Grains represented the raw material for less than 10 percent of the production in most years.

Toward the end of 1942 decision was reached to use grain as a base for major alcohol production for war purposes. In October of that year the entire distilled spirits industry was taken off beverage production and set to making industrial alcohol insofar as equipment and facilities would permit. Some 59 plants were expanded or modified for this purpose, largely financed by the Government. Three new plants were constructed by the Government with funds made available through the Reconstruction Finance Corporation. One of these plants, Plancor 1684, is dealt with in the proposed legislation.

As a result of the various constructions and conversions, wartime production of industrial alcohol was increased to more than five times the level which had prevailed prior to 1939. Most of this increase came from the utilization of grain as a base for the manufacture. Output from this source was increased more than 50 times over what it had been. The three Government-built grain plants alone had capacity to produce the equivalent of one-half the former peacetime use of industrial alcohol. "Cost-plus" contracts, grain allocations and numerous other measures were used to assure maximum operations. Production of synthetic industrial alcohol, made principally from petroleum refinery waste gas, also was increased.

In the utilization of industrial alcohol the major wartime development was the tremendous expansion in the field of synthetic rubber. At the end of the war more than half of the total supply of industrial alcohol was being used for that purpose. So great was the demand for material in that field and so high was its priority that there was little opportunity to consider peacetime problems relating to alcohol.

With the object of increasing industrial use of farm materials the Department of Agriculture has for years been endeavoring to find the best methods of producing alcohol and related products, including byproduct feeds, and to determine accurately the costs. While pertinent data in the files of RFC and the former OPA are mostly available to us, they are based upon war conditions and cost-plus contracts and probably do not represent peacetime possibilities. The figures derived from pilot-plant operations at the Northern Research Laboratory, Peoria, Ill., although highly valuable often are not translatable to commercial operation without large-scale trial and demonstration. To develop new means of utilizing substantial quantities of farm commodities as for example in alcohol motor fuel, it is considered essential to have use of a controlled plant operating on a large and strictly commercial scale such as would be afforded by Plancor 1684.

Today, much proper concern is being expressed over our rapidly diminishing reserves of petroleum. Active search is being made for synthetic liquid fuels to supplement these diminishing reserves, and large sums have been appropriated by the Congress in furtherance of this work. Yet, in farm-produced carbohydrates there already exists a vast source of liquid fuel which only lacks development. Such a development could be strongly implemented by the close integration and correlation of the research testing laboratories, alcohol pilot plant, and a large-scale production unit within the United States Department of Agriculture, where the required technical and legal personnel would be available. The advantages of having such an undertaking centered in a single organization will be at once apparent. A liaison already exists with the petroleum industry which might be extended to embrace such a development.

Should the Muscatine plant be made available to the Department its use would not be confined to work upon alcohol. The plant has excellent possibilities in many fields of agricultural chemical technology, and we would expect to explore all of them. I need only mention the problem of agricultural surpluses to emphasize the significance which favorable developments along these lines could have to the entire Nation. They might also be of great importance in relation to the national defense.

Attached to the proposed bill is a statement explaining in some detail how Plancor 1684 would be used in relation to existing facilities of the Department. We recommend that the proposed legislation be enacted.

The Bureau of the Budget advises that it has no objection to the submission of this proposed legislation.

Sincerely yours,

Secretary.

Proposed UTILIZATION OF ALCOHOL PLANT At Muscatine, Iowa, PlanCor 1684, IN THE EVENT OF TRANSFER TO THE UNITED STATES DEPARTMENT OF AGRICULTURE

The Bureau of Agricultural and Industrial Chemistry has been endeavoring for years to find the best methods of producing alcohol and to determine accurately the cost of producing industrial alcohol and other products from farm commodities as a first essential to their increased use by industry. Pertinent data now in the files of OPA, while available to us, are based on war conditions and cost-plus contracts and are not representative of peacetime possibilities. Control by the Department of Agriculture of at least one of the Government-owned grain-processing plants located in the Middle West would afford a means of ascertaining the costs and technical data under control conditions. While production costs in the alcohol industry vary from plant to plant because of location, diverse labor conditions, size, operation methods, etc., the cost data established at the Government plants will serve as an economic base or yardstick because the size, design, effectiveness of operation, labor situation, etc., are considered representative of the industry.

The Northern Regional Research Laboratory at Peoria, Ill., already has a small alcohol pilot plant, equipped for technological research on industrial processing problems relating to fermentation procedures. Certain of the required detailed information on processing costs and new operation methods may be established in this pilot plant. If sufficient operating funds were available, complete over-all operation studies might also be made in the pilot plant up to a production scale of 500 gallons per day. However, pilot-plant operations of this volume are usually not adaptable to commercial operation without adequate trial. Furthermore, the total possible production from this pilot plant is relatively small. The Muscatine plant, for instance, if operated by a cooperative lessee, would not need to be bound by certain restrictions affecting the Northern Regional Laboratory plant, and could serve as an actual full-scale trial ground on commercial basis, utilizing technological research developments from the present small plant.

