Foreign Investment Filing Sparks Hassle U.S. firms must file information on foreign operations; industry objects to IRS's proposed regulations This week chemical attention focuses on Internal Revenue Service hearings in Washington. The topic: Congress's new requirement that U.S. companies file an annual information return on all foreign operations that they control. The public hearing will be industry's chance to comment on IRS's proposed regulations for the annual filing. And comment it will, as indications are that industry is none too happy with some of the proposals. The requirement of an annual information return—tacked on (Sec. 6038) to Public Law 86-780 by a Treasury-backed Senate amendment during the last session of Congresscalls for a complete annual rundown by the U.S. parent of all the operations of foreign subsidiaries that it controls, as well as the operations of subsidiaries of the foreign corporation. Information to be furnished upon the Treasury Department's demand includes:
burden to industry, one industry spokesman points out. "1RS is going into this thing much too far at this early stage," adds another. Others are reserving their remarks for the hearing. Naturally, one reason for some industrial objections is that most companies are very reluctant to put any more information on record than is absolutely necessary. A ranking treasury official says that the department will carefully consider all industrial arguments before it makes a final ruling. From the information returns—effective for taxable years beginning Jan. 1, 1961—Treasury could draft a
blueprint for future tax legislation on foreign investments. Treasury states that it simply wants better reporting on foreign activities. But the returns could serve a dual purpose: • As a reference to point the way to more appealing tax setups for foreign operations. • As an enforcement tool to crack down on abusers of foreign tax credits. Foreign Tax Credits. Public Law 86-780, an offshoot of the ill-fated Boggs bill (H.R. 5 ) , is a technical amendment of the Internal Revenue Code designed to make it easier for domestic firms to do business abroad. It offers the company an alternate method to determine the limitations of its foreign tax credits. Under this new law, a company can compute its foreign tax credit by considering the income and taxes from all of its foreign operations in the aggregate.
• The accumulated profits, including the items of income (whether or not included in gross income), deductions (whether or not allowed in computing taxable income), and any other items taken into account in computing accumulated profits. • A balance sheet listing assets, liabilities, and capital. • Transactions between the foreign corporation or foreign subsidiary and any foreign corporation or subsidiary of a foreign corporation controlled by the domestic corporation, the domestic corporation, or any stockholder of it owning 10% or more of outstanding stock of the domestic corporation. • A description of the various outstanding stock and a list showing the name and address of, and number of shares held by, each citizen or resident of the U.S. and each domestic corporation which is a shareholder of record owing 5% or more of the outstanding stock of the foreign corporation or foreign subsidiary. Industry Complains. In its proposals, 1RS takes full advantage of the bill's scope and goes too far to suit many industry officials. The red tape and complex bookkeeping involved to satisfy IRS's proposals would be a big
Shell Completes Five-Year Research Expansion Fundamental chemical engineering research is now being done at Shell Development Co.'s new "high lab" in Emeryville, Calif. Part of a newly completed five-year expansion program, the high lab, along with other buildings, doubles the research center's office and laboratory floor space to about 500,000 square feet. The rotating disk contactor (left) is used to study mixing of liquids, the giant tube (right) in bubble flow studies. NOV.
14, 1 9 6 0
C&EN
33
More simply, it means that a company, if it chooses, can average its total foreign credits and apply this average against its U.S. taxes. Or it can continue under the old systemcalculating the credit separately for each country. In practice, consider the case of a domestic firm with identical amounts of income from two foreign operations, A and B. Say the foreign tax on A is 40%; on B, 60%. Under the new system it can average the two and declare a 50% tax credit. But in the past, the absolute tax allowance by the U.S. was 52%. Thus the company would come up with only a 46% credit on the two operations (40% for A, 52% for B ) . In addition, the new alternative should save considerable bookkeeping expenses.
