VOLUME 24 NUMBER 1
Industrial AND ENGINEERING Chemistry
JANUARY 1932
J
HARRISON E. HOWE,EDITOR
The Editor’s Point of View
W
-HAT OF CHEMISTRY AND CHERIISTS I N AMERICA? A new year is upon us.
neither necessary nor desirable that all men trained in science practice a scientific calling. The need is for leaders in finance, industry, and commerce who understand the possibilities and the limitations of modern science. What with our increasing wealth, the growing appreciation of the value of research, our ever expanding knowledge, the increasing number of men of power and initiative who are devoting their lives to chemistry or its practical application, the future of chemistry and chemists in America never looked brighter.
What of chemistry and chemists in America?
To the promotion of their welfare our SOCIETY stands committed. Have we builded well for future achievement? What seem to be the facts? R e have greater xealth than ever before; wealth to endow education and research in the pure science; wealth to finance industrial research and its exploitation. Men of finance, industry, and commerce are becoming more and more research-conscious. We have a broadening foundation of knowledge on which to build; an expanding, inexhaustible territory to be explored and cultivated. We have a greater number of well-trained workers. True, we have much to learn about the control of wealth, whether of labor or of commodities. We have not learned to achieve economic stability. But in terms of living, every crest of the wave has been higher and every trough less depressed. We are reassured by the fact t h a t our present condition is one of maladjustment, not poverty; surfeit, not famine. The man of business may be getting a dangerously exalted estirnate of the possibilities of research. H e will come to learn its limitations. His interest will grow; the results will compel it. I n the early days of science there were those who believed its domain to be narrowly bounded. Few today do not see its horizons receding with every advance. Years ago we were told that there would soon be an oversupply of men trained in chemistry. Some fear that such fate is now upon us. But before these days of doubt and uncertainty the schools were not keeping up with the demand for men of good training. Today, discouraging as is the immediate outlook for many, the proportion of those who are idle is, to say the least, no higher among chemists than among those in other walks of life. We shall again have a scarcity of welltrained men. Science properly taught is as cultural as the humanities. A foundation of training in chemistry and the allied sciences is of value in all walks of life. It is
L: J-. REDMAN *
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H E BASKER--d FALLEN IDOL. I n the new Sational Museum at Washington, in a corner not reached by all visitors, is a collection of bronzes by Herbert Ward. This is a magnificent group, depicting a few of the primitive people of hfrica, and includes “The Idol >laker.” This shows a workman in perfectly natural attitude with a block of wood held over his knee, as he carves. Most of us are idol makers, though we work in a different medium and with a somewhat different objective. The banker has long been an idol. H e dominates many a community and his advice has been sought with the same appreciation of its value as that given by the local judge and the minister of the church. Few stop to wonder by what process of contact with other people’s money our friend the banker came to possess superhuman qualities. He has been treated as if he possessed them, and from the way in which in later years he has assumed knowledge superior to others in the management of all manner of affairs it would almost seem that he believed such to be the case. We all know the danger of general statements. And whatever may be said concerning the banking fraternity as a whole, we recognize that there are to be found individuals who, through all that has happened, have remained sane and have displayed sound judgment. Unfortunately, their number has been few and there have been cases where circumstances beyond their control have placed some of these estimable gentlemen in a very unwelcome light. 1
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INDUSTRIAL AND ENGINEERING CHEMISTRY
“Consult your banker” has long been a formula for meeting all manner of situations. Not so long ago some one noted a placard in one New York bank reading “before buying worthless securities elsewhere, consult our list.” The English language is funny a t times, isn’t it? The banks have had lists enough. The layman finds it difficult to distinguish between banks, as he has conceived them to be, and houses of issue and so-called investment companies. The prospect of quick profits through commissions has been too alluring. And now come famous bankers before congressional committees, testifying to the soundness of their institutions because, among other things, they hold comparatively few of the questionable foreign “securities.” These are in the hands of their trusting customers. Somehow we remember the superior air displayed by bankers toward those who urged buying real estate in Florida, not for development, but for the quick turnover and a profit. Has the banker been a mere retailer? While some bankers have interests so broad as t o make them really ineffective in any one line, others manifestly fail to keep in touch with modern events. A banker of some prominence in his locality accosted a reporter friend of ours