REPORTS ON
INOUSTRIAL
MOBILIZATION
News of the nation's activity in marshaling its resources to meet the international emergency
Sulfur Use Restricted to 1 9 5 0 Level
"There simply is not enough sulfur to go around." said NPA in announcing Order Μ-69 which limits industry to the same amount of sulfur it used in 1950—a year wherein demand exceeded supply—and permits suppliers to ship sulfur only when specifically authorized by NPA. The use limitatioD applies immediately: the control on supplies goes into effect July 1. The order is expected to have wide repercussions in all phases of industry, but chiefly, of course, in the chemicals Seid. Producers of sulfur started toward the end of 1950 to limit their customers' orders to about 20%. Despite this, they sold more than they produced and had to dig into üheir reserves for about 445,000 tons. As shortages mounted, there remained only about six months* supply in the reserves and both government and industry efforts to increase the supply of sulfur and sulfuric acid could not meet the increasing demand. Sulfur is mined chiefly from deposits beneath salt domes üong the Gulf Coast. However, sulfuric acid can also b e obtained through the burning of pyrites—a more expensive process than making it directly from sulfur. In order to encourage the conservation of sulfur. NPA is now granting certificates of necessity to plants which are converting to pyrites burners and is withholding certificates from those which require sulfur burners. NPA is also stressing a program for the recovery of spent sulfuric acid. To get back to M-69. the supplier must file with NPA, one month before the quarter in which his shipments are to be made, a statement of shipments he expects to send out during the quarter. The agency will examine his application, adjust it if necessary, and return it 10 days before the quarter. T h e sulfur user must make a monthly report to NPA before the 28th day of each month on his use of sulfur during the preceding month and h e must also give a statement of his inventory at the close of that month. Certificate of Necessity M o r a t o r i u m After June 1 5
The deadline for filing applications for certificates of necessity for certain types of plant expansion comes up in a few days. Acting Defense Production Administrator Edwin T. Gibson announced on June 3 that such applications filed after June 15 would not be considered by NPA, except in urgent cases, until the backlog had been processed. Other agencies delegated authority for handling applications (Interior, Agriculture, and Defense Transport Adi Jnistration) will continue to do so beyond June 15. Therein ;e. the facilities affected are those for such basic materials as chemicals, steel, aluminum, pulp, and textiles. As of June 4, the number of applications received by DPA totaled 9153 of which 1512 had heen approved for a total investment of $5.9 billion in facilities expansion. A total of "S02 applications have heen denied, and 7081 are pending. V i r t u a l l y A H Artificial Graphite Allocated
A new order, Μ-06, limits inventories of artificial graphite and carbon electrodes and prohibits, with a few exceptions. all delivery or acceptance of orders not covered by an NPA quarterly allocation authorization. V O L U M E
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24
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JUNE
11,
The order spells out artificial graphite as "solid graphite electrodes, plain or threaded, for use in electric arc or re sistor furnaces; solid graphite anodes, plain, machined or treated, for use in electrolytic cells; and solid graphite shapes for use in metallurgical, chemical, or electronic ap plications." Carbon electrodes are defined as products produced in a baking furnace horn a mixture of calcined anthracite coal and pitch or other suitable binders. It is estimated that approximately 200 million pounds oi artificial graphite and carbon electrodes are produced an nually by four companies and distributed to 1265 con sumers, the largest users being operators of electric fur naces. The products are also widely used in the production of chemicals and abrasives. From now on, applications for allocation authorizations must be filed with NPA not later than the 10th day of t h e month preceding the quarter in which delivery is sought. NPA then notifies the appropriate supplier and the applicant if the authorization is to be made. Applications will b e made by each supplier and on a plant basis. Persons whose total receipts during a quarter will be less than 500 pounds are not bound by the allocation procedure. Inventory regulations in the order limit artificial graphite anodes to 20 weeks' minimum requirements, and inventories of any other artificial graphite, or carbon electrode, are limited to a four weeks' supply. Monthly reports on production, shipments, ownership, and consumption on the items in question will be required before the 10th day of the following month. The reporting provision does not apply to deliveries of graphite electrodes of less than one inch cross-section or to any deliveries that do not exceed 500 pounds during the current quarter Third-Quarter A l l o t m e n t for Tubular Goods A n n o u n c e d
Third-quarter oil and gas well-drilling programs will be supported by 350,000 tons of casing and tubing. This amount has been distributed to about 4000 oil and gas operators according to Deputy Petroleum Administrator Bruce K. Brown. Because of changes in their drilling programs, oil and gas operators, in individual instances, may not be able to use the entire amount of casing and tubing for which thirdquarter authorizations have been issued by Petroleum Ad ministration for Defense. In such cases, the operators axe to notify PAD's Materials Division of tonnages authorized in excess of programmed needs, so that the tubular goods may be reassigned to other operators with unfilled programmed requirements. Authorized operators will be permitted DO-48 ratings on orders to be delivered from the regular rollings of steel pipe mills after July 1. Such a DO-48 rating may not be used on delivery orders for casing and tubing to be used on ( 1 ) wells drilled by the applicant solely as a drilling contractor; (2) wells on which the applicant did not actually conduct the operations; (3) wells located on lands in which the applicant held no property interest. The 351,000 tons of tubular goods in question represent the largest segment of the 450,000 tons allotted by DPA and NPA to PAD for third-quarter distribution. The re mainder will be used as follows: 40.000 tons for casing.
