tended). The firm must decide whether to purchase or lease government-owned equipment a t Danvers o r p u t up a more appropriately sized unit there. And it must figure on which materials its future rests most firmly. It feels it cannot count on having a permanent spot in liquid high-energy fuels, a t least with its present products. • Products for t h e Future. Metal Hydrides was founded on metallurgical products—such as calcium, titanium, a n d airconium hydrides and nietai a n d alloy powders. These have been its top sellers in t h e past. But sales, tied to government requirements, have been erratic. Metal business reached its peak of $3.1 million in 1953, faded out after ! J 5 5 . Metal Hydrides h a s not given u p on metallurgical products. They still have a lot of potentially large applications awaiting development—as a source of hydrogen for fuel cells, for instance, for foamed aluminum, or in bombs for reactivating spent oil wells. But it is in chemical hydrides "that w e have currently found the greatest opportunity a n d t h e most rapid expansion," Davis notes. Growth has averaged 1 5 % a n nually over the past three years. As a result, the company expects to earn over $100,000 this year from output of its commercial plant at Bev,erly, after running $330,000 in the red last year. Because of rapid development of chemical uses a n d high-energy fuels, sales of chemical products—sodium h y dride, sodium a n d potassium borohydride, and lithium aluminum hydride a r e t h e most important now—currently a r e running about five times greater than the metals business. "We expect this ratio to increase for t h e next few years," says technical marketing director Robert C. W a d e . Uses range from pharmaceutical syntheses and production of foamed plastics to cleaning u p trace impurities in "organic chemicals. Other potential uses—as catalysts, for producing silane, in cellulose chemistry—look promising. Costs have been a barrier up to now. Lithium aluminum hydride, for instance, is priced a t $30 to $33 a pound. However, sodium aluminum hydride offers considerable price advantages as a substitute if demand should warrant large-scale production. And t h e company hopes to bring the price of sodium borohydride for commercial sale down from $33 a p o u n d to under $5.00 for tonnage requirements—or to about the price at which it is selling m a t i n a l to t h e Government.
Du Pont Plan Backed C o m p a n y should be p e r mitted t o retain its G M stock but not voting rights U-S.
D I S T R I C T COURT judge W a l t e r
J. La Buy has another recommendation to mull over this week in working out his decision on what D u Pont should do with its General Motors stock. T h e latest suggestion comes from Chicago lawyer Andrew J. Dallstream, a p pointed as a "friend of the court" to represent Du Pont stockholders.' In essence, Dallstream supports t h e proposals previously put forth h>y O u Pont itself (C&EN, May 26, page 2 5 ) . His suggestions are somewhat more stringent in certain details, however. Like D u Pont, Dallstream recommends that t h e company b e allowed t o keep its GM holdings b u t n o t vote them. Instead, voting rights in the 63 million G M shares would b e passed on to D u Pont stockholders in proportion t o their interest in Du Pont. Dallstream agrees with Du Pont, too, in claiming t h a t forced distribution or sale of t h e G M stock, as wanted by the Department of Justice, is "neither necessary n o r a p propriate nor equitable." Earlier, General Motors also had supported Du Pont's over-all plan. Government attorneys have asked the Chicago district court t o rule that D u Pont must distribute its G M interests over a 10-year period t o its individual stockholders, except for those that would go to D u Pont family holding companies; these shares would b e sold. Since the Internal Revenue Service has ruled that D u Pont stockholders will have to pay income tax on GM shares they receive, Dallstream claims the government plan will "produce harsh and confiscatory tax consequences to large groups of stockholders of Du Pont," also have "disastrous" results in t h e stock market that could cause "incalculable losses" to innocent persons. Dallstream goes a b i t further than the D u Pont proposal i n recommending that officers and directors of D u Pont or of the two holding companies ( Christiana Securities and Delaware Realty), their spouses, and D u Pont employees who sell to G M b e prevented from voting any "passed-through" rights. He suggests that Christiana pass voting rights on G M stock it holds through to its shareholders -and that restrictions be placed on future acquisitions of GM stock hy the cdmpanies involved in the case. He would also
have t h e court restrict the companies on their right to have directors, officers, or employees in common with G M or trade agreements with GM. Even if the court rules that Du Pont must give u p its GM stock, Dallstream says, it should hold up the order as long as legislation is pending in Congress to provide tax relief for such court-ordered stock distributions. O n e such bill, already introduced by Sen. Frear ( R.-Del. ) , would make stock received through involuntary distributions ordered in antitrust cases exempt from taxation as ordinary income, although still subject to capital gains tax if the shares are sold later. (The Frear bill has been pigeonholed, however, will not be acted on this session.) Government lawyers have until Sept. 25 to file comments on any of the plans presented to Judge La Buy.
Dow Earnings Down In the pages of D o w Chemical's annual report, o u t last week, company stockholders a r e getting a good look at how business recession affects chemical operations. Dow's fiscal year ended May 3 1 was "a difficult one," president Leland I. Doan told them. "Earnings were very disappointing, due to a combination of reduced levels of operation and the continued pressure on profits inherent in t h e cost-price squeeze." Heavy start-up costs at Dow's Louisiana Division and its synthetic fiber plant in Virginia also cut into net income. Dow's earnings fell to $46.1 million in its latest fiscal year, down about 16'^ from combined earnings the year before for Dow and Dobeckmun (merged a year a g o ) . Sales were off 6 ' i to $636.2 million. T h e full effect of recession was n o t felt until the year's second half. Magnesium and heavy chemicals volume were the worst hit. Physical volume of plastics sold during the year was u p , but dollar volume was lower because of reduced prices. T h e one broad area showing a gain was agricultural chemicals. In the face of declining sales, Dow has also reduced the number of employees in almost all divisions. Personnel at year e n d totaled 26,600, a cutback of about 2600 for t h e year. Dow's most recent quarter shows some signs of improvement, however. Sales were u p about 6f < over the preceding three months. And indicated earnings of 3 5 cents a share for che May quarter are 4 cents ahead of the February quarter. AUG.
18,
1958 C & E N
25
