Report of the Chemical and Dyestuffs Committee of the American Chemical Society

The Aniline Color, Dyestuff and Chemical Conditions
from
August 1st, 1914,
to
April 1st, 1917.
A series of Addresses and Articles
Compiled by:
I. F. Stone
1917New York Section
November 6, 1914

To THE NEW YORK SECTION, AMERICAN CHEMICAL SOCIETY:

1. At the meeting on October 9, 1914, the chairman of this Section was authorized to appoint a committee to investigate into the feasibility of expanding the chemical and dyestuff industry in the United States and to report to this Section on November 6, 1914.

2. The undersigned committee was appointed October 15 and at once proceeded. It addressed letters of invitation to co-operate to those who have been most active in the public prints in urging expanding of the chemical, and particularly the dyestuff, industry in the United States; further, an invitation was extended to the maker of the motion, which resulted in the appointment of this committee. The assistance from these is nil.

3. A request was addressed to trade publications in the city of New York and to some of the metropolitan dailies; in all nine such publications were requested to publish a suggested notice for the purpose of inviting co-operation; the object of this committee was set forth and request was made that suggestions be mailed to the chairman of this committee. All but one of these publications have complied with that request. No help has been obtained bythis committee from any suggestions mailed to it as a result of this publicity.

4. Your committee has carefully considered all the public suggestions as to methods of improvement and has searched through the governmental regulations of the belligerent nations as to embargo and as to contraband of war, in order to construct therefrom a list of chemicals, inclusive of dyestuffs, which have thereby been shut off from the United States, in the hope of thus being placed in a position to make specific recommendations of value.

5. It can be fairly stated that, in general, the chemical industry of this country is efficiently exploited and is making full use of all the opportunities presented to it under the normal conditions existing prior to the state of hostilities. Some of the chemicals which are imported from abroad are made in considerable amounts in this country as well, and the amount imported under normal conditions depends upon the ordinary normal fluctuations of business conditions both here and abroad. With the stoppage of this foreign supply the domestic production was not at once capable of making up the deficiency, but in a number of instances the American manufacturers have taken steps to increase their capacity, and the strain in the market of those particular things will exist no longer than it will require to extend the manufacturing facilities to the proper extent.

Among these are ammonia salts, barium chloride, barium nitrate, bleaching powder, sodium cyanide, yellow prussiate, sodium nitrite, sodium hydrosulfite, zinc dust.

6. If, however, it be desired and if public necessity requires the introduction of the manufacture of explosives and further chemicals and dyestuffs into our home industry, such as coal tar product explosives, pharmaceuticals, medicinals and other intermediates and finished coal tar dyes, then alterations of our tariff law are inevitable, and the consumers in the first place and the public in general must share in the burden thus imposed. If conditions of national defense in case of attack by a foreign power require us to manufacture our own explosives, and to be in that regard independent of all foreign nations at all times, or if our textile industries or any other of our industries requiring coal tar chemicals, such as dyestuffs, shall forever be protected and made independent of foreign nations for the supply of those materials, then the nation as a whole must bear the burden incident to such expansion. Under existing circumstances private enterprise and private capital have gone their limit. They have reached the limit for two reasons:

I. The explosive, dye and similar industries abroad, just referred to, are in a state of high development and of refined organization, and are financially the best suited to carry on an offensive campaign against any nation attempting to take business away from them.

II. Domestic manufacturers are prohibited by law from making use of co-operative commercial devices, such as pools, trusts, manufacturing and selling agreements, and the like, whereas such devices are wholly lawful abroad and are encouraged by the respective governments. In other words, the American chemical industry is expected to cope with the foreign industry while both its own arms are tied behind its back and its opponents have full and free use of their arms.


ANTI-DUMPING CLAUSE

7. The remedies required would be an effective antidumping clause that would certainly prevent underselling of domestic manufacturers in the United States by unfair methods. What the form of such clause shall be is a problem with which your committee is unable to cope; it is strictly a law-making and law-enforcing problem, and is allied to the usual problem of determining undervaluation as heretofore carried on by our Treasury Department; it, however, is a much more refined problem than the older problem of proving undervaluation. Nevertheless, your committee believes that with such a mechanism in our law that much would be done toward encouraging our chemical industries. 


