•"iBffljECn C O M M E R C E DEPARTMENT Charles Sawyer, Secretary
THE EFFECT OF
Performs operations relating t o priorities a n d allocations, requisi t i o n i n g , and voluntary agreements with respect to all materials and facilities e x c e p t those assigned to Interior, A g r i c u l t u r e , and Defense Transportation · Serves as guaranteeing a g e n c y for e x p a n d i n g productive capacity and supply · Certifies a p p l i c a tions for accelerated amortization ·> Certifies necessity for loans, purchases, and other commitments
GOVERNMENT
I Γ NATIONAL
PRODUCTION
AUTHORITY
REGULATIONS O N COMMERCIAL CHEMICAL DEVELOPMENT From the annual meeting of the C o m mercial Chemical D e v e l o p m e n t Associa tion, C&EN brings y o u the first of a se ries of papers on i m p o r t a n t problems fac ing the chemical a n d chemical process industries as they strive to meet the n a tion's needs both defense a n d civilian
Manly
Fleischmann,
Administrator Determines requirements for, formulates and executes p o l i cies concerning materials and commodities ( e x c e p t as other wise designated) for defense, civilian, f o r e i g n , and a l l other purposes
UNDER-SECRETARY
FOR
TRANSPORTATION Delos W .
Rentzel
Exercises the functions of the Secretary of C o m m e r c e with respect to air transportation intercoastal, coastwise, and overseas shipping
INDUSTRY can greatly help in maintaining t h e American way of business by organizing affirma tively and specifically to help the government. Our federal officials as a group are conscientious and sincerely desire to help the country fulfill its military requirements with the minimum disrup tion of business practices and principles. Many times, impractical regulations are the result of inadequate knowledge of an industry. Therefore, each industry has a responsibility to be of assist ance to the government in the development of t h e necessary regulations. W e can be sure that w e shall be faced with controls on production, alloca tion of materials and other lornis of government regulations, and it behooves each industry to or ganize so that: ( 1 ) W e can help the government establish p r a c tical regulations. ( 2 ) W e can comply with the established regu lations with the minimum oi disturbances to sound business practices. H o w can we help these agencies to establish practical regulations? First, we should get our thinking with respect to their responsibilities a n d aims on the proper level. W e can't be helpful if our suggestions are in the form of "gripes." Neither should we take a purely selfish or indi vidual business point of view. We should attempt to see the problem from a national point of view with the aim of obtaining full mobilization of this country's production capacity. For the most
1716
C H E M I C A L
AND
ENGINEERING
NEWS
PRES
IDENT
OFFICE OF DEFENSE M O B I L I Z A T I O N Charles Ε. W i l s o n , Director Directs, controls, coordinates all· mobilization activities, including, but limited to, production, procurement, manpower, stabilization, and transportation activities
Τ
DEFENSE PRODUCTION A D M I N I S T R A T I O N W i l l i a m H. Harrison, Administrator Directs the administration of priorities and allocations programs for defense production · Determines production programs required to meet defense needs · Determines facilities required for defense production · Spécifie? procedures and methods to be followed with respect t o purchasing, contracting, and specifications
1 AGRICULTURE DEPARTMENT Charles F. Brannan, Secretary
INTERIOR DEPARTMENT Oscar L. C h a p m a n , S e c r e t a r y
Performs operations relating to priorities and allocations, requisitioning, and voluntary agreements with respect to food for industrial
Performs operations relating to priorities and allocations, requisitioning, and voluntary agreements concerning petroleum, gas, solid fuels, electric power, fisheries, and certain minerals and mining equipment * Serves as guaranteeing agency for expanding productive capacity and supply
PETROLEUM A D M I N I S T R A T I O N FOR DEFENSE Oscar L C h a p m a n , Administrator Bruce Brown, D e p u t y Reviews needs for and allocates petroleum, gas · Establishes policies for operations of petroleum and gas industries · Performs other functions as vested in secretary
DEFENSE T R A N S P O R T A T I O N ADMINISTRATION James K. Knudson, A d m i n i s t r a t o r Performs operations relating to priorities in allocations, requisitioning, and voluntary agreements with respect to domestic transportation, storage, and port facilities
1
I
-L
_L
DEFENSE MINERALS ADMINISTRATION James B o y d , Administrator
DEFENSE ELECTRIC P O W E R ADMINISTRATION Clifford B. M c M a n u s , Administrator
DEFENSE FISHERIES ADMINISTRATION Albert M . D a y , Administrator
DEFENSE S O L I D FUELS ADMINISTRATION Charles W . Connor, Administrator
Reviews requirements for and allocates fisheries · Establishes policies for operation of fisheries · Performs other functions as vested in secretary
Reviews requirements for and allocates solid fuels · Establishes policies for production and use of solid fuels · Performs other functions as vested in secretary
Reviews requirements for minerals and allocates minerals · Establishes policies for operation of mining industries · Performs other functions as vested in secretary
The Government
Reviews requirements for and allocates electric power · Establishes policies for operation of electric power for defense · Performs other functions as vested in secretary
needs and wants your advice,
way to get it across is to begin by organizing
and the best-
business for . . .
