January, 1923
INDUSTRIAL A N D ENGINEERING CHEMISTRY
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Medicinal Chemicals in 1922 A Review of Prices, Tariff Legislation, ‘General Conditions, and Progress during the Past Year By J. F. Queeny’ MONSANTO CHEMICAL W O R K S , ST. LOUIS,M O .
HE DEMORALIZATIOK of prices which had prevailed in the field of fine and medicinal chemicals for twelve to iifteen months still affected the market at the beginning of 1922. No explanation or search for reasons is necessary, because it was essentially a continuation of the period of liquidation. There was a change in some of the factors which may be discussed, but prices were low and stationary, largely because conditions were stationary or uncertain. The level showed no particular inclination to change until midsummer, when prices stiffened perceptibly. A factor contributing to this result was the exhaustion of “distress” stocks and of reserve supplies both in the manufacturers’ and consumers’ hands. Inventories had been carried at as low a margin as possible for months, until, with the unemployment situation greatly relieved and a consumers’ demand created, it was necessary to begin manufacturing operations on a more nearly normal scale. Prices for such goods were, of course, set primarily on the cost of production, rather than the former fictitious one of realizing sales or of abnormal demand. This change in the market aspect was a welcome one. It was reflected in increased activity throughout the industry. A inovement of prices sideways was characteristic of the market, until the opening of the final quarter approached. Then a number of factors bearing on the situation resulted in substantial gains over practically the entire list. I n midsummer, the striking miners in many cases were farming on a small scale or working in other industries; the railway shopmen’s strike resulted in many cases merely in the exchanging of positions with fellow craftsmen in other cities, but the situation created a demand for workers in those lines which was never completely satisfied as far as some of the roads were concerned. These factors, together with the activity in the building trades, made unemployment a rare thing by fall. With its disappearance a great restraining iiifluencewas eliminated; a feeling of some certainty and confidence regarding the immediate future was a natural sequence. The final passage of the administration tariff bill a t least let the manufacturer know what to expect in the way of protection from, and of competition with, foreign producers. It must be remembered that the American chemical industry is now a part of productive business. It is therefore in line to suffer or profit with the rest of the business world, as long as it is not singled out for especial attack. It may be fairly stated that the influence which caused the increase in the prices of other commodities was the power behind the recent upheaval in the chemical industry. Stress has been put on the effect of our several months of extravagant indulgence in nation-wide strikes. This and the later rise in the cost of ordinary labor have been important factors, but repetition of the details adds no emphasis to the generally agreed wastefulness of strikes, except as it points to a particular susceptibility of our industry to such influences. Chemical plants, like most others, probably entered the period of the coal strike last spring with a three months’ fuel supply on hand. There were indeed few who did not
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Chairman of the Board.
deem this ample and to spare. But by midsummer it became necessary to purchase spot coal, often of poor quality, at the seller’s price. When this price exceeded that of crude oil, many plants switched to the latter, because of the more dependable deliveries and quality. The cost of making the necessary changes in the boiler room, installing pipe lines and storage tanks, and ultimately of dismantling all this equipment and changing back to coal as a fuel, was an additional burden. The heroic efforts of the railroad to offset the effect of the shopmen’s strike could not prevent delays in transit. Duplication of freight shipments of finished goods which were not received within a reasonable time by express shipments, and the frequent necessary delivery of bulky crude materials by express were further items of unusual expense. In a merely casual consideration of prices, the effect of the new tariff is likely to be given too much weight. Concerning this we shall comment presently, but the more important factors a t present are the economic conditions a t home and abroad and the indecisive ending of the recent labor-capital conflicts such as in the coal industry. In this case the stage was left all set for repetition of the performance by the respective groups. This may only be prevented by a constructive report of the recently appointed Coal Fact Finding Commission, followed quickly by control legislation which must provide power of enforcement. Confidence breeds confidence. The substantial gains and the hardening of prices beginning with the last quarter were followed almost immediately by the closing of an increased number of contracts, first for products, then for the crude material. These contracts, running from three to twelve months, are a definite indication that the present general level will carry over well into the new year. Further predictions as to the trend are as yet speculative but promising.
TARIFF Broadly speaking, the Tariff Act of 1922, a8 it relates to medicinal chemicals, represents a great improvement over the so-called Underwood Act. Nearly all rates were increased, this being necessary due chiefly to depreciation of the German mark and the fact that costs in Germany of labor, materials, etc., did not advance in sympathy with the fall in the value of German currency. However, there are many individual items of great importance, the manufacture of which should be continued in this country and which apparently did not receive appropriate rates. This is particularly the case with several of the non-coal-tar synthetics, such as chloral hydrate, barbital, etc. The tariff-making bodies of Congress rejected a plea for a 25 per cent ad valorem rate on synthetic camphor, a rate which would have assured American independence on this important product as against our present complete dependence on a Japanese monopoly. As this requested rate was not to apply until production reached a t least 2,000,00() pounds per year, it is hard to understand why so reasonable a proposal was rejected, when it is remembered that practically all the simple synthetics, as well as the inorganic medicinals, were given at least a 25 per cent ad valorem rate.
