some 40 societies. Among those societies that turned down endorsement of the guidelines were the American Chemical Society, Society of Automotive Engi­neers, American Institute of Architects, American Institute of Mining and Me­tallurgical Engineers, and American In­stitute of Aeronautics and Astronautics.

ACS declined to endorse the inter-society guidelines because they were not as strong in some ways as the ACS Guidelines for Employers. At the meet­ing of the ACS Board of Directors in Dallas last month, the Board voted on recommendation of the ACS Committee on Public, Professional, and Member Relations to endorse the recommenda­tion of the Council Committee on Pro­fessional Relations that the intersociety guidelines "not be endorsed until they have been suitably modified to incorpo­rate the stronger features of those guide­lines and the ACS Guidelines for Em­ployers" (C&EN, April 23, page 2).

Dr. Leibson rejects the idea that the intersociety guidelines are weak. He says that ACS is taking a militant posi­tion in its one-way document (the ACS guidelines). He claims that the inter­society guidelines (or "unity guidelines" as he calls them) represent the best con­sensus that could be developed among so many societies and organizations. The ACS guidelines, he says, are not guidelines but rather are a set of mini­mum standards the employer must ob­serve. Dr. Leibson believes the em­ployer-employee relationship should be two-way.

The intersociety guidelines present a conflict for some employed profes­sionals. Chemical engineers, in particu­lar, face a conflict since many of them belong to the American Institute of Chemical Engineers and the American Chemical Society. Asked how the chem­ical engineer who is a member of both organizations might resolve this conflict of which set of guidelines to adhere to, Dr. Leibson said that each person must make a choice, but that one set of guide­lines (ACS) has the backing of only about 100,000 professionals, whereas the intersociety guidelines have the support of more than 500,000 professionals.

Dr. Slowter says that the guidelines will be under continuous review. He also feels that many more societies and organizations will ultimately endorse them, including ACS.

Good news abounds at annual meetings Chemical company officials have ob­viously enjoyed talking with stock­holders this year. After a first quarter in which both sales and profits overshot most forecasts, they have had the happy task at annual meetings of explaining just how big their boom actually is. Their only disagreement has concerned not whether sales and earnings will in­crease but at what rate the advance will

Siverd: improvement will continue

continue. At the same time, numerous companies have been able to disclose increased dividends, to describe plans for new plants in the face of a sudden ca­pacity squeeze, and even suggest that rewon affluence has breathed new life into a major recession casualty, research and development.

The bulls for the year were led by the company with the biggest ongoing dollar gain, Du Pont. Having posted a whop­ping first-quarter sales jump of 19%, or just under $200 million, over first-quarter 1972, Du Pont sees daylight ahead.

"The outlook for the remainder of 1973 suggests that this will almost cer­tainly be a record year for Du Pont," says chairman Charles B. McCoy. "The longer term can be equally prom­ising, and we approach the future with real enthusiasm."

Business is strong across the board, he continues, with capacity operation in many major lines because of com­bined strength in Du Pont's big mar­kets—textiles, automobiles, housing, appliances, and foreign sales. "We see no reason why this recovery should not extend well into 1974," he says. The present challenge, indeed, "is to respond effectively to the special problems that are inherent in a strong economy rather than the faltering economy of recent years." Of particular note among these problems, to Mr. McCoy, is the poten­tially troublesome cost-push in ma­terials, energy, transportation, taxes, and other nonlabor costs.

Joining Du Pont in the bulls' corner is Stauffer Chemical. After a record first quarter, company vice chairman Roger W. Gunder told shareholders, "Since late last year, I have been estimating that 1973 earnings will surpass last year's figures by a minimum of 10%. The fast start, coupled with prospects for continued growth, has now en­couraged me to revise that forecast to an increase of at least 20%."

Similar optimism comes from Ameri­can Cyanamid and Diamond Sham­rock. In Portland, Me/, Cyanamid chair­man Clifford D. Siverd gave evidence that his company has snapped out of its former earnings plateau. "We have every expectation that the improvement shown in the first quarter [a 22% earn­ings hike] will continue." In Cleve­land, Diamond Shamrock president C. A. Cash said that the company's up-

Sneath: undercapacity problem

turn in chemicals should ride through the year on strong demand, firm prices, high operating rates, and efficient new plants.

