some building must be done on the line prior to the date of December 31, 1947, and I believe while this litigation was pending, in order to keep that contract alive, the contractor started building that line. There was no injunction to restrain them from building that line. They expect to spend probably between 2 and 3 million dollars building on that line even while the litigation is pending, taking the risk of an adverse decision, bearing in mind that the Federal Power Commission in issuing that certificate was divided 2 to 3. It was not a unanimous decision. And, as I say, the circuit court of appeals of this district now has before it a motion to dismiss the appeal.

Mr. HESELTON. Who constituted a majority?

Mr. WHITE. Of the Federal Power Commission?

Mr. HESELTON. Yes.

Mr. WHITE. Commissioner Olds and Commissioner Draper, I believe dissented against the issue of the certificate.

Chairman Smith and Commissioner Wimberly, and another Commissioner whose name I cannot speak now, not now on the Commission-Commissioner Sachse, who is not now on the Commission.

Mr. HESELTON. That was the majority?

Mr. WHITE. That is right; they were on the majority. That is right, and then as I say, that was opposed and appealed, as that decision that appeal should be dismissed they will have that line completed, I will say, by the latter part of 1950; I would say by the end of that building season, or the end of 1949.

Mr. HESELTON. Well then——

Mr. WHITE (interposing). If not, however, it will be a year later. Mr. HESELTON. Is it fair to say that a majority of the Federal Power Commission then acted at least in the sense of hind sight, in the interest of the people of Detroit, and the people of Michigan? Mr. WHITE. We think so.

Mr. HESELTON. I think so too.

I want to go back to page 14 of this transcript. And, this is because Mr. Beckworth and Mr. Harris' interest.

Involved in all of the delay of the Michigan-Wisconsin line, the Austin pipe line and the proposed Michigan gas storage (Consumers Power Co.) lines is the shortage of steel.

I should have put that in before. I will see that the record reads. correctly.

On these pipe lines, there may be other factors of delay?

Mr. WHITE. I think that is the major factor, the controlling factor. Mr. HESELTON. Now, this paragraph:

In approaching this problem, it must be understood that the Panhandle Co. on the one hand and the Michigan Consolidated with its new pipe line on the other hand, are fighting for the very desirable and highly profitable Michigan industrial area.

That is another factor, is it not?

Mr. WHITE. I do not think it has anything whatever to do with the delay.

Mr. HESELTON. You do not?
Mr. WHITE. No, sir.

Mr. HESELTON. Wait a minute. assume that one of them is fighting

How can you say that when I bitterly to delay this?

Mr. WHITE. Well I should say that the litigation no doubt I overlooked that when I said that.

Mr. HESELTON. That is a factor?

Mr. WHITE. I think I am wrong in saying that. The litigation certainly is causing delay.

Mr. HESELTON. Perhaps the public is looking to see what the effect will be upon the public of Detroit. The Governor says a thing which I think is just about as sound and sensible as it can be and which needs saying all over and over again, until somebody down here wakes up. He says:

What can the State of Michigan do to see to it that whatever is holding it up is expedited.

If we were at war and 200,000 men were suddenly thrown out of work over something of this sort, some general somewhere, or someone else with authority would make quick work of it.

Now, when we are at peace here, and everybody is seemingly trying to get along, there must be some common ground where this thing can be disposed of. I should say that that is about as wise counsel as anybody could give us. I compliment him for saying it.

Mr. WHITE. That is the statement of Governor Sigler?

Mr. HESELTON. Yes, sir. I commend him for making that statement.

Mr. WHITE. I might say also-I did not mention this this morningjust in passing, that our commission-I referred to this this morningto the continuation at least on the part of the Panhandle, that all the gas sold to Michigan Consolidated was required in the Detroit district. I refer to their various contracts which I have examined in detail which do not contain an express covenant to that effect, but might be argued to be construed to that effect, for reasonable discussion in detail. Under sections 5 (a) and 7 (c) of the Natural Gas Act, we believe that the Federal Power Commission has jurisdiction to determine that question.

We have instructed our council to initiate appropriate proceedings before the Federal Power Commission to obtain a decision upon that question. In other words, we are here furthering efforts, trying to get this matter straightened out. Furthermore we propose a suggestion by Governor Sigler in that conference that it may be well to get the heads of these two concerns together. We appreciate full well the bitter history that has been and is existing between them. There are two sides to the story. We take no position on either side. We favor one over the other not at all. We want to try to get them together and see if it is possible to iron out the differences which confront the Commission.

