VOLUME25 NUMBER6
Industrial AND E N G I N E E R I N G Chemistry
JUNE 1933
J
HARRISON E. HOW, EDITOR
The Editor’s Point of View
E
CONOMIC EXPERIMENTS. Certain students of current history and public affairs have suggested that the period through which we are now passing may be recorded as the American economic revolution. Perhaps it may be known as the age of great economic experiments. Scientists better than any other group are familiar with the experimental method and have learned from experience that best results come when only one variable a t a time is allowed to change. They also know that it is generally safer to try innovations on a scale so small that failure will not bring disaster. To avoid peril, advances from one step to the next are made only after each new gain has been thoroughly studied and fully evaluated. Current events are proceeding swiftly and proposed experiments in economics are on such a gigantic scale and involve the simultaneous introduction of so many variables that nearly all of us are left with some bewilderment and even apprehension. It takes much courage and faith optimistically to join the present majority, believing that whatever is done is worth the risk, hoping that it will better economic conditions. It may be conservatism, but some of the recently enacted bills by which the Federal Government may undertake the detailed regulation of agriculture, revalue the dollar, embark upon inflation, go into the power business, bargain on tariffs, etc., causes one to ask if this is the same United States as that with which he claimed a fair acquaintance. Among the proposed economic experiments is that detailed in Senate Bill No. 1712, introduced by Senator Wagner of New York “to encourage national industrial recovery, to foster fair competition, and to provide for the construction of certain useful public works, and for other purposes.” The second part of this bill puts forth a program of public works running into such astronomical figures as $3,300,000,000. The first part of the proposal, though at present limited to two years’ duration, outlines a procedure which, if enacted into law, bids fair to become the method by which industry will be controlled for a long time.
The purpose is to secure cotiperative action within industry with a view to eliminating unfair competitive practices and thereby reducing unemployment, improving standards of labor, and otherwise rehabilitating industry. T o promote industrial cotiperation under federal encouragement and reasonable regulation is indeed desirable, and, as we read it, industry is to be offered an opportunity to control itself through a code of fair competition which, however, is without effect until approved by the President. Any unit within an industry violating an approved code would be guilty of a misdemeanor and upon conviction subject to a fine of not more than $500 for each offense. The approval by the President of a code applicable to a trade or industry would be given if he found that the group proposing it is truly representative of its industry, that all engaged in the same trade or industry are freely admitted to membership in the association, that the code of rules is fair to competitors, employees, and consumers, that it will not promote monopoly, and that it does not oppress or discriminate against small business enterprises. The employers must consent to the organization and collective bargaining of their employees and guarantee that there shall be no interference with their joining or declining to join a labor organization. But now we come to the price named in the bill for these benefits. It is no less than the acceptance by industry of a dictatorship quite foreign to American principles and experience. The employers must agree to reduce the hours of labor to the number which the President finds will be most helpful in increasing employment in that industry, and to pay a minimum wage and maintain such minimum standards of working conditions as he may determine. The federal authority would invade business in another way, in that the President would be authorized to enter into or approve agreements relating to any trade or industry with a view to improving conditions within that industry and increasing its power to provide employment. In the absence of approved codes, the President would be
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INDUSTRIAL AND ENGINEERING CHEMISTRY
empowered to control directly or to license a corporation engaged in interstate commerce. A firm doing business without being a subscriber to an approved code or without such a license would be subject to a fine of $500, and if it continued in such practice or in violation of any condition of the license it would be liable to such a fme with each day’s operation considered as a separate offense. Some features, such as licensing, are thought to be unconstitutional. The Oklahoma experiment in licensing industry was ended by a Supreme Court decision. But in amended form the bill is likely to become law and thus add to the list of gigantic experiments which the United States seems determined to undertake. The various associations in which units of the chemical industry are found are fortunately well organized and a t least one of them-the Manufacturing Chemists’ Association-has a great many years of experience, includes practically all the important units of the industry, and in the products of its members represents a most impressive list of commodities. These associations will be quite prepared to exercise the initiative to be left with them, and produce, with a considerable degree of promptness, acceptable codes of fair competition, setting forth the standards covering competitive trade practices within the industry. The recalcitrant member who heretofore has made difficult the forwardlooking work of such associations will find a change which should speedily cure him of his evil practices, put him under an unwelcome federal license, or eliminate him. While there are sections of the bill which industry will be reluctant to accept, it is not unlikely that even more objectionable restrictions may be suggested and imposed, should there be any hesitancy in taking steps to eliminate practices which, in some fields, have tied the hands of the responsible manufacturer and brought him into disrepute. For some time there has been the feeling that competition unrestrained is not the life of trade described in the old adage, yet agreements which would correct the situation would have been illegal under the antitrust laws, now to be suspended, and there has been no prompt way of reaching those who would not hesitate to wreck an industry for a temporary personal advantage. To cure these conditions, it would be better to have control under the initiative of the reputable trade associations with the approval of federal authority, than to exercise the same restraint independent of industry. The trade association, therefore, is about to enter upon a broader program of important activity. Fortunately for the chemical industry, it has trade associations capable of undertaking additional responsibility. We are living in an age of great economic experiments, which involve much uncertainty. The failure of the old order may justify the compromise plan presented in the bill and entitle it to a fair trial.
Vol. 25, No. 6
C
OMPLEXITY SIMPLIFIED. Science continually works from the complex to the simple. A new method of analysis or synthesis, and a new process for industrial manufacture-these are nearly always much more complex in the beginning than after there has been some experience in their operation. One step after another may be omitted; a batch process may be converted into a continuous one. Time is saved in the over-all operation, and a t many points a simplification occurs. A recent example has come to our attention and is to be found in the petroleum industry. Elaborate steps have been developed for oil treatment. The elimination of objectionable odor, the improvement in color to overcome sales resistance, and an increase in octane rating have been important. More or less extensive systems have been set up to accomplish these purposes, involving high initial investment, substantial operating costs, and royalties. The control of gum formation in the cracked gasolines of high octane rating has been another troublesome problem. Now comes the era of inhibitors. This is a step toward much desired simplification. The inhibitors, which so satisfactorily retard gum formation, have been in vogue approximately two years and another class of compounds making for color stability has been used about six years. The use of the inhibitor is also a factor in saving values heretofore lost in treating, which lowered octane numbers after considerable cost had been incurred to attain them. It is estimated th:t, in afew plants operating on this more simple plan, the annual saving is already on the order of a million dollars. . *
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MPORT DUTY DECISION. The Supreme Court
decision rendered in the University of Illinois customs case, and reported in our NEWSEDITION of May 10, 1933, was one of far-reaching importance. Our academic institutions have often found themselves torn between a real desire to aid in the progress of an American scientific apparatus industry and the natural urge to purchase a t the lower price which foreign conditions of manufacture make possible. Their decision has usually been to remember the lessons of the past and to place business a t home, with the realization that they are helping those who support the institution. Had the Illinois point of view prevailed and been followed to its logical conclusion, some institutions might have been placed in the strange position of deriving their revenue from domestic sources and purchasing all manner of things from those who in no way contributed to their operating expenses. The decision will encourage our scientific equipment makers to undertake costly development and to proceed as a firmly established business in which fair treatment and acceptable service to the consumer are paramount considerations.
