Changes in Defense Production Act Urged Amendments are needed to permit easier disposal of stockpile surplus, OEP head says Once again representatives of the Office of Emergency Planning have asked the Senate Banking and Currency Committee to amend the Defense Production Act. They want to make it easier to dispose of surplus materials in the DPÀ stockpile. Last month Congress approved a two-year extension of the act until June 30, 1964 (C&EN, July 2, page 19). But the committee refused to recommend any changes in the law until it had a chance to take a closer look at the amendments proposed earlier by the Administration. Two major changes in the law are needed to help solve the surplus disposal problem, Edward A. McDermott, director of the Office of Emergency Planning, told the committee. One would permit sales of stockpile surplus overseas at competitive local prices; now, sales must be made at domestic prices. The other would permit OEP to make long-term disposal contracts; present law forbids the Government to make any contracts for sale of DPA inventory beyond June 30,1965. Fate of S. 3436, the bill which would make these changes plus several administrative changes, is uncertain. Some committee members fear that lower-priced sales abroad might depress domestic prices for metals and minerals. Others think it might be wise to take no action until a reappraisal of stockpile goals is completed. This study will not be ready before the end of 1962 at the earliest. Overseas Prices. Sales to other nations would be a good outlet for some surplus DPA stocks, Mr. McDermott says. But sales can't be made unless the U.S.-owned material is offered at competitive world prices; mandatory use of current domestic prices could freeze the surplus out of potential markets, he says. As an example, he points to a proposal made earlier this year to use surplus aluminum for foreign aid programs instead of making dollars available to recipient nations to purchase this material on the world market. This proposal failed, he says, because aluminum could be purchased at lower prices on the world market.
At earlier hearings, committee members feared that sales at world prices, which might be lower than domestic prices, could harm U.S. producers because the materials might be processed and shipped back for sale in the U.S. (C&EN, June 18, page 2 9 ) . This possibility is not created solely by the proposed amendment, Mr. McDermott says. Supplies of these materials are now available in foreign markets at lower prices and the purchaser of government surplus would probably use the material for the same purpose that he would if he had purchased similar material elsewhere, he says. The price to the purchaser would be identical in either case, Mr. McDermott says, unless the quantity of surplus offered forced down the price. In his opinion, this would not happen because OEP does not plan to sell surplus in such quantities as will disrupt the market. As he sees it, disposal will be a long-range program, covering 10 years or more. Sen. William Proxmire (D.-Wis.)
claims that it is impossible to sell any significant amount of surplus without depressing prices; even if prices don't go down, announcement of a sale might have a psychological tendency to keep them from going up. Mr. McDermott agrees that disposal affects markets, but he believes that OEP's proposed disposal program would have minimum effect. Contract Authority. OEP needs authority to make disposal contracts beyond 1965, the cutoff period in the present law, Mr. McDermott says. For example, three major aluminum producers—Alcoa, Kaiser, and Reynolds—last month offered to purchase all the surplus aluminum in the DPA inventory over a period of 10 years or more. But OEP does not have authority to take advantage of offers like this, he points out. In response to committee questions, Mr. McDermott revealed that the Administration is reappraising stockpile goals. Results of this study will not be available before the end of the year. But Mr. McDermott urges action now. Materials under consideration for disposal would be surplus regardless of new goals, he says, and with the new authority OEP might be able to make advantageous sales contracts during the interim.
CHANGES NEEDED IN STOCKPILE POLICY. At hearings before the Senate Com mittee on Banking and Currency, Edward A. McDermott (at microphone), director of the Office of Emergency Planning, asked for authority to sell stockpile surpluses overseas at local prices and to make long-range disposal contracts. At Mr. McDermott's left is Charles H. Kendall, general counsel for OEP JULY
3 0, 1 9 6 2
C&EN
47
C&EN CHARTS ORGANIC CHEMICALS AND CHEMICAL INTERMEDIATES TOLUIC ACIDS...
