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ing for, evaluating, processing, and closing the disposal bid. This procedure could easily delay the final transaction for 18 months or

Secondly, there is at present an active interest in the acquisition of this plant. If there is a delay of 18 months or 2 years, this interest might well abate. Those interested might build or acquire other facilities in the meantime. Furthermore, any idle plant depreciates rapidly. The Government might well find itself with a white elephant on its hands unless the measure before your committee is promptly enacted. It is certainly smarter to sell a property when there is an interest in its acquisition than when it has become an obsolescent drug on the market.

Third, it seems obvious that the purchaser of this plant will substantially remodel it so that it will not be solely used for the production of butadiene from alcohol. As such, it is at present an idle plant and, as previously pointed out, corporations are not investing in plant facilities to keep them idle. If the plant is sold in the near future, engineering plans can be developed and the purchaser can go right to work on remodeling operations when he takes possession next April on the expiration of the lease. The purchaser would not then have to discount his bid for idle plant expense and the Government would get a better price for the property. Furthermore, this would substantially hasten the date when the people of the community might expect enlarged employment opportunities.

Finally, this plant is costing the taxpayers about $1,000 per day under the present arrangements. All of us are vitally interested in economy and it seems to me, Mr. Chairman, that we have an opportunity to exercise it in this instance. We can sell this property for the account of the American taxpayer and secure $3 million or $4 million, and at the same time cut expenses by more than $300,000 per year.

The argument will doubtless be made that this plant should be maintained as an alcohol butadiene plant for defense reasons. I submit, Mr. Chairman, that the Office of Defense Mobilization fully endorsed H. R. 2528 on January 24, 1957. The Office of Defense Mobilization's representative then stated that the Office of Defense Mobilization's decision was cleared with its delegate agencies, including the Department of Defense. Furthermore, the disposition of the property would, of course, have to be consonant with all antitrust laws.

In summary and conclusion, Mr. Chairman, I support prompt, affirmative action on the pending legislation. It offers the most expeditious means of getting an idle plant facility into production and thus broadens employment opportunity in the area. It offers the best protection for the taxpayers' investment in the plant. It offers a quick, sure way of reducing expenses at a time when such reduction is sorely needed.

Thank you, Mr. Chairman, for the opportunity to appear here.

Senator Bush. I would like to make one observation and ask one question.

Senator Douglas. Certainly.

Senator Bush. I congratulate the Senator on that able statement arguing for the disposal of this plant and arguing for it to be done immediately

Is not the fact that the House has already passed this bill a special reason for the Senate to take action on it, and do it right now, because we have the job half done already by the House having acted?

Senator MORTON. Yes; and, Senator, there is another reason. The Congress has to be in session 130 days after the President signs this bill if we are to dispose of the plant.

Senator Bush. Does the Senator know to what extent this bill was opposed in the House? Was there a fairly unanimous opinion over there about it, or does he know anything about that?

Senator MORTON. I talked to the chairman of the House committee that handled the bill, which was the Armed Services Committee of the House. I talked to the chairman of that committee, Carl Vinson of Georgia, and, according to him, there was no case made against the bill.

Senator DOUGLAS. There is only one point for clarification that I should like to raise, Senator Morton. As I understand it, the bill provides for a review of the sale by Congress. Do you think that is necessary?

Senator MORTON. That procedure has been followed in the disposal of these other plans and for that reason, rather than break the precedent, I think perhaps it is a good safeguard.

Senator DOUGLAS. Mr. Hale has this procedure always been followed by this committee?

Mr. HALE. It was not followed in the case of the Texas City tin smelter or the Akron rubber research laboratory.

Senator MORTON. No, it was not, but the procedure was followed in the other rubber plants, and since this is in that category, perhaps we should follow that procedure.

As far as I am concerned, the change could be made and it would be all right. I think because it was followed in the House and the House saw fit to do it, it might be done that way in order to expedite it and avoid a conference in this case.

Senator DOUGLAS. Thank you.
Senator Curtis.

Senator CURTIS. I might suggest that Senator Cooper is pressed for time, so if he wishes to precede me, that will be all right.

