cient advance notice to the industry and to the trade journals."
GOVERNMENT No Chemical Price Probe Slated Kefauver c o m m i t t e e w i l l l o o k at drugs and fertilizers, pions no ïrîv4USiry*-^nr*ïv*e p n c e invesiigciion X HE
CHEMICAL
INDUSTRY
has
HO
reason t o expect a Congressional investigation of its pricing policies, despite press reports implying that chemicals will follow steel, autos, and oil under Senate searchlights. T h e chairman of t h e Subcommittee on Antitrust and Monopoly, Sen. Estes Kefauver ( D . - T e n n . ) , made this statement last week. Before Kefauver made his position clear to C&EN, members of the subcommittee's professional staff alreadx had hinted as much in a series of interviews on administered prices, industrial concentration, and inflation. They confirmed the subcommittee's plans to look into two fringe areas, drugs and fertilizers. But they made it clear that t h e r e is no present reason to look at the bvilk of the chemical industry. They point out, however, that the subcommittee could change its mind if presented with a strong, well-documented need for an investigation.
• W h e r e Chemicals Stand. Here is how Kefauver and his chief lieutenants view the chemical industry, in the light of their previous investigations of other fields: • There are no plans for a wide scale investigation, just a look at drugs a n d fertilizers. • The industry is not a major contributor to inflation—chemical prices rose less than 5 ' * during a period that saw steel go up nearly 40ff. • Strongly documented evidence contrary to what economists already have told the subcommittee could bring about an investigation in the future, b u t it is unlikeh that this would happen. • If a subcommittee member should call for an investigation, it would b e main· months before it could be held. The staff needs time to study and prepare; witnesses have to b e lined u p . And a staff member points out that time would be needed "to give suffi-
• Before the subcommittee takes on new projects, it wants to get rid of aimiez uiieaiiy in liur iniîi; ituuiei pi ice hearings on steel, autos, and oil; studies of b r e a d pricing; hearings on auto finuncing and Clayton act changes. Staff members point out that the subeommittee's first responsibility is to act on legislation. In addition to its own investigations and hearings on bills proposed within the subcommittee, bills introduced by other Congressmen and sent to the subcommittee must also be considered. A subcommittee staff attorney says he is u n d e r siege by almost every major industry, each wanting to know whether it will be investigated. He points out that only the Senators themselves can answer these questions. However, before Kefauver replied to C&EN's questions, the counsel gave the chemical industry this hint; "I'd like to tell your people to go home and relax—they're just seeing things—but I know it wouldn't do any good." T h e present series of hearings stems from statements Kefauver made in 195*7. He blamed heavily concentrated industries—steel and autos were named as examples—for the 1953-58 inflation trend. When he announced that his subcommittee would hold hearings, Kefauver referred several times to "administered prices," a term
W h a t Sen· K e f a u v e r Says About C h e m i c a l s Question: There have been several speculations in the trade press to the effect that the subcommittee is winding up for a full scale investigation of all aspects of the chemical industry. What do you say to tliis? Answer: It is not unusual for the trade press to speculate on the work of subcommittees. However, may I assure you that at present the subcommittee has no plans for a full-scale investigation of the chemical industry. Q. Do you personally have any present intentions or desire to investigate the chemical industry with respect to concentration, prices, etc.? A. I personally do not determine those industries that are to be investigated or studied by the Antitrust and Monopoly* Subcommittee. This decision is made by a majority vote of the subcommittee. The present program of the subcommittee includes studies to be made in t h e fertilizer and drug branches of the chemical industry. Q. According to economist Gardiner Means' figures, while steel prices increased nearly 40%, chemical prices increased less than 5%. Do you find any significance here, and if so, what? A. This indicates prices of chemical industries did not have the same impact on the problem of inflation as did t h e steel and steel-using industries. 38
C&EN
APRIL
13,
1959
some economists appi* to prices set by management fiat rather than the pressures of supply and demand. The expression was made popular in the midî o a u s uy i m o u u t c ^w»\ u**»i*iC»it CCOilO
mist Gardiner C. Means. • The Means Theories. Kefauver's use of the Means expression caused speculation to the effect that the Vienna, Va., consultant would blaze trail for the subcommittee's investigations. This did not develop, and Means has no official status with the subcommittee, although he has been a witness. However, Kefauver, staff director Paul Rand Dixon, and chief economist John Blair have high regard for Means and his theories. In this respect, the Means view of inflation— and of various industries—summarizes the subcommittee majority view. As Means sees it, inflation since 1953 is an artificial situation as opposed to the 1942-47 inflation caused by wartime demands. During the war the chemical industry was a major inflation factor. Chemical prices rose nearly 50',* ; prices of metals and metal products rose only some 30',
