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REPORTS ON
N
INDUSTRIAL
MOBILIZATION
News of the nation's activity in marshaling its resources to meet the international emergency MPA Considering Removing Chemicals from Most DO's
At a secent meeting with chemical industry representa tives, NPA revealed that it was considering a plan to re move chemicals from DO applications. No further explana tion of the plan was given, but it was assumed a new pro gram similar to the one that operated during World War II when chemicals were on a semicontrolled basis would probably evolve. The shortages that are plaguing the industry were dis cussed at some length. Chief among these shortages, of course, is that of steel which, as in every othes industry, is hampering expansion plans. The growing impact of DO's was pointed out and it was as a result of this discussion that NPA announced its forthcoming plans. A run-down of scarce chemicals naturally puts sulfuric acid at the top of the list. In spite of this, some industry men said they had been able to get, in some fashion or other, all the sulfur and sulfuric acid they needed. NPA said that the outlook may be somewhat better since there is some possibility of recovering sulfuric acid from new sources—such as sour gas—and through conversion of equip ment in some plants now using native sulfur. Naphthalene is admittedly in short supply, but NPA hopes to meet demand by new production facilities. Chlorine, al ways an item in short supply, is being helped by a 50% increase in production capacity. The outlook for styrene is improving, NPA said. Figures available on the styrene picture show that synthetic robber is taking about 360 mil lion pounds of the 660 million pounds of styrene available this year. Polystyrene plastics are taking another 300 mil lion pounds, and it is evidently on the 60-million pound shortage that NPA is working. A recommendation put forth by the styrene industry some time ago suggested that syn thetic rubber end uses be more carefully studied as a means of reducing consumption of styrene. Rapid Tax Write-Offs Again Under Scrutiny
The House Ways and Means Committee is reopening the question of whether or not defense agencies have been too liberal in granting certificates of necessity for expanded defense facilities. The program was under fire earlier this year in both.this committee and a House executive expendiN A M E O F C O M P A N Y AND LOCATION O F FACILITIES
Brown Co. Berlin, Ν . Η. Tide Water Associated Oil C o . Bayonne, N. J. Hewitt Oil Co. N. Charleston, S. C. Gulf Refining Co. Cleves, Ohio Basalt Rock Co., l a c . Mapa, Calif. Westoil Richmond Terminals Co. Richmond, Calif. Texas Eastman Co. Longview, Tex. Gulf Oil Corp. Port Arthur, Tex. Warren Petroleum Corp. Major Co., Okla. St. Charles Pipe Line Co. Arkansas & San Patricio Cos., Tex.
VOLUME
2 9, N O .
PRODUCT OR SERVICE
SOsgas Petroleum storage
AMOUNT A P P L I E D FOR
S
767,240
2,265,872 372,665
Gasoline storage
2*2,216
Heptene Steel pipe
2,055,108 494,526
Gasoline storage Butyraldehyde
6,623,500
Isoctyl alcohols Propane Gas pipeline
33
» » AUGUST
704,756 1,585,570 992,798
13.
tures subcommittee. The latter came up with a decidedly adverse report (see C&EN, page 2295). Some of the feeling among members of the Ways and Means Committee is that awards have not been selective enough: They feel certificates should be granted only for facilities for military items. They also believe that too large a percentage of the investment is certified for five-year amortization. At present the average percentage runs about 709fc. This affects a certified sum of $8.4 billion, and actually brings the amount that will be amortized in five years to something around $5.9 billion. This represents, said the Treasury, a potential loss of revenue of $3 to $4 billion dur ing the write-off period. So far the hearings have been held in executive session only. Whatever the outcome, it seems certain that hence forth Congress will watch rapid amortization decisions with hawk eyes. During the week ending July 27, rapid write-offs were allowed on 89 facilities fos an amount of more than $126 million. The accompanying table is of interest to the chemi cal industry. Phenol Formaldehyde Woes Told MPA
At a meeting with the phenol formaldehyde resin industry representatives, NPA said that in its plan removing chemi cals from DO's, phenol formaldehyde would be removed from all orders except those of the Military, the Depart ment of Defense, and the Atomic Energy Commission. This statement came after industry representatives pointed out that DO's were taking, in some instances, as much as 80% of a producer's production of molding materials. The bottleneck in the resin production comes from mate rial shortages that are hampering expansion plans. This, NPA pointed out, the industry has in common with virtually all industries—the need for stainless steel, nickel, copper, and aluminum for production and for equipment. NPA warned that the fourth quarter does not seem par ticularly bright for starting any expansion programs, but things are expected to be considerably better by the start of 1952. The shortage of tank cars is also hitting the in dustry which finds itself beset with the question* of how to ship its product once it has overcome other obstacles and completed it. As for the raw materials that go into the production of phenol formaldehyde resin and mold AMOUNT P I2RCEN·: ing powder, the picture is more prom ELIGIBLE C2ERTIF ising. The supply of benzene is al most matching demand. Our importa 80 8 548,800 tion of about 50 million gallons a year 2,265,872 70 and accelerated production from pe 371,515 75 troleum and the increase from coke 292,216 80 ovens hold a bright enough future on this score. Phenol production 60 1,983,981 (about two thirds of all annual pro 494,526 75 duction goes into the production of 50 6,301,685 the resin) is expected to jump from 80 704,756 343 million pounds to about 530 mil 75 1,585,570 lion pounds at the end of 1953. For maldehyde requirements will con 80 992,798 tinue to gcow and production is being
1951
3381