Canadian Chemists Ponder Laws on Status Quebec group wants restrictive laws, Ontario chemists worry about collective bargaining Chemists in Canada—and especially those in Quebec and Ontario—are thinking more about their professional status. They are undecided about the best way to safeguard their interests, but signs point to growing activity aimed toward legislative action. The Association of Professional Chemists of Quebec (APCQ) feels that restrictive legislation is desirable to retain advantages of professional status. Widespread use of "profession" to describe trade and craft activities has diminished the value of even the word itself, APCQ fears. Pointing to lack of adequate status in courts of law, lower civil service grades for chemists compared with some other professionals, and the chemist's own "lack of power to control his work in industry and hospitals," APCQ got its members to authorize the association to back a bill aimed at a "closed" profession. A bill to provide legal status to chemists is now in the provincial parliament of Quebec and may be acted upon next year. If it is passed as written, "this association will hold great power," says APCQ's immediate past president, Geoffrey K. Wright. APCQ, a group of professional chemists, was chartered by an "open 34
C&EN
NOV. 14, 1960
act" in 1926. (An open act is legislation, for a provincial association, giving a legal definition of a profession but not requiring membership in the association in order to practice; a closed act requires such membership.) Containing a large proportion of biochemists, it has grown considerably since World War II. Membershipall in the Province of Quebec—now numbers about 500, some 90% of whom also belong to the nationwide Chemical Institute of Canada. Total CIC membership in Quebec stands at around 1200. Interest in Ontario. In Ontario, no licensing action has crystallized yet, although the chemical profession does believe there is a growing need to safeguard its interests. Main danger in this province seems to arise from the announced intention of unions there to recruit in the white-collar field. Also, the activities of other professional associations might unintentionally invade the rights of chemists, according to Ellsworth A. Crockett, chairman of the Ontario provincial branch of CIC and former CIC board chairman. In Canada, he notes, a profession, to be legally exempt from collective bargaining, must be chartered by its province. Under present Canadian labor laws, the only professions now exempt are law, medicine, dentistry, architecture, and engineering. These professions are defined in each province by chartering appropriate groups, such as Ontario engineers' Association of Professional Engineers. Since chemists there have no provincial association of their own, Ontario has no legal definition of a chemist or of the chemical profession. The first step to be taken, then, Mr. Crockett feels, is to form a provincial society on the professional level for chemists and chemical engineers, subordinated to the national CIC organization. This would permit amendment of the Ontario Labour Relations Act to exempt the society's members from collective bargaining. Defining the profession would also preclude invasion of the chemical field by other professional associations. Industrial chemists in Ontario are anxious to achieve this type of automatic protection, Mr. Crockett says, and nonindustrial and university researchers are swinging around to this point of view. Opinion is still strong against a completely closed act, he emphasizes; he doubts that such a severe
bill would pass the legislative anyway. An open act, or some other form of legislation, may be the answer. Other Canadian provinces are displaying a wait-and-see attitude. Only in Alberta has any interest been aroused. Some activity is stirring there to amend the provincial professional engineers act to include scientists, but no move has yet been made to the Alberta legislature.
Texas Gulf Will Build $25 Million Potash Plant Texas Gulf Sulphur is starting construction on a $25 million potash mining and processing plant in southeastern Utah. The plant, according to TGS president Claude O. Stephens, is designed to produce well over 1 million tons of potassium chloride a year and will make TGS the largest potash producer in the country. TGS has been thinking about getting into the potash business for some time. Last April, it was granted an option on extensive potash reserves at Cane Creek, Utah, a town near Moab, by Delhi-Taylor Oil Corp. (C&EN, May 9, page 17). Under the agreement, Delhi-Taylor will retain an interest in the net profits of the potash properties and will receive advance payments of $4.5 million over a four-and-one-half-year period. If construction schedules are maintained, the company should be marketing potash by the end of 1962. Initial Shaft. TGS's initial mine shaft will have a depth of about 2700 feet and a diameter of about 20 feet. Core analyses, according to Dr. C. F. Fogarty, TGS vice president, show that the deposit is very large and has an average potash (potassium oxide) content in excess of 2 5 % . By the end of 1963, TGS says, the new plant's capacity may be raised to well over 1.5 million tons of potassium chloride a year. The company estimates that U.S. potash (as potassium oxide) consumption may reach 4.8 million tons by 1975. A Natural. "Diversification into potash is a natural for TGS because of our experience as an extractive company," Mr. Stephens explains. "Also," says Mr. Stephens, "many of TGS's present customers are in the fertilizer industry—the prime market for potash."
