Mr. WILLKIE. I don't see how else it could be a yardstick. A yardstick is for the purpose of measuring, and therefore you must have the same unit of measure. If your inches are longer or shorter Representative WOLVERTON. Some may have a restricted view of what is meant by a yardstick. I personally would be greatly helped if I could have the information that would enable me to determine whether the rate that has already been fixed is in accordance with the cost. Mr. WILLKIE. That is a different question, and that is quite a question, and that question you gentlemen, with the help of experts, can determine, as to whether or not here is an operation in and of itself where the allocations--whether the allocations, first, are fairly made and legitimately made, and proportionately made in accordance with the importance of these structures; second, whether the structures are properly designed for the objectives; and then the operations, whether or not in the relationship with the municipalities, subsides are given, and all of those things. You men can come to some conclusion on them, but not very accurately without a lot of experts. Representative WOLVERTON. Mr. Jenkins' question, as I took it, was an inquiry of you as to whether you had been able to have all of the opportunity you wished to express an opinion with respect to a yardstick. I have in mind, when I ask you the question which I have: Do you have sufficient facts, or do you know of the publication of sufficient facts, that would enable you or anyone else to determine whether the present rate of the T. V. A. is a proper one? Mr. WILLKIE. I may say that I think, on the basis of the present available information, that is impossible. Representative JENKINS. One other question-it has occurred to me several times-and that is the matter of costs in the production of electricity: Does geography or climate play much part? Mr. WILLKIE. It plays some part, and proximity to coal fields and other forms of fuel, and labor costs, and all of the other elements. I don't believe the variation is as wide in some other businesses, but it is still there. Representative JENKINS. Here is what I had in mind awhile ago. If our committee does anything that is improper or even-whatever happens, if we encourage the fixing of a definite yardstick in one territory, favored territory, and if the moral and psychological effect from that reaches out into Oregon and Minnesota and other places, where the climate is entirely different, and the geography is different, and all of the other elements are different, then we will be doing a tremendous injustice to some other place. Mr. WILLKIE. You would be disturbing the security markets. Mr. BIDDLE. SO certainly we ought to warn these people, if we do recommend any yardstick, that it might be applicable in a certain territory and might not in another. Mr. WILLKIE. That is right. Mr. BIDDLE. That would seem to be fair, obviously. Acting Chairman SCHWARTZ. I just wanted to observe that the committee has a group of competent engineers Mr. WILLKIE. I am not throwing off on them. Acting Chairman SCHWARTZ. Who are going into the various questions that Mr. Wolverton is inquiring about We cannot throw them all on the stand at once to put that in. Representative WOLVERTON. The point I was making was thisthat whatever that finding of our engineer is, or whatever facts he has been able to gather together, it has not yet been made available to this committee, nor has it been made available to the public. I am always coming back to the thought that with the meager information that is presently usable by and available to the public, as well as to this committee, that it is not sufficient on which we could or you could express an opinion at this present time. Mr. WILLKIE. I think that is right. I would like to say this to you Acting Chairman SCHWARTZ. That is undoubtedly true, but we are just in the middle of the case. We will take a look at that after we get through. Representative WOLVERTON. I want this witness to be put in such a position that when that information is available, if it is deemed advisable by the committee to recall him, he may have that privilege of returning. Acting Chairman SCHWARTZ. He always has the privilege. Mr. WILLKIE. It has been suggested by Mr. Jenkins as to whether there is any additional help or information that we could give to this committee. If it would not be deemed improper, I think the most helpful thing we could do would be, if these engineers that you have employed, and