Coordination w i t h the Government J O H N L. BURNS, Partner, B o o r , A//en &
Hamilton
part, the responsible individuals in these organizations are anxious to obtain the advice of men from industry. They need and want h e l p in formulating regulations. They need our advice on a great n u m ber of problems. Generally speaking, these problems may be classified in t h r e e broad areas. One, the Government frequently desires consultation with representatives of a n industry with respect to current practices, operating characteristics, and trends of a business. T h e government officials need background d a t a on current developments in the business. They need to know w h a t are the current m a n a g e m e n t p r o b l e m s production problems—and problems with respect to obtaining materials. This infor-
mation is most valuable in formulating regulations. And with accurate data, more practical regulations might b e developed. Second, government regulations necessitate a certain amount of statistical reporting. Contrary to the common concept, there are well-founded reasons for requesting most of such data. And, usually, impractical requests can b e traced to lack of understanding of the industry's problems. Steps have been taken to improve this situation. Under the F e d e r a l Reports Actany agency contacting more t h a n nine companies must submit t h e form of its request to t h e Bureau of t h e Budget. T h e purpose of this act is to provide for a central review of such requests with the hope that duplication of information may
VOLUME
APRIL
2 9,
NO.
18
.
-
·
3 0,
1951
he prevented, and impractical requests may be stopped or revised. This job of coordination is not easy. T o obtain industry's assistance on simplification of reports, there h a s been established the Advisory Council o n F e d eral Reports. This council advises t h e Bureau of t h e Budget on simplifying, improving or eliminating questionnaires a n d reporting procedures of federal agencies in connection with the bureau's a d m i n i s tration of the F e d e r a l Reports Act of 1942. Its objectives are governmental efficiency in the collection of information w i t h o u t duplication and with least burden t o business respondents, a n d in general, tlie improvement of federal statistical m e t h o d s for valid government or business needs. 1717
This council is financed by several private organizations, including the L'nited States C h a m b e r of C o m m e r c e and the National Association of Manufacturers. F e w businessmen art; cognizant of the extensive contribution this council has m a d e in eliminating requests lor unneces sary information, and, in some cast's, in substantially improving the form in which necessary d a t a are requested. Members of the council recognize, however, that there are nuuiy more opportunities for im provement, and t h e Council is constantly seeking advice from industry. T h e third area in which the Government needs help from industry is prior deter mination of the possible effect of a given regulation o n t h e industry. Obviously, it is impractical ίο circulate a proposed regu lation to obtain industry's comments. But, through informal discussions with repre sentatives of industry, government officials h o p e to learn of pitfalls in contemplated regulations. How can we provide this assistance— now that w e h a v e d e c i d e d to h e l p the Government and we k n o w the basic areas in which the Government desires help? I n t h e first place, m a n y here have al ready been contacted directly by govern ment officials because of personal stand ing in a given industry, a n d we may ex pect more calls in t h e future. But let us not wait for the agencies to contact us. It's our Government. Let us take the initiative ourselves. U n d e r pressures to have certain regulations issued, well-mean ing government executives may not have time to search for the proper industry ad vice; and as a result, impractical regula tions may b e issued. In addition to personal contact with executives, w e m a y work with the govern ment t h r o u g h industry advisory commit tees which h a v e been established for each major industry. T h e m e m b e r s h i p is m a d e up of selected representatives of the in dustry. O n e of these groups is t h e Mili tary Petroleum Advisory Board which ad vises t h e Petroleum Division of t h e Muni tions Board. A third c h a n n e l t h r o u g h which we may advise the g o v e r n m e n t is the associations. T h e National Petroleum Council is such a group, and there are m a n y others. M a y b e your association could serve as a channel for your men to counsel with government executives. M a n y associations that are truly repre sentative of—and can speak for—an indus try and h a v e h e a d q u a r t e r s in Washington, have been of great value to t h e industry and to the Government. T h e key execu tives of such associations are able to coun sel with a p p r o p r i a t e government agencies and, as is t h e case occasionally, t h e asso ciation participates in drafting prelimi nary regulations. Also, t h e associations, be ing on the scene in W a s h i n g t o n and hav ing close contact with federal executives, are able t o present to their memberships the most current thinking with regard to g o v e r n m e n t plans that may affect t h e members' businesses. A fourth means ol advising government 1718
J
OHN L. BURNS w a s b o r n a n d e d u c a t e d in Boston. H e received his d o c t o r a t e in s c i e n c e from H a r v a r d and was a faculty member a t both H a r v a r d and L e h i g h University before s p e n d i n g 14 years in b u s i n e s s in t h e Middle W e s t , includ ing positions w i t h W e s t e r n Electric C o . , D e w e y & Almy Chemical Co., a n d t h e Republic S t e e l Corp. At Republic Steel h e was manager o f t h e Grand Crossing W o r k a n d h e a d of the wire division. At t h e firm of Booz, Allen, & Hamilton he i s coordi n a t i n g p a r t n e r of t h e e a s t e r n activity.