I assure you that we will make every honest effort toward that end and if we fail it will be through no fault of ours or no lack of effort on our part to harmonize the differences so far as possible and build toward the ultimate welfare of the people in the State of Michigan. The people in the State of Michigan are the only ones that we are concerned with.

Mr. SADOWSKI. Certainly if the people of Michigan should go through another crisis like they have gone through this winter, then I would think that they would be justified in saying, "Plague on both your Houses and we had better take this thing into our own hands" and although the people of Michigan may not be socialistically inclined; may not be in favor of national ownership; but if this sort of a fight continues, I feel reasonably sure that the people of Michigan will lose

71869-48-pt. 1—34

patience with all these utility people and say, "Get out of here completely and let us take over this business and let us get gas for our people." And, in my own judgment, I think that they would be justified in taking that kind of a position.

Mr. WHITE. Is that all you have of me, Mr. Chairman?

Mr. HALE. Just a minute. Mr. Jonkman, of Michigan, would like to ask some questions.

(Thereupon, Hon. Bartel J. Jonkman, a Representative in Congress from the State of Michigan, was recognized and the following proceedings were had:)

Mr. JONKMAN. Mr. White, I represent the Fifth District of Michigan, which embraces Grand Rapids, Holland, and Muskegon is just over the line from us, so that many people employed in Muskegon live in Grand Haven, in the Fifth District.

I think that you said the 12 plants in all had been shut down because their supplies had been curtailed. Do you know how many of those are in Grand Rapids and how many in Muskegon?

Mr. WHITE. Three in Grand Rapids and nine in Muskegon.

Mr. JONKMAN. Is not one of those in Grand Rapids the NashKelvinator plant?

Mr. WHITE. That is correct.

Mr. JONKMAN. And it is almost necessary for them to use gas in a lot of their work like spray painting, and so forth.

Mr. WHITE. That is correct.

Mr. JONKMAN. Now, does that district, the Grand Rapids and Muskegon district benefit from the Panhandle Eastern Pipe Line?

Mr. WHITE. Not today. There is no physical connection whatever between that district and the Panhandle Eastern Pipe Line gas.

Mr. JONKMAN. Assuming that the Panhandle were permitted to pipe into Michigan the additional 7,000,000 cubic feet that was mentioned before the Federal Power Commission, would that affect it? Mr. WHITE. No. There is a misunderstanding about that. I will be brief about that. The 7,000,000 feet arose in this way: They are now on step 2. The Michigan Consolidated is receiving its full quota of 125,000,000 cubic feet per day. Mr. Buddrus of the Panhandle told us yesterday in conference with the Federal Power Commission that he was rather fat on step 2, meaning that he was not down anywhere near the bottom, and he thought that they could bring out 7,000,000 cubic feet more, I assume along the line, if so ordered by the Federal Power Commission, so that we could then have 132,000,000 cubic feet instead of 125,000,000.

That would have nothing to do whatever with the district you are talking about.

Mr. JONKMAN. Would that ease the situation so that the Grand Rapids-Muskegon district would benefit by it?

Mr. WHITE. Not in the least, because their only source of gas is either manufactured gas or gas from the Austin field area, storage and natural-gas fields. They are absolutely isolated from any other source of supply of gas.

Mr. JONKMAN. And at the present time that area does not receive gas from those fields?

Mr. WHITE. No; not at all.

Detroit receives gas only from two sources, the Panhandle Eastern Pipe Line service and distributed by the Michigan Consolidated Gas

Co., and gas manufactured by the Michigan Consolidated, with a total capacity of 100,000,000 cubic feet a day.

Mr. JONKMAN. Has the Michigan Public Service Commission considered any remedies for the delivery of gas to Grand Rapids and the Muskegon district by any method?

Mr. WHITE. Yes; it very definitely has studied relief. That is two steps. First, the building of the Austin line, as we have approved it, and which is under construction right now, being built from the River Rouge station of the Panhandle, near Detroit to the Austin field. They are starting at both ends and building toward the middle and building as fast as they can. They have even devised a means previously unknown to pipe-line laying of going through 2% to 3 feet of frost, by cutting through the frost like you would ice on both sides and cutting down the middle so that the ditch digger can throw the frozen ground out. They are building the line even under these zero conditions and expect to have it in operation some time during May or June, whereupon gas can be physically transported at least from the River Rouge station pipe line of the Panhandle and Eastern Pipe Line up into the Austin field and stored there during the summer.

