Chemical industries Summary

  • Last updated on November 10, 2022

Chemicals have played an important role in the development and modern prosperity of the United States and of various businesses. Manufacturers of such bulk chemicals as sulfuric acid and fertilizers, as well as such light chemicals as pharmaceuticals and synthetic fibers, helped transform chemical industries from the small, unoriginal, and inefficient enterprises of the eighteenth century into the world’s largest, most innovative, and most highly efficient oligopolies in the twenty-first century.

Great Britain’s mercantilist policies in the eighteenth century encouraged the export from its American colonies of such raw materials as pig iron and potash but discouraged the production of high-quality steel and gunpowder. As a result, American chemical industries during and after the Revolutionary War were much inferior to those in England and other European countries. Were it not for the importation of high-quality gunpowder from France, the American war for independence might well have failed. Eleuthère Irénée Du Pont, Eleuthère Irénéedu Pont, who had learned to make excellent gunpowder under Antoine Lavoisier in Paris, came to the United States and, in 1802, began manufacturing high-quality powder. The DuPontDuPont company, which became the chief manufacturer of explosives for the American government, grew, diversified, and prospered along with the nation.Chemical industries

Nineteenth Century Industries

Throughout the nineteenth century, the United States was a predominantly agricultural society, and chemical businesses, which manufactured the most-needed acids and alkalis, were largely family-type establishments. Some firms began to manufacture chemical fertilizers to supplement materials derived from such nitrogenous wastes as manures, compost, fish meal, and guano. During the American Industrial Revolution of the first half of the nineteenth century, some industries, such as iron and steel, became large and prosperous, but many scholars have restricted the scope of chemical industries by separating them from the steel and petroleum industries.

Scholars, engineers, and businessmen have distinguished two chief categories of chemical industries. In heavy chemical industries, such inorganic chemicals as sodium carbonate and sulfuric acid are produced in great amounts in large factories, whereas in light chemical industries, such organic chemicals as dyes and pharmaceuticals are produced in modest factories with specialized equipment. The origin and development of both types of chemical industries were mainly European. For example, the Leblanc process for manufacturing sodium carbonate was developed in France, and the production of such sophisticated chemicals as dyes and drugs took place mostly in Germany.

Despite reliance on Europeans for standard as well as new processes and chemicals, some Americans attempted to found new chemical businesses, with mixed results. For example, after Charles Goodyear, CharlesGoodyear patented vulcanization in 1844, he tried to establish rubber industries in the United States and Europe, but his failures left his widow with gigantic debts. On the other hand, Charles Pfizer, CharlesPfizer founded a Brooklyn company in 1849 that pioneered fermentation techniques in the manufacture of organic acids, which led to successes in the production of pharmaceuticals and varnish resins.

This Copperhill, Tennessee, copper mining and sulfuric acid plant, pictured in 1939, produced sulfuric acid, a chemical that played a significant role in the U.S. chemical industry.

(Library of Congress)

The U.S. Civil War stimulated the expansion of certain chemical industries in the North, and this growth continued after the war. For example, in 1867 Graselli Chemical constructed a sulfuric acid plant in Cleveland, near a Rockefeller refinery whose patronage led to success great enough to foster expansion to several states in the Midwest, East, and South. During the 1890’s, General Chemical Company, which later became part of the Allied Chemical CorporationAllied Chemical Corporation, also had success in the manufacture of sulfuric acid, a bulk chemical that has often been characterized as a significant indicator of a country’s technological progress.

The Path to Market Dominance

During the latter decades of the nineteenth century and throughout the twentieth century, chemists working in industrial research laboratories, first in Europe and then in the United States, helped make chemicals a significant part of Western economies. For example, aluminum, which had been a prohibitively expensive metal, became an important element in the world economy after the American chemist Charles Martin Hall, Charles MartinHall in 1886 discovered an efficient and inexpensive electrolytic process for making this light and useful metal. The Pittsburgh company that first capitalized on the Hall process later became the Aluminum Company of AmericaAluminum Company of America.

Similarly, Herbert H. Dow, Herbert H.Dow adopted an electrolytic process for making caustic soda (sodium hydroxide) that contributed to the early success of the Dow Chemical CompanyDow Chemical Company. Research chemists also helped make the Schoelkopf Aniline and Chemical Company the largest American producer of coal-tar dyes, and chemicals and chemical engineers–by developing an improved method for making sulfuric acid–also helped make the Allied Chemical Corporation a success. DuPont’s chemists, working in the company’s General Experimental Laboratory, created a smokeless gunpowder that was a phenomenal success throughout the world.