TO CREATE COAL TAR CHEMICAL INDUSTRY

8. According to the best information that your committee can gather, such an anti-dumping clause alone would not be sufficient, however, to create complete and independent domestic coal tar explosives, dyestuffs and medicinals industries. It has been conclusively demonstrated during the past thirty years that the present tariff rate of 30 per cent on dyestuffs is not sufficient to induce the domestic dyestuff industry to expand at a rate comparable with the consumption of dyestuffs in this country, and that therefore all dyestuffs made from coal tar, whether they be aniline dyes or alizarin, or alizarin dyes, or anthracene dyes or indigo, so long as they are made in whole or in part from products of or obtainable from coal tar, should all be assessed alike, namely, 30 per cent ad valorem plus 7½ cents per pound specific, and that all manufactured products of or obtainable from coal tar, themselves not dyes or colors and not medicinal, shall be taxed 15 per cent ad valorem and 3 3/4 cents per pound specific.


TARIFF TO AID DYE INDUSTRY

9. The best information and judgment your committee can obtain is that the above mentioned products of coal tar, not dyes and not colors and not medicinal, should carry one-half the duty of the finished coal tar dye and that the above rate of 30 per cent ad valorem and 7½ cents specific would probably be sufficient to encourage and enable domestic manufacturers to expand their operations to such an extent as to supply a very material increase in, if not the whole, of these commodities consumed in this country. The reason for a specific duty is to protect the domestic manufacturer in the manufacture of the relatively cheap dyes, such as the cheap scarlets, the cheap yellows and the like, whose prices abroad are in the neighborhood of from 12 cents to 20 cents per pound. With dyes of that type 30 per cent ad valorem would not offer so serious an obstacle to importation and underselling thereof as does the 7½ cents per pound specific; on the other hand, on dyes whose prices are $1 and upward per pound the function of the 7½ cents specific more nearly approaches zero. That is, with the cheap dyes the chief function lies in the specific portion of the duty, and with the expensive dyes the chief function lies with the ad valorem portion of the duty.

This is said to be the price the nation will have to pay to have a complete self-contained and independent coal tar chemical industry. However, it must be remembered that if such an industry be created and importation of coal tar products, inclusive of intermediates and dyes, is restricted, its ultimate effect upon the Federal revenues will have to be considered. It will, therefore, be necessary to determine carefully if the advantages to be gained are equal to the price to be paid.


PATENT LAWS

10. This committee is a unit in the belief that an alteration of our patent laws aiming at compulsory working or compulsory licensing would not be any substantial benefit to this industry or to the country as a whole. Twenty-nine countries have attempted compulsory licensing clauses and fifty-six countries have attempted compulsory working clauses, and the best information your committee can obtain is that in none of these attempts has there been any appreciable measure of success. While it may be true that under extraordinary conditions, such as now exist, compulsory licensing might have some advantage, yet it is equally true that in normal times the disadvantage due to compulsory licensing or compulsory working would more than overbalance any advantage at all likely to be obtained under stress of unusual conditions.

11. In none of the countries where there have been working or licensing clauses, or both, co-extensive with the existence of the coal tar chemical industry has there been established any real coal tar chemical industry, and your committee does not feel that an alteration in our present patent laws could be made which would be effective against foreigners and at the same time not be onerous and a hardship to domestic inventors. Your committee believes that in the long run and, in the final outcome, our present system with regard to working and licensing is as efficient as that of any other country. In the dyestuff industry in particular there are so many non-patented commercial products and so many commercial products once patented now free from patent restraint that their production alone would form a basis for a very considerable industry, and your committee feels that the way to encourage that industry, if the establishment of that industry in this country be a national necessity, is through a change in the tariff and the additional anti-dumping feature in the administration of the tariff and not through any change in the patent laws. Once established, such an industry could develop and ultimately cope with any foreign combination upon fair and equal terms. Over 90 per cent of the tonnage and of the individual dyes used in the United States will be free from any patent restraint within the next four years; over 75 per cent of the dyes are now in that condition.


AVAILABILITY OF RAW MATERIALS

12. The best information your committee has so far been able to gather is that this country can produce so-called coal tar raw material in amounts sufficient for the needs of a complete domestic coal tar chemical industry, inclusive of explosives and dyes, provided there is a certainty of outlet as to volume and continuity. Those engaged in manufacture here do not want to expand unless the dyeusers are willing to make corresponding contracts. In other words, it is a closed circle. If the dye-users will contract sufficiently with the dye-makers, the dye-makers will contract with the coal tar distillers and the industry will take a start. The initiative rests wholly with the users; if they cannot afford to contract the dye-maker and the distillers cannot afford to make their contracts and additional investments.


