Vol. 23, No. 5
May 1, 1931
Team Work TEAM‘work in industry no longer means secret agreements, conspiracy in the restraint of trade, price control, and other such objectionable things. Today the much overworked word “cooperation” explains more nearly what is implied, and we do not hesitate to say that the chemical industry seems not yet to have learned its meaning and the benefits to be derived from its application. During the last few months we have had a number of instances of the la’ck of team work, Several years ago the industry damaged itself through its unwillingness to work with certain government bureaus in the same whole-hearted manner as did other industries on such simple things as statistics of inventories and market. Seemingly, we itre just beginning to learn the value of authoritative statistics, but there are still some groups among chemical manufacturers which are disinclined or actually refuse to supply data which would make the resulting compilations of great value to them. Complete data are valuable to all; incomplete practically worthless. It will doubtless be a long while before the units in the chemical industry are prepared to work together as do those in the mining industry. The smelter operator who finds a way to win more values from his ores is likely to be anxious to show another smelter his results and how they were obtained, Also witness the automobile industry. Perhaps that is too much to expect of chemical manufacturers, but there are plenty of fields in which team work will count heavily without calling for tjhe disclosure of confidential technical information. Our industry, or at least parts of it, has been guilty of a ruthless price war, from which so far as we can see there has been no advantage to those particularly concerned. True, wise purchasers have made long-term contracts and have laid in large supplies, However, in the alkali price war the industries lost perhaps ten million dollars, and we are informed that the principal aggressor in that unprofitable program emerged from the conflict with contracts a t the lowest price and with the percentage of the total business enjoyed reduced by approximately 25 per cent. Failing to learn from this demonstration, the alcohol industry has just put on a price war of its own. Rumor has it that certain officials decided that the paramount thing was to move stocks on hand regardless of costs. The low prices quoted certainly would seem to be below costs figured according to any rational accounting, and orders and contracts at such bargains must certainly have moved the surplus. Of course the price a t which a manufacturer sells his product is his own affair, but after all, no matter what the motive may be, consideration for fellow producers should dictate the fair policy of accurate cost determination and a faithful adherence to a price schedule a t least not below that cost. Price wars are nearly always disastrous; if not immediately, then in the long run. Unsettled conditions are made worse, not better, and confidence is shaken by such an experience. Ultimately even the consumer is left without benefit, since
the losses of today must be made up tomorrow or bankruptcy will result, Some of the competition which has characterized still other phases of the chemical industry in the past year has been regrettable. We must not overlook the vital importance of public relations which the industry has come to have. Hearings before committees of state legislatures, attacks upon scientific work, charges and countercharges can have lasting detrimental effect upon the consuming public and, if carried to the extreme, will do far more harm than the loss of a little business. After all, what is riow known as the chemical industry is comparatively young. Maybe these experiences are a necessary accompaniment of growing pains. The further application of the scientific method with due reference to what others have endured as recorded in the literature ought to dictate the wisdom of whole-hearted team work. Three choices present themselves. The industry might unwisely attempt to fix prices and immediately run counter to the law. It might engage in ruthless price-cutting and bring about self-destruction. The better way is to cultivate the middle ground and cooperate within the law to the benefit of all. Unfortunately this is difficult, especially in view of the customary federal attitude of suspicion toward all who endeavor to work together, even though the advantages to be gained are mutual with the public. Progress along this difficult but necessary course must be begun without delay.
Looking Ahead HE present disturbance in industry has been characterT ized by frequent statements of experts that we have rounded the corner or that the bottom is being scraped, with immediate promise of an upward turn. Some business men have been misled by these over-optimistic opinions and have refrained from taking matters as seriously as they deserved, even postponing activities designed to change the course of affairs. It is well, therefore, in considering the chemical prospects of 1931 to exercise due conservatism. There seems no basis for gloomy pessimism, while here and there we find reason for a t least mild optimism. Inquiry among the representative establishments in industry indicates that, so far as the staff is concerned-the operating men and employees generally-a consistent eff ort is being made to maintain it as nearly intact as possible. No drastic cut in employment is contemplated, and the indications are that the men who through training, experience, and industry have made themselves valuable will continue to be retained. While there will doubtless be fewer places for June graduates in research and control laboratories, nevertheless research is proceeding in most establishments a t full tide. Concerns have finally realized that desirable work, often impossible t o undertake under the pressure of boom business, can be performed to great advantage when business is quiet.
