without seriously jeopardizing the end product, we are going at it that way.

Since three-fourths of the sulfur produced is used for sulfuric acid, a parallel order limiting the use of sulfuric acid will also have to be issued. No limitation on the use of sulfuric acid has heretofore been in effect except in 11 Western States, where it is presently under allocation.

That simply backs up the fact that the two must be considered jointly.

There will be no reduction in the total production and consumption of sulfur as a result of these proposed limitations. Every available pound of sulfur will be put to use.

The limitation provisions may take several months to be felt. Since the problem is so urgent, we plan to add to Order M-69 an inventory provision restricting stocks at consuming plants to a maximum of 25 days, except in cases where normal shipments, such as boats or barges, would result in greater than a 25-day supply. In such cases, new shipments chould not be received until inventories had fallen to 25 days or below. Since some plants have substantial inventories, it is expected that there will be made available for redistribution a substantial tonnage of sulfur during the coming quarter, perhaps as much as 75,000 tons. This benefit can be realized only once. Excessive accumulation, however, will be prevented in the future.

Since nitrogen is not dependent on a raw material in short supply, as superphosphate is dependent on sulfur, production is limited only by installed capacity. The available supply of fixed nitrogen from all sources during 1951 is estimated at 1,790,000 tons. To this must be added the potential capacity of the Morgantown Ordnance Works, estimated at 164,000 tons, which, however, may not actually be in production until 1952. Requirements in 1953 for agricultural, industrial and military purposes are estimated at 2,564,000 tons. An expansion of facilities totaling 610,000 tons nitrogen is therefore required to meet 1953 estimated needs.

Proposed expansions as reflected in applications for certificates of necessity exceed this figure so that there is no doubt that it will be realized, although a part may not come into production until as late as 1954. The producing units are large, and it takes time to fabricate and install the equipment.

Supplies of byproduct ammonia will increase steadily as the steel industry expands. The entire quantity of ammonia produced from byproduct coke ovens will be recovered. The increase will be of the order of 10 percent per year through 1953. 1951 production is estimated at 200,000 tons nitrogen.

The Department of Agriculture has estimated that an annual increase of 100,000 tons nitrogen per year after 1953 will be needed to keep pace with rising population.

With regard to potash, it is estimated that 1,423,600 tons will be produced during 1951 and 140,000 tons imported. The corresponding figures for 1952 are estimated at 1,573,800 and 150,000, an increase of 10 percent. Industrial uses for potash are comparatively small, and the major portion of the total supply will go to fertilizers.

The new facilities for the recovery of sulfur, for conversion of sulfuric acid plants to pyrites burning, and for synthetic ammonia require a substantial tonnage of steel and other critical materials. The chemical industry's expansion program is second in size only to that of the steel industry.

Applications for structural steel for the fourth quarter for approximately 800 projects totaled 52,000 tons-note that is structuralagainst which 19,780 tons were allotted. To this must be added 2,642 tons transferred by the Department of Agriculture specifically for certain of the new ammonia plants.

This division, after consultation with other agencies, recommended prime consideration for 20 chemicals-that is out of a good many, I think, actually 5,000 commercial chemicals, 20 were given prime consideration-among which the following directly or indirectly support agricultural needs:

Approval has been or is about to be granted by the Facilities and Construction Bureau allotting construction materials to 14 sulfuric acid projects-principally conversions-and 10 ammonia projects, which are the two items most essential to fertilizer production.

The Chemical Division will continue to make every possible effort to correct inequities in distribution caused by the shortage of sulfur and sulfuric acid and to encourage and to complete projects which will augment the supply of fertilizers and pesticides.

The CHAIRMAN. Any questions?

Senator HOLLAND. I have a question, Mr. Chairman.

I note that in your statement you deal with the production of potash and of ammonia, and you also mentioned the production of superphosphate, triple superphosphate, but not the production of phosphate itself. Is there any particular reason why you felt it unnecessary to mention hosphate production?

Mr. KLIPSTEIN. I believe I am correct on this. The supply of phosphate, phosphate rock and the mining of it is adequate.

Senator HOLLAND. Then it would be proper to consider in your statement that as far as production of the raw phosphate rock is concerned, it is ample?