1951
2395
INDUSTRIAL M O B I L I Z A T I O N
tubing, and drill pipe for export; 13,200 tons for casing, tubing, and drill pipe for Canada; 22,000 tons for casing and tubing for wildcat emergency field stocks; 21,000 tons for drill pipe for domestic drilling programs; and 2000 tons for casing, tubing, and drill pipe for sulfur, brine, and miscellaneous wells. Operators seeking priorities assistance for fourth-quarter delivery of oil country tubular goods to carry out regular drilling programs must file applications by June 30. Industry to Report on Rapid-Write-OfF Expansion Progress
Holders of certificates of necessity have been called on to make progress reports concerning their defense plant expansion. Defense Production Administration is conducting this survey to gage the effect its accelerated tax amortization program is having on the mobilization picture. One of the basic regulations for direction of the expansion program stipulates that the tax concessions of the Revenue Act of 1950 should not he extended after the capacity to meet the mobilization program has been reached. Henceforth, these reports must be made quarterly and must provide the following data: exact location of the new facility; construction contracts awarded; any revisions of the estimated costs of each project; value in place at the end of the calendar quarter; added capacity for specified products which will be available upon completion of the project; existing capacity that has been or will have to be shut down or dismantled as a result of disruption during the individual expansion program; existing capacity for each specified product that will remain in operation during the expansion. M R O Supplies Upped b y 2 0 %
Defense rated orders for maintenance, repair, and operating supply items now have a call on 120% of the amount spent on such items during the base period. Until this new amendment to NPA Regulation 4 was issued, the limit was 100%. A 10% price hike on M R O items over t h e base period average and a 10% increase in requirements occasioned by plant expansions were the factors which, according to NPA, determined the increase in the permissible amount set aside for DO-97 ratings. The amended order also made the following changes: (1) MRO consumers may now choose either the calendar year or the nearest fiscal year ending before March 1, 195L for a base period; (2) an organization that uses a DO-97 rating to get 20% or less of its quarterly quota is now permitted an unlimited MRO total without use of a DO-97. This provision is subject to inventory limitations and restrictions contained in other NPA orders; (3) the use of DO-97 for capital addition is limited to 10% of the quarterly quota, or to $750, whichever is higher; (4) companies owning more than one plant have the choice of deciding whether MRO quo f as shall be established for the organization as a whole, or for each plant individually as has been the rule; (5) DO-97 cannot be used to obtain material on lease. Notes on Small Business
Defense Mobilizer Charles E. Wilson recently notified the heads of all government agencies with mobilization functions to exert every possible effort to ensure the widest distribution of defense contracts among all segments of business, large and small. In order to accomplish this, Mr. Wilson said Defense Production Administration had already announced a policy designed to bring into the defense effort on a prime contract, subcontract, or purchase-part basis 2396
every qualified contractor so that orders could be spread across as wide an industrial base as possible. At the same time the Munitions Board announced a plan to make more procurement information available to small husiness firms. The plan calls for publicizing every procurement of $10,000 and over, except where security does not permit. These listings will be given to major procurement offices and will be condensed for publication in synopsis form by the Department of Commerce. And finally, DPA announced that of the sLx emergency loans approved between April 4 and May 14, four were awarded to small business firms for amounts of $300,000 or less. Up to this date 3 3 such emergency loans had been made. Authority for such loans is provided under Section 302 of the Defense Production Act which stipulates that DPA shall make the loans only when financial assistance is not otherwise available on reasonable terms. Meanwhile, several congressional committees continue hearings on the role of small business in the mobilization program. A number of congressmen are readying provisions to be included in the n e w Defense Production Act to protect the interest of the small businessman in the surging activity of the defense program. Tighter Controls for Z i n c a n d Lead
A larger share of special high grade zinc is being channelled to the defense program and essential civilian production. NPA officials have said that at no time during World War II was the shortage of zinc as acute as it is today. By an amendment to zinc order M-9, each producer is required to set aside 20% of his anticipated production of high grade zinc (slab zinc that is 99.9% pure) and 10% of his anticipated production of all other grades for DO's. In addition to these percentages, zinc manufacturers will also have to set aside 5% of their anticipated monthly production as a reserve to meet emergency requirements. Applications for zinc from the fund must be submitted before the 25th day of the month preceding the month in which zinc is required. NPA amended M-15 to limit civilian consumption of high grade zinc to 70% of the average quarterly use during the last six months of 1950. Other types of zinc are limited to 80% of base period. By an amendment to M-38. lead producers are required to place aside 25% of their lead products for D O orders. This order affects lead chemicals containing 50% or more lead by weight. Appointments . . .
Mobilization Director Charles E. Wilson has named Clay P. Bedford, executive vice president of the Kaiser-Frazer Corp., as assistant to the director. H e will be concerned with stimulating industrial production for defense. Mr. Bedford has been associated with Kaiser-Frazer since 1925 and during World W a r II was in charge of a shipyard that completed a Liberty ship, from keel to launching, in four days and 15Va hours. Frank G. Chambers, secretary-treasurer of the Magna Engineering Corp., San Francisco, Calif., has been named chief of the Munitions Board's Office of Priorities and Controls. Mr. Chambers served in much the same capacity during World War II. S. B. Coolidge, Jr., of Cleveland Ohio, has been named deputy assistant administrator of NPA's Metals and Minerals Bureau. Mr. Coolidge is on leave from his position as vice president and director of auxiliaries of the SherwinWilliams Co. An expert on procurement and distribution of raw materials, he will assist in carrying out NPA's policy of supplying defense needs and meeting essential civilian requirements. C H E M I C A L
AND
ENGINEERING
NFWS