Two other companies in the 20% club for earnings growth are Olin and Mon­santo. However, both advise some cau­tion for the rest of the year. Olin presi­dent James F. Towey notes that his company's expected earnings gain of at least 20% this year assumes that "this superheated economy may let off some steam later in the year."

In St. Louis, Monsanto chairman Charles H. Sommer said that the com­pany will enjoy gains this year of at least 6% in sales and 27% in earnings. He warns, though, that Monsanto's 55% earnings jump in the first quarter cannot be annualized, since agricultural chem­ical sales, a big earnings factor, are con­centrated in the first period.

In New York City, Union Carbide president William S. Sneath told stock­holders that the second quarter is con­tinuing the torrid pace of the first three months, when sales jumped 20% and profits 30%. He adds that although some slowdown is expected later in the year, it should be moderate. Although the outlook beyond 1973 is less clear, he be­lieves that Carbide is in a good position.

In an astonishing turnaround from the situation just a year ago, unforeseen demand has outpaced current construc­tion programs at Carbide. In fact, Mr. Sneath says, during the next several years undercapacity may well become the company's most serious problem.

Other problems striking companies are their own prices and suppliers' prices as well as growing shortages of raw materials and energy. Du Pont's Mr. McCoy says the company's selling price index was still down 1.5% in the first quarter this year from first-quarter 1972. However, this is not as great a slippage as a 3.3% drop for all of 1972. At Monsanto, Mr. Sommer says that selling prices actually helped earnings for the second straight quarter. Diamond Shamrock chairman James A. Hughes feels Phase III price controls will allow some recouping of cost increases, pro­vided competition allows price hikes.

Materials and energy scarcity pro­vided painful asides at many annual meetings. Amid an otherwise improving picture, Celanese president John W. Brooks remarked in New York City, "Short-term future growth in some

May 14, 1973 C&EN 7

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product lines may be somewhat limited by a tightening of raw material sup­plies."

Any crunch from materials has not arrived yet, however. For the moment, meanwhile, chemical firms are happily passing along fruits of their higher cash flow. Dividend increases came to stock­holders at Air Products (an effective doubling), Allied Chemical, Dow, Ethyl Corp., Great Lakes Chemical (the first dividend at all since 1937), Hercules, Mallinckrodt, Nalco, National Starch, Rohm and Haas, Stauffer, Union Car­bide, and Virginia Chemical, among others. Air Products, Dow, Hercules, Mallinckrodt, and Nalco all presented stockholders with 2-for-l stock splits.

Another welcome traditional after­effect of good earnings, a boost for re­search and development, is beginning to surface. Rohm and Haas president Vin­cent L. Gregory, Jr., says that R&D productivity will be important in sus­taining the company's goal of at least an 11% increase per year in earnings per share. The specific new products goal is rising from 10% to 15% of sales in the next few years. This acceleration, Mr. Gregory says, "is the main reason we have decided to double our research effort over the next five years."

INTERNATIONAL

Japan to allow more foreign investment Michael K. McAbee

In what could be called a postfinal change in the rules, the Japanese gov­ernment has shifted its position in the long-vexed dispute over restriction of foreign business operations in Japan. The net effect of a grudging capital decontrol program that was labeled complete in 1971 was, in general, to waive official screening of foreign invest­ment only for new joint ventures with Japanese partners in the same business line, and only if the foreign partner held no more than a 50% share in the venture.

Tokyo's new rules have now dropped the much-criticized 50% norm of lib­eralization (C&EN, May 7, page 7). New firms with any degree of foreign ownership can be set up in most in­dustries, with automatic validation. And for the first time foreigners may buy into going Japanese companies without government restriction. Yet the surprise shown by the foreign busi­ness community in Japan at Tokyo's sudden shift is so far mixed with doubt. The wall is breached, but some wonder whether there are hidden snares within.

Since 1967 the Japanese government has engaged in a slow and cautious re­treat from the concept of an economic Fortress Japan. Before the first round

Continued on page 14

8 C&EN May 14, 1973