Senator DOUGLAS. That is very courteous of you.
Senator Cooper.

STATEMENT OF HON. JOHN SHERMAN COOPER, A UNITED STATES

SENATOR FROM THE STATE OF KENTUCKY

Senator COOPER. Thank you, Senator Curtis.

Mr. Chairman and members of the committee, I appreciate very much this opportunity to attend this hearing and at your invitation to sit here as a member of the committee for a time.

Shortly after H. R. 2528 was passed by the House, I received a memorandum about it and also visits by a number of people showing interest in this bill.

As you know, the Treasury Department strongly advocates its passage.

I communicated with the officials of the city of Louisville and Jefferson County and found they generally approve the passage of the bill.

On the other hand, other views have been advocated. Of, course, the lessees are opposing the adoption of and passage of the bill. I agree with my colleague, who knows the city of Louisville much better than I do, that it is very important under all reasonable conditions that this plant be in operation, rather than remaining idle, but there is a question which addresses itself to me, and it is for that reason that I come here.

I have had information from members of the President's Special Committee on the Use of Surplus Agricultural Products that they have considered the use of this plant in connection with their program.

Further, I have been interested in the aspects of this bill which bear upon the question of national security. I know that butadiene is one of the principal components of synthetic rubber. For that reason the national security clause is an important part of the terms of any sale of a plant such as the one which is the subject of H. R. 2528.

I myself have wanted to hear the testimony both pro and con on the adoption of this bill before I make a final statement upon it. I am interested, as is my colleague, that a plant be put in operation, but I am also interested in the security aspects of the proposal, and for that reason I will withhold my final statement until later in the hearing

Senator Douglas. Thank you very much, Senator. That is very characteristic of you. We appreciate what you said.

Senator Curtis.

STATEMENT OF HON. CARL T. CURTIS, A UNITED STATES SENATOR

FROM THE STATE OF NEBRASKA

Senator CURTIS. Thank you, Mr. Chairman. I appreciate the opportunity to be here this morning.

My appearance this morning on H. R. 2528, proposing authority to sell the Government-owned alcohol butadiene plant at Louisville, Ky., is for the purpose of bringing to the attention of your committee some important considerations which I believe merit a delay in the early sale of this facility.

I know that this committee is deeply concerned about the situation of our agricultural economy, and that you share the desire of every Member of Congress to secure for agriculture a long-range stable income. There is no expedient which will solve the total problems of agriculture. Two facts are well known, however.

1. Our ability to produce is more than keeping pace with the population growth; and

2. Foreign markets for American farm products are unlikely to expand, because many nations who were importers prior to World War II are now becoming exporters of farm products.

In our search for new agricultural markets we cannot ignore the potential of American industrial ingenuity. American technical and industrial skills have been equal to the challenge of about every crisis which we have faced. There is no doubt in my mind that an intense

application of our know-how to the problems of agriculture will result in many beneficial attainments.

For this reason I sponsored an amendment to the agricultural bill of last year which created the President's Commission on Increased Industrial Uses of Surplus Agricultural Commodities. This bipartisan Commission of eminent men is, of course, working diligently to recommend to the Congress by June 15, 1957, means whereby industry can utilize farm surpluses. Task forces of experts from every area of our agricultural economy and from industry are submitting reports to the Commission.

These reports will weigh the utilization of farm products in such important fields as plastics, paints, medicines, and a host of others.

One expanding industry, which may utilize surplus grains, is synthetic rubber. Today we are using more synthetic rubber than natural rubber. The proportionate use of synthetic rubber will show a marked increase in the next 5 years.

Admittedly, synthetic rubber made from alcohol is at present far more expensive than that which is made from a petroleum base. But if research can afford a share of the synthetic rubber market to surplus farm products, we will benefit both agriculture and industry.

A healthy agricultural economy provides markets for industry.
The present competitive situation of alcohol butadiene with

petroleum butadiene is noted in the report of the House Armed Services Committee, and I want to quote from it. It appears in about the third paragraph'on page 4 of the House report, which reads as follows:

Because the basic raw material for petroleum butadiene is cheaper per pound of product than alcohol, petroleum butadiene can be produced and sold at a price appreciably below that which alcohol butadiene must command in order to yield a profit. Thus, alcohol butadiene is not price-competitive with petroleum butadiene. Alcohol butadiene labors not only under the competitive disadvantage of an important price differential, it also faces great expansion from its petroleum-based competitor, as the Corporation's statement of January 8, 1957, shows.

