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tend to create or maintain a situation inconsistent with the antitrust laws.
The chemicals important to the national security are those which are included in the list for which expansion goals were established by the Office of Defense Mobilization, plus those that may hereafter be authorized by the President.
Senator Douglas. Mr. Robbins, I wondered if you would give us a list of some of the other chemical products which are covered in clauses 1 and 2, running from lines 13 to 19 on page 7! I am informed that this is in the House report.
Mr. ROBBINS. On pages 8 and 9, Mr. Chairman.
Senator Douglas. That is right. I understand that the list on pages 8 and 9 of the House report is merely list 1, and it covers a wide range of products.
Unless there is objection, I shall ask to have this made part of the record. There are 68 different chemicals mentioned there.
Mr. ROBBINS. Yes, sir.
(The list referred to follows:) Acetic acid
Phenol phosphatic fertilizers Acetone
Phosphatic feed supplements Adipic acid
Phthalic anhydride Adiponitrile
Plastics materials Aniline
Potash Anthraquinone vat dyes (single- Quinoline strength basis)
Rubber and rubber products Benzene hexachloride (lindane) 99 per- Sebacic acid
cent or more gamma isomer content Soda ash Butadiene
Sodium syanice Benzene hexachloride (technical grade) Styrene, monomer (including methyl Calcium carbide
styrenes) Carbon, activated (water purification Sulfur and decolorizing grade)
Synthetic fibers, noncellulose Carbon black
Tetraethyl lead Carbon tetrachloride
Titanium dioxide pigment Chlorine
Vulcanized fiber DDT
Benzene Ethyl chloride
Formaldehyde Ethylene glycol
Glycerin Ethylene oxide
Hexamethylenetetramine Ethylene dibromide
Hydrofluoric acid Hexamethylenediamine
Hydrogen peroxide Industrial ethyl alcohol
Lithium compound Iron oxide, yellow (synthetic)
Methanol synthetic Ketone, methyl ethyl
Nitrogen Ketone, methyl isobutyl
Penicillin Maleic anhydride
Pentaerythritol Methyl chloride
Phosphorus, elemental Methylene chloride
Sodium bichromate Naphthalene
Sodium chlorate Octyl alcohols
Sulfuric acid Oxygen, high-purity
Senator Douglas. That is only list 1. Could you furnish for the record list 2; namely, the chemicals for the production of which a material has been determined to be strategic and critical under the Strategic and Critical Materials Stockpiling Act of 1947, or is that subject classified ?
Mr. ROBBINS. No, sir. I think not. We shall be glad to furnish it.
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF DEFENSE MOBILIZATION
OCTOBER 1, 1956. Subject: Current list of strategic and critical materials for stockpiling. Section 1. Purpose
This memorandum is issued pursuant to section 2 (a) of Public Law 520, 79th Congress. The materials as listed herein comprise those currently included in the stockpiling program. It should be noted that all of the listed materials purchased must conform to stockpile specifications but not all of them are under active procurement. Section 2. Group I materials
The materials listed in this section constitute group I and have been or may be acquired through purchase pursuant to section 3 (a) and by transfer of Government-owned surpluses pursuant to section 6 (a) of Public Law 520, 79th Congress. 1. Abrasives, crude aluminum oxide 38. Manganese, battery grade, synthetic 2. Agar
dioxide 3. Aluminum
39. Manganese, chemical grade, type A 4. Antimony
ore 5. Asbestos, amosite
40. Manganese, chemical grade, type B 6. Asbestos, chrysotile
ore 7. Asbestos, Crocidolite
41. Manganese ore, metallurgical grade 8. Bauxite, metal grade
42. Mercury 9. Bauxite, refractory grade
43. Mica, muscovite block, stained A/B 10. Beryl
and better 11. Bismuth
44. Mica, muscovite film, first and sec12. Cadmium
ond qualities 13. Castor oil
45. Mica, muscovite splittings 14. Celestite
46. Mica, phlogopite splittings 15. Chromite, chemical grade
47. Molybdenum 16. Chromite, metallurgical grade 48. Nickel 17. Chromite, refractory grade
49. Opium 18. Cobalt