from all I know about them they are thoroughly competent, but to get all viewpoints and consider all factors, I should be delighted to make available to them, so that at least they could get the viewpoint, our engineers. You heard one of them testify here, and I think you will agree with me at least they are alert. Let them sit down with them. They don't have to accept the viewpoint, but a man has this notion of a figure, or that notion of a figure, and I will be delighted to send a staff of engineers here to sit down with your engineers, or any place else, and give them their ideas and figures, and work with them. Representative WOLVERTON. In other words, you are willing to do on the part of your affected utility the same as the T. V. A. has already done with respect to its part? Mr. WILLKIE. Yes; is that all? Mr. BIDDLE. Yes. Mr. WILLKIE. I want to thank you all very much for the courtesy you have shown me. I appreciate it. Acting Chairman SCHWARTZ. We are glad to have had you with us. TESTIMONY OF CHARLES J. BRAND Mr. BIDDLE. Please give your full name and address and position to the reporter. Mr. BRAND. Charles J. Brand, executive secretary and treasurer of the National Fertilizer Association, 616 Investment Building, Washington, D. C. Mr. BIDDLE. Mr. Brand, what group do you represent before the committee? Mr. BRAND. I represent the manufacturers of mixed fertilizers and superphosphate, and to some extent also the manufacturers of nitrogen and the producers of potash. Mr. BIDDLE. You represent the group that are members of your association? Mr. BRAND, Yes. Mr. BIDDLE. What is the name of your association? DESCRIPTION OF THE NATIONAL FERTILIZER ASSOCIATION Mr. BRAND. The National Fertilizer Association. Mr. BIDDLE. What is the total capitalization of the companies who are members of your association? Mr. BRAND. I never have prepared a statement showing that, but we usually estimate that the total investment in the mixed fertilizer industry and the superphosphate industry approximates about $300,000,000. Mr. BIDDLE. About $300,000,000? Mr. BRAND. Yes, sir. Mr. BIDDLE. Is that investment largely distributed or is it substantially concentrated; is substantially half of it concentrated in a few companies? Mr. BRAND. There are about 800 firms operating something like 912 different factories, and approximately 100 of those manufacture both sulphuric acid and superphosphate, as well as mixed fertilizers; approximately 93 manufacture superphosphate, and also mixed ferti lizers, but not sulphuric acid, and the remainder, some 700, manufacture mixed fertilizers. Mr. BIDDLE. And your association is a research and educational association? Mr. BRAND. Research, educational, trade promotion, and all of the usual activities of a national trade association. Mr. BIDDLE. Have you described all of the types of companies companies that are represented in the association? Mr. BRAND. Approximately so. The superphosphate manufacturers do, as I stated, either produce sulphuric acid and make superphosphate and mixed fertilizers, or they purchase sulphuric acid and produce superphosphate and mixed fertilizers. Other purchasers of these materials produce mixed fertilizers only. Mr. BIDDLE. It includes companies that mine phosphate? Mr. BRAND. We do have a number of companies that mine phosphate, as members of our industry. Mr. BIDDLE. And potash? Mr. BRAND. And potash also, but they also have their own separate agencies. FERTILIZER PROGRAM OF THE TENNESSEE VALLEY AUTHORITY I Mr. BIDDLE. Now, I do not want to interrupt you any more. will ask my questions after you have made your statement. So as briefly as you can, but not feeling too pushed, will you give the committee the benefit of your views on the fertilizer program of the T. V. A.? Mr. BRAND. Mr. Chairman and members of the committee, our interest in the activities of the Tennessee Valley Authority in the fertilizer field are due to the fact that we begin to feel a definite competitive stress from their activites. RESEARCH PROGRAM In the first place the Tennessee Valley Authority conducts research on new processes and on the testing of new projects and new products, which we certainly do not criticize, in fact which we rather applaud, because we think that the Authority has funds to do things which the private industry has been unable to do. Mr. BIDDLE. You applaud the research program? PRODUCTION OF CONCENTRATED SUPERPHOSPHATE Mr. BRAND. Yes. Second, it produces concentrated superphosphate on a large scale. We feel that that is not necessary. Mr. BIDDLE. I would like to get some idea of a "large scale". How many tons of the superphosphate were sold last year? Mr. BRAND. I can tell you better with respect to this year, because I have those figures conveniently at hand. The total is approximately 62,000 tons. Mr. BIDDLE. How many tons of fertilizer are sold in the United States annually? Mr. BRAND. The total sales of fertilizer of all kinds in the United States for the year 1937 was 1,200,000 tons, approximately. Mr. BIDDLE. 