INDUSTRY
& B U S I N ESS
U.S. Antitrust Laws May Go Abroad Administration may apply domestic antitrust laws to U.S. companies' overseas operations, former Attorney General fears A new antitrust policy of great concern to U.S. chemical producers may be in the wind. A former U.S. Attorney General believes that the Kennedy Administration may attempt to expand jurisdiction of domestic antitrust laws to cover international business of U.S. companies. Herbert Brownell, Attorney General in the Eisenhower Administration, blasted the idea in a luncheon address to a special one-day conference on antitrust sponsored by the National Industrial Conference Board. He accused the present Administration of fostering tariff, tax, and antitrust policies that will discourage expansion of U.S. business in western Europe. To lend substance to his belief that the Government may try to apply U.S. antitrust laws abroad, Mr. Brownell cites remarks by Federal Trade Commission Chairman Paul Rand Dixon in his recent speech to a Detroit business group (C&EN, March 26, page 2 7 ) . In it, Mr. Dixon expressed concern over joint ventures abroad by U.S. companies who normally compete in the domestic market. Possibly foreshadowing the new antitrust policy, Mr. Dixon said that FTC must do more than merely challenge old practices. "It must also observe and evaluate new ones which may be developing so that, if necessary, prompt action can be taken against them/' ECM Fills Antitrust Void. Mr. Dixon's remarks, says Mr. Brownell, "indicate the Chairman's failure to make any differentiation between intervening in respect to the activities of U.S. companies abroad and at home." He adds that, applied to western Europe, "such thinking fails to take into consideration vast changes in trade practices there." Prior to World War II, when western Europe had virtually no antitrust laws of the type known to us, there might have been some basis for expanding our antitrust laws to cover ac-
Herbert Brownell Warns against expanding antitrust laws
S. Chesterfield Oppenheim Danger of antibigness doctrine
tivities there. But, Mr. Brownell points out, this void has been filled. The European Common Market now has a new set of antitrust laws with teeth in them. They outlaw such
practices as price fixing, price discrimination, division of markets, tie-in sales, limitation of production, and monopolization—all of which are forbidden by U.S. antitrust laws. ECM's antitrust laws, Mr. Brownell notes, "bear more than a superficial resemblance to the Sherman Act." Curbs on Attorney General's Power. U.S. antitrust concepts should be revised to take account of these new developments in western Europe, Mr. Brownell believes. For one thing, he suggests a new look be taken at recommendations of a special committee on antitrust laws of the Bar Association of New York City which would check the power of the Attorney General to start antitrust action which could have international impact. Mr. Brownell notes the following committee recommendations: ". . . that machinery in our Government should be created so that, prior to the initiation of any proceedings by the Attorney General under the antitrust laws that may have an effect abroad, any such proposed exercise of the power of the prosecutor is subjected to careful scrutiny by agencies of the executive branch of our Government concerned with our own survival and our relations with other nations." It is too late after a complaint has been filed, says the committee-. It insists that final responsibility to decide what course shall be taken regarding problems of national security and foreign relations should rest with the President, not the Attorney General. The committee recommends that Congress, by legislation, should give the President power to grant exemption from the antitrust laws to companies "engaged or proposing to engage in any activity that may present a question of violation of the antitrust laws as applied to commerce with foreign nations." Exemptions should be granted, it explains, if the President finds and makes public his finding that MAY
2 8,
196?