ICI Boosts Capacity For Organics By modifying its plants, Imperial Chemical Industries is stepping up production of basic organic chemicals at Wilton and Billingham in England without making heavy capital outlays. ICI's heavy organic chemicals division has been working overtime to improve its ethylene, acetone, and phenol units. Capacity for high-purity ethylene has been increased from 120,000 to 140,000 tons a year, with corresponding gains in propylene, butadiene, and butène capacity. ICFs acetone plant is being expanded from 28,000 to 36,000 tons a year, with the increased capacity expected by mid-1961. Wilton's two p-xylene plants will be modified, too, for a "large rise" in capacity. ICI turns out acetone at Billingham, from propylene produced at Wilton, for making methyl methacrylate. Billingham also converts propylene to
butanol in a section of Id's carbonylation plants, which are also being expanded for increased output of higher alcohols. Improvements at the Billingham phenol plant have increased output from 15,000 to 18,000 tons a year. The phenol by-products units will get new equipment to lift production of o- and p-phenylphenol from 650 tons to 1000 tons a year by the end of 1961.
BRIEFS General Dynamics Corp.'s Genera! Atomic division gets a $190,000 contract from the Wright Air Development Division of the Air Force for the development of a high-temperature thermionic converter. Purpose of the device: to convert electricity for space uses directly from the heat found in nuclear auxiliary power systems.
Diamond Alkali will market the Duramir chrome-plating processes developed by General Development Corp., Miami, Fla.
Helmerich & Payne, Inc., Tulsa, Okla., producer of natural gas, lias purchased Matural Gas Odorizing, Inc., Houston, Tex., maker of odorants for the gas transmission and distribution industry.
^ Du Pont, the pioneer in tank-car shipments, offers expert help in the handling, storage and use of bulk liquid hydrogen cyanide.
Du Pont Liquid H C N a low-cost, high-purity cyanide n o w o n l y 14?lt». Liquid hydrogen cyanide is the most economical form of cyanide needed in the production of organic nitriles, plastics and finishes, sequestering agents and many other products. Your best source of liquid HCN is Du Pont. Du Pont liquid HCN is high in purity —99.5% minimum; low in water content—0.5% maximum. Result: you get less by-product formation and cleaner reactions. As a source of the cyanide radical, liquid HCN is much lower in cost than other forms of cyanides and is easier to process to the reaction stage.
And Du Pont's centrally located plant in Woodstock, Tenn., gives you a reliable, fast source of supply. Du Pont has the experience and practical know-how to help make liquid hydrogen cyanide a profitable part of your operation. Du Pont will be glad to work with you in establishing safe practices and designing the storage facilities needed to handle bulk liquid HCN. For more information call your Du Pont representative or write: Du Pont, Electrochemicals Department, Sodium Products Division, Wilmington 98, Del.
DU PONT LIQUID QUALITY
SPECIFICATION
HCN Acidity (as H 2 S0 4 )
9 9 . 5 min. 0 . 0 6 % min. 0.10% max. Not darker than APHA 2 0 0.5% max.
Color H20
BETTER
THINGS
FOR
BETTER
LI V I Ν G . . .
HCN TYPICAL ANALYSES 99.8% 0.08% W a t e r white 0.12%
THROUGH
NOV.
