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Furnace for potassium metaphosphate (1942, none; 1943, $270,000).- A new fertilizer product from the Authority's research program is potassium metaphosphate. A sufficient quantity of this material has been made for testing under a variety of conditions and in different soil types by the various land-grant colleges. Preliminary results from the testing of this new product are favorable, and it is believed that such a highly concentrated material composed of two plant nutrients of such importance as phosphate and potash will be of great value. To develop the process for the production of this new fertilizer on a larger scale and to determine manufacturing costs, small-scale pilot-plant research is being conducted in 1942. It is proposed to design and build a larger scale furnace and accessory apparatus in 1943. While the final design of this furnace will be determined from the research conducted in 1942, it is anticipated that the estimate of $270,000 will be sufficient for the construction of a suitable unit.

Washing and agglomerating plant (1942, $630,000; 1943, $55,000).—It is anticipated that the total estimate of $685,000 for 1942 and 1943 will provide for the completion of the field plant for beneficiating raw phosphate matrix by washing, and for the carrying on of the construction of facilities for the economical recovery of fine sizes of phosphate sand by sintering. The increase in the present estimate for 1942 over that given in last year's document, and the extension of the project into 1943, are due to the retarding of this construction work in favor of the new Muscle Shoals calcium metaphosphate unit.

Flotation plant (1942, none; 1943, $165,000).-In connection with the field washing plant, it is contemplated that equipment for separation of phosphatic · material from impurities by flotation will be installed. It is believed that the apparatus will make possible the conservation by economical means of a greater proportion of phosphate from raw phosphate matrix than could otherwise be achieved.

Plant replacements (1942, none; 1943, $165,000).—The existing fertilizer plant is approaching the stage where substantial replacements of facilities will become necessary, due to the expiration of their useful lives, in order to continue the economical operation of the plant. It is anticipated that $165,000 will be needed for such purposes in 1943.

Plant improvements (1942, $325,000; 1943, $345,000).—The Authority is operating a plant for the production of two major fertilizers, concentrated superphosphate and calcium metaphosphate. From time to time opportunities occur for improvements in this plant from the standpoint of economy, safety in operation, quality of products, or better utilization of byproducts. This estimate is to provide for such opportunities and to keep the plant an effective up-to-date operating unit.

Furnace for calcium metaphosphate at Muscle Shoals, Ala. (1942, $900,000; 1943, none). —The estimate for 1942 provides for the new 12,000-kilowatt electric furnace and accessory facilities to produce 50,000 tons of concentrated superphosphate annually or an equivalent amount of calcium metaphosphate, representing approximately a 50 percent increase in the capacity of the existing plant at Muscle Shoals necessary to help meet the increased demand for highly concentrated products domestically and for aid to Great Britain. · The financing of the construction of this addition was partly provided by retarding the progress of other fertilizer plant construction activities. This furnace is now under construction and it is contemplated that this project will be completed in 1942.

Fertilizer inventories

Actual obligation, fiscal year 1941.

- $33, 138 Estimated obligation, fiscal year 1942

44, 000 Estimated obligation, fiscal year 1943.

316, 000 The increase in inventories in 1943 of $316,000 is caused by the increase in plant capacity for the production of calcium metaphosphate, and necessity of stocking larger reserves of raw materials to insure continued plant operation.

INCOME AND EXPENSE ACCOUNTS

The 1943 estimate for the net expense of fertilizer operations as shown in table 5 is $2,440,000, an increase of $97,000 over the approved amount for 1942. This increase is accounted for by the requirements of the tests and demonstrations program as it is further extended on a Nation-wide basis, and a slight expansion of the research activities to include nitrogenous fertilizers.

Research and development of fertilizer production processes Actual expense, fiscal year 1941.

$641, 719 Estimated expense, fiscal year 1942

695, 000 Estimated expense, fiscal year 1943.

714, 000 For 1943 there is included an estimate of $512,000 for a continuing program planned to carry on the necessary small-scale research that is the basis for all of the subsequent fertilizer development work. From this small-scale work in the past has come the development of the electric furnace process for the production of concentrated superphosphate, the conception of and the process for the manufacture of the new product calcium metaphosphate, the new fertilizer product potassium metaphosphate, the partially developed process for defluorination of rock phosphate, and many other developments of lesser importance. The estimates for 1943 include initial research on ammonia-nitrogen fertilizers in order that the ammonium nitrate plant now being constructed at Muscle Shoals by the Authority for the War Department may be useful for the manufacture of fertilizers after the present emergency period.

Under fertilizer plant in table 4 there is provision in 1943 for a flotation plant and furnaces for potassium metaphosphate and for defluorination of rock phosphate. In order to improve the design and operation of these new facilities concurrently with their use, continued small-scale research and pilot-plant operation is planned for 1943. The detail of estimates for this small-scale research for 1943 as compared to the approved estimate for 1942 is shown in the following tabulation:

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Experimental large-scale production.