C&EN
31
the grant would further the national security or foreign policy of the U.S. Blasts Big Business Critics. Earlier in the conference, one of the country's top antitrust authorities levied a broadside at ivory tower economists who preach antibigness policy toward business. Professor S. Chesterfield Oppenheim, of the University of Michigan School of Law, says that professional economists "do a disservice to antitrust" by espousing theoretical approaches which set limits on business size or market s h a r e s theories which, in the professor's words, "cannot be translated into practical and realistic conceptions of competition compatible with progress in the kind of economic society in which we actually live." "There is more danger to antitrust in an American growth economy in this antibigness economic doctrine than in the dangers of bigness these critics allege to exist," he believes. Statutory curbs, according to Professor Oppenheim, would destroy incentive and spirit to compete for more business as an enterprise approaches the permitted legal maximum. Without incentives to grow beyond a legally prescribed ceiling, an enterprise would have little inducement to improve products, to lower costs, and keep prices down at a good profit rate. "Legal limits on size or market shares would thus tend to make big business act like tranquilized monopolists -rather than vigorous competitors," he believes. Such an antitrust policy would not be practical either from a legislative or an administrative standpoint. Economists themselves admit that economics is not an exact science, he claims. They disagree among themselves on every phase related »to evaluating big business in the structure of an industry or market. "There are glaring gaps not only in economic facts but in the meaning of the facts that are known," he says. "This certainly calls for humility rather than dogmatic hypotheses about the 'curse of bigness/ " he concludes. Interpretations of the Sherman, Federal Trade Commission, and Clayton acts—all related to the common goal of maintaining effective competition—have not been based on the one principle that small business tends to promote public welfare, while big business tends to injure it, he points out. And he believes that there is no need for any basic, substantial revision of existing antitrust laws. 32
C&EN
MAY 2 8, 1962
USB Markets New Borate Fire Retardant Emulsibor process using Firebrake-T flameproofs wood in one-step preservative process U.S. Borax and Chemical came up with another application for borates as fire retardant materials last week with the introduction of Firebrake-T. To be used in the company's Emulsibor process, the "special borate mixture," as USB calls it, is intended for treating lumber and timber as part of the one-step process now used to preserve wood. Immediate market for the new product is for structures along railroad rights-of-way, but the potential market is much larger. The use of borates as fire retardants isn't novel. Aside from fighting forest fires, borates have been used for some time to treat fiberboard, cotton, paper, cloth, wood products, and other materials used indoors, away from conditions that might leach out the watersoluble chemicals. In the Emulsibor process, on the other hand, petroleum oils—a part of the emulsion—seal in the borates and keep them from being dissolved out by rain. USB will sell Firebrake-T to wood treatment plants, which will use it in an emulsion with chemical mixtures normally used to preserve wood—creosote, petroleum oils, and pentachlorophenol, for example. Processors can use the same pressure, temperature, and treatment times they use in their preservative treatments. USB says the process is a singlepass treatment that does everything at once with a minimum of extra effort. Customers will be able to buy USB's borate mixture alone and add an emulsifier themselves or with an emulsifier included. USB's development of the product started about three years ago, when? Maurice H. Pickard, director of market development, interested a major western railroad in its possibilities. At U.S. Borax Research, Sam Draganov and Dr. Carl Randolph worked out the best way to make a stable borate emulsion and to impregnate wood with it. Encouraging lab tests on treated panels led to large scale treatments in the railroad company's pilot plant. Trial by Fire. USB then used the treated timber to build railroad bridge replicas for fire tests. Tumbleweed was piled under a replica and ignited. The brush burned very fast, generat-
ing temperatures of 1600° to 1700° F., and burned out in 2.5 to 3 minutes. The bridge timbers did not catch fire and were only slightly charred. The test was repeated about six hours later. After two burnngs, char depth on the wood was only 1 / 3 2 to 1 / 8 inch. USB plans to repeat the burnings on the same bridge replicas periodically to see how long they will take such punishment. Contrasted with the most commonly used fire retardants for wood, organic phosphates, the Emulsibor-treated timber endures higher temperatures and suffers less char, USB says. And the cost via the Emulsibor process is only 25 to 30% of the cost of using organic phosphates. A good fire retardant is no small matter to railroads. They have been looking for an effective, economical material for at least a decade. USB thinks it has what they want and sees a ready market in timber and lumber for railroad bridges, trestles, snowsheds, roundhouses, and other structures. Few railroads have their own wood treatment plants, so USB will have to sell them on demanding Emulsibor-treated wood from their suppliers. Other Markets. Beyond the railroad market, long range prospects are considerable. In 1961, about 150 million cubic feet of wood got the preservative treatment. This figure excludes railroad ties, which are not candidates for fire retardants. But other applications—such as poles, lumber and timber, fence posts, piling, and cross arms—are potential outlets. Urban buildings might be a big outlet eventually. Many of the homes destroyed in last year's fire in the Bel Air district of Los Angeles burned from the top down after windborne embers ignited the shingle roofs. The fire also ignited a controversy that may yet result in building restrictions barring shingle roofs in certain areas. If Firebrake-T works well on shingles, it could be the answer. USB won't forecast what the immediate market might be for the new entry, except to say that it is expected to be "substantial." The long range market depends on educating the public on the benefits of the treatment.