CHEMISTRY
14,
196 0 C & E N
35
IMPROVED METOODS OF PREPARING ΓΕΧΓΙΙΕ
PR» COLORS
An important technical bulletin has been prepared on this subject, based on actual plant operations developed over a period of many years. It describes basic methods and procedures in detail and shows how significant advantages are now being real ized in the preparation of oil-in-water and water-in-oil emulsions through the use of Morehouse Mills and Cowles Dissolvers. In both types of operations these advantages include—Faster processing of larger batches with thorough distribution of components • Greater volume-per-hour than other equipment · Full control of quality and tints · Important savings in space, operat ing and maintenance costs · Greater ver satility—ability to handle practically any type of material in practically any viscos ity range-Dry Pigments, Pulp Colors, Soluble Resins, Dispersable Pastes and Emulsions · Ease of cleaning — rapid change-over without contamination. Spec/fie advantages in "waf er-in-oi7" method
-Rapid grinding of color pigments in resin solutions · Ability to handle all types of such bases · Fast, efficient dispersion of "cut clear" materials · Perfect dispersion in large batches. Specific advantages in "oil-in-water"
We are sure this bulletin will be interesting and helpful. Copy will be sent free upon request on your company letterhead for Bulletin 32-1960.
MILLS DISSOLVERS MOREHOUSE-COWLES, INC. Π50 San Fernando Road, Los Angeles 65, California REPRESENTATIVES IN P R I N C I P A L C I T I E S C O N V E N I E N T LEASE A N D T I M E - P A Y M E N T PLANS
C&EN
NOV.
14,
1960
New air pollution control equipment has gone into operation at American Cyanamid's triple superphosphate plant at Brewster, Fla. This structure cost $500,000 to build and will cost $100,000 a year to operate. It has two chain mills, which break uncured triple super into small particles. The free fluorine is released from the particles in a rotating drum. A fan pulls the fluorine off through two scrubbers (cylindrical structures in the foreground), where it is captured by a water spray. The water is then discharged into the gypsum disposal pond. Less than 0.15% of the fluorine entering the plant escapes. Construction will begin soon on dust collectors for the drying and grinding units, American Cyanamid is spending over $2 million on pollution control at Brewster.
The purchase was for cash and is part of a $23 million expansion program.
method
-Complete in-plant preparation of print ing color pastes from both dry pigments and color pulps · Perfectly level cuts with thickeners fully dissolved in minimum time · Brighter colors, reproduced to established standards from batch to batch, from month to month.
36
New Fluorine Scrubbers at Cyanamid's Florida Plant
Reichhold Chemicals, through an ex change of stock, has increased to 95% its stock holdings in Modiglass Fibers, Inc., maker of glass fiber products (C&EN, Aug. 15, page 28).
Gorton's of Gloucester, Inc., frozen
food processors, and Gloucester By products have acquired an interest in Gray Chemical, Inc., maker of organometallics. Purpose: to develop new chemical uses for fish by-products.
The Oil, Chemical, and Atomic Work ers International Union, Local 2-652, at the AEC's National Reactor Test Station, Idaho Falls, Idaho, has
reached an agreement w i t h Phillips Petroleum's Atomic Energy Division
which operates the plant. Phillips says that the strike which had been in progress for about two months was settled by an agreement which in cluded a 4.5% general wage increase. Also settled: a strike at the AEC's K-25 atomic plant at Oak Ridge, Tenn., for the same terms (9 cents per hour increase) previously accepted without a strike by atomic workers at the Paducah, Ky., plant and another Oak Ridge atomic plant.
NEW FACILITIES Colgate-Palmolive has broken ground for a new multimillion-dollar research center on a 75-acre tract in Piscataway Township, N.J., adjacent to the Rut gers University science campus near
New Brunswick. Turner Construc tion Co. is general contractor for the 200,000-square-foot center, which is slated for completion in the spring of 1962.
Pfaudler Co., a division of Pfaudler Permutit, is building a $1 million ad dition to its Rochester, N.Y., manu facturing facilities. Cooper and Craib, Inc., of Rochester is the con tractor for the addition, which is due for completion by May 1961. Pfaud ler also plans to build a $750,000 research and development center on an 85-acre site in Henrietta, a Rochester suburb. Architect for the center, which is slated for occupancy in the fall of 1961, is Barrows, Parks, Morin, Hall & Brennan of Rochester.