The event that, more than any other, fostered the rapid development of American chemical industries was World War I[World War 01];chemical industriesWorld War I. The war deprived the United States of access to the drugs, dyes, and other organic chemicals produced in Germany. American firms thus had to expeditiously expand productivity and create new chemical industries to meet military and domestic needs. They were aided by government actions such as the confiscation of German patents and the implementation of large tariffs. A good example of a new company that benefited from these policies was Union Carbide, formed in 1917 to manufacture various chemicals from petroleum. Other companies such as Kodak, Monsanto, Hercules, and American Cyanamid also became prosperous and powerful by expansion and diversification.

During the decades following World War I, American firms established over one thousand industrial research laboratories, and chemical businesses profited from discoveries made in their laboratories. For example, during the late 1920’s Thomas Midgley, Jr., discovered odorless and nontoxic organic fluorine compounds (freons) that replaced ammonia as a refrigerant. During the years before World War II, Wallace Carothers, WallaceCarothers, a DuPont chemist, headed a research group that created the first wholly synthetic rubber (later known as neoprene) and a synthetic fiber, nylon, that was put on the market in 1939. Nylon would go on to earn the company more than $25 million. During World War II, well-established companies, such as DuPont, and many new firms produced the large amounts of explosives, synthetic rubber, pharmaceuticals, and other chemicals needed by the U.S. military.

Because of pent-up consumer demand and the success of new chemical products, American chemical businesses continued to prosper in the postwar years. Although such petroleum companies as Exxon, Texaco, and Mobil were the largest corporations in the second half of the twentieth century (and some would categorize these as chemical companies), such strictly chemical corporations as Dow, DuPont, Union Carbide, and Allied Chemical took the place, in total assets and productivity, of automobile and iron-and-steel firms, which suffered because of poor management and increased domestic and foreign competition. U.S. chemical industries grew, through mergers and acquisitions, into oligopolies, and they increased their investments in the research and development of new products, driving their success.

Concrete evidence for this success is the increasing number of chemical corporations in lists of the nation’s top one hundred companies and the increasing proportion of U.S. patents generated by these companies’ researchers, compared with those in other industries. By the early years of the twenty-first century, the American chemical industry was by far the world’s largest and most productive. Despite growth in assets, workforce, products, and markets, however, American chemical businesses encountered environmental and safety problems, as their products were blamed for polluting the land, water, and air; for precipitating accidents that killed people and damaged property; for overcharging consumers for drugs; and for retrenching on investment in research and development during a period of intense global competition. Nevertheless, some companies continue to exhibit healthy growth, and many new and successful chemicals continue to find their way to eager customers in an increasingly diverse and demanding marketplace.

Further Reading
  • Chandler, Alfred D., Jr. Shaping the Industrial Century: The Remarkable Story of the Evolution of the Modern Chemical and Pharmaceutical Industries. Cambridge, Mass.: Harvard University Press, 2005. This book, part of the Harvard Studies in Business History series, insightfully analyzes the evolution of influential chemical industries in the twentieth century, while showing why some companies prospered and others failed. Index.
  • Haynes, William. American Chemical Industry: A History. 6 vols. New York: Van Nostrand, 1945-1954. This comprehensive history of the American chemical industry, written by a business historian, traces developments from the colonial period to the start of World War II. This indispensable work emphasizes the organizational and economic aspects of numerous chemical companies. Illustrations, chronologies, and appendixes.
  • Hounshell, David, and John Kenly Smith, Jr. Science and Corporate Strategy: Du Pont R&D, 1902-1980. New York: Cambridge University Press, 1988. Hounshell, an expert on the development of industrial research in the United States, focuses on a company that has been important in the evolution of the American chemical industry. Index.
  • Spitz, Peter H., ed. The Chemical Industry at the Millennium: Maturity, Restructuring, and Globalization. Philadelphia: Chemical Heritage Foundation, 2003. Spitz heads a team of scholars who analyze the scientific, technological, economic, political, and environmental factors that have influenced the development of various chemical companies in the recent past.
  • Thackray, Arnold, et al. Chemistry in America, 1876-1976. Dordrecht, Holland: D. Reidel, 1985. Collects much useful and relevant information on the history of American chemistry and the chemical industry. Charts, graphs, tables, extensive bibliographies, and index.

Arms industry

Colonial economic systems

DDT banning

Environmental Protection Agency

Food-processing industries

Occupational Safety and Health Act

Petroleum industry

Pharmaceutical industry

World War I

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