Going Private

Leave it to the Dutch to be different. While industry is being nationalized from Italy to Indonesia, The Netherlands has decided to move in just the opposite direction. Before the Dutch Parliament this week is a bill that will make a private company out of the government-held Dutch State Mines, a $300 million organization. The move, which would be equivalent in the U.S. to sending the Tennessee Valley Authority off on its own, is supported by all political parties except the inconsequential Communists. The reason is that the Dutch understand what nationalizers do not: in today's highly complex industrial world, companies go farther and faster without government shackles.

Dutch State Mines was organized in 1902 to promote newly discovered coal veins that were being ignored by private capital; but since then, DSM's research teams have moved beyond coal into more profitable fields, including plastics and fertilizers. Chemicals now contribute 40% of DSM's $190 million annual sales, thus helping to turn an $8,000,000 loss on coal into an overall $4,700,000 annual profit. Next year new revenues will begin coming in from recently discovered natural gas fields.

In spite of such broad activities, DSM's board still has to seek approval from the Minister of Economic Affairs for any expenditure of more than $25,000, must wait for a snail-paced Parliament to approve partnerships with private companies (recent examples: Dow Chemical, Pittsburgh Plate Glass). Many firms are reluctant to enter into deals that require excessive red tape and government scrutiny. Largely for such reasons, the Dutch decided on "privatization." For the time being, the government will remain DSM's only stockholder. But in all other respects, DSM President Antoine C. Rottier and his four vice presidents will be as unfettered as any of the free-enterprising executives with whom they deal.

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