1,200,000? Mr. BRAND. The type of material produced by the Tennessee Valley Authority, which is the concentrated superphosphate containing on the average about 43 percent phosphoric acid, is equal to roughly 3 tons of normal superphosphate which it is competing with, which is so largely used throughout the world. Mr. BIDDLE. How much of this type of superphosphate at roughly 42 percent is produced and sold by the industry? Mr. BRAND. The industry has a capacity to produce annually- Mr. BRAND. I will have to answer that a little indirectly because of the fact that the triple-A program enters into it, but I think I will get precisely to your facts. The industry has capacity to produce 200,000 to 210,000 tons annually. Mr. BIDDLE. How much does it produce annually? Mr. BRAND. The production last year, as nearly as I can estimate, and you will remember all of these statistics are estimates, because we don't have the exact figures split down by different kinds of product, probably about 150,000 tons. Mr. BIDDLE. You mean 150,000 tons of superphosphate running over 40 percent? Mr. BRAND. That is right. Mr. BIDDLE. That is chiefly produced in the West, is it? Mr. BRAND. No, no. Mr. BIDDLE. Where? Mr. BRAND. There are in the United States eight wet process plants for producing 43-percent acid, several of them in Tennessee, some of them in Florida, only one of them Mr. BIDDLE. You are speaking of phosphate only now? Mr. BRAND. Superphosphate of the 43 percent grade-only one of them in the far West, namely, at the Anaconda Copper Mining Co. at Anaconda, Mont. Mr. BIDDLE. What I am speaking of is the sale of the superphosphate as superphosphate, not of the production and mixture of the superphosphate in other forms of mixed fertilizer. Do you follow me? Mr. BRAND. Yes. In these answers I am giving only the concentrated superphosphate, the triple superphosphate. Mr. BIDDLE. You mean 150,000 tons of superphosphate is sold on the market? Mr. BRAND. That is the amount we estimate for last year. Mr. BIDDLE. None of that is premixed before sale, or remixed? Mr. BIDDLE. That is what I mean. Mr. BRAND. There is no method of answering that. Mr. BIDDLE. That is what I mean. Mr. BRAND. That is rather too detailed. Mr. BIDDLE. You say the T. V. A. is, through the Department of Agriculture, distributing this very highly developed superphosphate with 42 percent phosphate. Now, my question is how much of that very highly developed superphosphate is sold unmixed, in the same method as the T. V. A., in the market; very little, isn't there? Mr. BRAND. No, no; it is constantly furnished, and has been for more than 30 years. Mr. BIDDLE. But in a mixed form? Mr. BRAND. No, in any form desired, either plain or in mixtures. Mr. BIDDLE. I mean plain, how much of it? Mr. BRAND. I should say we would arrive at that roughly in this manner: the triple-A distribution of concentrated made by the T. V. A., we will assume, was about 27,000 tons, or roughly of that general magnitude. In addition, bids were requested of the industry on the 14th of last March, returnable on the 1st day of April, 2 weeks later, and the industry bid on considerable in excess of the 25,000 tons that were requested to be bid on by private industry, all of which was furnished. Mr. BIDDLE. Does the 150,000 tons include nonmixed highly developed phosphate? Mr. BRAND. It includes the whole. Mr. BIDDLE. It includes the mixed? Mr. BRAND. It includes the concentrated used as such, and used in mixtures, but the larger part is used in mixtures. Mr. BIDDLE. That is what I mean. Mr. BRAND. The only part that is not used in mixtures, practically speaking, is that which goes through the T. V. A. direct and is given away in its investigation and research program in the valley or distributed through the triple A. Mr. BIDDLE. Isn't it true that the Anaconda is about the only company which distributes the highly concentrated forms of phosphateand that in very small quantities-without being mixed? Mr. BRAND. Oh, no; every one, Mr. Biddle. |