executives is through Washington offices of individual companies. Many companies, during World W a r II—and even more recently—have estab lished Washington offices. Usually, the primary function of these offices is to assist in obtaining government contracts. How ever, these offices are becoming more and more valuable to certain of the government agencies in providing t h e m with the think ing of their respective m a n a g e m e n t s . T h e m a n a g e r of t h e W a s h i n g t o n office usually represents t h e top m a n a g e m e n t ol t h e company—reporting either to the president or executive vice president. In some cases, the W a s h i n g t o n representa tive reports to the vice president in charge of sales. T h e m a n a g e r of the Washington office of a c o m p a n y usually devotes most of his time to promotional work. It is his job to become personally acquainted with appropriate government officials; keep currently informed on regulations or any other government activities that may affect his company; and b e sure that his company is well received by the Govern ment. W h e n agencies call on the W a s h ington manager for assistance in regard to points of view on regulations, h e is able to provide that guidance. W h e t h e r a c o m p a n y works t h r o u g h an association or establishes its o w n office in W a s h i n g t o n , it is important t h a t this office be staffed with an individual w h o u n d e r stands his c o m p a n y ' s or industry's opera tions and also u n d e r s t a n d s the organiza tions and operations of the F e d e r a l Government. A highly competent indi vidual with this b a c k g r o u n d is essential to achieving cooperation and, insofar as is possible, practical regulations. T h e man in t h e W a s h i n g t o n office should develop personal acquaintances with appropriate g o v e r n m e n t officials. H e should not limit his contacts to t h e heads of d e p a r t m e n t s and agencies or to m e m bers of Congress, but should get ac q u a i n t e d with the key personnel on t h e working level. Usually these are t h e in dividuals w h o develop t h e preliminary drafts of policies a n d regulations, and it is frequently at this level that a c o m p a n y or association representative can b e most helpful by providing these people with an industry point of view. He should at tempt to inform these federal executives of C H E M I C A L
the operations ot his industry under any given set of regulations, and should also point o u t how the G o v e r n m e n t m a y b e a b l e to achieve its objective w i t h a mini m u m d i s t u r b a n c e of normal business prac tices. Fie should conduct himself i n such .1 m a n n e r as to have these key executives d e v e l o p a professional confidence i n him. H e should, at all times, maintain a n o b jective point ot view and attempt t o work w i d i these government officials in h e l p i n g t h e m a c h i e v e their objectives insofar as t h e y can, but with full knowledge of t h e effect of their regulations on business. T h e second major consideration in d e v e l o p i n g an organization for cooperation arid coordination is to organize so that w e c a n comply with t h e established regula tions w i t h a minimum disturbance to sound business practices. Mobilization a n d Business First, let us consider w h a t t h e mobiliza tion p r o g r a m may mean to business. F o r m a n y of us it will mean ( 1 ) the G o v e r n m e n t is a big customer; (2) the G o v e r n m e n t is a major factor in t h e source of supply t h r o u g h the allocation of materials a n d through- t h e control of production; ( 3 ) t h e g o v e r n m e n t is d e t e r m i n i n g many b a s i c m a n a g e m e n t policies for us, such as d i r e c t i n g some form of p r i c e control and w a g e control. Also, we sball b e faced with t h e renegotiation laws which place added responsibilities on legal and financial de partments. In o t h e r words, practically every part of business will b e affected b y some g o v e r n m e n t regulation. F o r t h e most part, t h e work of each key executive will be influenced by a government regulation. T h e s e conditions make i t imperative that each c o m p a n y should o r g a n i z e t o : ( 1 ) k n o w all the government regulations that m a y affect its business; ( 2 ) provide for intelligent interpretation of these regula tions; and ( 3 ) assure t h a t t h e company is c o m p l y i n g with established regulations. To achieve these three objectives, we b e l i e v e that a company s h o u l d provide for a key executive to he responsible for co o r d i n a t i n g all government activities with respect to the regulations t h a t resxilt from t h e mobilization programs. As an example of the proposed organi zational relationships, w e propose the esAND
