_Germany._—Germany is the largest producer of naphthalene and the third largest producer of coal tar. With increased production of coal tar and intensive efforts to recover the maximum of naphthalene there has been a larger output of naphthalene in recent years, but increased consumption has created a scarcity in Germany as in all other important producing countries. As a result, greatly reduced quantities are available for export, a situation that is in marked contrast to earlier periods when superabundant production created a marketing problem. The manufacture of phthalic anhydride for alkyd resins is requiring increased quantities of naphthalene. The demand for alkyd resins has been given a marked impetus by the development of a new standardized linseed oil varnish substitute known as El Varnish, the use of which is required by the Control Board for Industrial Fats in Germany for certain interior and exterior painting (see p. 77). Increased requirements for other important purposes such as intermediates, dyes, black pigments, and explosives have also contributed to the scarcity of naphthalene. In order to conserve domestic supplies, the Reich Government, from December 1935 until late in 1937 prohibited its export without special permit. The prospect of continued strong domestic demand apparently will curtail for an indefinite period the quantities available for export. The international scarcity of naphthalene resulted in a sharp increase in its price in Germany as elsewhere. The export embargo augmented the domestic German supply, although a shortage still existed and large consumers found it difficult to secure adequate amounts. The shortage of foreign exchange greatly curtailed imports of naphthalene from nearby countries. The German Government issued a decree requiring that beginning July 1, 1936, the entire national output of coal tar should be delivered to plants equipped for the recovery of tar products distilling up to 240° C. (naphthalene boils at 218° C.). This measure assured maximum recovery of benzol, toluol, xylol, solvent naphtha, phenol, cresol, xylenol, other tar acids, and naphthalene. The decree contemplated an official list of distillation units, and all tar producers were required to report to the official trade control board for mineral oil their monthly output, quantities distilled, and quantities delivered to other distillation plants. German production, imports, exports, and apparent consumption of naphthalene are shown in table 36. Production increased from 108 million pounds in 1928 to 146 million pounds in 1935; imports decreased from 9 to 4 million pounds; exports decreased from 48 to 22 million pounds; and apparent consumption increased from 69 to 128 million pounds in the same years. TABLE 36.—_Naphthalene: German production, imports, exports, and apparent consumption, 1928-37_