the grant would further the national security or foreign policy of the U.S. Blasts Big Business Critics. Earlier in the conference, one of the country's top antitrust authorities levied a broadside at ivory tower economists who preach antibigness policy toward business. Professor S. Chesterfield Oppenheim, of the University of Michigan School of Law, says that professional economists "do a disservice to antitrust" by espousing theoretical approaches which set limits on business size or market s h a r e s theories which, in the professor's words, "cannot be translated into practical and realistic conceptions of competition compatible with progress in the kind of economic society in which we actually live." "There is more danger to antitrust in an American growth economy in this antibigness economic doctrine than in the dangers of bigness these critics allege to exist," he believes. Statutory curbs, according to Professor Oppenheim, would destroy incentive and spirit to compete for more business as an enterprise approaches the permitted legal maximum. Without incentives to grow beyond a legally prescribed ceiling, an enterprise would have little inducement to improve products, to lower costs, and keep prices down at a good profit rate. "Legal limits on size or market shares would thus tend to make big business act like tranquilized monopolists -rather than vigorous competitors," he believes. Such an antitrust policy would not be practical either from a legislative or an administrative standpoint. Economists themselves admit that economics is not an exact science, he claims. They disagree among themselves on every phase related »to evaluating big business in the structure of an industry or market. "There are glaring gaps not only in economic facts but in the meaning of the facts that are known," he says. "This certainly calls for humility rather than dogmatic hypotheses about the 'curse of bigness/ " he concludes. Interpretations of the Sherman, Federal Trade Commission, and Clayton acts—all related to the common goal of maintaining effective competition—have not been based on the one principle that small business tends to promote public welfare, while big business tends to injure it, he points out. And he believes that there is no need for any basic, substantial revision of existing antitrust laws. 32
C&EN
MAY 2 8, 1962
USB Markets New Borate Fire Retardant Emulsibor process using Firebrake-T flameproofs wood in one-step preservative process U.S. Borax and Chemical came up with another application for borates as fire retardant materials last week with the introduction of Firebrake-T. To be used in the company's Emulsibor process, the "special borate mixture," as USB calls it, is intended for treating lumber and timber as part of the one-step process now used to preserve wood. Immediate market for the new product is for structures along railroad rights-of-way, but the potential market is much larger. The use of borates as fire retardants isn't novel. Aside from fighting forest fires, borates have been used for some time to treat fiberboard, cotton, paper, cloth, wood products, and other materials used indoors, away from conditions that might leach out the watersoluble chemicals. In the Emulsibor process, on the other hand, petroleum oils—a part of the emulsion—seal in the borates and keep them from being dissolved out by rain. USB will sell Firebrake-T to wood treatment plants, which will use it in an emulsion with chemical mixtures normally used to preserve wood—creosote, petroleum oils, and pentachlorophenol, for example. Processors can use the same pressure, temperature, and treatment times they use in their preservative treatments. USB says the process is a singlepass treatment that does everything at once with a minimum of extra effort. Customers will be able to buy USB's borate mixture alone and add an emulsifier themselves or with an emulsifier included. USB's development of the product started about three years ago, when? Maurice H. Pickard, director of market development, interested a major western railroad in its possibilities. At U.S. Borax Research, Sam Draganov and Dr. Carl Randolph worked out the best way to make a stable borate emulsion and to impregnate wood with it. Encouraging lab tests on treated panels led to large scale treatments in the railroad company's pilot plant. Trial by Fire. USB then used the treated timber to build railroad bridge replicas for fire tests. Tumbleweed was piled under a replica and ignited. The brush burned very fast, generat-
