OUR PRESENT AGENCIES HAVE FUMBLED AND FAILED
By GUY M. GILLETTE, United States Senator from Iowa
Radio address over the Blue Network of the National Broadcasting Company, July 21, 1942
Vital Speeches of the Day, Vol. VIII, pp. 677-681.
THE Evening Star is once more evidencing its alertness to timely topics in the allotment of the Radio Forum time for this evening to the discussion of the Nation's rubber situation, particularly the field of synthetic rubber production. Rarely do our people have before them a problem as vital and, at the same time, a problem concerning which there is so much confusion, misunderstanding, and conflict of statement.
I am grateful that I have been asked to make a brief statement this evening. I do not come as one who possesses any technical training or technical knowledge which would qualify him to express dependable opinions, but as one who has sat for months with the subcommittee of the United States Senate charged with the duty of conducting a thorough investigation of the subject of artificial rubber production. This subcommittee has held more than 100 hours of public hearings. Its members, Senators Norris, McNary, Thomas of Oklahoma, and Wheeler, have met day after day, week after week, and month after month, endeavoring to learn the facts pertaining to the Nation's rubber situation. In the limited time allotted to this broadcast, it is obviously impossible for me to present even the high points of evidence presented in these scores and scores of hours of investigations and discussion. Perhaps then, I can make the best contribution to the general subject by listing facts which are generally accepted by all concerned and then referring briefly to some facts that are in dispute.
At the outset, I wish to deny with all the vehemence of which I am capable, the wholly unjust and wholly unjustified editorial suggestions which have recently appeared in some poorly informed publicity media to the effect that this controversy is a renewal of hostilities of long standing between the Nation's farming interests on the one hand and its great petroleum interests on the other, and that the contest is wholly motivated by selfish enterprises and selfish interests.
I allow myself to indulge in the hope that a few brief statements this evening relative to the national rubber situation may be clarifying and helpful.
This Nation has for many, many years been the world's greatest market for rubber, and has been largely dependent for its supplies on the natural rubber production from the plantations of the Dutch East Indies and the adjacent mainlands. As a consequence, the incursion into and occupation of these areas by the hostile Japanese forces destroyed these sources of supply, as far as our Nation is concerned, almost overnight. Scant indeed were the reserves accumulated in anticipation of such a contingency. This is no time for recrimination or for attempts to accuse anyone of responsibility for this lack of foresight or to ask why precautionary steps were not taken in anticipation of the occupation of these rubber plantations by hostile armies. The fact remains that the situation was not foreseen in time, and the fact remains that the war developments resulting in the control of these areas by the Axis Nations found the United Nations with exceedingly limited reserves. Practically the only reserve stock piles in the control of the United Nations were some quite substantial reserves in the United States in accumulated supplies, plus the very substantial stock pile in private ownership and use on automobiles and trucks. With the exception of the Soviet Union, our war Allies immediately turned to the United States for help, and our limited reserve which might have tided us over a period of shortage if the demand had been limited to our own needs, became entirely inadequate to meet these insistent and expanding demands of the nations allied with us. A careful review of these anticipated needs revealed the unpalatable fact that the insatiable and rapidly expanding demands of the war machine for all available rubber supplies would cause our limited reserves to disappear with almost the rapidity of melting snow. Our responsible agents reached the conclusion, which we all sharetoday, that the United Nations war needs in the succeeding months will require every pound of rubber that we can secure from any source whatever—natural, reclaimed, or synthetic—and some have gone so far as to conclude that even these sources will be inadequate to meet the demands for some time, and that probably there will be no supplies for private use; and some have gone so far as to express the opinion that it may be necessary to confiscate some of the supplies now in private industry.
Feverish interest was at once manifested in every suggestion of supply sources which might alleviate the situation. Tremendous interest developed in supplemental natural rubber supplies—the expansion of the resources of Brazil and other countries of the American Tropics, as well as the study and steps toward the development of new vegetable and plant sources from which natural rubber could be secured. But it was painfully apparent at once that these new or expanded sources would require time beyond the period when our needs would become acute, and while this field is being developed, attention of necessity turned to other possible sources of supply. Consideration turned to the use of scrap rubber, or reclaimed rubber. Extravagant estimates were made of possible recoveries from this source. Estimates ran all the way from 400,000 tons to 10,000,000 tons. A well-conceived campaign was put into effect to secure this scrap rubber within a few weeks' time. Our people responded actively and generously, but the results have been disappointing, and the supplies which the campaign for scrap rubber brought us failed to reach even the minimum figure of estimate up to the date of this broadcast.
