Five Proposals

Muscle Shoals

The House passed, some weeks ago, the McKenzie Bill accepting Henry Ford's offer for Muscle Shoals. The Senate Agricultural Committee, considering the bill, developed a tendency far less favorable to Mr. Ford. Much testimony was taken; some new offers were submitted, and the impression began to get about that other offers were more favorable.

The testimony for the auto manufacturer's bill was mostly of the "trust Ford" variety. Five leading suggestions have been made for disposing .of the Shoals project. The chief features of the proposals:

Ford:

1) $10,000,000 capital to be invested.

2) Purchase outright from the Government for $5,000,000 of the following property: Nitrate Plant No. 1, Nitrate Plant No. 2, Waco Quarry, a 40,000 horsepower steam plant (to be built)--four items which cost, or will cost, the Government $83,915,000.

3) Lease from the Government for 100 years of the water power plants and preferred right to renew lease.

4) Guaranteed production: 40,000 tons annually of fixed nitrogen for fertilization at maximum profit of 8%; no guarantee as to quantity, if any, or price of electric power available to the public.

5) Forfeiture of none of the plants purchased for failure to live up to agreement; forfeiture under certain conditions of water power leases.

6) In case of war, the Government is guaranteed 40,000 tons of nitrogen and right to take over Plant No. 2, indemnifying Ford for losses.

7) For research work no sum guaranteed.

8) Rental of water power $219,964,954 for 100 years ($103,866,654 for 50 years).

Allied Power Companies (Tennessee Electric Power Co., Memphis Power & Light Co., Alabama Power Co.):

1) $15,000,000 capital invested.

2) Purchase, if the Government desires, of the Sheffield steam plant for $4,500,000.

3) Lease of Nitrate Plant No. 1 and water power from the Government for 50 years.

4) Guaranteed production: 50,000 tons annually of fixed nitrogen; 100,000 horsepower at cost for manufacture of fertilizer; excess electric power to be sold at prices regulated under the Federal Water Power Act.

5) Forfeiture of leases on nitrate plants and water power for failure to live up to contract.

6) In case of war, 90,000 tons of fixed nitrogen guaranteed, and right of Government to take over project without guaranteeing company against loss.

7) For research work a minimum of $1,000,000.

8) Rental of water power, $138,084,400 for 50 years.

Hooker-White-Atterbury:

1) $1,000,000 to be invested by the company as evidence of good faith, the Government to supply the remainder of the capital required, later to be amortized.

2) Purchase of no property.

3) Lease from the Government for 50 years of the nitrate plants and water power, with renewal preference.

4) Guaranteed production: as much fertilizer as can be manufactured with a maximum of 25% of the power generated by dams and steam plants, the power to be furnished at 10% less than the going rate at Muscle Shoals, the maximum profit on fertilizer to be 8%. Other power to be sold.

5) Forfeiture of lease for nonfulfillment of contract.

6) In case of war the Government would have the right to take over the nitrate plants.

7) For research work the company and the Government will provide equal sums not to exceed annually $200,000 each.

8) Payment to the Government during the first 10 years of sums aggregating twice the total of all payments to stockholders, and thereafter of sums aggregating three times the total of all payments to stockholders.

Norris Plan:

Government ownership and operation advocated by Senator Norris.

Union Carbide (Full details of this offer, recently published, were not known):

It was reported to contain a guaranteed return to the Government of $120,000,000 under a 50-year lease. For the manufacture of fertilizer 50,000 horsepower was guaranteed; the fertilizer to be sold at cost plus 5%, and half of the profit to be devoted to research work. Three quarters of the profit from the sale of hydro-electric power was to go to the Government.

The most telling point made against the Ford offer was that by it the Government would lose for all time its nitrate plants, steam plants and Waco Quarry and receive for them only $5,000,000, whereas under the other plans the Government would retain ownership of plants as well as dams, and receive probably as great or greater profit. Major General C. C. Williams, Chief of Ordnance of the War Department, estimated that under the Ford Plan the Government would receive $115,906,896 in 50 years; under the Power Companies Plan $134,909,320; and under the Hooker-White-Atterbury Plan $113,274,738.