COAL TAR PRODUCTS

13. Benzol, toluol and the like are produced in sufficient amount in present installations of by-product coke ovens to provide all of these things that would be needed for a coal tar chemical industry of a magnitude sufficient to supply the United States market; the separation of these materials from the gas that carries them is dependent upon the market and the demand therefor. There is no inherent defect in our coke industry with regard to the actual making of these things; the only question involved is whether it be more profitable to burn the benzol, toluol and the like contained in the gas as a fuel than to separate them and from each other for purposes of sale. Ample supply can be provided before any plant that could use benzol and the like for dyestuff making could be erected in the United States and thereafter the supply of these materials can readily be kept up to any requirements.

14. The materials of the preceding paragraph are the ones used in the coal tar explosives industry, as well as in the coal tar medicinals and dyestuffs industries. Each of these three industries co-operates with the others to make full use of those materials, alone none can fully make use thereof nor succeed; the correct and proper utilization of these materials requires successful co-existence of all three industries in one and the same country.

15. Naphthalene and anthracene are contained in the tars produced in the United States in an amount sufficient for the needs of a domestic dyestuff industry, and it is merely a question whether it is more profitable to leave them in the creosote oil, where they now occur, or to separate them out of such oil and refine them for purposes of dye manufacture. Ample supply of either of them could be produced and provided at the same time or shortly after any plant could be erected in the United States for the use of these things in the production of dyes.

16. What has been said with regard to the supplies of naphthalene is also true of the supplies of creosote.

17. All the creosote oil contained in the total amount of coke oven tar now made is separated from it and used. Increased production of creosote oil requires a greater production of tar, and a greater production of tar is dependent upon increased installation of recovery coke ovens.

18. Phenol or carbolic acid supply is primarily dependent upon our deliberately selected method of coal treatment; to change that treatment so as to get more phenol would entail abandonment of other advantages which would not be compensated for by the increased amount of phenol so produced. Under present circumstances freights and haulages play an important part. At isolated plants, separated by considerable distances from each other, small amounts of phenol are produced, and the separation of the phenol at such individual places would be economically unprofitable, and in order to concentrate this amount of phenol to or at a point where separation could be conducted profitably would entail freight haulages much in excess of the value of the phenol that would thus be transported.

19. The only source of phenol in sight is that produced synthetically from benzol by means of sulfonation and subsequent melting with caustic soda; this depends in turn upon our benzol supply, and would be profitable only so long as the United States market is not killed by the dumping of foreign phenol thereon, whether such phenol be synthetic or distilled.

20. Salicylic production depends upon availability of phenol, and the production of benzoic acid depends upon the availability of toluol, which has heretofore been discussed.

21. Phthalic acid made from naphthalene by means of bichromate cannot successfully compete with the mercury and sulfuric acid process, which is protected by patents having about three years more to run.


MISCELLANEOUS CHEMICALS AND RAW MATERIALS

22. Acetic anhydride can be made without trouble in this country, and will be made in this country so soon as the domestic demand is large enough and steady enough to warrant the installation of a suitable plant.

23. Nitric acid. All countries with the exception of possibly Norway and the countries importing from Norway are dependent upon Chile for raw material for making nitric acid. It will not be profitable to make nitric acid from air in the United States until the value of the electric horse-power reaches a level of $3 or $4 a year, as it is in Norway.

24. Ammonia and its salts all depend upon recovery coke ovens, and such recovery plants are increasing as fast as circumstances will permit.

25. Barium chloride and other compounds of barium may be made from domestic barytes. A number of attempts have hitherto been made, but with indifferent success. Factories established within the last year promise to be successful.

26. Magnesium chloride of a sufficient purity to be used in the production of flooring is almost generally made from magnesite found in Greece, which is the only deposit known having sufficiently high purity. There are reports of suitable deposits in California and in Lower California, and with the completion of the Panama Canal the question of freights, which seems hitherto to have stood in the way of developing these deposits, may be eliminated. Other sources, less remote from centers of consumption, and using other materials, e. g., brine waste, are about to be successfully operated.

27. Manganese in the form of pyrolusite is not known to occur in paying deposits in the United States; these are practically all in the Caucasus.

28. Potash. In view of the great exertions that have been made for a number of years, both on the part of the Federal Government through a number of its departments and a great many different groups of capitalists, there is nothing to be said in this report that would be of any value with regard to increased production of potash either as fertilizer or as a chemical.

29. Yellow prussiate and sodium cyanide can be and have been made from domestic materials in such an amount as to provide practically the entire consumption or a great portion thereof in this country so long as there was a sufficient duty on them; the present duty is not enough to protect the American manufacturer, and those who were engaged therein have in large measure withdrawn from the business, but some are reported to be taking up manufacture cautiously and in limited amount.

30. Hydrosulfites in solution can be made from domestic materials without interference with any patent rights; the production of solid salts and derivatives are, however, still protected by patents that have a few years more to run.