Mr. KLIPSTEIN. Yes, sir.

The CHAIRMAN. Thank you very much, sir.

Is Mr. Allstetter here?

Mr. ALLSTETTER. Yes, sir.

The CHAIRMAN. Will you step forward please. Senator Holland desires to ask you a few questions.

90402-51--10

STATEMENT OF W. R. ALLSTETTER, DEPUTY DIRECTOR, OFFICE OF MATERIALS AND FACILITIES, PRODUCTION AND MARKETING ADMINISTRATION, UNITED STATES DEPARTMENT OF

AGRICULTURE

Senator HOLLAND. Thank you, Mr. Chairman.

Mr. ALLSTETTER. I am W. R. Allstetter, Deputy Director of the Office of Materials and Facilities, Production and Marketing Administration.

The CHAIRMAN. All right, Senator Holland, you said you had some questions.

Senator HOLLAND. I might say, Mr. Allstetter, that Mr. Clark Thompson, Member of Congress from the Galveston district of Texas, was particularly interested in this and he asked me to go into this question with the proper witness from the Department of Agirculture to develop the facts for the record. Have you seen the proposed questions of Mr. Thompson?

Mr. ALLSTETTER. I have, yes, sir.

Senator HOLLAND. All right, I would like to address them to you, first placing in the record the preliminary statements supplied to me by Mr. Thompson. I can read it for the information of the committee. The CHAIRMAN. It will be placed in the record at this point. (The document above referred to is as follows:)

MEMO FOR SENATOR HOLLAND

Urea is a product long recognized as a valuable and important fertilizer and supplement for cattle feed. It is a nitrogenous compound and since the bacteria in a cow's paunch use nitrogen for food, urea becomes a very important ingredient when properly used.

Urea works in a cow's paunch by supplying valuable nitrogen to the bacteria that are always there. When a plentiful supply of nitrogen is available to the bacteria in the paunch, these bacteria become more active and multiply more rapidly. The result is they really go to work making ready for digesting the ration the cow eats, resulting in more complete assimilation of the total ration. The supply of urea has been very limited and its originaally known sources were insufficient to supply the demand. In recent years it has been discovered that natural gas is a source of urea and a properly equipped plant can furnish this chemical in quantity.

Senator HOLLAND. The first question: What is the current annual production of urea?

Mr. ALLSTETTER. Urea is produced by two companies and a portion of it goes to agriculture. The exact quantity produced by these two companies is not information which we have because it is considered. private competitive information.

We do have, however, information as to the amount of urea that is going to agricultural purposes which is a fraction of this total. About 50,000 tons of urea annually goes into urea compounds which go into fertilizer. They are fertilizer.

Something less than half that amount is used as a protein feed supplement for cattle, ruminants.

Senator HOLLAND. In other words, you do not have available the figures as to the total production of urea or as to that specific part of the production which goes to supplement cattle feed, but you do have the figure as to the total amount of urea that goes into commercial fertilizers.

Mr. ALLSTETTER. It is about 20,000 for cattle feed, it is 50,000 for fertilizer.

Senator HOLLAND. And your 50,000 figure is an accurate figure?
Mr. ALLSTETTER. Yes, sir, we believe it to be accurate.

Senator HOLLAND. Would you explain for the record just what urea is.

Mr. ALLSTETTER. Urea is a nitrogen compound. It is derived from ammonia as are most of the other nitrogen fertilizers. It is a particularly desirable form of nitrogen fertilizer for several reasons.

One is that it is a solid form of very high analysis. The fertilizer grade has approximately 44 percent nitrogen as compared to, say, 33 percent in ammonium nitrate and 21 percent in ammonium sulfate. Therefore you can ship 100 tons of nitrogen in that form over long distances for the same freight cost as three-quarters or one-half as much nitrogen in other forms.

Senator HOLLAND. It is a concentrate as far as this nitrogen content is concerned.

Mr. ALLSTETTER. Yes, sir. Also, it is a safe material to handle which, in connection with ocean shipping particularly and coastwise shipping and river shipping, is very important. Such things as happened at Texas City could not happen with urea.

Senator HOLLAND. You mean it is not explosive?