Confiscation of the great stock pile in the hands of American motorcar owners became unthinkable after mature consideration. Our Nation's industry and economy has become so geared to rubber-clad wheels that the certain breakdown consequent to a confiscation program made such a source impossible, excepting as the last resort of desperation.
There remained, then, one alluring possibility—the production of artificial substitutes or synthetic rubber. Our responsible agencies began to point their course toward this goal of rubber synthesis, and while they have been lessening rapidly the distance to be traveled to the goal of synthetic-rubber production, their steps have been uncertain, unsteady, hesitating, faltering, and stumbling. In trying to explain these uncertainties of action and decision, some of our citizens have attributed it to the fact that the field of synthetic-rubber production was a new and untried field with many undeveloped and undetermined types of production plants and processes. Others, less charitable, have freely made the charge that the financial values incident to the control of a great industry, the access to a great process-royalty pool, and the ownership of a host of valuable plants built at Government expense would be of such immense value in the postwar period that they have been factors in influencing steps, judgments, decisions, and directions taken toward the goal of production.
I do not have the time, and I realize that this is not the place, to discuss these opinions. At the conclusion of these remarks I shall take occasion to state some of my own personal views and judgments. But further than this, I shall confine my statements to facts presented before our committee in the course of its work.
Synthetic rubber, or artificial rubber, can readily be made of a quality which will compare favorably with natural rubber for most uses.
Some types of synthetic rubber are even preferable to the natural rubber for certain specific uses.
Some of our great tire companies have tested synthetic-rubber tires and the natural rubber tires in operation on thesame vehicle at the same time, and, after months of use, have made comparisons which are favorable to the synthetic-rubber tire.
Most synthetic rubber is made from a product called butadiene. Butadiene can readily be made from alcohol or from processing petroleum. Alcohol to produce butadiene may be either synthetic alcohol or grain or ethyl alcohol.
Synthetic alcohol is made from petroleum, and the ethyl alcohol is and can be made from a host of vegetable products, such as wheat, corn, rye, sweet potatoes, cane molasses, wood pulp, waste of sulfite liquor from forest products, and many, many other vegetable substances.
From whatever source the butadiene is produced, the translation of butadiene into rubber follows approximately the same process and is a very simple one.
Synthetic rubber from butadiene can be made on a basis of cost fully competitive with natural rubber, and tremendously cheaper than the prices that we have had to pay at various times in the past to the closely integrated rubber monopoly which was controlled by English and Dutch interests.
When our governmental agencies fully realized how dependent we would be on the production of synthetic rubber for our future supplies, great activity followed, looking to the establishment of plants for its production.
Allocation of our needs to the synthetic rubber source were made in rapidly changing amounts. Early last fall there was an allotment of about 40,000 tons. After Pearl Harbor, in late December, it became 120,000 tons; in January 1942, 400,000 tons. A few weeks later this had jumped to 700,000 tons, then to 800,000 tons, and in late May Secretary of Commerce Jones told our committee that these estimates might be expanded to 1,000,000 tons or even more before the summer had passed.
Now what steps were being taken by our agents to supply this rapidly expanding program of synthetic rubber production?
It must, of course, come from butadiene, but where was the butadiene to be obtained?
On the 4th day of January, 1942, our Government agents called into conference in the city of Washington a large number of representatives of the petroleum, rubber, and chemical industries. No one in this group had a process which was fixed and determined. They were asked to pool the results of their previous research and to get into production at the earliest possible moment with some sort of process, and were advised that the Government of the United States would build the plants for them. As a result of this conference, and subsequent letters of intent and contract drafting, there was allocated to these petroleum interests by the Rubber Reserve Company under the Reconstruction Finance Corporation the sum of $650,000,000.
Please keep in mind that all this effort and allocation was for the purpose of producing butadiene from petroleum and by petroleum interests, and not 1 penny was allocated to the alcohol source, excepting a relatively small allocation to the Union Carbide & Carbon Corporation, which company also produced a substantial amount of synthetic petroleum alcohol in its own plants.