Mr. Chairman, I do not believe that that current disparity between synthetic rubber produced from alcohol and that which is produced from petroleum forecloses a need for research to narrow this disparity.

Mr. Chairman, I also wish to call attention to the fact that the costs of the current crop-storage and export programs are important elements which contribute to the need for research. As stated before, the President's Commission will report its recommendations to the Congress not later than June 15, 1957. One of the studies will treat fully the production of synthetic rubber from alcohol butadiene. If our research ingenuity can find a reasonable means of making alcohol butadiene competitive with petroleum butadiene, we will have obtained an important gain for American agriculture.

The Louisville butadiene plant may be able to make a major contribution to the share of our industrial market, which agriculture needs and deserves. I urge the committee to hold in abeyance legislation proposing the disposal of the Louisville butadiene plant until the recommendations of the President's Commission can be fully studied by Congress.

Senator DOUGLAS. Thank you very much.

Senator CURTIS. Mr. Chairman, I just want to stress the economics of this proposition. According to the President's budget of the next fiscal

year, it will carry estimates for agriculture amounting to almost

$5 billion. We will spend for high supports, $1,195 million; for the soil bank, $1,293 million; for conservation, $262 million; for REA and RTA, $265 million; and for other programs

Senator Douglas. May I interject and say in the case of REA, the Rural Electrification Administration, and the RTA, the rural-telephone program, that those are capital investments.

Senator CURTIS. That is right.

Senator DOUGLAS. If we had a capital budget we would have corresponding assets set up on their side. As an advocate of the capital budget, I want to put in a little plug here that these should not be regarded as out-of-pocket expenses for which we get no return.

Senator CURTIS. The chairman is right about that. They are not the current costs of supporting agricultural prices. We have other programs for agriculture. $1,120 million goes for the other programs, which makes a total of $4,890 million.

Mr. Chairman, I think that it would be wise and prudent inasmuch as this Commission is going to report very shortly—and it is just a matter of weeks until they do, by June 15—that we have a look at the overall picture, because it might be utilized for making an important contribution in this new field, which naturally will have to start on a modest basis. Naturally, it is the Government's business, because of the heavy amounts we are spending for agriculture now. I also want to say that I share the concern of everybody else, and I would like to see this plant providing employment. I think this waiting period will enhance that, rather than delay it.

Senator DOUGLAS. Thank you very much, Senator Curtis.

The committee is aware of the President's Commission on Increased Industrial Uses of Agricultural Products, and our eminent chairman of the full committee, Senator Fulbright, on March 4 of this year, addressed the following letter to Mr. J. Leroy Welsh, Chairman of that Commission, and I will read it in order that it may be made a part of the formal record at this point.

COMMITTEE ON BANKING AND CURRENCY,

UNITED STATES SENATE,

March 4, 1957. DEAR MR. WELSH: The Subcommittee on Production and Stabilization of the Senate Banking and Currency Committee will conduct hearings on Thursday, March 7, on H. R. 2528, which would authorize the sale of the Government-owned butadiene plant at Louisville, Ky.

Assuming that this legislation may be of possible interest to your Commission, I write to inquire whether your Commission does have an interest in this legislation and, if so, what your interest may be.

The committee has been urged to act promptly on H. R. 2528, and I would like to have your comments by Thursday morning if at all possible. Sincerely yours,

J. W. FULBRIGHT, Chairman, I would like to inquire if Mr. Welsh is here this morning. Senator CURTIS. May I respond to that inquiry? Senator DOUGLAS. Surely.

Senator Curtis. Mr. Welsh is in the city and I shall contact him immediately. I am not sure whether the President's appointees had determined the question as to whether or not they should inject themselves into this legislation, because their report is still in the formative stages; but I would not want to bind the Commission either way. I all contact Mr. Welsh.

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