FNGINFERIMG
NEWS
tablishmcnt of a position of vice president for government relations. In a SJnailer corporation, it might be a d v i s a b l e t o designate a present officer of t h e comp a n y to serve in this capacity in addition t o his regular duties. T h e essential point, h o w e v e r , is that the responsibility for g o v e r n m e n t relations b e placet! on the t o p - m a n a g e m e n t level of the company. T h e vice president for government relations reports to the president of t h e corporation. He is responsible for: < 1 ; Recommending t o the p r e s i d e n t policies with respect to relations w i t h t h e government. ( 2 ) Establishing necessary channels directly with government agencies or t h r o u g h a Washington representative or t r a d e association, to assure t h e receipt of ail regulations affecting t h e c o m p a n y . ( 3 ) Transmitting these regulations to t h e executives of the company whose activities may b e affected thereby. ( 4 ) Assisting in obtaining interpretation of t h e regulations. ( 5 ) Providing for systematic t o l l o w - u p on executives to assure compliance with regulations. ( 6 ) Preparing periodic reports for t h e President and Board of Directors o n curr e n t status of the company's performance u n d e r government regulations. (7) P r o v i d i n g a s s i s t a n c e to the F e d e r a l G o v e r n m e n t i n t h e d e v e l o p m e n t of r e g u l a t i o n s directly or t h r o u g h other c h a n n e l s . T h e d e l e g a t i o n of t h e s e r e s p o n s i b i l i t i e s t o a s i n g l e t o p e x e c u t i v e d o e s not r e l i e v e t h e o t h e r k e y e x e c u t i v e s of t h e i r r e s p o n s i b i l i t i e s for c o m p l y i n g w i t h t h e r e g u l a t i o n s p e r t a i n i n g to t h e i r r e s p e c t i v e d e p a r t m e n t s . O b v i o u s l y , n o o n e i n d i v i d u a l can b e e x p e c t e d t o k n o w all g o v e r n m e n t r e g u l a t i o n s .
T h e p l a n p r o p o s e d h e r e is t o p r o v i d e a s s u r a n c e a n d protection to t h e c o m p a n y that regulations are being complied w i t h a n d to e s t a b l i s h a c e n t r a l s o u r c e t o p r o vide assistance to t h e G o v e r n m e n t . T h i s p l a n p r e s u p p o s e s t h a t r e s p o n s i b i l i t i e s of e a c h m a j o r a r e a of r e g u l a t i o n s , s u c h a s priorities, allocations, and renegotiations, a r e c l e a r l y d e l e g a t e d t o a n e x e c u t i v e of t h e c o m p a n y . By t h e s e m e a n s , y o u c a n e s tablish an organizational structure that will greatly facilitate the necessary coordinat i o n of y o u r b u s i n e s s w i t h t h e G o v e r n ment. Summary In s u m m a r y , t o a c h i e v e o u r t w o b a s i c objectives—( 1 ) W e can h e l p the governm e n t establish practical regulations. (2) W e can comply with the established regul a t i o n s w i t h t h e m i n i m u m of d i s t u r b a n c e to s o u n d business practices—eight p r o gressive steps should b e t a k e n . These steps are: ( 1 ) D e s i g n a t e a key executive to b e r e s p o n s i b l e for g o v e r n m e n t r e l a t i o n s a n d see that other executives are brought into t h e p i c t u r e as r e q u i r e d . ( 2 ) Study thoroughly present mobilization laws and regulations that pertain to the particular industry. ( 3 ) D e s i g n a t e a key executive to b e r e s p o n s i b l e for c o m p l i a n c e w i t h t h e s e l a w s and regulations. ( 4 ) A f t e r c o n s i d e r i n g t h e effect of t h e s e laws and regulations, review them again f r o m a n a t i o n a l p o i n t of v i e w . ( 5 ) D e f i n e t h e p r o b l e m s of t h e i n d u s try under these laws and regulations, a n d d e v e l o p a n s w e r s to these p r o b l e m s in written form.