Secretary Jones told us that the reason that more attention was not given to the alcohol process was because they had been advised that alcohol was limited in supply and only 36,000,000 gallons were available for synthetic rubber production. Mr. Fraser Moffat of the War Production Board, however told the committee that the reason that only 36,000,000 gallons were made available for synthetic rubber was because that was all that the Rubber Reserve Company asked for.
Right here, let me advert to a further contribution to this confusion. In late 1941, Mr. Moffat, of War Production Board, estimated our alcohol needs for all purposes for munitions manufacture, antifreeze, synthetic rubber, and everything else, at 175,000,000 gallons. This was raised to 275,000,000 gallons after January 1, and then to 365,000,000 gallons—with only 36,000,000 gallons considered in connection with the manufacture of synthetic rubber. We had millions and millions of bushels of corn and wheat, both in the hands of the farmers and in the Commodity Credit Corporation. Alcohol could be readily and cheaply made from this grain.
Inquiries directed to the War Production Board as to why these grain supplies were not being utilized and steps taken to direct their use to the production of alcohol, butadiene, and synthetic rubber, brought the response that alcohol was being made from blackstrap molasses, a by-product of sugar refining which was a much cheaper source of supply.
It is interesting to recall that almost immediately after these replies were given blackstrap molasses disappeared as a source of supply and 1,200,000 long tons of Cuban can were acquired by the Reconstruction Finance Corporation to be changed into so-called invert molasses for the production of alcohol.
Again inquiry was made of those in charge of the program as to why these tons of sugar cane were taken from the production of sugar, resulting in the rationing of sugar supplies to our people, while the millions of bushels of grain in storage and with a bountiful crop coming on, were, in many cases, dumped on the ground for lack of storage facilities. These pointed inquiries brought a shift of position on the part of those to whom they were directed and assertions that the grain could not be utilized because of transportation difficulties in moving the grain to distilleries equipped to process it into alcohol.
When it was proven that these transportation difficulties were magnified and the further inquiry made as to why smaller distilleries were not erected or expanded in the grain-producing sections to obviate the long hauls of the grain, another shift of position brought the reply that new plant would require the diversion of critical materials vitally needed in war production industries.
Many of the central western distilling interests urged expansions for their plants for the production of alcohol and the translation of their plant facilities from beverage alcohol to industrial alcohol. Letters urging this action have been addressed to the War Production Board many months before the outbreak of the war, but received scant attention and no favorable consideration. Communities from the grain-producing sections of the Nation sent numerous delegations to Washington with proposals for the establishment of small alcohol plants in their respective communities. Some of these proposals had been well planned and engineered. Some had nothing behind them but the wishful thinking of their sponsors. But whether their proposals were concrete or abstract, they received no encouragement whatever from those in control of the alcohol program. The answers were varied, but the results were the same. No consideration was being given to the production of butadiene from alcohol sources excepting the very small portion allocated to Union Carbide & Carbon Corporation to which I alluded a few moments ago. The committee learned of the great expansion of synthetic-rubber production in the European countries. We learned that 73 percent of the Soviet Union's rubber was synthetic and produced from rye and potatoes. We learned that Germany had 36,000 small distilling plants scattered through her farming district, utilizing similar farm products for alcohol production. We learned that Poland, just prior tothe invasion, had 1,600 of these small plants, and that the Polish Government had established synthetic-rubber production from grain alcohol, and that the industry was rapidly expanding at the time of the German invasion. The committee located the expert whom the Polish Government was using, a Dr. Szukiewicz. We learned that he was in this country through the patriotic efforts of some governmental agents in the Office of Price Administration and War Production Board, and that he had built a pilot plant for the Publicker Distilling Co., of Philadelphia, and that it was in operation and producing rubber from grain. We brought this Polish expert and the representatives of the Publicker Co. before the committee and verified these facts. These men made the assertion that they had gone to the War Production Board and the Rubber Reserve Corporation with concrete proposals to go into immediate production and failed to gain even a suggestion of consideration or approval. Experts in the governmental experimental laboratories, experts in the Department of Agriculture, and experts from some of the leading agricultural experiment stations in the Nation appeared before the committee and verified the chemical process for the production of rubber from grain. There was some difference as to particular processes, but no difference of opinion whatever as to the feasibility of production. And may I add that there has not been presented to the committee in the months of hearings a single word of evidence to refute the fact that a good quality of rubber can be readily produced from butadiene secured from grain and vegetable sources. No one had the temerity to assert before the committee that grain rubber could not be readily, quickly and promptly produced from the Nation's resources of grain and forest products.
