tend to create or maintain a situation inconsistent with the antitrust laws.

The chemicals important to the national security are those which areincluded 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 widerange of products.

Unless there is objection, I shall ask to have this made part of the record. There are 68 different chemicals mentioned there.

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.

35. Lead

36. Magnesium

67. Tin

68. Titanium sponge

69. Tungsten

70. Vanadium

71. Vegetable tannin extract, chestnut

72. Vegetable tannin extract, quebracho

37. Manganese, battery grade, natural 73. Vegetable tannin extract, wattle

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.

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. So it is 69-plus.

Mr. SHEEHAN. Plus an indefinite number of other chemicals.
Senator DOUGLAS. That is right.

I want to clear these matters up as we go along.

Mr. ROBBINS. Surely.

Shall I proceed?

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.

Senator DOUGLAS. But as an indication of intent.

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.

Mr. SHEEHAN. That is right.

Senator CAPEHART. I would like to ask one question.

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.

Senator CAPEHART. And this Union Carbide bid is a result of that? 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

Senator CAPEHART. And there will be no competition?

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.

Mr. HOLLAND. They cannot, because of the conversion costs.
Senator CAPEHART. They are standing idle?

Mr. HOLLAND. Yes. At $100,000 a line.

Senator CAPEHART. How much did Koppers pay for that?
Mr. HOLLAND. They paid $2 million plus.

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?

Mr. ROBBINS. In synthetic rubber.

Senator CAPEHART. And in his opinion it did not for what reasons? Mr. ROBBINS. In his opinion

Senator CAPEHART. Because it completely eliminated any facilities for producing butadiene by alcohol; is that it?