31. Sodium nitrite is produced more cheaply as a byproduct in Norway than it can be produced anywhere in the world; unless the price of the electric horse-power in this country sinks to a $3 or $4 level per year, as in Norway, this product cannot be manufactured in the United States.

32. Oxalic acid is and has been made to some extent in this country, and the information coming to your committee is that suitable efforts are being made to expand the capacity of existing plants. 33. Tartaric Acid and Citric Acid. To make this country independent of others with respect to tartaric and citric acid would call for radical changes on the part of our grape growers and our lemon growers as to the policy of their business.

It is probably true that edible grapes do not produce argols (the crude material for tartaric acid) very largely, and that our domestic lemons do not produce as large yields of juice (the crude material for citric acid) nor as high an acidity as do the Italian lemons; therefore an independent supply of the raw materials produced in the United States for tartaric and citric acids is in the first instance an agricultural problem, and in the second instance a market problem.


GENERAL REMARKS

34. Finally, it should be pointed out that the United States is by no means the only country whose chemical and allied business has been strained or upset by the European War. Each and every other country has felt the strain. British committees have gone into this same subject of expanding British chemical industries, and not only that, but also into the question of making their very basic necessities, and the reports have so far been adverse to any immediate relief by domestic manufacture. The Boston Chamber of Commerce, through its committees, has arrived at the same conclusions for this country.

35. It is further clear that the stability of a complete domestic chemical industry, insofar as it depends upon foreign supplies, is bound up to a successful merchant marine and to an efficient foreign banking condition just as is all our foreign business.


FINDINGS

36. Your committee finds as follows, as to the facts:
I. Prior to the hostilities domestic chemical industry was utilizing and exploiting every reasonable opportunity to its full extent.
II. Since the outbreak of hostilities domestic industry has increased its output just as fast as physical means could be provided and physical obstacles overcome.
III. Since the outbreak of hostilities domestic plants that had theretofore been shut down or partly dismantled because of disastrous foreign competition are said to have resumed operation, with caution.
IV. That a 30 per cent duty on some coal tar dyes for over thirty years has not produced a real coal tar dye industry in this country.


CONCLUSIONS

37. Your committee submits its conclusions as follows:

A. To prevent the unfair underselling alleged to be practiced by foreigners in this country, the adoption of an effective anti-dumping clause.

B. The so-called coal tar "intermediates" which are the basis of the coal tar chemical industry, inclusive of explosives, medicinals and dyestuffs, should be assessed one-half of whatever the finished dyes are taxed for tariff purposes; all coal tar dyes without exception to be taxed alike, namely, 30 per cent ad valorem and 7j^ cents per pound specific.

C. Changes in the patent laws such as by compulsory licensing or compulsory working clauses are wholly ineffective, do more harm than good and should not be attempted.

Your committee recommends that this report be submitted to the appropriate committees of Congress. Further, that this report be forwarded to interested organizations.

Respectfully submitted,
BERN HARD C. HESSE, Chairman.
J. B. F. HERRESHOFF.
H. A. METZ.
I. F. STONE.
D. W. JAYNE.
J. MERRITT MATTHEWS.
ALLEN ROGERS.

[Editorial from the Oil, Paint and Drug Reporter, November 9, 1914]


THE DEVELOPMENT OF OUR CHEMICAL AND DYESTUFF INDUSTRIES
The exceptional opportunities for the development of the chemical and dyestuff industries in this country since the war forced the realization of the extent of our dependence upon foreign sources have been the occasion of widespread publicity, most of which has been of a superficial and chimerical character, and it was not until a meeting of the New York Section of the American Chemical Society on October 9 that the subject resolved itself into concrete and tangible form by a consideration by the best representative trade and expert interests of the questions involved in the attainment of the desired ends and the appointment of a committee to study the various conditions and to report the results at a meeting scheduled for last Friday night. The personnel of the committee bespeaks the most convincing and creditable accomplishment of its purpose, consisting of such well-known representatives as Bernard C. Hesse, chairman; J. B. F. Herreshoff, H. A. Metz, I. F. Stone, D. W. Jayne, J. Merritt Matthews and Allen Rogert, all native citizens of many years' active and intimate associations with both the commercial and technical phases of the chemical and dyestuff trades. Frequent meetings have been held and the research work so systematized that in less than a month the committee was able to prepare its report of such masterly and comprehensive consideration and treatment as readily to constitute the most practical and definite step toward the development in this country of the industries in question. THE REPORTER has been able to obtain a copy of the committee's report so as to present it in full in the current issue, and we urge it for the particular attention and study of our readers concerned in the breaking of our European chemical and dyestuff bondage.

