Palatka daily news. [volume] (Palatka, Fla.) 1919-1994, 1922-02-02
excess of the $40 600. 900.

| SINNNSo VI WIG Y16,OootOoO. IL thC
amortization fund should be invested
continuously at 4 per cent there
would be at least 100000 to be
thus applied, but should it be invest
ed at greater rate of interest the
amount would be increased as shown
by the table.
The provision for renewal of the
lease which was contained in the pro-
posal of July 8, 1921 was numbered
II, and reads as follows:
AT any time prior to the expira-
ton of said lease period of one hun
dred (100) years, the company shall
have the right to negotiate with the
government, for renewal of the
leases for the two above dams, their
power houses, ETC."
"The effect of this provision was to
bind the United States to renewal
of the lease for one hundred (10O)
years on such terms as should be de-
tormined to be just by board of ar
bitration. Under the new proposal
the renewal clause is contained in par
agraph II, which reads as follows:
"In order that said company may
be supplied with electric power and
the farmers with fertilizers after the
termination of the said one hundred
year leases, should the United States
elect not to operate such power
plants but determine to lease or dis
pose of same, the company shall have
the preferred right to negotiate with
the United States for such lease or
purchase and upon such terms as may
then be agreed upon"
"This paragraph does not bind the
United States to a renewal of the
lease and is in no way an attempt to
control the policy of congress beyond
the one hundred year period of the
present lease. ~
Ford Would Pay Interest
"In the event Mr.. Ford's proposal
is accepted, the government must
make new appropriations amounting
to $40,000,000 to $50,OO0OOO, of
which Mr.. Ford will have the ben
eft for approximately 100 years at 4
per cent. The company is, of course,
bound to keep nitrate plant number
two in condition to produce explo-
sive which, as matter of prepared
ness, is of great value to the govern
ment. Nevertheless, Mr.. Ford is of
fering but $5,000,000 for the title to
the two nitrate plans, the Waco
quarry, the Gorgas- Warriar steam
plant, transmission lines and appur-
tenances. That you may the better
understand the value of the property
for which Mr.. Ford is offering this
S5OOO,000, | am attaching to this let
ter a brief statement prepared by
the chief of ordnance showing the
cost and estimated salvage value of
these properties. From the table
in this statement, it will be
seen that these properties cost he
United States approximately $685.
100000 and that as scrap they are
estimated to be worth $8,812,0OO.
However, the last column of the table
in Exhibit A indicates, that he chief
of ordnance believes the war depart
ment can dispose of the property for
$16,272,0 600. Mr.. Ford is bound by
his proposal to operate nitrate plant
No. 2 but there is no legal obstacle
to prevent his disposing of the other
to which he gets title.
Should he be able to obtain what the
chief of ordnance estimates that the |
can secure for the var
lous items, namely, 100000 for the
Warrior plants which have an install
lation of 10000 horse power, and
100000 for nitrate plant No. | and
dispose of the Warrior Muscle Shoals
line, as transmission
line and not as scrap, for $675,OOO, |
and should he obtain S357,0O0 for the
Waco quarry, he would have left the
nitrate plant No. 2 with its 10000
horsepower steam plant at a cost to |
him of less than 100000. The inter-
est on the proceeds of such possible
sales would amount to a very large
sum during the term of the propos-
ed contract. The present revenue
from rental of the power plant at nj
trate plant No. 2 is a minimum of |
$4,000 per annum with a possibil- !
ity that, in event of operation, it may
run to 100000. TIE cost of main
tenance of nitrate plant No. 2 was
approximately 100000 during the
fiscal year 1921. The total horse
power developed by the three steam
plants to which Mr.. Ford will get