ing temperatures of 1600° to 1700° F., and burned out in 2.5 to 3 minutes. The bridge timbers did not catch fire and were only slightly charred. The test was repeated about six hours later. After two burnngs, char depth on the wood was only 1 / 3 2 to 1 / 8 inch. USB plans to repeat the burnings on the same bridge replicas periodically to see how long they will take such punishment. Contrasted with the most commonly used fire retardants for wood, organic phosphates, the Emulsibor-treated timber endures higher temperatures and suffers less char, USB says. And the cost via the Emulsibor process is only 25 to 30% of the cost of using organic phosphates. A good fire retardant is no small matter to railroads. They have been looking for an effective, economical material for at least a decade. USB thinks it has what they want and sees a ready market in timber and lumber for railroad bridges, trestles, snowsheds, roundhouses, and other structures. Few railroads have their own wood treatment plants, so USB will have to sell them on demanding Emulsibor-treated wood from their suppliers. Other Markets. Beyond the railroad market, long range prospects are considerable. In 1961, about 150 million cubic feet of wood got the preservative treatment. This figure excludes railroad ties, which are not candidates for fire retardants. But other applications—such as poles, lumber and timber, fence posts, piling, and cross arms—are potential outlets. Urban buildings might be a big outlet eventually. Many of the homes destroyed in last year's fire in the Bel Air district of Los Angeles burned from the top down after windborne embers ignited the shingle roofs. The fire also ignited a controversy that may yet result in building restrictions barring shingle roofs in certain areas. If Firebrake-T works well on shingles, it could be the answer. USB won't forecast what the immediate market might be for the new entry, except to say that it is expected to be "substantial." The long range market depends on educating the public on the benefits of the treatment.
AEC Head Glenn T. Seaborg Proposes multi-purpose reactor
AEC Expands Program Adds projects to allay Congressional criticism The Atomic Energy Commission has come up with an expanded program designed to meet Congressional criticism. The new program, unveiled at hearings on AEC's authorization for fiscal 1963 before a subcommittee of the Joint Committee on Atomic Energy, includes $20 million for a dual-purpose reactor to generate electricity and steam for process heat, $10 million for design studies leading to prototype power plants with new types of reactors, and design assistance to encourage industry to build large plants of types now in operation. The AEC's proposed program for fiscal 1963 drew sharp criticism from JCAE at hearings earlier this year on the state of the atomic energy industry. Principal target of committee criticism was a slowdown in the civilian power reactor program. The new proposal seems to have taken some of the edge off Congressional ire, but chances are that JCAE will add some more projects to AEC's /proposal. At the hearings, subcommittee chairman Sen. John Pastore (D.-R.I.) said: "The new bill incorporates some improvements over the January draft, I
am happy to say. Perhaps during subsequent consideration by the joint committee and Congress, we will be able to make some further improvements to the AEC program." Process Heat. Proposals for building reactors to furnish low-pressure steam for chemical processing have been in the AEC program for a number of years but have never been accepted. An earlier proposal to use an atomic reactor to furnish heat for a government saline water conversion plant in California fell through because of safety problems connected with the plant location. And last December, AEC axed a $4 million proposal for an experimental process heat reactor as a result of an Administration economy drive (C&EN, Dec. 4, 1961, page 2 7 ) . However, AEC thinks that the outlook for the new proposal is favorable. The $20 million project would be built at the Filer City, Mich., plant of Packaging Corp. of America. The organic power reactor would have a capacity of 160 thermal megawatts; 27 megawatts of electricity would be generated for use on the plant site and the balance of the output would generate steam for pulp and