CONTENTS Bell, Wm. B., president American Cyanamid Co... Brand, Charles J., executive secretary and treasurer National Fer- Cottrell, Dr. F. G., chief of fertilizer and fixed nitrogen investigation, Bureau of Chemistry and Soils, Department of Agriculture__ Howard, Dr. P. E., chemical engineer, Bureau of Chemistry and Soils, Department of Agriculture.. Knight, Dr. H. G., chief Bureau of Chemistry and Soils, Department Miles, Maj. F. H., Ordnance Department, United States Army. Williams, Maj. Gen. C. C., Chief of Ordnance, United States Army.. Appendix (Cove Creek Dam No. 3 and Primary Power Dam No. 2), S. J. 49 as passed by Senate and amended in House Committee, together Report submitted on War Department activity at Muscle Shoals.. 275 170 153 177, 189 211 177 MUSCLE SHOALS THURSDAY, FEBRUARY 6, 1930 HOUSE OF REPRESENTATIVES, COMMITTEE ON MILITARY AFFAIRS, Washington, D. C. The committee met at 10.30 o'clock a. m., Hon. Harry C. Ransley presiding. Mr. RANSLEY. At the last meeting of the committee, a letter from Mr. Bell, the president of the American Cyanamid Co., was read. This meeting was called only for the purpose of giving Mr. Bell an opportunity to reply to some newspaper articles that accompanied his communication. The committee will be glad to hear from Mr. Bell. STATEMENT OF W. B. BELL, PRESIDENT OF THE AMERICAN CYANAMID CO. Mr. BELL. Mr. Chairman and gentlemen, I appreciate very much this opportunity to come before you again. You did us the honor some time ago to report out the Wright bill with favorable action— a bill which contains the offer of our companies-and I felt when I got back from Europe, on the 27th of last month, and read these newspaper articles, it was no more than right, in view of the confidence you had reposed in us by that action, that I should make some statement in regard to the matter that appears in those articles. First of all, it was suggested in the articles that the Tennessee River Improvement Association and/or Col. J. W. Worthington, its Washington representative, were in the pay of the American Cyanamid Co. That is not so. We have never paid them a cent, either the association or Colonel Worthington, nor have we ever made them any promise of compensation. The Tennessee River Improvement Association, so I have understood, is supported by voluntary contributions from people up and down the Tennessee Valley who would like to see the stream improved and would like to see industry brought to it and, obviously our offer was calculated to accomplish those results and they supported the offer. They have frequently criticised the offer; they have taken the stand that unless this were done or that were done, they would not support the offer. They have exercised a very independent judgment and attitude in the whole matter and I repeat that we have not paid them anything and we have never even suggested a promise of future compensation. While I am on that subject, I would like to add this: Some time I am told, it was suggested that we employed, or had in our employ, or paid money to the American Farm Bureau Federation, ago, or Mr. Chester Gray, its Washington representative, or both. We have never paid either of them a cent; we have never made them the slightest promise or suggestion of compensation in the future, and that story is absolutely untrue. Some years ago, there was a great deal of propaganda appearing in the papers against the cyanamid offer. Nobody throughout the country seemed to know what the Cyanamid offer was. The offer had been indorsed by the national convention of the American Farm Bureau Federation. In fact, it has been indorsed in their national conventions in Chicago repeatedly. Mr. Gray prepared an article on the subject. That article seemed to us admirably to express and describe the situation and the offer of the American Cyanamid Co. and we asked Mr. Gray whether he would object to allowing us to reprint that article, so that if the press of the country chose to print the article the people might know what the American Farm Bureau Federation thought about it and gain some idea of what the offer actually meant. Mr. Gray did not object to that, but said it must appear over his name; that he was responsible for it. He had no money available for writing to the editors of the different papers throughout the United States, or furnishing them with mat service, or anything of that kind. We did not pay him any money; we did not pay his association any money, but we instructed our advertising agents to prepare mat service showing the reprint of the article, so that men who ran stereotype plants in connection with their newspapers might have it reprinted by using these mats, and the letter went out to the editors of the United States over Mr. Gray's signature, offering them the use of mat service in connection with the article, a copy of which article was inclosed. We paid for the postage on those letters; we paid for