and told him t h a t he had just learned of an astounding development which he thought the reporter should investigate a t once, for it would surely lead to a marvelous story for his paper. It developed that the piece of news the banker had just picked up was t h a t Russia is working on a fiveyear plan-and this, within the last three months! When the prices of commodities fell sharply, it was the bankers in many cases who urged retailers to borrow to buy goods for stock. When, t o their amazement, commodity values sank still lower, these same bankers became panicky, demanded their money, and forced sales, which practically dumped merchandise upon the market and helped further to demoralize wholesale and retail trade. On the boards of various corporations are to be found representatives of the banking fraternity, and in some cases these boards authorized enormous bonuses for certain executives, already overpaid. The payment of such bonuses has constituted a drain upon funds which it is now recognized could be more properly and profitably used in other directions, but the movement for reform has started in other quarters. These same boards have also authorized stock issues, usually based on the prices established through speculation on stock exchanges, rather than upon earnings or increase in assets. Once issued, these stocks are capital just as sacred as the original issues and remain to become a burden or even an embarrassment when business is curtailed. Dividends paid in stock may easily fall into this class, and surely the enormous fees paid in stocks to organizers and as commissions
Vol. 24, No. 1
in the case of mergers and purchases constitute another load for the corporation. Our financiers are also responsible for the fallacy under which many an industrial enterprise has been launched and maintained-namely, the idea of a permanent bonded indebtedness. I n some cases apparently no effort is ever made to pay bonds, and everyone is supposed to be happy if the interest is regularly forthcoming. It often happens that equipment, to purchase which bonds were sold, is worn out and discarded or becomes obsolete and inefficient, but the bonds go on forever. The practice of writing off equipment a t the earliest date is quite foreign to some of our commercial enterprises, and it is no wonder that they find difficulty in maintaining themselves in satisfactory condition in the circumstances of today. Obsolescence is another handicap often promoted by banking methods. There have been instances where equipment should have been sold to make way for better machinery but, since it stood as security for certain bank loans, if sold the proceeds had to be applied on the loan. In the absence of an appreciation of things technical, the banker could not be persuaded of the advantage to the industry involved in the transaction, with the result that the old machines had to be retained. It would be interesting to know t o what extent such a situation accounts for the considerable number of obsolete plants which today constitute millstones about the neck of industry. And then there are the foreign loans. Before the appearance of the articles by Garet Garrett which were reprinted by the Chemical Foundation, Inc., keen observers returning from Europe gave us their opinions on the use of American money in foreign lands and made remarks about the sagacity of our international bankers which it would be just as well not to repeat here. Anyone who has not read these discussions should do so speedily, for they touch upon topics of vital interest to each one of us. Long ago we indicated what a two-edged sword such loans could be. Much of the money went into equipping industries, the better to compete with our own. The repayment of these loans may depend upon trade, possible only with reduced tariff protection, leaving our own industries and their workers to foot the bill. B u t if any one thing irritates the technical man more than another, i t has been the actual opposition which has developed in some places toward technical advice. Even some of our biggest banking institutions have declined to keep permanently on their s t d men capable of giving them sound technical reports. For the sake of accounting they preferred t o charge the cost of such advice against each particular case and to call in consultants accordingly. The result-that they would overlook some of the instances where the opinion was needed most-was inevitable. Even
January, 1932
INDUSTRIAL, AND ENGINEERING
where given, the advice is not always heeded. Published chemical advice apparently prevented some fifteen million dollars in nitrate bonds being unloaded upon the American public. We do not know whether the failure to sell them is due to some pang of conscience, which prevented unloading upon a gullible public, or whether the customary buyers displayed better judgment than the bankers. I n a western city one of the smaller banks, with but twenty-seven vice presidents, stood creditor to the extent of several thousands to a company dealing in secondary metals. They had done business together for years. A little while ago the company had not been able t o pay its temporary loans with the usual promptness. Additional money was borrowed and things went from bad to worse. T h e vice president supervising such accounts was about t o sell them out for what he could get when a superior officer in the bank thought of a firm of consulting chemists and engineers. He asked them to look over the situation and report the possibilities. A survey of