It is particularly interesting at this point to refer to a process for making rubber from grain which has been under experiment for some months and which is known as the butylene-glycol process. Many outstanding chemists in the Federal and State Governments were conducting researches along the lines of this process. Proponents alleged that this process would greatly shorten and greatly cheapen production, and would also greatly increase the percentage of rubber-making material to be secured from a bushel of grain stock. And today the Agricultural Department is quoted in the public press as making a definite announcement that its research laboratory in Peoria, Ill., has fully developed and proved the butylene-glycol process. The following is a quotation from today's paper:
"Chemists at the laboratory have succeeded in producing excellent yields of pure butadiene from which synthetic rubber is made from corn-made butylene glycol. Three steps would be involved in the production of rubber from farm crops by this method, involving the fermentation of plentiful farm crops such as corn and wheat. The three steps are, raw agricultural material to butylene glycol, butylene glycol to butadiene, and butadiene to rubber."
This confirms the claims made by numerous witnesses before our committee and proves that even the advantages for the alcohol source heretofore claimed can be greatly cheapened, expedited, and strengthened.
After weeks and weeks of hearings, objections to bringing the agriculture sources into the program were abandoned one by one, until but one objection remained—that there was no critical material available for the establishment of new butadiene plants. The assertion was made that whereas it had been a mistake to allocate the entire program to the petroleum industry last January, yet the fact remained that the allocations had been made and that construction was too far advanced to justify abandonment. Cumulative evidence was produced before the committee that plants for the production of alcohol and butadiene from alcohol could be constructed and placed into production in 6 to 8 months' time, and that these plants could be built with about one-third the amount of critical material that was being expended on comparable plants being constructed by the petroleum industry. To refute the assertion of those in charge of the petroleum program that these allocations had already been made and construction started, the committee secured the evidence of the petroleum contracting parties which showed that early in May very few, if any, of these contract holders expected to be in production in less than an 18 months' period. In many cases, the engineering had not yet been completed. In some instances, sites had not been optioned and in some cases construction had not even been started. It is fair to state that since the evidence was so given, the War Production Board has presented evidence to the committee within the past 10 days which justifies the hope that these contemplated petroleum plants will be in production in the early fall in 1943.
After persistent investigation and hammering by the committee, and after long weeks of hearings, a public announcement was suddenly made in the early portion of May this year that the War Production Board had reached the decision to expand its rubber production from the alcohol source, and that 200,000 tons of the contemplated production or about one-fourth of the total was to be allocated to the alcohol field. But it is interesting to note that this apparent concession limited the allocation of even this one-fourth portion to the Union Carbide & Carbon Corporation which is closely allied in industry and purpose to the great petroleum and chemical group. To try to bring this confused picture up to date Mr. Madigan and Mr. Crossland of the War Production Board appeared before the committee within the last week and stated the situation to be as follows:
On a proposed program of production of 800,000 tons of synthetic rubber 200,000 had been allocated to the Union Carbide & Carbon Corporation for their alcohol process. Substantially 100,000 tons had been allocated for special types of rubber such as neoprene, and the balance of 500,000 tons was to be sought by adherence to the hastily conceived, wholly unjustified contract program which was negotiated under the proceedings initiated at the petroleum conference of last January. In response to my personal question addressed to Mr. Donald Nelson who appeared before the committee, he stated that he did not know of a petroleum process for the production of synthetic rubber that had passed beyond the laboratory or experimental stage. To summarize the situation as it exists today, the Rubber Reserve Corporation and the War Production Board refuse to take any steps whatever looking to the renegotiation of contracts hurriedly made some months ago with the great petroleum industry. Last Friday Mr. Stanley Crossland, of the Rubber Reserve Corporation, appeared before the committee and in response to inquiries stated that there was in contemplation at the present time no plans for the expansion of the synthetic rubber production into the field of agriculture sources other than the allocation made to Union Carbide & Carbon Corporation. He was asked if any consideration were being given to the utilizing of the Polish process, sponsored by the Publicker Distilling Corporation. He was asked if any consideration was being given to the groups from the State of Nebraska and contiguous States which had completed their engineering, had arranged their finances, had optioned more than 90 percent of their construction material and claimed to be able to get into production within 6 months. He was asked if any consideration were being given to the much-publicized Houdry process which claimed to be able to build
its plants and produce butadiene within a much shorter time and with less expenditure of critical material. He was asked if there were consideration being given to the establishment of small plants near the source of grain supply. He was asked if any steps were in contemplation or being taken to develop the butylene-glycol process of production of butadiene from grain, which eminent sponsors claimed would produce heavier recoveries from each bushel of grain and with much cheapened cost of production. To all of these questions the answer was in effect, "No." To use the words of Mr. Madigan before the committee last week the program was "definitely set about 2 weeks ago."