materials
"^EuBiCtrr
THE EFFECT OF
[ Ci > D e t e r m i n e ht be c h a n n e l through w h i c h w e c a n he mo: lost e f f e c t i v e in w o r k ing w i t h t h e G o v e r n m e n t . ( 7 ) Direct the answers to our industry's problems t h r o u g h this c h a n n e l to the w o r k i n g l e v e l ot t h e a p p r o p r i a t e a g e n c y . Get b e h i n d t h e W a s h i n g t o n g l a m o u r t o thi' w o r k i n g l e v e l — h e r e is w h e r e n e w i d e a s and r e v i s i o n s in p r e s e n t r e g u l a t i o n s o r i g i nate. (8) When you receive from the G o v e r n m e n t r e q u e s t s for i n f o r m a t i o n t h a t apnear to b e unnecessary, write to the Advisory C o u n c i l o n F e d e r a l R e p o r t s , 1615 H S t r e e t , N . W . , W a s h i n g t o n , D . C . , and e x p l a i n y o u r r e a s o n s . T h i s is a p r i v a t e organization sponsored b y t h e United States C h a m b e r of C o m m e r c e a n d o t h e r business o r g a n i z a t i o n s . T h e s o u r e e of criticism w i l l n o t b e r e v e a l e d . Tliese steps are t i m e - c o n s u m i n g a n d are costly to a c o m p a n y . H o w e v e r , in v i e w of t h e e x t e n s i v e effect of g o v e r n m e n t r e g u lations o n b u s i n e s s t o d a y , it is c h e a p e r t o face t h e m s q u a r e l y . G o v e r n m e n t r e g u l a t i o n s are' c e r t a i n to p r e s e n t m a n y o p e r a t i n g p r o b l e m s for all of o u r b u s i n e s s e s . T h e r e is n o i n d i c a t i o n , at l e a s t , t o d a y , t h a t w e c a n a v o i d s o m e form of g o v e r n m e n t r e g u l a t i o n s : b u t w e can —and s h o u l d — t a k e s u c h s t e p s a s will facilitate t h e c o n t i n u a n c e of o u r b u s i n e s s with t h e m i n i m u m d i s r u p t i o n o t A m e r i c a n business p r a c t i c e s a n d p r i n c i p l e s . W e can help g r e a t l y in m a i n t a i n i n g t h e A m e r i c a n way of b u s i n e s s b y o r g a n i z i n g so t h a t w e can h e l p t h e g o v e r n m e n t e s t a b l i s h p r a c t i cal r e g u l a t i o n s , a n d b y o r g a n i z i n g s o t h a t we e a n c o m p l y w i t h t h e e s t a b l i s h e d r e g u lations w i t h a m i n i m u m of d i s t u r b a n c e t o sound b u s i n e s s p r a c t i c e s .
Not substitutes, but important are available in . . .
and
useful
Chemicals and Plastics
REGULATIONS O N COMMERCIAL CHEMICAL
F. H . C A R M A N , Assistant Secretary, Manufacturing Association, Inc., Washington, D. G
Chemists'
DEVELOPMENT T H E mobilization program increases from month to month and controls are imposed on t h e use of many engineering materials, more and more people b e c o m e interested in plastics. T h e publie and m a n y industrial experts not conversant with t h e chemicals and plastics i n d u s t r y h a v e been prone to look upon plastics as readily available substitutes—this is far from a reality. In many instances plastic materials are in shorter supply than steel or aluminum today, and this exists in spite of the great expansion which has b e e n V O L U M E 2
9.
NO.
made in the industry- since World War I I . Early in 1950 plastics were operating at probably their highest production levels in history, yet producers were not able to take care of all requirements. Generally, most materials manufacturers could not produce at capacity because of restricted supplies of many basic chemicals. Plastics are now a major claimant for many basic chemicals and must compete with other essential e n d uses for the available supply. T h e industry is now of such m a g n i t u d e that no shift in demands for plastic ma-
I S ^ ^ . A P R ' L i n ^ Q s i
terials can be made without placing a terrific stress on t h e chemical manufacturer. No substantial expansion can be undertaken without provision for basic chemicals, hence commercial chemical development studies become factors in any major move in this industry today. The critical supply position for many chemicals has been covered by the press and previous reports to the industry. Some of the materials now in short supply for plastics are benzol, phenol, resorcinol styrène, phthalic anhydride, methanol, chlo1719