By statute, the Authority, in order to improve and cheapen the process for the production of fertilizer, is authorized to manufacture fertilizer experimentally at the Muscle Shoals plant. The larger portion of the capacity of the plant is being reserved for the manufacture of phosphatic fertilizers for the Agricultural Adjustment Administration and Great Britain, unless required for the production of elemental phosphorus for the War Department. The War Department has already placed orders with the Authority for phosphorus which will require almost one-third of the expanded plant capacity, and have advised that their needs will most probably be increased. During 1943 a capacity of 15,000 tons of superphosphate, and 22,400 tons of calcium metaphosphate is being reserved for the Authority's tests and demonstrations program which is believed to be the minimum requirement consistent with its long range-success. The estimated tonnage and cost of fertilizer to be shipped in 1943 as compared with the approved estimates for 1942 and actual amounts for 1941 are as shown in the following table:

Actual, 1941

Estimated, 1942

Estimated, 1943

Types of fertilizer

Tons

Cost

Tons

Cost

Tons

Cost

118,000
25, 000

$3, 342,000

945,000

Triple superphosphate.
Calcium metaphosphate.

Total after depreciation.
Total before depreciation.

86,100 $2,572, 471 94, 923 $2,703,000

9,000 410, 133 21, 517 840,000
95, 100

2,982, 604116, 440 3, 543,000
2,735, 858

3, 233, 000

143, 000

4, 287,00 3, 947,000

As shown in table 5, the estimated credits for shipments in 1943, including shipments to other Federal agencies for which there will be a cash transfer, results in a net credit of $441,000 for large-scale production, excluding depreciation. This is sufficient to absorb depreciation charges of $310,000 and to leave a credit of $101,000 for this operation. Tests and demonstrations of fertilizer use.

The new forms of fertilizer produced at the Muscle Shoals experimental plant are being tested throughout the country by experiment stations and under practical farming conditions. The testing of these fertilizers in this manner furthers the evaluation of their contribution to improved farm management programs. The fertilizers are distributed to experiment stations for use in controlled tests and to county farmer organizations to measure the physical and economic returns from their use on selected practical farms. The use of these phosphatic fertilizers under test-demonstration conditions acquires new significance in the light of the increased food production program of the country for war purposes.

The 1943 estimate of $2,167,000 for tests of fertilizers consists of $1,272,000 for fertilizer and $895,000 for administering the tests in cooperation with the land-grant colleges of the various States--both inside and outside the Tennessee Valley area. The estimated increase of $98,000 over 1942 includes $33,000 for fertilizers and $65,000 for other expenses. These increases are largely accounted for by expected increased participation in the testing program by non-Valley States.

Cost of fertilizer used for tests and demonstrations.- By far the largest single item of expense in connection with the test-demonstration program is the cost of the fertilizer used. This fertilizer is manufactured at Muscle Shoals by the Authority and is charged to this activity at full production cost. Estimated tonnages and costs by products and fiscal years are shown in the following table:

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The increase in tonnage in 1943 over 1942 is intended primarily to extend the tests and demonstrations within the States now cooperating, and to extend the program to other States on the basis of requests from the agricultural institutions as to the quantity needed for tests on representative soil types and in representative types of farming and sizes of farms.

Controlled soil and fertilizer investigations.- These fertilizer investigations comprise a series of studies of the physical and chemical characteristics of new forms of fertilizers and their various effects upon plant life and animal and human nutrition. A soil inventory is being made in cooperation with the land-grant colleges and the United States Bureau of Plant Industry in order that determinations may be made of the characteristic conditions and the plant nutrient deficiencies in the soils of the Tennessee Valley area. This inventory will also be used as a basis for extendng and applying the results of proper fertilizer practices from soil types of one locality or one farm to the same soil type in other localities and on other farms. Following the determination of the plant nutrient deficiencies of major soil types, controlled tests to ascertain their proper fertilization with improved forms of fertilizer are then conducted under laboratory, greenhouse, and test-plot conditions, preliminary to the more extensive trials of these new fertilizer materials under actual farm conditions. The investigations also include studies of the behavior of known soil types under various conditions of cover, tillage, slope, and rainfall; and the utilization by livestock and human beings of crops produced under various methods and with differing quantities and content of fertilizer materials.

To June 30, 1941, soil inventory mapping had been completed in 41 counties covering a total of 20,863 square miles, or 13,352,320 acres. During 1942, approximately 3,000 square miles will be mapped, completing the valley area counties of Virginia, North Carolina, Georgia, and Kentucky; during 1943 such activities will be increased in Tennessee and Alabama. Through 1941 the experiment stations in 47 States had received phosphate products for cooperative testing. Approximately 35,000 tests of all kinds had been made to June 30, 1941. The increase in 1943 is mostly accounted for by an extension of this cooperative program with additional nonvalley States. An amount of $10,000 is included for highly important nutrition studies. The estimate for this work, excluding the cost of fertilizer, provides the following amounts for direct Tennessee Valley Authority expense and contractual cooperation:

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Parm unit and large-scale test-demonstrations.- The Authority has arranged for land-grant college personnel to supervise the testing, by practical farmers, of fertilizers produced by the Authority. This becomes a part of the colleges' educational program. Because the States are unable to carry out this program with existing personnel, the Authority reimburses the institutions for the employment of the additional personnel required for this purpose.