paper processing. According to AEC Chairman, Dr. Glenn T. Seaborg, the proposed reactor will do three things. First, it will be a prototype for a contemplated organic reactor power plant of 300 electrical megawatts capacity. Second, operation of the reactor will provide needed data and experience on which to evaluate the organic cooled and moderated reactor for central station power generation. Third, the project will demonstrate the capabilities of an organic reactor in providing process steam for industrial use. Packaging Corp. has submitted a tentative proposal to AEC covering the process heat reactor and AEC expects to receive a firm proposal from the company in the next few weeks. Rep. Chet Holifield (D.-Calif.), chairman of JCAE, hails the process heat proposal as a promising step forward. In his opinion this could serve as the pioneer move in developing large atomic plants to furnish process heat for the chemical industry. Food Irradiation. The joint committee has been deeply disturbed by the cutback in spending for development work on food irradiation (C&EN, March 10, page 2 9 ) . But AEC's new proposal still contains only $500,000 for research on food irradiation, the
same amount that the committee sharply criticized at earlier hearings. Dr. Seaborg says AEC will carry on the food irradiation program vigorously within the budget limitation, but this did not impress the subcommittee. Chances are that the subcommittee will expand AEC's authorization to include more money for food irradiation. Most likely move is a suggestion of Rep. Melvin Price (D.-Hl.) to add $600,000 for a marine products irradiation center and $650,000 for portable food irradiators.
Emerging Nations Offer Key to Economic Future The key to the long-term economic future of the U.S. lies more in her ability to compete with Europe in the newly emerging markets of Latin America, Africa, and Asia than in the European markets, says Richard W. KixMiller, executive v.p. for international operations, Celanese Corp. of America. "My own view is that we are all a little hypnotized by the astounding growth and early success of the (European) Common Market—so much so that we may be tending to neglect the longer term consequences of Europe's coming challenge to our world trade leadership," said Mr. KixMiller, speaking at the 46th annual meeting of the National Industrial Conference Board in New York City. Medium-term prospects for increased U.S. exports to ECM look good, if a high tariff wall isn't erected against us, Mr. KixMiller feels. But a foreign producer is always at a disadvantage competing with an efficient domestic industry. Western Europe will eventually become as self-sufficient in manufacturing as the U.S. is. So, in the long run, direct U.S. exports of standard manufactured and semimanufactured goods to the European Common Market will taper off, Mr. KixMiller says. In another decade or so, these exports will consist mostly of specialty items, and a few basic raw materials, he feels. At the same time, the markets of Latin America, Africa, and Asia will be coming of age. The Latin American market alone, for example, in 40 to 60 years could equal the combined markets of Europe and the U.S. today, Mr. KixMiller says. And Europe knows this as well as we do. Thus, tariff cutting is useful in the MAY
2 8, 1962
C&EN
33
short run. But the way to gain a permanent stake in ECM and other world markets is to invest in these markets—exporting know-how, management, and capital. This is the long-term answer, Mr. KixMiller says. Mr. KixMiller doesn't feel that the proposed Trade Expansion Act of 1962 is adequate or "even satisfactory as a short-range expedient." And he believes that the Administration's proposed tax treatment of U.S. firms' foreign income will discourage the capital investment overseas that he considers so vital.
BRIEFS Atlas Chemical Industries has formed a new aerospace components division to build and operate a plant for making precision miniature ignition and actuating devices for missiles and space vehicles. The plant, to cost more than $1 million, will go up at Valley Forge Industrial Park near Philadelphia. The new division, an outgrowth of the ordnance material department in the Atlas explosives division, will also operate the Reynolds ordnance plant at Tamaqua, Pa. Ground will be broken for the new plant in the third quarter of this year. Completion is scheduled for the end of the year.