COOH
COOH
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o-Toluic reactions typical of carboxylic acids, providing ideal intermediates for the manufacture of aromatic esters, amides, acid chlorides, nitrile and anhydride compounds.
ESTERS OF TOLUIC ACIDS... coocHs Methyl - m -Toluate
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esters of the Toluic acids such as those shown here offer many interesting possibilities for spe cific applications in the textile and plastic industries.
ΛΓ,Ν-DIETHYL-m-TOLUAMIDE -C2H5 (DETAMIOE 95)
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In a recovery in manufacturing em ployment that has been distinctly dis appointing this year—the number of workers in manufacturing last month was still 80,000 below the May 1960 level—the more stable nondurable goods industries have turned in a considerably better performance than has the durables sector, employment by producers of nondurables has finally climbed back to its prerecession level. And among the nondurables indus tries, chemicals have tallied one of the best improvements from a year ago. In actual numbers, the indus try's payrolls have been practically urv changed in the past three months. But employment normally declines in June, so that after allowing for sea sonal factors total employment in the industry reached a new peak of more than 855,000, up more than 1 % since April and nearly 3 % in the past year. Production workers in chemi cal plants, meanwhile, have climbed to the highest level in six years at nearly 530,000, up 2 % since April and almost 4 % from mid-1961. Also last month wage rates took their usual* midyear step upward. This, coupled with a slight increase in the workweek to the highest level in about two years, lifted average weekly
earnings for chemical production workers to a new record of just over $111. That, in turn, carries the in dustry's payrolls to more than $230 million per month. Take-home pay is only part of the industry's labor cost, of course. A recent study by the U.S. Chamber of Commerce indicates that fringe bene fit payments in the chemicaUindustry averaged 2 7 . 6 % of its total payroll last year, a higher level than that for any other manufacturing industry. The average fringe payment for all manufacturing was 23.6% of pay rolls. The 59 chemical companies for which the Chamber has figures paid an average of $1505 in 1961 to each employee in such benefits. (Because its wage rates are higher, the petro leum industry, in which fringe pay ments were slightly lower—27.0% of total payroll—paid out $1719 last year to each worker.) As in other industries, the biggest items on the chemical industry's list of fringe benefits are pension and in surance payments and payments for time not worked (such as vacations, holidays, and sick leave). Both of these types of payments, which are made by nearly all companies in the industry, amounted to about 8 % of the industry's payroll.
EMPLOYMENT NUMBER OF EMPLOYEES 900
Chemicals and Allied Products •«1962 — 1 9 6 1
[Thousands)
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developed originally as an in sect repellent, Detamide 95 provides unusually high purity and high meta-isomer content.
ALL EMPLOYEES
800
550
SEND FOR INFORMATION 500 NEW PRODUCTS NEW FACILITIES NEW THINKING
C0W&4
CHEMICAL COMPANY Cleveland 20. Ohio
48
C&EN
JULY
30,
1962
PRODUCTION WORKERS 450
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Source: Bureau of Labor Statistics
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J U L Y 3 0, 1 9 6 2
ALL WHOLESALE COMMODITIES VS. CHEMICALS •1962
108
INDUSTRIAL CHEMICALS
_1961
104 100
108 104
ALL WHOLESALE COMMODITIES
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ALLIED PRODUCTS
92
92 D
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1957-1959 = 100
RUBBER PRODUCTS
PETROLEUM PRODUCTS
DRUGS
108
108
108
104
104
104
100
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AVERAGE WEEKLY HOURS
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AVERAGE HOURLY EARNINGS Production W o r k e r s $2.70
Production W o r k e r s 43
42
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D J F M A M J J A S O N D 1957-1959=100
1957-1959 = 100
1957-1959=100
96 92
92
I I I II III III I I D J F M A M J J A S O N D
100
CHEMICALS AND ALLIED PRODUCTS
2.60 CHEMICALS AND ALLIED PRODUCTS
2.50 2.40
2.30 ALL MANUFACTURING 2.20
38
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C&EN
49