Test-demonstrations with new fertilizer materials are designed to test, on practical farms, the effects of materials which have shown potential value in preliminary scientific investigations. Test-demonstrations on individual farms are designed to allow the determination of some of the effects of the judicious use of Authority-manufactured fertilizers on the over-all economy and resources of individual farms over a period of years. Area or large-scale tests are designed to allow the determination of some of the effects of the judicious use of Authoritymanufactured fertilizers in the farm programs of groups of geographically associated farms on the over-all economy and resources of the community of which the farms are a part and on other communities.

Concentrated superphosphate, the first fertilizer product produced in largescale quantities by the Authority, is the most extensively used test-demonstration material. Calcium metaphosphate is being tested and the tests of this material are being extended as rapidly as feasible. Tests with fused phosphate rock, & more recent product, have been initiated. Calcium silicate slag, a byproduct of the fertilizer plant, is also being tested.

Shipping costs constitute a major portion of the cost of fertilizer to the farm consumer. It is important, therefore, that studies and experiments to cheapen fertilizers include investigation and determination of the most economical routing of fertilizer products. Studies are also made of the freight rates on fertilizers from various points of production to the different sections of the country to determine the sources from which the greatest economies may be effected in the distribution of fertilizers of varying degrees of plant-food concentration.

By the end of the fiscal year 1941, 35,691 test-demonstration farms had been established in 751 counties in 26 States, and 368 communities had engaged in area or large-scale test-demonstrations. More farm units and about 50 new area tests are to be added during 1943. Many of the farm unit tests will be with the newer fertilizer materials. It is anticipated that the test-demonstration program will be initiated in 8 new States during 1942 and 12 or more additional States in 1943. The estimate for this activity will provide cooperative assistance as follows:

1941

1942

1943

Contractual cooperation with land-grant colleges
Tennessee Valley Authority supervisory expense.
Administering distribution of fertilizer
Transportation studies relating to fertilizer distribution.

Total test and demonstration expense..

$417, 377 $448, 000

42, 589 50,000
16, 517 17, 000

6,000

$465,000

60.000 20.000 6,000

3, 730

480, 213

521,000

551,000

RELATED PROPERTY OPERATIONS PROGRAM

INCOME AND EXPENSE ACCOUNTS

This program covers those activities on public lands in the custody of the Authority which are not assigned to the major objectives of the act. It includes the administration of lands acquired on reservoir margins, the operation of the villages of the Authority adjacent to its completed dams, and the maintenance of the idle portion of national-defense properties in the vicinity of Muscle Shoals, Ala.

Asset accounts for this program are contained in the statement on general assets. The estimates in table 6, for the income and expense accounts of this program, show a total requirement of $756,000, which is the same as the 1942 estimate. The various activities and their estimates are discussed in the following sections.

TABLE 6.-Related property operations program, income and expense accounts

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62,000

66,000

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Reservoir area operations:

Operation of reservoir lands principally after completion of con

struction (net expense)...
Design of public grounds and buidlings in reservoir areas.
Development of recreational facilities in reservoir areas.
Operation of recreational facilities in reservoirs (net expense).
Reforestation and erosion control on reservoir lands.
Construction of fish- and game-preservation facilities.
Fish and game readjustment investigations..

Total, reservoir area operations (net expense)..
Village operations:

Muscle Shoals area (net expense)
Norris Town (net expense).
Wheeler Village (net expense).
Pickwick Village (net expense)
Hiwassee Village (net expense).

Total, village operations (net expense).
Maintenance of national-defense properties:

Nitrate plant No. 1 (idle property expense).
Waco quarry (net idle property expense).
Nitrate plant No. 2 (idle portion expense).
Steam-generating plant (rent charged to power operations).

Total, maintenance of national-defense properties.
General and administrative expense proration..

Net expense of related property operations..

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Reservoir-area operations.

The 1943 estimate for reservoir-area operations is $363,539, as compared to an estimate of $346,224 for 1942. This increase is accounted for by the increased expense of agricultural readjustment around reservoirs as additional projects are placed in operation. It will be noted that the net income estimated to be realized from the operation of recreational facilities will be greater in 1943 than in previous years.

Operation of reservoir lands principally after completion of construction. The narrow strip of agricultural and forest lands surrounding the various reservoirs is so managed that a maximum income may be derived consistent with sound conservation practices, improvements to properties, and reservoir-operating requirements. The increase in the net estimate for 1943 is accounted for by an increase of $18,000 in the estimates for agricultural adjustment around reservoirs due to the first full year's operation of the Cherokee and Watts Bar projects. It includes $87,000 for cooperative assistance from the State extension services of the valley area to assist and advise farmers and the Authority in adjusting the management of lands in the reservoir areas to the revised economic base resulting from inundating valuable farm lands. An estimate of $4,000 is included for land-use plans and regional investigations required to provide an adequate factual basis for reservoir-land management. The tabulation on the following page

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