Use of a controlled plant operating on a full-size commercial scale is essential for establishing accurate basic production costs and technical information for the development of new means of utilization of farm commodities, such as for motor fuel, for example. Congress has provided $30,000,000 for research to develop synthetic liquid fuels to supplement our diminishing petroleum reserves. A liquid fuel source, alcohol, derived from agricultural raw materials, already exists and only lacks commercial development.

The subject of alcohol motor fuel is now being actively investigated at the Northern Regional Research Laboratory, where fuel and engine testing laboratories are installed. An arrangement whereby a close coordination and correlation of research testing laboratories, alcohol pilot plant, and large scale production unit directed by a single organization, such as the United States Department of Agriculture, with competent personnel, would provide an effective basis for commercial implementation of progress made in technical research. A liaison already exists with the petroleum industry covering the development and use of synthetic liquid fuels derived from coal which should be extended to embrace the development of liquid fuels from agricultural raw materials.

The developing of new methods for the use of farm raw materials for the production of such industrial commodities as alcohol entails consideration of a combination of economic and technical factors, and also frequently requires entry into presently uneconomical fields. For these reasons, it cannot be expected that private industry will have the organization or the desire to undertake full-scale development of such uses from agricultural products.

The industrial utilization of farm surpluses is limited on one hand by the relatively high cost of the raw material, and on the other hand by the necessity of selling the manufactured products in competition with those produced from cheaper or often better raw materials. Finally, increased attention must be given to balancing agricultural production and consumption through programs of surplus diversion into uses other than food and feed. Government control of the Muscatine plant would permit its use for developing outlets for crop surpluses. It would also make possible the demonstration of methods for utilization of soft corn and other off-grade grains which cannot be used efficiently in normal channels and which tend to depress market prices.

The nature and scope of the problems involved demand coordinated action for which the proper incentives and adequate facilities can be expected only from the Government. Therefore, this field of activity is preeminently one in

which the Government should pioneer. Past attempts by the Department to solve such problems have been stymied because of lack of plant facilities to implement results of our research laboratories. The utilization of existing Government-owned commercial facilities to supplement the present laboratory and pilot plant facilities will provide the needed means of attacking these problems on a scale sufficient to meet the requirements of industry.

The Muscatine plant has unusual possibilities for use in many fields of agricultural chemical technology, and is not limited to industrial alcohol production. If this plant were to be taken over by the Department, the Bureau of Agricultural and Industrial Chemistry, under proper authorization, would endeavor to use it through the lessee (a) to definitely establish the costs of producing alcohol for motor fuel or other use on a commercial scale, and the costs of recovering related byproducts, under wide variations in operational conditions and kinds and types of raw materials; and (b) as an industrial trial operation or demonstration plant to translate laboratory and pilot plant findings on new fermentation or correlated process developed through research to large-scale commercial utilization.

These facilities would not only be available for use by other agencies of the Department in connection with the disposal of surplus crops and inferior grades of grain, potatoes, and other farm commodities, but would also serve as a base unit in developing and promoting market research programs. Under Government ownership, accurate and complete records of production and distribution costs can be kept and made available to the entire industry. This should stimulate the fuller utilization of farm commodities for industrial purposes.

O

80TH CONGRESS HOUSE OF REPRESENTATIVES 2d Session

REPORT

{No. 1660

DR. TIMOTHY C. H. LIANG AND DR. ESTHER CHANG

LIANG

APRIL 6, 1948.-Committed to the Committee of the Whole House and ordered to be printed

Mr. FELLOWS, from the Committee on the Judiciary, submitted the

following

REPORT

[To accompany H. R. 3358]

The Committee on the Judiciary, to whom was referred the bill (H. R. 3358) for the relief of Dr. Timothy C. H. Liang, having considered the same, report favorably thereon with an amendment and recommend that the bill, as amended, do pass.

The amendment is as follows:

Strike out all after the enacting clause and insert in lieu thereof the following:

That in the administration of the immigration and naturalization laws, the Attorney General be, and he is hereby, authorized and directed to dismiss the deportation proceedings now pending against the aliens Doctor Timothy C. H. Liang of the Newton Memorial Hospital, Cassadaga, New York; and his wife, Doctor Esther Chang Liang.

SEC. 2. That the Attorney General be, and he is hereby, authorized and directed to record the lawful admission for permanent residence in the United States of Doctor Timothy C. H. Liang as of November 18, 1941; and of Doctor Esther Chang Liang as of June 18, 1946, which are the respective dates of their lawful entries.

SEC. 3. Upon the enactment of this Act, the Secretary of State shall instruct the proper quota-control officer to deduct two numbers from the quota for Chinese persons of the first year that such quota is hereafter available.

Amend the title so as to read:

A bill for the relief of Doctor Timothy C. H. Liang and Doctor Esther Chang Liang.

PURPOSE OF THE BILL

The purpose of the bill, as amended, is to dismiss deportation proceedings outstanding against, and grant permanent residence to, Mr. and Mrs. Liang, natives and citizens of China. The amended bill would also provide for the usual quota deductions.

H. Repts., 80–2, vol. 2- -108