the premises disclosed very little activity in secondary metals but a considerable volume in other recovered values. They found that the sole chemist on the job had been handicapped in his work, that the business began to fall off with the advent of new alloys which they were unable t o unscramble. and t h a t the miscellaneous secondary merchandise to be seen everywhere had been taken on in the hope of supporting the six family partners depending on the business. For once a bank took technical advice. The experienced chemist was put in a building elsewhere. H e was properly supported in his work and given assistants. The technic was rapidly perfected. The complex alloys in the scrap ceased to give substantial difficulty, and now the loan is being gradually discharged. There is a great deal of this sort of thing going on. Our banking friends delight in the statement of the certified public accountant, which is a record of what has happened, and from this they try to project what may happen. They have not yet fully realized t h a t i t is the chemical audit that can better tell the story of where you are today and what your prospects may be for tomorrow. They have yet to learn t h a t the attitude toward research is a better indication of the endurance and future of a manufacturing company than is its balance sheet. The banker is very much like the rest of us. We have made him an idol without considering how he came to deserve a halo and now we are disappointed in our own judgment. We realize that much of what we have regarded as capital, as represented by pieces of paper, will have to disappear, if i t ever actually existed, before we can really get down to a sound working basis. If the financier and the business manager, recognizing this unpleasant fact, will but make the most of what technology offers, there not
CHEMISTRY
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only will be ways out of many present difficult situations, but a defense will be creat.ed which can withstand any tendency to repeat our bitter experiences, * *
USCLE SHOALS I N A N E W ROLE. As the years have gone along, even those reluctant to see the facts have been compelled to realize that Muscle Shoals can no longer be characterized as a factor essential in national defense. We even believe that a large number of those who must make the final decision regarding the property know that actually it is important only as a power development, but such a sane consideration appears unacceptable to those who claim to help the American farmer. The last Muscle Shoals Commission has unanimously reached the follom-ing conclusions: 1. It is economically feasible and desirable to use and operate the Muscle Shoals propertiep for the following purposes: (a) Primarily for quantitative production of types of commercial fertilizer and/or fertilizer ingredients of greater concentration than those which are now genally sold to the farmer. ( b ) Cooperative scientific research and experimentation for the betterment of agriculture. (c) Manufacture of chemicals. 2. It is the definite conclusion of the commission that the foregoing public benefits can best be obtained by private operation under lease contracts through competitive negotiations.
Obviously, the commission has retreated to the last line of trenches-namely, the position that concentrated fertilizer can be produced a t Muscle Shoals, either in a form or a t a cost not possible with commercial enterprises now operated. It should be noted t h a t the foregoing conclusions of the commission are contrary to the opinion of the chief of the Bureau of Chemistry and Soils and that his views have been endorsed by the Secretary of Agriculture. I n the secretary’s memorandum of September 29, 1931, addressed to the commission, he repeats the question : “The commission would also appreciate a statement of your general views as to the most practicable use to which the Muscle Shoals project may be put in the interest of agriculture.” The answer follows: “An attempt to find a use for the h h s c l e Shoals project in the interest of agriculture discloses the fact that the objective which it was believed could he accomplished by its operation has already been achieved by other means. Prices of nitrogen fertilizers have been greatly reduced. Ammonium sulfate, the world’s leading nitrogen fertilizer, is now quoted a t $23 to $26 per ton. Before the World War the average price was $60 per ton and in 1918 and 1920 it sold as high as $150 per ton.” While much has been said and written regarding concentrated fertilizers, there is still a great deficiency of information as to their proper use. Notwithstanding sincere efforts to create a large demand for them, it remains limited. Concentrated fertilizers have not met a ready sale, in spite of well-directed educational
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I N D U S T R I A L A N D E N G I N ElE R I N G C H E M I S T R Y
