Henderson daily dispatch., 1938-01-07
Chemical Industry Picked
AS the Industry IF 1888"
tcontmued srom Page one.o


swing UP faster whenever there is an
upward surge of general business.
Moreover their volume does not suf-
fer as drastically during recessions
Wool made from milk, roads from
cotton, cloth from glass, paint from.
soy-beans, cosmetics from oats, vege
tables in tanks are a few of the new
processes which the chemists have re-
Gently discovered. Because of Their
research work and the vast range o:
their products, chemical manufactur
ers represent "one-industry diversifi-
cation. This is the first reason for
my enthusiasm.
Chemistry is the father of all in
dustries'' That is another reason
why I am so enthusiastic about this
group. Writers have played up the
future wonders mentioned above to
the neglect of the industry's everyday
business. A new plastic or a novel
synthetic substitute for rubber O!
leather puts romance into the indus
try. But these are long-range deYel-
opments. Even without this further
progress, chemists already have built
up vast backlog Of "bread-and-but-
teri demand for industrial essentials.
Caustic soda and soda ash are indis-
pensable raw materials in the soap,
rayon, paper, textile, glass, petroleum
and other industries.
Every Industry Customer.
Every branch of the steel and metal
industries would be handicapped with
out plentiful supply of the oxy
welding. Important consumers in this
field include the automobile, railroad.
construction, and machine tool com,
panies Even if further competition ie'
offered by electric welding, the
acetylene method is constantly work
ing out new applications. Coal an6
copper mining require great volumes
of explosives
Carbon black is necessary for max
ing automobile tires. New cOnstruc
ton and home Improvement should
boost the demand for paints and lac
quers. Medical requirements maintain
steady outlet for medical chemicalc
Flastics are finding their way into
automobile, building, and various 9TH
err fields. General business activity
requires commercial alcohol as its
standard solvent. Even the food and
grocery trades are calling upon the
chemists. It is truly the universal in
dustry. This is the second reason TO.
my enthusiasm. s,,,...
"LabOr-PrOof" and "Politics-ProOf"
Not only today's prosaic needs, bu+
tomorrow's irresistible demands are
crowding business toward this grow
ing industry. Unruly labor, cunlser
some overhead charges, sharper com
petition, necessity for speed, quicke
style changes-are all aiding the
chemicals. Perhaps the most impor-
on the part of many employers tc
make their business 'labor-proof'
Most people do not think of it in this
way, but the chemical industry sell.
more '1abor-saving machinery" in the
form Of new processes every yea.
than the neutrality-suspicious. them
selves.
Unlike mechanical methods, chem
ical processes give you more produce
without much more labor. Chemicals
never sit down. Throughout the in
dustry labor costs represent only 2
per cent of the value added to tho
product by manufacturing as compar
ed, for instance, with so per cent If
textiles. It is winning bigger volume
through lower prices made possible
by greater efficiency. Late 1886 was
the first time since 1923 that chemica
prices had t,een boosted The curren' p
slump has started prices down again
and the outlook is consequently bet
ter. Moreover, the industry is too com
pick and nimble to be an easy stick
up for politicians. This "labor-proof'
and "politics-proof'' feature is thirc
reason for my enthusiasm.
Hedges Against Initiation and War.
Furthermore, the industry is for
titled by two more hedges in add
ton to those already mentioned. First
if the smoldering fires of initiation
blaze again, the industry should be
among the best Ravens for capital
eral European war in 1899 However
with world conditions as unsettled as
they are a "war proof" industry ma
turally is popular. Certainly the chem
ical makers would be running full
blast during a war period. Hence.
while the business seems to be in
position to benefit from good. news, it
is also well protected against dis
asters This is fourth reason why
the industry and it's securities are SC
popular with me.
OF course, for these four reasons
chemical stocks usually sell high in
relation to their earnings Investors
are willing to pay much bigger price
for chemical shares Moving-picture
stocks sell at about eight times an
nual earnings per share, oils at twelve
times profits; while chemicals are
customarily priced at twenty to thirty
times earnings. With the outlook for
better business later in 1888, the
chemical industry will be a real lead
er. Stocks of established concerns in
this Industry of 1888" should be in
cluded in every investors list to pro-
vide balance, stability, and long-term