NOW I IN SO MANY DIFFERENT
lilJliMMJ:liliimH,',l*MII:NM IWil:liMiMiyiJ:TiTiME
N:kiiHmViami yi «iι ΗΜΙ Κ Η \mammbmim
Tidewater Oil Co. plans to start build ing early next year a 50 million-cubicfoot hydrogen generating plant and a $20 million, 20,000 barrel-per-day Isocracking unit at its Avon refinery in the San Francisco Bay area.
Northern Gas Products Co., a sub sidiary of Northern Natural Gas Co., plans to build a $9 million propane extraction plant and liquid storage fa cilities in a salt cavern near Bushton, Kan. The plant will have a processing capacity of 900 million cubic feet of gas per day and will be able to ex tract propane, butane, isobutane, ethane, and natural gasoline.
Wo More
to Make Fonds May fresh Longer
REPRINTS AVAILABLE You may order reprints of the special feature, "Creativity Can Be Stimulated," by Dr. Alfred E. Brown, which appeared in Oct. | 1 24 C&EN, page 102.
This advertisement is one of a series of full-page two-color advertisements which highlight many applications of Kelco Algin. More and more proe*, assors are using Kelco Algin to provide substantial improvements m their products»
Prices: Single copies: $0.50 each 10-49 copies: 15% discount 50-99 copies: 20% discount 100 or more copies: rates upon request Address orders to: Reprint Department ACS Applied Publications 1155 Sixteenth St., N.W. Washington 5, D.C.
| 1 | 1
KELCO ALGIN
products of
KELCO COMPANY NOV. 14, 1960 C&EN
37
Owens-Corning Fiberglas has started operation of its new multimillion-dollar, fully integrated glass fiber plant located on a 350-acre site three miles east of Aiken, S.C. Production capacity of the 900,000-square-foot plant will be 70 million pounds of glass fiber per year. The plant has facilities for mixing the basic ingredients of glass and transforming them into finished textile yam products. Bechtel Associates designed the plant and Daniel Construction was general contractor.
Rockwell Mfg. Co. has opened enlarged and modernized chemical engineering research labs, which cost $100,000, adjacent to its headquarters building in Pittsburgh, Pa.
American Cryogenics, Savannah, Ga., plans to sell 150,000 shares of common stock to the public. The company, which produces oxygen, nitrogen, and other industrial gases and related equipment, will use $1.3 million from the financing for expansion of production and distribution facilities and the balance of the funds for working capital.
Norwich Pharmacal will increase its quarterly cash dividend by 5 cents to 25 cents a share with the payment due Dec. 9.
Standard Oil (Ind.) has declared a special dividend of one share of Standard Oil (NJ.) stock for each 65 shares of Indiana Standard. This will be the 13th $tear that Indiana Standard has given its stockholders a special dividend of Jersey Standard stock, using shares acquired during the early thirties in exchange for foreign properties.
INTERNATIONAL Compagnie Francaise des Matieres Colorantes (Francolor), Villers-StPaul, France, is building a phthalic anhydride plant which will use oxylene, naphthalene, or a combination of both as initial feedstock. Societe Francaise des Services Techniques, C&EN
November 7,1960 Advances CURRENT
PREVIOUS
6-Chloro-2-nitrotoluene, tech. $ 0.207 2 $ 0.17 Copper scrap, lb.: No. 1 0.247* 0.241/* No. 2 0.227 2 0.2274 Copra, Coast, ton 170.00 164.00 Grease,white,lb. 0.077s 0.077* Muriate of potash, 60% K 2 0, per unit: Standard 0.35 0.34 Granular 0.36 0.35 Coarse granular 0.36 0.35 Tallow, fancy, lb. 0.057s 0.057s Tin salts, lb.: Potassium stannate 0.793 0.789 Sodium stannate 0.652 0.648 Stannous chloride, anhyd. 1.02 1.013
General Mills Chemicals
Declines
FINANCE
38
WEEK'S PRICE CHANGES
NOV. 14, 1960
Menthol, natural, lb,: Brazilian Japanese, C. and F. Formosan m-Phenylenediamine, tech., c.l. Steel scrap, No. 1, Pittsburgh, ton Vitamin B12, gram: Crystal, 87%, USP Concentrated Titurations
8.75
8.80
9.55 8.75
9.60 8.85
1.08
1.10
26.00
28.00
45.00 52.00 52.00
83.00 85,00 95.00
a French affiliate of Scientific Design, Inc., is handling the engineering and construction.
