The Birmingham age-herald., 1922-02-08


 company and its attitude in the Cor gas steam plant matter before Con- gress in the form of section Of Henry Fords bid for Muscle Shoals is set out in the following statement issued in Birmingham yeste; day by "lilian- Logan Martin. general at- t'rney fer the C T any.
 Dr. Martin declares that under the terms of the contract entered into between the government and the Alabama Power company the com pany has two more years in which to operate the plant before it can be called upon to purchase 1t.
 The statement of Mir. Martin fol- lows:
 Tn 1916 the Alabama Power com pany completed It's steam plant at Gorgas as part of its hydro-elec- tric system to serve as 8 standby in times of low water in the Coosa river. It's capacity was 27 ,00o horse power, with foundations and facili- ties in place for the installation of additional units when the power market demanded
 "In 1917 the government needed large amount of power for use at Muscle Shoals before 1t could com plete Wilson dam and the govern ment steam plant at that place. As 9 war measure the government could. of course, have taken from the com pany's system as it then existed any amount of power necessary for It's needs, but such a requirement. woulc have resulted in a shortage and would have disarranged and crippled mny industries and municipalities in Alabama 1t was, therefore, deter mined between the government and the company that the comrtay would add tc it's already existing steam plant at Gorgas an additional unit of 42,aOu horse power, for waich he fcurdattons and facilities wero sl- ready in r ace. The construction of the necessary substaticns, transmits sion lines to Muscle Shoals ia djs- tance of 1e1 miles) and otaer ncces- sarg equipment was provid sd for, All to be placed on the Power company's lands. with the company as the agent of the government performing this construction, and with funds supplied by the government. This construc- tion began in November, 1917, under the joint supervision of the ordnance department of the government and the power company.
 Discusses Contract
 "The contract embodying the details of this agreement was not formally entered into until November, 1913, al- though dated November 1, 1917 IL provides, among other things, that the government may withhold under certain named conditions from It's payments to tho company for power an amount equal to approximately 30 per cent of it's monthly power bills to reimburse the government for it's expenditure; that when the entire amount so withheld equals the ex- penditures made by the government. thus making the government whole, it shall then upon demand of the company convey to the company all it's right, title and interest in the property so installed and con strueted.
 Ut is provided further that at any time subsequent to three years after the termination of the war the gov ernmenc shall have the. option to sell to the contractor (power com pany) and the contractor shall upon written demand of the United States buy all it's rights, title and interest in and to the Warrior extension and Warrior substation, with all rights appurtenant thereto. at the value fixed by arbitration as hereinafter provided In the event the company fails so to pay the fair value so fixed by arbitration dess such cred it's as shall have accrued through the amounts withheld by the govern ment for the power supplied) the sovernment may sell the property to anyone else, requiring the power company to pay the difference be- tween the amount realized from such st,e to another and the amount fixed by the arbitrators. less accrued cred it's IS stated.
 "It is provided further that the company shall pay the government fixed amount as compensatioh< ol royalty per unit of power for the nower generated by the government unit and sold bY the company to the public. =,
 nrrbe government notified the conn nory on May "A. 1919. that the conn panv need no longer hold for the government the power for the gener- stion of which the additional unit was installed. Under the contract the company was then free to supply ms power to the public. Ihis IL piu m mediately. finding a waiting market ana -nsine the additional unit as an increased standby to supply the ad- ditional industries and municipaiitles reouirin.r power To deprive the comnany today of th!s facility may result inNdisarrangin its system and embarrassing and crippling u ana such of its customers as hoid con tracts for power dependent on the government unit.
 Tt will be seen. therefore, that under the terms of the contract:
 Il. The. company has until 1924. or three years from the day on whicn peace was declared, before the gov ernment may demand that the com pany take oyer the property.
 "2. That the Gorgas plant of the power company (nanied after Gen eral Gorgas and known as Warrior Reserve plant) is not a part of the government nitrate plant at Muscle Shoals. and has never been so re- garded.
 "3. That the Gorgas plant is an en- tirelys different plant from the gov ernment steam plant at Muscle Shoals which was built by the gov