The report treats in logical order the various questions concerned in the establishment of our industries and gives assurance that our natural resources are ample to cover the needs of a complete domestic coal tar chemical industry, inclusive of explosives and dyes, provided there is a certainty of outlet as to volume and continuity which can be assured only by the closest co-operation between the dye-users, the dye-makers and the coal tar distillers, with the initiative on the users. Much stress is laid upon the enactment of an effective anti-dumping clause in the administration of the tariff, to prevent the underselling of domestic manufacturers by unfair methods alleged to be practiced by foreigners. Another specific recommendation is the assessment of a duty on the so-called coal tar "intermediates," which are the basis of the coal tar chemical industry, by one-half of whatever the finished dyes are taxed, and the taxing of all coal tar dyes, without exception, on a uniform basis of 30 per cent ad valorem and 7½ cents per pound specific, since the experience of thirty years had conclusively demonstrated that the present rate of 30 per cent on dyestuffs was not sufficient to induce the domestic dyestuff industry to expand at a rate commensurate with the country's consumption. Once established through a change in the tariff and the additional anti-dumping feature, the industry could develop and ultimately cope with any foreign combination upon fair and equal terms.

The subject of patent laws in the relation to the development of more capable home industries is convincingly treated and the conclusion of the committee is emphatic that proposed changes in the law such as by compulsory licensing or compulsory working clauses are wholly ineffective and are calculated to work more harm than good.


The committee's report covers so thoroughly and convincingly every phase of the subject entrusted to its care that definite action on the conclusions would seem to be in order without further research work. The committee takes the further step of recommending that the report be submitted to the appropriate committees in Congress, as well as forwarded to the interested organizations in the country. The latter can undoubtedly take up the cause from this point and exert their best efforts in helping to perpetuate the work so advantageously launched by the chemical and dyestuff committee of the New York Section of the American Chemical Society.

The authoritative value and significance of this report can be well appreciated by the following outline of the careers of the various members of the committee:

DR. HESSE was for ten years a research chemist with the Badische Aniline and Soda Fabrik at its German works and in New York, and for the last ten years has been a consulting chemist in New York, specializing in coal tar dyes and the patents relating to them. He was a consulting expert to the Bureau of Chemistry, United States Department of Agriculture, in respect to the formulation of the regulations relative to coal tar dyes in foods under the Federal Food and Drugs Act. He was secretary of the Eighth International Congress of Applied Chemistry.

DR. HERRESHOFF, whose family has been prominently identified with yacht building, is one of the pioneer and most successful chemical engineers in the country. He has been engaged in chemical manufacture in and about New York since 1876 and is well known for his successful invention in roasting sulphur-bearing ores, in the manufacture of nitric and hydrochloric acid and of sulphuric acid both by the chamber and contact processes. His method for the electrolytic refining of copper, which is used practically all over the world, has been one of his most notable achievements. He is intimately identified with a great number of leading American chemical undertakings, among them being the General Chemical and the Nichols Copper Companies. He was the first recipient of the Perkin medal, the highest chemical honor in the United States.

MR. METZ is one of the leading representatives of the dye and dye material industry in the United States and at present is at the head of the Farbwerke-Hoechst & Co., formerly H. A. Metz & Co. He is a member of Congress and on the House Committee on Patents.

MR. STONE has been prominently identified with the manufacture of coal tar dyes in this country and is 'president of the National Aniline and Chemical Company, and vicepresident of the Schoellkopf, Hartford & Hanna Co., which, since 1879, has been engaged in the manufacture of coal tar dyes, making the company a pioneer in the industry in the country. Mr. Stone read a valuable paper on the "Development of Coal Tar Colors in This Country" at a meeting of the New York Section of the American Chemical Society on October 9, which was published in full in THE REPORTER on October 12.

MR. JAYNE, as manager of the Barrett Manufacturing Company at Frankford, Pa., has been in close connection with the coal tar industry of the United States for many years. He is the successor of his father, the late Dr. Harry W. Jayne, who was recognized throughout the country as an authority on coal tar and its treatment.

DR. MATTHEWS has been for many years professor of chemistry at the Philadelphia Textile School, and is a wellknown consulting expert to the textile trades. He has specialized in the treatment and dyeing of fabrics and all textile manufactures and is the author of many standard reference and textbooks on finishing and dyeing and coal tar dyes.

DR. ROGERS, as professor of chemistry at the Pratt Institute, Brooklyn, has developed a very practical and thorough system of instruction in industrial chemistry both by lectures and in practical laboratory operations. He is the co-author with Professor Auder of the well-known reference book on "Industrial Chemistry."