Polymer Corp., Ltd., Sarnia, Ont., plans new facilities at Sarnia for making black masterbatch rubbers. The plant is due for completion late next year and is expected to cost over $1 million.
International Rectifier Corp., El Segundo, Calif., sets up International Rectifier Corp. Italiana, S.P.A., as a joint venture with Piemontese Sviluppo Industriale S.P.A., an Italian holding company. The new subsidiary plans to build a multimillion-dollar, 16,000-square-foot plant on a two-acre site in Borgaro, Italy. Production of semiconductor rectifiers and automotive diodes is slated to begin in April of next year.
On t i m e . . all the time n^S Midnight, 6 AM, high noon, or 6 PM . . . 24 hours a day the tankcars roll from General Mills Chemical Division in Kankakee, Illinois, the heart of mid America. The high grade chemicals are on their way to a host of diversified industries. Each shipment leaves on time, every time. Production men around the world have come to know General Mills Chemicals as a dependable source of supply. Here at the Chemical Division, we take pride in our reputation. Production manager, traffic manager, shipping clerk . . . the whole team works with one goal in mind—on time delivery, all the time. Why? Because we all know the production bottlenecks that develop when shipping d a t e s are missed. It won't happen when you deal with General Mills. You can't see this dependability in a General Mills sample casef but it's there and it's mighty important. The best way to sample it is to try General Mills Chemical Division as a source of supply.
S U R F A C E F I L M I N G . . . this key property of Fatty Nitrogen Chemicals inhibits corrosion General Mills F a t t y Nitrogen Chemicals are cationic surface active agents t h a t adsorb on metal as a monomolecular film a n d shield t h e m e t a l from corrosive environment. I n t h e production, storage, transportation a n d refining of corrosive crude oil, small a m o u n t s of inhibitors based on F a t t y Nitrogen Chemicals form a film on t h e m e t a l surfaces of storage t a n k s , pipelines a n d o t h e r equipment, preventing corrosion. I n a n o t h e r surface filming application, F a t t y Nitrogen Chemicals are sprayed on soil and form a film on individual clay particles to act as a n efficient soil stabilizing agent. Surface filming, along with t h e other key properties listed a t right, h a v e m a d e F a t t y N i t r o g e n c a t i o n i c s u r f a c t a n t s v a l u a b l e t o m a n y industries. Check and see w h a t t h e y can do for you. Send for a new 40 page technical bulletin, "Fatty Nitrogen Chemicals for Industry." Write to General Mills Chemical Division, Kankakee, Illinois.
O T H E R K E Y F A T T Y N I T R O G E N P R O P E R T I E S :* \r\
Lubricity—adsorbs on fiber and fabrics, lubricates and confers softness.
\f/\ S e l e c t i v e Adsorption—adsorbs on certain nonmetallic minerals. 0 " Solubility—Wide range of solubilities in a variety of polar and non-polar solvents. \Y\ C h e m i c a l Reactivity—unique "building blocks" for organic chemical synthesis. S u r f a c e Activity—cationic emulsifiers, wetting agents and detergents. \\r\ B i o c i d a l Activity—inactivates certain bacteria, fungi and algae.
CREATIVE CHEMISTRY FROM GENERAL MILLS SERVES INDUSTRY WORLD WIDE
SALES OFFICES: New York, Boston, Philadelphia, Detroit, Charlotte, Cleveland, San Francisco, Houston, St. Louis, Los Angeles, Kankakee Fatty Nitrogen Chemicals
•
GenEpoxy® Epoxy Resins Versamid® Polyamide Resins • Steroids • Genamid® Epoxy Curing Agents
CHEMICALS CHEMICAL DIVISION, Kankakee, Illinois and Tlalnepantla, Mexico •
Deriphat® Amphoteric
Surfactants
C&E N
39