50. Palm oil 19. Coconut oil
51. Platinum group metals, iridium 20. Columbite
52. Platinum group metals, palladium 21. Copper
53. Platinum group metals, platinum -22. Cordage fibers, abaca
54. Pyrethrum 23. Cordage fibers, sisal
55. Quartz crystals 24. Cotton, extra long staple
56. Quinidine 25. Diamonds, industrial—bort and 57. Rare earths stones
58. Rubber, crude natural 26. Feathers and down, waterfowl 59. Selenium 27. Fluorspar, acid grade
60. Shellac 28. Fluorspar, metallurgical grade 61. Silicon carbide, crude 29. Graphite, Ceylon-crystalline and 62. Silk, raw amorphous
63. Silk waste and noils 30. Graphite, Madagascar - crystalline 64. Sperm oil flake and fines
65. Talc, steatite, block 31. Graphite, other than Ceylon and 66. Tantalite Madagascar-crystalline
67. Tin 32. Hyoscine
68. Titanium sponge 33. Iodine
69. Tungsten 34. Jewel bearings
70. Vanadium 35. Lead
71. Vegetable tannin extract, chestnut 36. Magnesium
72. Vegetable tannin extract, quebracho -37. Manganese, battery grade, natural 73. Vegetable tannin extract, wattle ore
Section 3. Group II materials
The materials listed in this section have been acquired principally through transfer of Government-owned surpluses pursuant to section 6 (a) of Public Law 520, 79th Congress, and constitute group II. None is under procurement. 1. Bauxite, abrasive
7. Optical glass 2. Corundum
8. Rutile 3. Cryolite, natural
9. Sapphire and ruby 4. Diamond dies
10. Talc, steatite, ground 5. Mica, muscovite block, stained B 11. Wool and lower
12. Zirconium ore, baddeleyite 6. Mica, phlogopite block
13. Zirconium ore, zircon Section 4. Effective date This list supersedes all previous lists and is effective immediately.
GEO. B. BEITZEL,
Assistant Director Production Area. Senator Douglas. Can you mention any offhand that would be included
Mr. ROBBINS. No, sir; I could not.
Mr. SHEEHAN. There is only one, as I understand it, under that. It is an acid with a name I do not recall.
Senator DOUGLAS. That is the only one?
Mr. SHEEHAN. Sebacic acid would be the one chemical caught under category 1.
Senator Douglas. I do not want to interrupt Secretary Robbins in his testimony, but the thought naturally occurs to one, which of these sixty-nine-or-so chemicals could this plant, in its present form, be converted to manufacture?
Mr. ROBBINS. I have no knowledge of that.
Senator Douglas. Do your experts have any knowledge on that subject ?
Mr. ROBBINS. No, sir. I know only that one of the bidders for this plant informed us it intended, if it acquired the plant, to spend something like $4 million in conversion and in additional facilities.
Senator Douglas. Mr. Sheehan, do you wish to make a statement as to your knowledge of what the plant could be converted to in its present form in manufacturing this list of 69 chemicals?
Mr. SHEEHAN. No. I would not want to go beyond what Mr. Robbins said. We were told both in the sale negotiations of last spring and in the lease negotiations this fall that the plant as it exists could do nothing but produce alcohol butadiene. That is the designed purpose. But with expansions and changes, which were not made at the time, it could be used for a variety of chemicals in various stages of chemical manufacture.
Senator DOUGLAS. Do I understand in its present form, therefore, that the only chemical that this particular plant could produce would be alcohol butadiene?
Mr. SHEEHAN. That is my understanding.
Senator DOUGLAS. And that extensive refitting would be necessary to have this plant produce any of the 69-or-more chemicals in clauses 1 and 2?
Mr. SHEEHAN. Yes. There would be alterations, additions, and changes needed.
Senator DOUGLAS. And, of course, there is a third clause that if in the future the President, on the request of the corporation prior to its entry into a contract of sale, or upon the request of the plant pur
chaser during the term of the national-security clause--if he should approve it, the President may designate other chemicals which he regards as important to the national defense.