INDUSTRIAL MOBILIZATION stepped up; however, NPA estimates that the supply will still be about 15% below total demand by the end of 1953. Phenol formaldehyde resin is used in die manufacture of such products as abrasive wheels, helmet liners, and ply wood adhesives. Combined with molding powders, the resin is utilized in production of a wide range of plastic products. Tungsten Carbide Shortage Imperils Tool Output Essential industrial production is taking almost all the tungsten carbide available in this country, according to a report made recently by the tungsten carbide industry ad visory committee to NPA. Such is the situation in spite of the fact that producers have increased their output by 50% since Korea. Committee spokesmen told of experiments with molybdenum and cobalt as substitutes for tungsten, but the results, they said, have been wholly unsatisfactory. Plans are now in the making for investigating the substitution program carried out by German industry during World War II when Germany lacked tungsten for its tool program. The U. S. is currently operating at a deficit of 400,000 pounds of tungsten a month. The richest supply area known in the world today—China—is now completely lost to this country. There is some hope that tungsten mines in Korea will be teopened soon. Jess Larson Heads New Agency to Speed Stockpile President Tsuman has established a new agency to in crease the supply of critical and strategic materials at home and abroad. It is to be called the Defense Materials Pro curement Agency and will take over procurement and de velopment functions of the Defense Minerals Administra tion, the General Services Administration, the Economic Cooperation Administration, and the Defense Production Administration. However, GSA will continue as the financial and custodial agency for the stockpile. Jess Larson, the present GSA chief, is slated to head the new agency. It will be directly under the administration of Defense Mobilizer Charles E. Wilson. The change comes at a time when the Munitions Board warns that the nation's stockpile of strategic materials has reached only one third of its goal. This default is due in part, of course, to the shortages of material and to competi tion in the market. However, critics of the mineral program have spoken of wrangling among government agencies con cerning how the mineral program should be run. They point out that the minerals men signed fewer than six of the 200 purchase contracts that were estimated as necessary and doled out less than half the money they had to disburse for encouraging exploration. Fourth Quarter CMP Allotment Almost Same As Current Period; 5 % Cut Due for Consumer Durables Little change is foreseeable in the allocation pattern fol lowed in the third quartes as Defense Production Administra tion announces fourth-quarter allotments of available steel, copper, and aluminum. However, the steel consumption of strictly civilian items will be reduced from 70% of the base period rate to 65% of that rate. Automobile production will be reduced from 65 to 60% and this will allow for 1.1 million cars in the fourth quartes. In their quotas, automotive manufacturers will get less copper and increased amounts of aluminum to make substitution possible. Of the estimated supply of 21.3 million tons of steel, none has been allotted to chemicals, 3.3 million tons are going to rubber production, and 5.7 million to scientific and technical equipment; 1.1 billion pounds of copper and 598 million 3382
pounds of aluminum have been set aside for the fourth quar ter. Of these amounts, chemicals will get 100,000 pounds of copper and 813,500 pounds of aluminum; rubber, 334,200 of copper and 47,500 pounds of aluminum; scientific and technical equipment will b e allotted 3.5 million pounds of copper and 1.6 million pounds of aluminum. In making fourth-quarter announcements, DPA Admin istrator Manly Fleischmann pointed out that within the next 12 months military hard goods deliveries are scheduled to rise from a monthly rate of about $1 billion to about three times that amount. At the same time, materials will be needed to increase our productive capacity and resources so that materials shortages may be reduced by 1953 and the expanded economy may b e able to carry the defense pro gram and also permit normal levels of civilian production. inventory Pile-upjEases Cadmium Restrictions While cadmium inventories have not piled u p to the ex tent that television sets and certain makes of automobiles have, still inventories are backing up in the hands of pro ducers to the point where NPA has loosened the cadmium order, M-19, to allow its use in nonessential pigments up to 60% of the base period use. This action is quite a departure from last January's order which listed the metal as being in short supply. Conse quently, cadmium w a s permitted only in pigments needed for essential purposes. All other uses for pigmentation were limited to 40% of t h e producer's avesage monthly use for such purpose during the first half of 1950. In addition, the use of cadmium in silver-brazing alloys was increased from 19 to 25% b y weight. Labor Market Big Factor in Placing Government Contracts Defense Mobilization Director Charles E. Wilson has instructed all defense agencies to give adequate considera tion to the manpower factor in the location of n e w defense plants, the placement of defense contracts, and the alloca tion of materials. Special emphasis was laid on the effect of such a program on the machine tool industry. This is part of the general plan to speed the present tool output rate of $ 6 7 5 million a year to a rate of $ 1 billion annually by the end of 1951. Officials concerned with the placing of government con tracts ate to keep a sharp eye on Labor Department in formation on the labor markets and, as far as possible, they are to send more government work to places where labor supply xS adequate, and withhold it from places where there aren't enough workers to g o around. However, Mr. Wilson pointed out that othet factors must also be taken into con sideration in the location o f plants. These include security, access to materials, maximum use of existing plant facilities including small business, and access to power and trans portation. Appointments . . . Edward B. Arenson, president of the Toledo Iron and Steel Co., has been named consultant on NPA*s production controls staff. Mr. Arenson v. ill handle construction prob lems arising under the Controlled Materials Plan. Richard M. Morrison has been appointed deputy director of petroleum administration for Defense's materials divi sions. Mr. Morrison is on leave of absence from the Texas Co. where he has been managing the purchasing depart ment. Eventually, Mr. Morrison will replace the present division director, Frank A . Watts, when the latter returns to the Humble Oil and Refining Co. CHEMICAL
AN D Ε N G I N E E R I N G
NEWS