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INDUSTRIAL A N D ENGINEERING CHEMISTRY
The rates for the high-priced coal-tar synthetics may prove inadequate as the specific of 7 cents per pound, as named in paragraphs 27 and 28, is of small value in protecting such of those items selling for more than $1.00 per pound. Credit must be given for the insertion of paragraphs 315, 316, and 317 in the Tariff Act of 1922, as under their provisions the President is given unusual latitude (with certain limitations in the case of coal-tar chemicals) to review schedules, to change the basis of valuation, and to combat effectively cases of discrimination against American-made goods as compared with those of other nations. Such drastic measures are only necessary to render the probability of their use negligible. Perhaps the greatest virtue to be claimed for the whole tariff law is recognition of the value and the provision for broadening the activities of the Tariff Commission. The power vested in the President is, after all, only nominal, since he cannot act on any proposed change in the tariff bill as passed, except after investigation by and (by implication, a t least) in accord with the report of the Tariff Commission. This general provision is a plain admission by Congress that the proper regulation of tariff matters involves the consideration in detail of too much technical information to be left to any but a group of impartial experts in the particular field concerned. The Tariff Commission when completely organized will have such experts in its employ as are necessary to handle properly the cases referred to it for investigation. This is not only an important advance in the administration of what we feel is otherwise quite a mediocre measure, but the future may show that its greatest value lies in the existence of a well-organized and authoritative body for assisting in the framing of succeeding tariff bills intelligently. It is the hope of the present commission, as expressed by Vice Chairman Culbertson, that tariff making in the future may cease to be the periodic cause of economic upheaval and uncertainty; that the appeals of proponent and opponent, instead of being made to respective individuals or groups of legislators known to lean toward the cause of one or the other, will be presented, so to speak, in open court before the
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impartial Tariff Commission. The latter having facilities. for independent investigation may proceed to gather any additional data which may be necessary and quickly render a decision based on and supported by the indisputable facts. Such procedure is fair, it is direct, it is economical, and as applied to our industry-we must add the important qualification-it is scientific. NEWPRODUCTS Under the circumstances which have prevailed during the past two years, it is natural that the American manufacturers, as well as those abroad, have confined their principal efforts to the perfection of processes and more economical production of the materials for which a demand existed. That research of an active, thorough and forward-looking type has not been entirely suspended by our manufacturers, has been shown directly, however. Perhaps the best example is the recent formal introduction by the Abbott Laboratories of a new synthetic local anesthetic. This product is the result of several years of pioneer work, during which Dr. Roger Adams and coworkers collaborated with the Abbott staff. That other innovations of a similar character will be brought forward from time to time is to be expected of this type of applied science. CONCLUSION The medicinal and fine chemical industry has carried its full share of the burden of uncertainty. The current improvement in business conditions is most welcome and it is believed that the low prices of the reconstruction period are back of us, as far as the medicinal chemicals are concerned. The great changes which have occurred throughout the world within the past few years and the leadership assumed by America necessitate our chemical independence, and it is hoped that lack of friendly cooperation of our government agencies will not militate against the heroic efforts and substantial accomplishments already made by commercial institutions in this field.
To Commemorate Benjamin Silliman On April 4, 1804, Benjamin Silliman delivered the first lecture on chemistry ever given in Yale College. On April 4, 1923, Yale University will dedicate the new $2,000,000 Sterling ChemiSOCIETY as a cal Laboratory, with the AMERICAN CHEMICAL guest. This date was chosen in order to commemorate the beginning of chemical instruction in Yale. Benjamin Silliman graduated from Yale College in 1796 a t the age of seventeen. Two years later he returned to New Haven as a student of law, and in 1799 was appointed a tutor in the college, a t the same time continuing his study of law. At about this time the Yale Corporation voted to establish a professorship in chemistry and natural history. President Dwight felt that it would be better to select a young man of proved ability and high character and give him time and assistance in order that he might prepare himself for the work, rather than to risk the appointment of even a distinguished man who would be a stranger and probably a foreigner. I n the fall of 1802, Benjamin Silliman was formally elected to this position. He immediately went to Philadelphia and began his studies of chemistry under Dr. James Woodhouse, of the Medical School of Philadelphia. Associated with Silliman as a fellow student and intimate friend was Robert Hare, the inventor of the oxyhydrogen blowpipe. During his stay in Philadelphia, Silliman also had the opportunity of meeting Dr. Joseph Priestley. In March 1804, Silliman returned to New Haven to take up his professorial duties. His own account of his first lecture is given in his published reminiscences. MY FIRST LECTURE-April 4, 1801. In a public room, hired for college purposes, in Mr. Tuttle's building on Chapel Street, nearly opposite to the South College, I met the Senior class, and read to them an intro-
ductory lecture on the history and progress, nature and objects, of chemistry. I continued to lecture until the Senior class retired in July, preparatory t o their Commencement in September. M y first efforts were received with favor, and the class which I then addressed contained men who mere afterwards distinguished i n life.
At the close of the session of 1805, Silliman set sail for EnglancP' on a mission from the college to buy books and apparatus, and a t the same time to spend another year in study. There h e met William Henry, whose treatise on chemistry he afterwards revised and edited, Dalton, Sir Humphrey Davy, and other distinguished scientists of the day. While in Edinburgh, Silliman became very much interested in geology, and in his subsequent career he devoted as much time and effort to geology as. t o chemistry. Returning to America, Silliman took up again his teaching duties, continuing as a professor until 1855. During that time he not only taught the chemistry and geology in Yale College, but deliveied a large number of popular lectures all over the United States, gave much of his time to public activities and development of new industries, particularly the petroleum industry, and founded and through his lifetime edited the A m e r i c a n Journal of Science. Professor Silliman was a gifted writer and brilliant public lecturer, a great teacher, and a broad-minded and public-spirited citizen, enjoying the confidence and friendship of the leaders of his day, among whom were Daniel Webster, President Adams, President Jackson,. and. Lafayette. It is indeed fitting that Yale University and the AMERICAN SOCIETY should honor the memory of one of the CHEMICAL pioneers in the teaching of chemistry in America by dedicating a great research and teaching laboratory on the anniversary of the first lecture delivered by Benjamin Silliman in Yale.