Mr. ROBBINS. Yes.
Senator Douglas. May I ask if, when you speak of the potential purchaser, which I assume is Union Carbide & Carbon, did they confide in you as to what chemical they intended to produce if they purchased the plant and then reequipped it?
Mr. SHEEHAN. I take it the question is relating back to the proposed. purchaser at the time of last summer?
Senator DOUGLAS. That is right. Of course, it will be understood. that that will not be necessarily controlling as of this moment.
Mr. SHEEHAN. That is right.
Mr. ROBBINS. I should like to make it clear that Union Carbide is not the only potential bidder for this plant.
Senator DOUGLAS. I have been assuming it was the bidder to which the counsel referred as having made a bid.
Mr. ROBBINS. That is right.
This has slipped my memory. Why have we not sold this plant before? Why did we not sell it when we sold the other 26?
Mr. ROBBINS. Under the original legislation which covered all of the synthetic rubber plants
Senator CAPEHART. It covered the Louisville plant too.
Mr. ROBBINS. It covered all of the plants in the synthetic rubber program. There was no bid for this plant. Then a special bill was introduced to authorize the sale of this plant and to extend the authority of the Commission to negotiate a sale.
Senator CAPEHART. You mean originally when the other 26 plants were sold, there was no bid on this one?
Mr. ROBBINS. No bid.
Senator CAPEHART. Then we passed another act authorizing you to sell it?
Mr. ROBBINS. Authorizing the Commission to sell it.
Mr. ROBBINS. There were two bids under that legislation-Union Carbide and Publicker-and after extended negotiation a contract of sale was executed with Carbide, and it was disapproved by the Attorney General and by the Congress.
Senator CAPEHART. On what grounds? Just briefly.
Mr. ROBBINS. That ground is covered in my statement if I may get to it. It was not disapproved on antitrust grounds but it was disapproved because of some special language in the law which required the Attorney General to find that the sale of the plant would best foster a free, competitive synthetic rubber industry, and it also required
among the criteria for the sale that the bidder should in good faith intend to operate the plant for the manufacture of butadiene.
Senator CAPEHART. If this plant is sold and they do not make butadiene from alcohol then there will be only one source for butadiene, and that will be petroleum. Is that correct?
Mr. ROBBINS. Yes, except-
Mr. ROBBINS. But there is a great deal of competition in the petroleum butadiene field.
Senator CAPEHART. But other than that there will be no competition between two different kinds of products for the making of butadiene?
Mr. ROBBINS. The Koppers Co., in the sale of other facilities, bought the alcohol butadiene plant owned by the Government at Kobuta, Pa., which has a rated capacity of 80,000 tons of butadiene per annum, equal to or greater than Louisville's capacity. That plant has been kept in standby under the national security clause, and must be kept in standby for 10 years from the time of its purchase, which was 2 years ago. It has not been operated for the manufacture of butadiene since.
Senator CAPEHART. But they have been making other things there in the meantime?
Mr. ROBBINS. I think not.
Senator CAPEHART. And they can only make one thing in it, and that is butadiene from alcohol?
Mr. HOLLAND. And they are spending about $100,000 a line, which is somewhere over $300,000 a year, maintaining it for the security reasons, with the exception of their powerplant which they are using for their other facilities.
Senator Douglas. Did they not perhaps buy it for the sake of the powerplant rather than the capacity?
Mr. HOLLAND. Yes. As we stated in our report.
Senator CAPEHART. In other words, it was a bargain just for the power, and the other part was thrown in?
Mr. HOLLAND. They did not think so, but it was one of those negotiated deals where the cost of this maintenance depressed the amount that they would pay for it. It was the only bid we had.
Senator CAPEHART. Getting back to the Attorney General's decision, the reason why you rejected this other bid was because there was no competition. No competition in what?
Mr. ROBBINS. No. It was not rejected on the basis of competition. It was rejected on the language that required the Attorney General to state affirmatively that this sale would best promote a free, competitive industry.
Senator CAPEHART. A free, competitive industry in what?
producing butadiene by alcohol; is that it?