Government in providing for rental; it also is a liberal contribution, as I view it, to the agricultural interests of the country, in providing for the production of fertilizer virtually at cost plus a reasonable profit. We also, in this bill, authorize the lessee or lessees, through a holding corporation not authorize; we direct the lessee or lessees, through a holding corporation, to construct Cove Creek Dam, which will double the power at Dam No. 2, popularly known as the Wilson Dam, and increase the amount of water power at all intervening dam sites, some 10 or 11, that may be constructed. Mr. THURSTON. What is the necessity for that, Mr. Staffordconstructing another dam? Mr. STAFFORD. The Cove Creek Dam is essentially a reservoir proposition, and the Dam No. 2, Wilson Dam, can not economically be administered without increasing by twofold the constant primary water power that will be developed by reason of the storage at Cove Creek. Mr. THURSTON. What will that cost? Mr. STAFFORD. Cove Creek Dam is estimated to cost $36,000,000, but there is to be set off as a contribution by the National Government such amount as that dam will be of benefit to the navigation interests. and flood control, which we estimate will not exceed $15,000,000. Mr. THURSTON. Will we lose as much in proportion in building this new dam as we will in the old one? Mr. STAFFORD. The Government does not construct the dam; under the bill, as reported, different from the Senate resolution, the Government does not construct the dam. We direct the lessee or lessees, through a holding corporation, to construct it, and the members of the Committee on Rivers and Harbors and speaking with Mr. 0 McDuffie-I do not think I am violating any confidence-approve of the policy, if we can get private interests to construct the dam, as being far better than compelling the Government to construct it. Mr. THURSTON. Yes; but if we are losing money on the initial investment and can not get a profitable return, how will we gain through spending $40,000,000 more? Mr. STAFFORD. We are not spending $40,000,000 more; we are directing the lessee or lessees, through a holding corporation, to construct that dam, which will double the power at Dam No. 2, known as Wilson Dam. Mr. SPROUL. But does not the Government furnish the money? Mr. STAFFORD. No; it does not. Mr. THURSTON. It comes from the earnings of the plant. Mr. STAFFORD. The Government does not furnish the money. The lessees are required to build this dam; but, in the determination of how much the holding corporation will be charged in the amortization for this dam, there is to be set off in the annual rental to be paid that part which goes as a contributing factor to navigation and to flood control on the Tennessee River below the dam. Mr. THURSTON. The Government pays for it, though? Mr. STAFFORD. Oh, the Government will pay to that extent of probably $10,000,000. Mr. THURSTON. Surely. Mr. STAFFORD. Now, it is the confirmed judgment of the subcommittee, if not of the entire committee-and, by the bye, I may say our full committee has been giving hearings three days a week from the first of the year until the special committee was appointed, only about a month ago Mr. SPROUL. And this is a report from the full committee? Mr. STAFFORD. They were not. The committee vote was 11 to 5, and the 5, I suppose, some of them were in favor of the Government ownership proposition as announced in the Senate resolution, and one or two others may be in favor of some other program of leasing, mayhap by a legislative lease, as was provided for in the MaddenWright bill. There are some other members of the main committee, like the gentleman from South Carolina, Mr. McSwain, who is an authority on this subject and has been giving it close study for years and years, and I myself, who were opposed to the so-called MaddenWright bill, because we believed the Government would hold the bag and the American Cyanamid Co. would get the entire profit, and there was nothing under that bill that would insure the manufacture of fertilizer under certain conditions and, moreover, the views of the War Department show the return to the Government would be less. than 2 per cent. Mr. O'CONNOR. You have been talking about Government ownership Mr. STAFFORD. Government operation, I should say. Mr. O'CONNOR. As I understand, this bill only authorizes a lease? Mr. STAFFORD. A lease or leases. Mr. O'CONNOR. The Government will always own, continue to own all this property; that is, it can not be sold under this bill, or any part of it? |