Mr. ALLSTETTER. It is not explosive. It has some other special advantages in that it can be actually sprayed directly on the leaves of plants.

On some plants on which you wish to control the amount of nitrogen that is applied, the amount that is needed can be applied and then shut off at the right time. It can be used for a very quick shot and a small shot of nitrogen. Also, urea can be used to replace some uses of ammonium sulfate, which, of course, requires sulfur in substantial quantities. It can be used to replace it in rice. Ammonium sulfate is the principal material that is used now as a nitrogen rice fertilizer. Another advantage that is very substantial is that it can be used as a cattle feed supplement. One of the critical problems, of course, is to get enough yield of meat for the amount of grain fed. By protein supplements the yield can be increased, and there are some limits it would appear, looking at the over-all picture, some limits on the amount of protein supplements that farmers will be able to obtain over a long period of time. Urea mixed with the natural protein substances can serve equally well as a natural protein supplement, according to recent experiments. Urea has something like six times the protein value of natural protein supplements.

Senator HOLLAND. The second question which I was requested to ask is this: If no new sources are found, what would be the estimated shortage in the next 3 years?

Mr. ALLSTETTER. I can estimate the fertilizer shortage. There are many other uses of urea, to make plastics and other chemicals, and Mr. Klipstein could expand on that, but for fertilizer the Department of Agriculture has just completed a study on what would be the desirable amount of nitrogen of the 700,000-ton expansion requested that should go into urea, and it is substantial; 130,000 tons of nitrogen in the form of urea. That is about 300,000 tons of urea.

In other words, in 1953-54, if we do not get any more urea, why that will be considered the shortage. About a sixfold increase is the position of the Department as being desirable in the next few years.

Senator HOLLAND. In other words, the Department in the near future would like to see the presently available amount of around 50,000 tons for fertilizer use increased six times.

Mr. ALLSTETTER. Yes, sir, and there is some additional need for feed, but that is a very hard one to estimate.

Senator HOLLAND. The third question is this: What step have been taken to increase the present production?

Mr. ALLSTETTER. It has largely been a matter of persuasion. I think I am correct in saying that practically all of the leading nitrogen producers and many other companies have been approached by the Department of Agriculture with regard to production of urea, and many of them have evinced interest. There have been a lot of nibbles, but there has been no firm proposition presented other than by one company, which has presented an application for assistance in the financing of a urea plant, and that has been recommended by the Department to the Defense Production Administration, and is under consideration by that organization.

Senator HOLLAND. All right. Thank you, sir.

Mr. ALLSTETTER. Thank you, Mr. Chairman.
The CHAIRMAN. The next witness is E. J. Fanflik.
Have you a prepared statement?

STATEMENTS OF E. J. FANFLIK, CHIEF, MANAGEMENT AND DIS-
POSAL DIVISION, REAL ESTATE, CORPS OF ENGINEERS; H. D.
REYNOLDS, AMMUNITION BRANCH, ORDNANCE CORPS; AND S. D.
BLAEUER, CHIEF, INDUSTRIAL LEASING MANAGEMENT BRANCH,
REAL ESTATE, CORPS OF ENGINEERS, DEPARTMENT OF THE
ARMY

Mr. FANFLIK. We have no prepared statement. We were requested to appear to give information with respect to ammonia plants which are under the control of the Army and which are available for nitrogen production.

My name is E. J. Fanflik. I am in the office, Chief of Engineers, Real Estate, and our responsibility is to lease or sell such plants as may be made available by the Department of the Army.

Mr. Blaeuer is my principal assistant on industrial plants.

Mr. Reynolds is from the Ordnance Department, and their responsibility is the maintenance and operation of such plants for Army purposes.

The CHAIRMAN. First can you give us a résumé of those plants that are available at the moment?

Mr. FANFLIK. There are three anhydrous ammonia plants which are in a stand-by status. One is the San Jacinto Ammonia Works which is presently leased to the San Jacinto Chemical Corp.

The second one is called the Cactus Ordnance Works which is presently leased to Phillips Chemical Co.

Both of those plants are in Texas. The San Jacinto Ammonia Works has a rated capacity of anhydrous ammonia production of about 70 tons a day or approximately 25,000 tons a year. The Cactus