The time allotted for this broadcast is rapidly passing. I shall have time to state a few personal conclusions before it will be necessary to go off the air. Again may I say that the committee as a whole has no quarrel with the petroleum industry; that no one of the members has any desire to curtail or interfere with any legitimate activity of the great petroleum, rubber, and chemical industries of the Nation, but we see the Nation's war effort jeopardized through a lack of rubber. We see the people of the Nation asked to make stupendous sacrifices to preserve our dwindling rubber reserve for war purposes. We see an impending destructive threat to the wide-flung industries of the Nation essential to its economic life and vitally essential to the production of its revenues and the maintenance of its war industries. We are forced to face the undoubted fact that it will require the straining of every national nerve cell and the exploration of every channel of supply to meet the rubber demands for the war effort and for the essential civilian needs. We see a source of supply, the petroleum industry, and we would be the last to advocate the abrogation of that source of supply, even though we are forced to realize that these petroleum supplies are dwindling and are not replaceable, yet the need is so dire that we concede the necessity for continuing to use some of our petroleum resources in the production of synthetic rubber. But we also see a great source of supply for the production of rubber in our surpluses of grain, pulp-mill wastes, sweet potatoes, cane, and other agricultural sources. We see a new wheat crop now in harvest being in some cases dumped on the ground through the lack of storage facilities. We see this source of agriculture supply which can readily be converted into synthetic rubber and further realize that this supply is not irreplaceable, but is recurring production year after year. Yet we have been forced to say that those who have charge of the program of rubber production have been negligent indeed in taking steps to utilize those replaceable supplies. We have been forced to note that no concessions of any kind have been made to the production of rubber from alcohol excepting as the result of persistent hammering on the part of those who have advocated the program of its use. We see these concessions grudgingly made, and made only after the advancement of every possible excuse for not so doing. I am not ready to concede, as has been charged by some, that this attitude of hostility to the alcohol source is motivated by unpatriotic or selfish interest. I prefer to believe that those responsible for the judgments and decisions that have been made have failed to investigate the problem in its entirety and have approached it solely from the perspective of long association with a particular industry, and the fact that they may be congenitally or through long training unable to conceive a breadth of viewpoint that is unrestricted or uncontrolled by their own habits or personal thoughts due to training with some particular industry.
America wants rubber. America must have rubber. The United Nations must have rubber. We must have the rubberquickly. We must have the rubber in amounts sufficient for our war needs and sufficient to maintain on a reasonably productive basis all our essential industries. We have supplies from which this rubber can be made. We have these supplies in tremendous quantities. We have the processes with which these supplies can be translated into rubber. We have the engineering and technical skill to put these processes into production. What possible excuse can there be for failure to meet this indisputable need?
Our present agencies have fumbled and, to a large extent, failed. The record of the last few months is not one to which anyone can point with pride. Whether the failure is the result of incompetence of one or more individuals, whether it is the result of wrong advice given by those in subordinate positions to those policy-making individuals charged with the duty of making the policy judgments, or whether it is properly charged to any man or to any group of men from ulterior, questionable, or sordid motives which might haveinfluenced their advice or decisions, yet the fact remains that after long months of indecision and uncertainty we are yet long months away from the production goal, and the members of our committee feel that with a situation of this kind so fraught with destructive possibilities to our Nation that the time for quibbling and indecision has passed and that an agency can and must be set up with direct responsibility, not to be exercised independently of present agencies, but in coordination with them and under the supervision of the President of the United States. We believe that the problem belongs to all our people, that our destinies are at stake, and we do not believe that there is any place in American industry or in American Government where there should be a holy of holies within which there is established an "ark of the covenant" for any specific industry, and that all other industries must be kept outside the portals with the assertion that this is hallowed ground, solely dedicated to one group of citizens or one restricted set of interests.