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The language of the bill, as it passed the House, has been superseded by new language whereby the President of the United States is given almost unlimited authority to lease the Muscle Shoals property for fertilizer manufacture, with limitations only controlling the quantity, quality, and selling price of the fertilizer there manufactured, leaving it wholly to the judgment of the President what rental shall be charged for the nitrate plants and other property mentioned in the bill, and the price for power to be paid by the lessee.

It is our firm conviction that only by granting such wide and general blanket authority to the President, making it possible for him to sit across the table from a prospective lessee, can a lease of the Muscle Shoals properties ever be negotiated. We believe that there are no such restrictions or limitations in the leasing language of the conference report as will bar any reasonably minded prospective lessee from submitting a bid, or from negotiating for a lease. The terms may be made attractive, without the grant of government subsidy, and at the same time realizing a much fairer return to the Government than it is now receiving, and has been receiving, under present arrangements.

Manifestly, it was necessary to make the lease language as liberal as possible so as to bring about a lease. The price for power and the rental to be charged for the other property may be made as liberal as the President sees fit.

The long continued disagreement between the Senate and House conferees arose over the language to be used in granting authority to the lessee in the matter of manufacturing or processing by-products incidental to the manufacture of fertilizer. Under the language as now written in the conference report, the lessee is permitted to manufacture, process and sell, on the Government reservation, all such by-products as are not ingredients of fertilizer, and is also permitted to manufacture and process, but on property outside of the reservation, electrochemicals, or any other product whatever, he chooses to manufacture, and for that purpose is allowed as much as 15 per cent of all the power actually used in fertilizer manufacture, so long as he complies with the quantity stipulations of subdivision d of section 25 of this act, and subject to the same conditions, is permitted to purchase as much secondary power as, to the President, appears fair and equitable. The lessee is given first call on power, both primary and secondary, subject only to the reasonable conditions stated in the report.

HARRY M. WURZBACH.
PERCY E. QUIN.

HUBERT F. FISHER.

Managers on the part of the House.

For the purpose of giving the two Houses opportunity to act upon the measure, I am signing conference report embodying provision for private leasing of nitrate plants for quantity production of fertilizer with Government operating power plants and constructing Cove Creek Dam.

While this is not what I preferred, it is the best that could be obtained in view of the situation which developed in conference. If satisfactory operations are secured under proposed lease authorization, the legislation will be beneficial. Otherwise it would be unsound and hurtful.

This formula includes in a measure compromise principles propounded by House conferees last December, but it is not consistent with the House plan.

In event the measure should become law, I am hopeful that successful fertilizer production may be started and continued under limitations now proposed or modified as practical experience demonstrates to be necessary.

With successful operation of nitrate plants under lease contract for large-scale fertilizer production, no need will arise for Government to build transmission lines, as most, if not all, the power will be used in nitrate plant operations as originally intended in national defense act under which whole project was constructed.

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WAR DEPARTMENT APPROPRIATION BILL, 1932

FEBRUARY 19, 1931.-Ordered to be printed

Mr. BARBOUR, from the committee of conference, submitted the following

CONFERENCE REPORT

[To accompany H. R. 15593]

The committee of conference on the disagreeing votes of the two Houses on the amendments of the Senate to the bill (H. R. 15593) making appropriations for the military and nonmilitary activities of the War Department for the fiscal year ending June 30, 1932, and for other purposes, having met, after full and free conference have agreed to recommend and to recommend to their respective Houses as follows:

That the Senate recede from its amendments numbered 1, 2, 3, 5, 6, 7, 8, 9, 10, 11, 13, 14, 15, 16, 17, 18, 20, 21, 24, 25, 26, 27, 28, 29, 31, 33, 34, 35, 42, 47, 49, 50, 51, 52, 53, 56, 57, 58, 59, 60, 61, 62, 63, 67, 68, 69, 73, 75, 76, and 77.

That the House recede from its disagreement to the amendments of the Senate numbered 4, 22, 23, 37, 38, 39, 45, 46, 55, 64, 65, 70, and 71, and agree to the same.