the postage on the returns; we paid for the postage on the mat service; we paid for the preparation of the mats. I am not sure that I can give the exact figure; but my recollection is that some 1,500 or 1,600 hundred editors availed themselves of that service, and the bill was, I think, $7,050 or $7,048. I mention that because I want you gentlemen to have a clear understanding of the true relations between the American Farm Bureau Federation and Mr. Gray on the one hand, and my companies and our associates on the other. And I repeat that we have paid the American Farm Bureau Federation not one cent; we have paid Mr. Chester Gray not one cent, and we have never made any promise of or any suggestion of compensation in the future. Coming back to the articles which were on my desk when I returned, there was a charge made that the American Cyanamid Co. had entered into an agreement with the power companies in regard to Muscle Shoals. There was no agreement; there is no agreement. Some years ago, when we began the preparation of this offer of ours (some five or six years ago), we had a feeling that a sensible, economic businesslike solution of the situation at Muscle Shoals was complicated by the question of how to dispose of surplus power and that the logical, sensible, businesslike way to dispose of the surplus power was over the existing transmission lines. There was talk between the representatives of the power company and ourselves as to how that could be done. As I have repeatedly testified to you gentlemen, there is not any great amount of power at Muscle Shoals and when you get through with the manufacture of fertilizer, even as of that date, we realized that the surplus power would be very slight. On the other hand, there had been built up an expectation of surplus power distribution from Muscle Shoals throughout the United States, or throughout the Southern States, I should say,. which had resulted in a demand for an equitable distribution of that power. You gentlemen, some of you, and I have struggled with the question of what is an equitable disbution of power. I do not know what it would be. If it was to be distributed among cities, States, and municipalities, what would be equitable to-day would be inequitable to-morrow. Would it be based on population; would it be based on existing demand; would it be based on future demand? What in the world does equitable distribution of power mean? And if we were to become responsible for the equitable distribution of power, supposing that we had decided in our minds that the city of Sheffield was entitled to 50,000 horsepower and then the city of Memphis, a little later on, came in and felt that they wanted 50,000 horsepower. The supply of surplus power would have been exhausted and what would we do then? The whole thing, once you embark on equitable distribution of power, simply becomes a tangle which I do not believe anybody could solve, and my own feeling is we could not be certain we could solve it, because, as I have also testified to you gentlemen, we have no guarantee that the Public Service Commission of Alabama would grant us rights and franchises for those transmission lines and, if we had the franchises and rights to embark on the construction of transmission lines, what would we do when we got to the end of the transmission lines? Suppose, for example, we built a transmission line to one of the great cities of Alabama, or Tennessee, and we had no franchise within the city limits: What would our transmission line be worth? We were not in a position to make a guarantee as to the distribution of power, because the determination of and granting of the necessary franchise rights would not be a matter which we could control. All that you gentlemen will no doubt recall. Consequently, in the very beginning, when this offer was in preparation, we were glad to talk with the representatives of the power company, because we felt that the power company, with its existing transmission lines, with its connections with other companies, possessing franchises in the different cities, was the only company in a position to insure a distribution of the surplus power. Further than that, we had in mind this fact, that transmission lines require many millions of dollars of investment and, under our fertilizer guarantee, the power must always be available for the manufacture of fertilizer and we might soon find ourselves in a position where we would have but little power to distribute and that that power, which in the first place was not of quantity sufficient to insure or justify millions of dollars of investment in transmission lines and francises for the distribution of the power-that that investment would become absolutely worthless when the power still further diminished because of the demands of the fertilizer operations. So we talked to the power people and pointed out that that would be a very sensible arrangement to make. |