Merck has won a $100,000 judgment against Caesar C. Bottone and Panmed Pharmaceuticals, Inc., Fort Lee, N.J., for continued infringement of Merck patents on vitamin B 1 2 . The consent judgment was handed down in the U.S. District Court in Newark. The judge found Mr. Bottone and Panmed in contempt of a consent decree and permanent injunction entered in the same court on March 6, 1961. In the 1961 case, Panmed and its president, Mr. Bottone, admitted infringing the patents and agreed to stop selling vitamin B
12-
European Common Market tariffs will go down by another 10% on July 1. Intra ECM custom duties will then be 50% below their level on Jan. 1, 1957. Originally, a 50% total reduction was not planned until Jan. 1, 1965. On the common external tariff, the reduction of 30% in the difference between national rates and the common tariff, scheduled for the end of 1965, has been brought forward to July 1, 1963. 34
C&EN
MAY 2 8, 1962
Ingram-Bloch Corp. has been formed to make and distribute petroleum polymers. The newly formed company brings together the Ingram family interests in the petroleum, transportation, electronics, and investment fields with those of Maurycy Bloch, president of the new firm. Executive offices are in Nashville, Tenn.; sales offices are in New York.
Federal Chemical Co., a division of National Distillers and Chemical, plans to acquire Kingsbury and Co., Inc. Kingsbury makes superphosphates and granulated fertilizers at plants in Indianapolis and Peru, Ind. It sells its output in Indiana. The merger brings the number of Federal's fertilizer plants to 13.
NEW FACILITIES Diamond Alkali has completed an expansion of its vinyl chloride monomer plant at Deer Park, Tex. The expansion doubles the plant's capacity to 100 million pounds per year.
Tennessee Eastman is building a new plant at Kingsport, Tenn., to make methyl isobutyl ketone and methyl isoamyl ketone. Capacity for production of the two ketones will be about 20 million pounds per year. The plant should go on stream this December. Eastman Chemical Products will market the two chemicals.
Miles Laboratories, Inc., has dedicated its new $4 million research lab at Elkhart, Ind. To be called the Charles S. Beardsley lab, in memory of the late president of the company, it will be used initially for research on basic medical science and chemical therapeutics and for the research work of Ames Co., Inc., a Miles subsidiary. Miles has also recently completed new labs in Stoke Poges, England, and Mexico City.
Continental Oil has completed an expansion of its research complex at Ponca City, Okla. The expansion doubled the size of the company's main research lab and added a new service building. Conoco says it has invested about $8.5 million in the complex since 1950.
Armour Pharmaceutical Co. has built a new pilot plant and synthetic organic laboratory at its Kankakee, 111., plant. Armour says the new building marks the beginning of its program to make its own synthetic organic chemicals.
Warner-Lambert has completed a $4.5 million addition to its Warner-Lambert Research Institute at Morris Plains, N.J. The expansion nearly tripled the company's research facilities.
American Metal Climax has completed its $7 million potassium nitrate and chlorine plant (C&EN, July 11, 1960, page 21) at Vicksburg, Miss. The plant uses a new process involving the treatment of potassium chloride with low-grade nitric acid to make potassium nitrate, for fertilizer and other uses, and salable amounts of chlorine. The company's Southwest Potash division will operate the plant, using potash from Southwest's reserves near Carlsbad, N.M.
Chemetron is setting up a new research and development laboratory named Hilltop Laboratories near Rochester, N.Y. The new unit will do work pointed toward entrance of the company into new fields, such as solid state electronics for process control, ultrasonics, and microwaves.
Standard Oil of California's research arm, California Research Corp., will build a new five-story laboratory and office building at Richmond, Calif. The new facility will house 350 employees when it is completed late in 1964. California Standard also plans to build a 21-story office building, scheduled for completion in mid-1965, in San Francisco.
Allied Chemical will build its West Coast toluene diisocyanate plant at Oxnard, Calif. Capacity will be 15 to 25 million pounds per year (C&EN, July 3, 1961, page 2 7 ) . Construction, due to start in the next several months, will be completed 12 to 15 months after start. Output from the plant, together with the tripled capacity of the firm's Moundsville, W.Va., plant, will bring Allied's total TDI capacity to the 40 to 50 million pound-a-year range.