and sales campaigns conducted in behalf of such products as Nitro-phoska, Ammo-phos-ko, and Ammo-phos, At any rate, the results in this country have been disappointing, for the sales of Nitro-phoska, which has been well advertised for several years, have not exceeded 12,000 tons per year, as indicated by imports. When it is remembered that the total domestic fertilizer sales approximate 8 million tons per year, it is evident t h a t even this high-grade concentrated fertilizer has enjoyed but a very small demand. Furthermore. several of the larger domestic fertilizer manufacturers have attempted to develop outlets for moderately concentrated fertilizers, but the sales have been small, despite the fact t h a t the agricultural experiment stations and colleges and the National Fertilizer Association have whole-heartedly supported the use of such plant foods. This experience leads t o the conclusion t h a t a demand of any size for concentrated fertilizers is non-existent a t the present time, even in the territory adjacent to i\iIuscle Shoals. Our fertilizer industry without doubt could readily increase the concentration of mixed fertilizers as much as 20 t o 25 per cent with economy to itself and to the farmer, if there were sufficient demand. There is supplied to the farmer the grade of goods which he requests and which he knows best how to apply. As an indication of this we cite the report of the Commissioner of Agriculture of the State of Mississippi for the year 1930. The state law requires a minimum plant food content of 16 per cent. The report shows that, for the year 1930, 89 per cent of the sales of mixed fertilizers was of the minimum grade and that 95.7 per cent contained 18 per cent or less of plant food. Another interesting point is that in many sections of the country, more particularly in the large fertilizerconsuming areas of the southeast, it is becoming generally recognized that highly concentrated fertilizers are not as efficient as the well-balanced fertilizers of moderate concentration which have been used in the past with more or less empiricism. The fact is often overlooked that, in order to produce a fertilizer of high concentration, such essential plant foods as calcium and sulfur are generally omitted, whereas the ordinary mixed goods based on superphosphate carry these elements in adequate proportions. I n Circular 91 of the Georgia Experiment Station, December, 1930, is a report of yields of seed cotton, using comparable quantities of complete fertilizers but varying the source of phosphorus. Using ordinary 16 per cent superphosphate, the yield of seed cotton in pounds per acre was 668, with diammonium phosphate, a concentrated type, 507 pounds, and with monoammonium phosphate, 549 pounds. The relative yield for the last two named, taking superphosphate as 100, is 76 and 82, respectively. The circular goes on to report that, when limestone was applied with the concentrated phosphate fertilizers, the yields were markedly increased, indicating
Vol. 24, No. 1
that two factors-namely, calcium content and soil acidity-are of extreme importance in fertilizer practice. Fortunately, ordinary phosphate available today a t bargain prices approaches very closely the ideal phosphate fertilizer. In the effort to cut costs, vital factors of plant nutrition must not be sacrificed. There has been much loose talk about cheap fertilizers, and as we have frequently pointed out, there has been a persistent effort t o have the agriculturist believe that, without subsidy other than that involved in the transfer of the Muscle Shoals property, the plant there could be operated to produce a really cheap fertilizer in a quantity to affect American agriculture generally. At the present time ammonium sulfate, which continues to be the world’s leading nitrogen fertilizer, is offered a t approximately one-third of the average pre-war price. By-product ammonium sulfate, produced a t the coke plants, brings in the neighborhood of $14 or $15 per ton a t the point of shipment. These figures show that America is not a t a disadvantage and this form of plant food is indeed offered a t bargain prices. It is difiicult to see by what magic procedure a new group is to enter into a business now characterized by a world overproduction and achieve even a small per cent of the advantages claimed to be possible. We cannot see how a plant can be economically operated on a business basis for the purpose, nor does there exist any emergency or other peculiar set of circumstances which would justify the operation of Muscle Shoals a t public expense. As time has passed, the utter folly of the prior bills and proposals urging the production of fixed nitrogen a t Muscle Shoals has been amply proved. The latest recommendations, save for the second conclusion favoring private operation, are equally unsound. Even the commission reports that no acceptable bid has been received from private interests. Notwithstanding the honest efforts of the commission to evolve an acceptable solution, there continues t o be too much of politics, too much of tradition, and too little common sense in the Muscle Shoals problem. 0
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HE AMERICAN CHEMICAL SOCIETY enters
upon the new year with confidence that its constructive program will move forward, notwithstanding the difficult times. Our national officers are capable of carrying their responsibilities. Local section officers, in addition t o ordinary duties, have unusual opportunities for service in furthering employment. Encouraging news of such activities reaches us from many localities and while new places are slow in developing, specialists are being placed. Lists of our national, divisional, and local section officers appear in each issue of the Journal of the American Chemical Society. Learn who these officers are. Support them in their SOCIETY activities.
1931 Passes in Chemical Review
pitc that we are going foru.iird to any such iicriod of artificial prosirerity as cliariiolt~izcd tile yaars prcoediiig IW), brit iiiie niay also rliicrnint tlic dismal prop11 iieoniitled witliout ilet,ract,irig the co1,eren