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I N D U S T R I A L A N D ENGINEERING CHEMISTRY
Naturally, the demand for new equipment cannot be expected to be great in such times. However, reduced production affords opportunity for replacements without disturbance, which normally is out of the question. The use of corrosion-resistant alloys in all manner of equipment, piping, valves, etc., has made available to some branches of the industry devices with which products of greater purity and more satisfactory yield can be made. Where outstanding economies and increase in efficiency can be expected, new equipment is being placed with the immediate future in mind. As for repairs, these are going forward on a considerable scale. Buildings are being put in order or altered. Equipment not to be replaced is being put in the best of condition, and much painting is in progress. Frankly, in some cases a part of this work is being done to retain valuable men on the payroll. However, even this is an optimistic sign, indicating a belief in the need ere long for these men in their old positions. The very large building program initiated in 1930 has naturally carried over into 1931, during which year it may be completed. It is not likely, therefore, that any considerable building will be begun later in the year to carry over into 1932. What transpires in the interim must be left to dictate those future decisions. The favorable position of the chemical industry as compared with others can suffer from two causes. Bankers can disturb the structure if they force to be sold at any price the surplus stocks of manufacturers who become temporarily weakened. Any further price wars would be equally detrimental. The latter is more likely to be hurtful than the former. All in all the prospects seem conservatively encouraging, and the lessons being learned, if they are but remembered, will make for a stronger industry in the immediate future.
The Chemical Exposition HE week of May 4 will find the Thirteenth National Exposition of Chemical Industries established in the Grand Central Palace in New York with as much space occupied as on former occasions and with a number of new exhibits. The exposition is more than an assembly of new and improved equipment, chemical products, raw materials of the chemical industry, and related items. Admittedly conducted as a commercial enterprise, the exposition nevertheless has become established as an important factor in the chemical life of America. Those familiar with the history of the exposition and the concurrent development of American chemical industry agree that the former has had a great influence upon the latter. It is well to recall that in those early days it was the exposition that served to emphasize the ability of our equipment manufacturers to provide the necessary devices with which to undertake seriously large-scale production of needed chemicals. It was to the earlier expositions also that manufacturers brought the first fruits of their efforts to show how successful they had been in a comparatively new and untried field. Those responsible for the advance of our chemical industry also came in numbers and found the opportunity to decide major questions after conversation with their colleagues. The exposition is not without an enviable record of services rendered to the exhibitors. Orders approaching a quarter of a million dollars have been known to be placed with exhibitors during the exposition week, and some of the largest purchasers came from foreign lands to see and to buy. The publicity incident to the exposition’s activities has been dignified and constructive, thereby adding its bit to our success in winning the sympathy of the general public. There has been the educational side. Students, accompanied by instructors, have attended, but far more should
Vol. 23, No. 5
make the most of the opportunity. However, those who have come-and the number has increased as we have gone along -have been able to see in the compass of a week more pertaining to their work than would be possible in weeks of travel to the various plants and warehouses. The students’ courses have called forth the cooperation of well-trained specialists, who have been glad to present discussions on topics chosen by the director of the students’ courses to produce a well-rounded program and leave the lasting impression which comes from the receipt of valuable information. The event is important from many points of view. That section of the public which comes in the evening cannot fail to go away impressed with the fact that this industry, so little known prior to 1914, is now fundamental to public well-being and is conducted on a scale comparable with other commercial enterprises. There will be stockholders interested in more intimate details of the products of various concerns. There are sure to be bankers and financiers, executives and economists, journalists and teachers, among the crowds of plant operatives, technical men, and students. All are a part of the great army of ultimate consumers whom we seek to serve. The exposition is an occasion of moment. It is a biennial opportunity to get abreast of new developments. It is one of the yardsticks by which we can measure our progress.
Taxes N SCHEDULES of costs an item for taxes may frequently Imore be found toward the end of the column, and we view it as an indication of the completeness of the estimate than as a matter of serious consequence. We know taxes are necessary. We know they must be paid, but we pay altogether too little heed to current trends in taxation and their direct bearing upon industry and the cost of doing business. Because of the publicity given to the federal budget and expenditures, when the subject of taxes is broached we are inclined to think of the income tax, or of customs, or some other federal levy and leave out of consideration state, county, and municipal taxes. Of late the only encouraging sign in taxation has been the decrease, until 1930,in the federal budget, and consequently in federal taxation. During the 1925-28 period the interest payments by the Federal Government decreased 5.7 per cent, 5.2 per cent, and 7.1 per cent over each preceding year, There was a decrease in total federal expenditures, aside from public debt requirement, up to 1930, but the commitments made by an overgenerous Congress indicate a considerable increase from that time through 1932, for which estimates have been made. The actual expenditures, after setting aside something over 100 million dollars to meet the soldiers’ bonus, “adjusted compensation,” maturities in 1944, are $3,994,152,487.09 for 1930, $4,014 941,900 for 1931, and $4,054,519,200 for 1932. The item for soldiers’ relief, which appears as veterans’ administration in the budget, will be almost one billion dollars in 1932. And the end is not yet. Substantial sums raised by taxation are distributed by appropriations under the heading “loans.” The 500 million dollars originally authorized for the Farm Board, all of which and more will doubtless be used, are listed as loans. The Shipping Board advances with a total authorization of 225 million dollars are loans, The 60 million dollars to relieve drought sufferers are loans, and there are many more loans, totaling nearly a billion dollars. Whether or not any seriousminded person really expects any of these loans ever to be repaid, so far as the current taxpayer is concerned they are just as expensive as if known by any other name. I n 1932
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