Now, the second phase of that question is the contention of the Panhandle that that gas must be returned to Detroit. The third point is, we are asking the Federal Power Commission to construe that contract; that is, we are going to urge that that gas can be used in western Michigan as well as in Detroit.

Mr. JONKMAN. And the Michigan Consolidated Gas Co. is in favor of that construction, so that it can be used there?

Mr. WHITE. I think that is a fair statement, although they have not expressed themselves. I think it is a fair statement, because naturally they want to serve their customers. They have customers in the western district. It is perfectly natural that they would, although I will say this, these contracts were made, first made September 23, 1935, between Panhandle and what was then the Detroit Gas Light Co., and afterward the Michigan Consolidated Co., at a time when Michigan had no customers in western Michigan. Their only customers were in Detroit. The contract all of the way through talks about the Detroit territory, Detroit now being served by it and so on and so forth, now contemplating at that time service of that gas anywhere else, although there is no covenant in that contract requiring that it be furnished to Detroit and Detroit only. Nevertheless, that is the contention.

Mr. JONKMAN. Gas is now being consumed in Grand Rapids and in the Muskegon district that is a mixture of natural and manufactured gas.

Mr. WHITE. A mixture of manufactured and natural gas. The natural gas comes from the wells, and you can mix the natural gas of that type of manufactured gas to the ratio of about 65 percent natural, 35 percent manufactured. If you go beyond that you have plant difficulties, carbonization and you have to have a complete readjustment of your appliances throughout the district, and in their case they serve 56,300 domestic and residential customers and 451 industrial and commercial customers. So you can see that the practical matter of adjusting their appliances would be quite a problem.

Mr. JONKMAN. You have explained that there are remedial opportunities for the gas supply for a later time, for next winter. Is there

any immediate relief that could be suggested to meet the present situation?

Mr. WHITE. That is in western Michigan?

Mr. JONKMAN. The Grand Rapids and Muskegon district.

Mr. WHITE. None whatever.

Mr. JONKMAN. Thank you.

Mr. WHITE. The only hope for relief is the building of the Austin line and the use of that Austin field for storage.

Mr. JONKMAN. Thank you. Thank you, Mr. Chairman.

Mr. HALE. Thank you, Mr. White.

STATEMENT OF HENRY WOOLFENDEN, COMMISSIONER, MICHI-
GAN PUBLIC SERVICE COMMISSION, LANSING, MICH.

Mr. HALE. IS Mr. Woolfenden present?
Mr. WOOLFENDEN. Yes, Mr. Chairman.

My name is Henry Woolfenden, Commissioner, Michigan Public Service Commission, Lansing, Mich.

I am here for the commission and Mr. White has spoken for the commission. My only purpose of appearing here is to reiterate and underscore what he has said.

Mr. HALE. You have nothing to add to what he has said?
Mr. WOOLFENDEN. I have nothing/to add; no, sir.

Mr. HALE. Thank you, Mr. Woolfenden.

Mr. WOOLFENDEN. Thank you.

STATEMENT OF HENRY FINK, PRESIDENT, MICHIGAN CONSOLIDATED GAS CO., DETROIT, MICH.

Mr. HALE. Mr. Fink.

Mr. FINK. Mr. Chairman.

Mr. HALE. You have a prepared statement, Mr. Fink?

Mr. FINK. Yes, Mr. Chairman; I have a very brief prepared statement which I would like to read into the record.

My name is Henry Fink and I am president of Michigan Consolidated Gas Co. which is the distributing company serving gas to 625,000 customers in Detroit and other large Michigan cities.

The reason it is impossible to furnish an adequate supply of natural gas in severe winter weather to Detroit and other areas served by Michigan Consolidated Gas Co. can be explained in a few words.

Mr. HALE. Just a moment. You are reading from a summary of your statement, is that correct?

Mr. FINK. Yes; though it may be considered an opening statement, I would like to read both statements.

Mr. HALE. Very well.

Mr. FINK. Michigan Consolidated is entirely dependent for its natural gas supply upon Panhandle Eastern Pipe Line Co. We have a contract for a daily maximum delivery of 125,000,000 cubic feet in Detroit. Since our demand in winter months runs frequently over 200,000,000 cubic feet per day, we have sought in vain to obtain an increased supply of natural gas from Panhandle. We have been unable to get an agreement to supply more gas from Panhandle for three reasons: