are going to have an extensive field hearing on ocean dumping legislation at Rehobeth, Del., this coming Friday, March 26.

The schedule of witnesses covers all aspects of the subject-scientists, industrialists and public officials. This is very timely. I am grateful to you for your presentation.

Senator NELSON. Thank you.

Senator RANDOLPH. I would like to conclude while you are here, Senator Nelson, on the note that Senator Boggs has stressed, and that is the field hearings, as well as the Washington hearings.

We do have some 14 or 15 bills that are dealing with this general subject matter now pending in the Senate and it indicates the intense interest. I know in talking with my colleague from Delaware, I asked him what would be the interest at the Rehobeth Beach hearing, I believe in the Convention Hall. He said they anticipate at least 1.000 persons coming for those hearings.

So, there is this interest, understandably. It is encouraging, and to have a cross-section, and to have a colloquy, and to have the dialogue within our democracy upon pressing problems.

I congratulate the subcommittee, and I know Senator Muskie will arrange his schedule to be here and I believe five or six other members of the subcommittee will join you at that time.

Senator NELSON. The bills you are considering at least are all called ocean dumping bills?

Senator RANDOLPH. I mean water pollution. I didn't mean to say there were a dozen or 14 ocean dumping bills but there are bills in which that is a portion of the problem.

Senator NELSON. In the bill I introduced and maybe in the rest of them, too, the dumping control aspects apply to the Great Lakes and I would hope that you apply just as strict a rule to those lakes, too, which border my State, as you do elsewhere.

Thank you.

Senator RANDOLPH. Thank you very much.

Our next witness is Reynold C. MacDonald, chairman, Task Force on the Environment, American Iron and Steel Institute.

Mr. MacDonald, would you please identify your associates who are appearing with you this morning?

STATEMENT OF REYNOLD C. MacDONALD, CHAIRMAN, TASK FORCE ON THE ENVIRONMENT, AMERICAN IRON AND STEEL INSTITUTE; ACCOMPANIED BY D. J. CARNEY, VICE PRESIDENT, APPLIED RESEARCH, UNITED STATES STEEL CORP.; FRED E. TUCKER, VICE PRESIDENT, ENVIRONMENTAL CONTROL, NATIONAL STEEL CORP.; AND MAX N. EDWARDS, COUNSEL

Mr. MACDONALD. Mr. Chairman, I am accompanied by Dr. D. J. Carney, to my far right, vice president of Applied Research, United States Steel Corp.; Mr. Fred Tucker, to my near right, vice president for Environmental Control, National Steel Corp.; and Mr. Max Edwards, counsel.

Mr. Chairman and members of the Subcommittee on Air and Water Pollution, we thank you for the opportunity to appear before you today.

My name is Reynold C. MacDonald, and I am president and chief executive officer of Interlake, Inc.

I appear before you today representing the American Iron and Steel Institute, a nonprofit trade association with 66 member companies in the United States. These companies account for more than 95 percent of this country's raw steel production, and employ 506,000 hourly and salaried workers-who are also vitally concerned with this legislation.

I am also a member of the association's board of directors and chairman of its Task Force on the Environment.

The steel industry and its commitment to environmental control are well known to this committee. Our representatives have testified before you on numerous occasions in the past.

This year you are considering amendments to water quality legislation which originated in 1948. In 1965, Congress rewrote the Federal Water Pollution Control Act and amendments to this act were passed by the Congress in 1966 and 1970. This Congress has before it in this session numerous proposals for modifications to the 1965 act. Principal among these bills are S. 523, S. 1012, S. 1013, and S. 1014. We will limit our comments today to these proposals.

It is interesting to note that progress in water quality control in the steel industry appears to parallel legislative progress on this subject in the Federal Congress. In the 15-year period between 1951 and 1965, inclusive, the steel industry spent approximately $210 million for the installation of water quality control equipment at AISI member plants.

During the next 4 years, 1966 through 1969, an additional $206 million was spent for water quality control and, although final figures for 1970 have not been assembled as yet, at the beginning of the year member companies estimated that an additional $188 million had been allocated for water quality control.

Assuming this amount has been or will be spent, the steel industry can report capital expenditures for water quality control since 1951 of $604 million.

It is interesting the way in which this expenditure has grown over the years as a percent of steel industry net earnings. In 1966, water quality control capital expenditures represented 1.7 percent of earnings. By 1969, this figure increased to 7.9 percent, and it is estimated that the 1970 figure will be in excess of 20 percent of earnings being spent on water control facilities.

From these figures it is understandable that a recent study by the National Industrial Conference Board reported that steel leads all other major industries in spending for environmental control equip

ment.

Capital expenditures are not the only costs involved in this commitment to clean water. It is estimated that every dollar of capital investment in this area results in a 10-cent increase in operating cost. Thus, this $604 million capital investment increases steel's operating cost approximately $60.4 million per year. Adding a reasonable return on the investment, the total cost would be over $100 million per year.

This recitation of steel's financial commitment to water quality control should not in any way be construed as a complaint on our

part. We are proud of what we have done and are continuing to do in environmental control.

We are disappointed to note, however, that S. 523 eliminates from the 1965 act what little financial assistance did exist in Federal legislation to assist industry. The 1965 act provided $20 million per year for demonstration grants to industry and municipalities for development of new and improved methods of treatment for industrial wastes.

During the 4 years 1967 through 1970, under this act, industry actually received $24 million for this purpose.

S. 1012 proposes to continue this program for 1 year with an appropriation of $60 million to be divided three ways at $20 million per program. It is our interpretation that direct grants to industry would be available under this program.

We urge the Congress to continue grants to industry for research and demonstration projects through fiscal year ending 1976.

Senator RANDOLPH. Let me interrupt at that point, Mr. MacDonald.

You call attention to S. 523 and the elimination of the financial assistance effort that you commend. In a sense, what you say is true in the introduction of the measure.

I cannot speak for Senator Muskie, although I joined him in the purposes of the bill just as I have joined cosponsoring other measures because of the purposes, not always the specific language, itself. But I believe that in a sense we look upon those as technical amendments, and I believe there is no disposition within the subcommittee or the committee to fail to continue such provisions in a measure that would be reported from this subcommittee or committee. A member of the staff especially working closely with Senator Muskie reinforces what I am saying.

Would you want to make a comment on that, Senator Boggs? Senator BOGGS. I am inclined to agree with you, Mr. Chairman. The committee's final resolution will come from the very useful testimony such as this.

Senator RANDOLPH. It would be my feeling, and I don't want to take a hard and fast line here in reference to this matter, but I think generally that will be the thinking within the subcommittee and the committee, that that type of program, financial assistance, should go forward.

Mr. MACDONALD. Thank you, Mr. Chairman.

CONSTRUCTION GRANT PROVISIONS

S. 523 requires that all industrial pollution sources which fail to satisfy water quality standards must be placed under control within 3 years of approval of these standards.

It also provides a construction grant program for municipal treatment plants at an annual rate of $2.5 billion for 5 years. Municipal facilities constructed under grants given in 1976 could not possibly be completed until 1977.

This grant program then in effect says that political entities have 6 years to complete construction of facilities while industry has 3 years to reach the same objective.

At the same time, municipalities will be given $12.5 billion in financial assistance while industry will be given none for construction of treatment facilities.

Regardless of our position, either as representatives of industry, or as private citizens, this double inequity seems unfair and discriminatory.

We realize that this committee cannot provide badly needed tax relief for industry in environmental control. Your committee recognized this in a report titled, "Steps Toward Clean Water," published in January 1966.

Commenting on a proposal from Mr. Charles H. Callison, assistant to the president, National Audubon Society, in which Mr. Callison proposed tax incentives for industry, your committee report states the following:

As noted by Mr. Callison, the subcommittee is without jurisdiction in tax and fiscal matters. It is firmly convinced, however, of the intrinsic merit in this proposal from the standpoint of achieving effective water pollution control. The subcommittee commends, therefore, the serious consideration of this or similar proposals by the appropriate committee of the Senate and its counterpart in the House of Representatives with the view toward urgent and favorable action by the Congress.

We have yet to receive any substantial assistance from Congress. Although this committe cannot write tax legislation, the committee, however, can provide other meaningful assistance to the industry. We urge the committee to reaffirm its recommendation to the Congress for more favorable tax treatment for industry. If we are to accelerate this program, we need that assistance.

We, therefore, propose that this committee draft legislation to provide a low-interest revolving loan fund for construction of industrial treatment system. Such a fund would at least make it possible for industry to obtain a portion of the capital needed to meet anticipated water quality standards.

We propose a fund on the order of magnitude of $3 billion to provide low-interest long-term loans to industry to construct facilities certified by the States to meet Federal water quality standards. Such funds would not constitute a direct grant to industry but would merely permit acceleration of a program for water quality control which industry cannot afford to capitalize from current earnings. We also consider it unrealistic to put a specific time such as 3 years in the legislation to meet water quality standards. No one has any idea how long it will take to meet water quality standards because the standards haven't even been promulgated as yet.

If the Congress wants to set a target date or objective, that's one thing, but to establish a legal date to meet limits which haven't even been established does not appear realistic.

Senator RANDOLPH. At that point, Mr. MacDonald, you refer to the committee report in which we noted the subcommittee's approval of the intrinsic value, we used that expression, of the industrygovernmental cooperative effort that you have mentioned and I see no reason why what we indicated then would not be reaffirmed in connection with legislation from the subcommittee and the committee at this time.

As you have indicated, there is the jurisdictional matter, yet there may be a real reason why we can do more than we have done. The

sense of this subcommittee and the committee is important, of course, but there may be other appropriate methods to which we can direct our attention on this matter.

You speak here of the low-interest revolving loan fund for construction of industrial treatment systems and you gear that, of course, to the water pollution control programs.

I recall, as does Senator Boggs, that in connection with our 1970 air pollution legislation, that was a matter of very detailed discussion within the committee and, although nothing was actually done at that time, it does indicate that we then, as now, certainly must take a very careful look at such a program. As you have indicated, it is a problem of tremendous magnitude, isn't it, Mr. MacDonald? Mr. MACDONALD. Yes, sir.

Senator RANDOLPH. I don't think you have cried "wolf" here today when you come and discuss the investment that is involved within the industry and its exponent parts.

I don't attempt to single out a corporation or a subsidiary within a corporation, but in a sense when the Weirton Steel Co., at Weirton, W. Va., expended a million dollars on what they called "the mill of the future," I don't think they did it under pressure, per se, but a realization that that subsidiary and that company and that corporation needed to make a contribution toward the lessening of pollution from the standpoint of production of steel, with the problems that we knew there in the West Virginia panhandle.

Yet, that investment was not really returning a profit to a company, was it?

Mr. MACDONALD. No, sir.

Senator RANDOLPH. It was a built-in cost to a company and I think sometimes there is a tendency to criticize sometimes these companies within industry by saying in a sense that they are under the gun, and therefore they are doing something.

I think there is a statesmanship within industry which should not be overlooked.

I had the opportunity a few weeks ago of seeing what was being done in connection with a casting plant in Iowa. That plant, I believe, cost the company in question about $40 million and I was told, and I am trying to determine the factuality, that the water coming out of the casting plant is actually purer than when it went in. That may seem a very unusual statement to make, but here is a company, the John Deere Co., a manufacturer of farm implements, that is making in that one instance a contribution of a considerable amount of money, and, I was told, is planning another casting plant of the same order.

I take this time because I think that it is important that in these hearings we stop for a moment when we have the facts, and when progressive moves within industry take place, to mention those. If I may suggest to you, Mr. MacDonald, sometimes I think such organizations or associations as yours, talk sometimes too much to yourself. You exchange your own ideas back and forth. You keep rather a circle that is too, I think, narrow, not all-encompassing.

I think if you have a story to tell, I think you must tell it just as anyone else who has a position that should want to have it heard. If this is criticism, I hope you will understand. It is one in which, I think, sometimes certain organizations such as yours are inclined