Amendment numbered 12:

That the House recede from its disagreement to the amendment of the Senate numbered 12, and agree to the same with an amendment as follows:

In lieu of the sum proposed insert $85,413; and the Senate agree to the same.

Amendment numbered 19:

That the House recede from its disagreement to the amendment of the Senate numbered 19, and agree to the same with an amendment as follows:

In lieu of the sum proposed insert $5,105,897; and the Senate agree to the same.

Amendment numbered 36:

That the House recede from its disagreement to the amendment of the Senate numbered 36, and agree to the same with an amendment as follows:

In lieu of the sum proposed insert: $14,472,585; and the Senate agree to the same.

Amendment numbered 54:

That the House recede from its disagreement to the amendment of the Senate numbered 54, and agree to the same with an amendment as follows:

In lieu of the sum proposed insert $31,479,635; and the Senate agree to the same.

Amendment numbered 66:

That the House recede from its disagreement to the amendment of the Senate numbered 66, and agree to the same with an amendment as follows:

In lieu of the sum proposed insert $2,779,129; and the Senate agree to the same.

Amendment numbered 78:

That the House recede from its disagreement to the amendment of the Senate numbered 78, and agree to the same with an amendment, as follows:

In line 7 of the matter inserted by said amendment, before the period, insert, to be available immediately; and the Senate agree to the same.

The committee of conference have not agreed on amendments numbered 30, 32, 40, 41, 43, 44, 48, 72, and 74.

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The managers on the part of the House at the conference on the disagreeing votes of the two Houses on the amendments of the Senate to the bill (H. R. 15593) making appropriations for the military and nonmilitary activities of the War Department for the fiscal year ending June 30, 1932, and for other purposes, submit the following statement in explanation of the effect of the action agreed upon and recommended in the accompanying conference report as to each of such amendments, namely:

Nos. 1, 2, 3, 5, 6, 7, 8, 9, 10, 11, 13, 14, 15, 16, 17, 18, 24, 25, 31, 33, 34, 35, 47, 49, 50, 51, 52, 53, 56, 57, 58, 59, 62, 63, 68, 69, 73, and 75: Appropriates for personal services, as proposed by the House, instead of allowing increases for promoting employees in under average grades, as proposed by the Senate.

No. 4: Appropriates for classifying and indexing the military personnel records of the World War, $250,000, as proposed by the Senate, instead of $200,000, as proposed by the House.

No. 12: Appropriates for salaries, office of Chief of Bureau of Insular Affairs, $85,413, instead of $85,033, as proposed by the House, and $85,713, as proposed by the Senate.

No. 19: Corrects a total.

No. 20: Appropriates $155,000 for contingent expenses, War Department, as proposed by the House, instead of $157,000, as proposed by the Senate.

No. 21: Restores House provision in re use of funds not required in consequence of the economic survey which has been conducted by the War Department.

No. 22: Appropriates $30,000 for participation by the United States Army in the Yorktown Sesquicentennial Celebration, as proposed by the Senate.

No. 23: Appropriates $57,480, as proposed by the Senate, instead of $47,480, as proposed by the House, for contingencies, military intelligence division.

Nos. 26 to 29, both inclusive, relating to pay of the Army: Makes available $131,132 for increased pay for retired officers on active duty, as proposed by the House, instead of $168,650, as proposed by the Senate, and provides for the use of $800,000 of purchase-of-discharge funds, as proposed by the House, instead of $400,000, as proposed by the Senate.

No. 36: Appropriates $14,472,585 for Army transportation, instead of $14,442,155, as proposed by the House, and $14,506,955, as proposed by the Senate.

Nos. 37 and 38, relating to horses, draft and pack animals: Makes $132,500 available for the encouragement of the breeding of riding horses, as proposed by the Senate, instead of $120,000, as proposed by the House.

Nos. 39, 42, and 45, relating to military posts: Excepts the appropriation from the provisions of sections 1136 and 3734 of the Revised Statutes, as proposed by the Senate; makes available $36,760 for

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