Cleaning Up on Pollution

In the never-ending scramble for a rapid dollar, Wall Street speculators can be moved to frenzy by the vaguest rumor. Their response to every economic fad and fancy is almost a conditioned reflex. In the uranium boom that followed World War II, the magic words atomic and nuclear rang through brokers' offices with the authority of an inside tip. Just about any company that managed to get that magic into its name, or to pass the word that it had even a fringe involvement in the field, enjoyed a profitable play in the market. Since then, the speculative incantation has run through electronic, transistor, missile, computer and--in the recent franchising spurt--fried chicken.

The latest field to fascinate the speculators is pollution. Though the stock market has been drifting through the doldrums in the past few months, new highs have been set by many companies that are concerned with the campaign to clean up the environment.

Avalanche of Money. Back of all -the expanding activity is the expansive talk about the vast amounts of cash that will be needed for the big cleanup. The Federal Water Pollution Control Administration estimates that the cost of bringing polluted streams and lakes up to federal standards would amount to $26 billion to $29 billion between 1969 and 1973. Senator Henry Jackson of Washington figures that cleaning and deodorizing the air will cost $12 billion to $15 billion during the next five years. President Nixon has prepared a $10 billion, five-year program to build municipal waste-treatment plants for U.S. waterways. Congress has already authorized about $1 billion in funding for pollution control in this fiscal year alone. In addition, U.S. companies in 1969 invested an estimated $1.5 billion --up 40% for the year--to control the air and water pollution they create. New York City's Con Edison, for example, has spent $60 million in the last decade on equipment such as a $10 million precipitator to curb smoke pollution.

The avalanche of money is attracting many companies. Last week Merck & Co., the drug manufacturers, agreed to pay $44 million in stock for Baltimore Aircoil Co., which earned $1.2 million in 1969 by making cooling towers to control thermal pollution of water. Last month the Coca-Cola Co. announced plans to acquire Aqua-Chem Inc., a Milwaukee water-purification firm. Alurm-num Co. of America moved late last year to set up a division that will develop and market antipollution systems.

High Fever. The pollution-control industry is smaller than the big-dollar amounts might indicate. About 1,000 companies claim to be in the act, but only 200 to 300 have any real stake. Among them are Betz Laboratories, Re-search-Cottrell, American Air Filter, Sy-bron and Zurn Industries. Most anti-pollution equipment is neither new nor exotic. In air pollution, it consists largely of particle collectors for smoke stacks, fabric filters and electrostatic precipitators. Only 10% of the money spent on water and waste treatment goes into hardware; the rest is accounted for by labor, engineering and materials.

Dorothy Pels, a Pittsburgh-based specialist, figures that air-pollution control equipment is selling at a $200 million-per-year rate. The market for water pollution control equipment, she says, is twice as large. Total industry sales are growing at 20% per year. Though there are certain to be failures, Wall Street has such a strong case of antipollution fever that most shares are now selling at prices around 40 times earnings, with some as high as 70.

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