Evening star. [volume] (Washington, D.C.) 1854-1972, 1922-02-02

| government, ne agrees 10 operakE m
trate plant No. 2 at the approximate
present annual capacity of it4 pa
| chinerN.and equipment in the pro-
duction of nitrogen and other 1er-
tilizer compounds throughout the
lease period. and to maintain 1t In Us
present state of readiness. or, its
equivalent. for immediate operation
in the manufacture of materials nee
essary in time of war for the pro-
duction of explosives. He further
agrees that the fertilizer produced at
nitrate plant No. 2 shall not be SOLD
at profit in excess of per cent OF
the actual cost of production thereof.
and to turn over to the United states
nitrate plant No. . whenever it shalt
be required for the national defense.
Preference for Purchase.
He likewise asks for a preference
the property at the end of the lease
period and for the right. for period
not stated. to be supplied win eles
trio power at reasonable rates In an
amount equal to his average con
sumption during the previous ten
years, in case the plant Is operated
land his company does not purchase
or lease it. He also states that ms
proposal must be accepted as whoie
land not in part.
/! which the Secretary incorporates IN
his letter of transmission he men
lions the considerations running 10
the government as follows:
"(a) Four per cent on part OF 'he
capital necessary to complete the con-
| struction of the power projects tno
interest is proposed to be paid upon
that part of the government invest.
ment which goes to pay Tor lahos anu
fiowase rights for dam No when
item is estimated by the engineers 10
exceed So. 900. 900 in probable cost.
"(b) The payment of sum semi
annually into a sinking fund calcu-
lated to produce about $49.0O0,0 600 at
the end of the lease periods. This
payment amounts to S46.146 annually.
in other words. Mr.. Ford proposes to
pay approximately $49.000,0OO at the
end of the lease period provided the
government has been able to invest
his payments at 4 per cent per annum
/ 'tD Mr.. Ford proposes to pay
So, 600 a year for the upkeep of dam
No. and its locks and the sum of
$4,000 a year for the upkeep of dam
No 3 and it's lock. These payments
are expected to meet the ordinary up
keep expense with which the govern
ment is charged. Mr.. Ford assumes
the responsibility for upkeep and re-
pair Of the powerhouses and equip
| ment so that ultimately such equip
ment is expected to be turned back to
the government in approximately as
good condition as when received.
! (uD Inc 'pTOpoSdl iequii 60 ~shi :.
Ford's company to operate nitrate
plant No. . to it's approximate pres
ent capacity. which is estimated to
be a production of 10000 tons of am
! monium nitrate per annum. and to
sell such material at price not to
return A net profit in excess of per
cent of the actual annual cost OF pro-
duCtiOn.
- ''te) Mr.. Ford's company is to main
tain nitrate plant No. . in its present
state of readiness for immediate oper-
| alton for the production of explosives
! and is to turn it over tC the govern
ment. together with such of its per-
sonnet as may be required for the
national defense.
go The government will he saved
the expense of maintaining and operat-
ing the present imperfect facilities for
navigation at Muscle Shoals. amount
ing to from $4,000 to $4,000 per an
num-"
Cost of Nitrate Plants
i Attention also is directed to the cost
of the nitrate plants, for which Mr..
Ford offers $5.000.00O.
''Mr. Ford is Offering but $1,000. 900
for the title to the two nitrate plants,
the Waco quarry. the GorGaS-W arrior
steam plant, transmission lines and
appurtenances." says Secretary Weeks.
| adding that so 'tyou may better under
stand the value of the property, l sm
attaching to this letter a brief state
ment prepared by the chief ord
nance showing the cost and estimated
salvage value of these properties. From
the table contained in this statement
it wilt>be seen that these properties cost
the United States approximately $751;
900 and that as scrap they are es-
timated to be worth SS.S12. 000.'
The statement further shows that the
chief of ordnance believes the War De-
partment can dispose of the property for
$16o72, 600 -
"Mr Ford is bound by his proposal
to operate plant No. ?, but" the letter
to prevent his disposing of the other
properties to which he gets title. Should
he be able to obtain what the chief Of
ordnance estimates that the government
can secure for the various items, name
ly, $3,000.O 900 for the Warrior plants.
which have an installation of 10000
horsepower, and 100000 for nitrate
plant No. l. and dispose of the Warrior
Muscle Shoals transmission line. as a
transmission line and not as scrap. for
$675,000. and should he obtain S357.000
for the Waco quarry, he would have left
the nitrate plant No. 2, with its $4,000
horsepower steam plant a. cost OF
less than 100000. The interest on the
amount to a very large sum during the
term of the proposed contract"
Present Revenue.
The letter says the present revenue
| from the rental of power plant No.
IL is minimum of $4,000 a year,
with a possibility that, in the event
of operation, it may run to S260.000.
The cost Of maintenance for the fiscal
year 1921 is given at 100000.
A statement by Maj. Gen. Williams.
chief of ordnance, summarizing the
Ford offer from the standpoint of his
department., says it has the very i'm
portant advantage of materially as
sisting in the development of nitro
gen preparedness. and has the disad-
vantages of conflicting with contrac-
tual obligations with the American
Cyanamid Company and the Alabama
Power Company and of making a net
return to the government of less than
i$5O00,O00 for properties which have
an estimated salvage value of some
$4,000. 900"
Another statement appended to the
\ Secretary's letter. prepared by Maj.
Gen. Beach. chief of Army engi-
neers. points out four indirect bene-
fits the government will receive in
the event the Ford offer is accepted.
They follow:
1.-The maintenance of a nitrate plant
in readiness for war emergency.
| 1.-The production. in the interest of
the public welfare, of large amounts
of fertilizer at a cost not exceeding
the reasonable cost of production,
providing that the production of nj
trate adapted to fertiliZing purposes
is found to be practicable.