The American Synthetic Organic Chemicals Industry: War and Politics, 1910-1930
Co-Winner of the 2015 Ralph Gomory Prize of the
Business History Conference
It's true. The United States confiscated Bayer aspirin in World War I, or, rather, it confiscated the trademark and the manufacturing plant near Albany, New York. It even took the company name, Bayer (which the German parent firm bought back in 1995). An outpost of the famous German Bayer company, the American subsidiary got caught up in historical events beyond its leaders' control. That aspirin, dyes, and related synthetic organic chemicals were identified with Germany would not help the Bayer subsidiary when war arrived and Americans consequently feared and rejected all things German.
Prior to World War I, Germany dominated the production of synthetic organic chemicals—particularly dyestuffs and pharmaceuticals like aspirin—having built the "high tech" industry of the late 1800s and early 1900s through the pioneering use of industrial research. Firms like BASF, Bayer, and Hoechst collectively supplied almost 90 percent of the world's synthetic dyes on the eve of World War I. Sometimes they set up subsidiary manufacturing plants, but usually they distributed their products around the world through exports to local importing agencies.
And then war came to Europe in August 1914, disrupting the global trading networks, including the shipments of German chemicals to the United States. Americans faced severe shortages in synthetic dyestuffs and pharmaceuticals, causing economic hardship to the giant U.S. textile industry and generating concerns about health. To make matters more complicated, TNT and some of the other important military explosives and war gases were also synthetic organic chemicals, and advocates for building an American industry argued that national security required Americans to have the ability to make their own synthetic organic chemicals. The argument worked, although TNT was relatively simple to make and would not have required the high-level skills that synthetic dyes and pharmaceuticals demanded.
The argument worked because it was war! Even before the United States joined World War I, relations with Germany had deteriorated, and the official U.S. declaration of war in April 1917 only exacerbated the already intense anti-German attitudes in the United States. Sauerkraut famously became "liberty cabbage," and Americans banned German language instruction from schools and German operas from the theaters. Because synthetic organic chemicals were so closely associated with Germany, many Americans began to see the development of a domestic industry as a patriotic act. Most significantly, the xenophobic, charged atmosphere led Congress and others in government to foster the growth of a domestic synthetic organic chemicals industry through policies that included very high tariffs, war mobilization (directing resources into making enormous quantities of explosives and into war gas research), and confiscation of German chemical property in the United States (including the Bayer subsidiary and aspirin trademark). After the war, the Allies included specific provisions on dyes in the Treaty of Versailles, and for a while the United States received dyes from Germany as reparations payments under the terms of the treaty (even though the United States never signed the treaty).
The 1920s would determine whether the U.S. industry would survive. The policies gave the industry an enormous amount of help, but a tariff couldn't teach Americans to make complicated dyes and other chemicals. The industry's prospects depended on the ability of American manufacturers and chemists to acquire technical and organizational expertise. The war and the expanded employment opportunities prompted more people to become chemists and chemical engineers, however, which certainly helped to create a larger pool of experts for the industry.
Intriguingly, by 1930, the United States had a strong and growing synthetic organic chemicals industry, but Americans found much more success in the newer product sets in the industry: Bakelite and other plastics, and ethylene and alcohol-based chemicals, many of them serving the enormous demand for chemicals coming from the automobile and other consumer goods industries (think Prestone antifreeze, Bakelite distributor caps and radio knobs and casings, and ingredients to process natural rubber, for example. And, oh joy, solvents.). The next decade would see synthetic rubber, nylon, and polystyrene. The German contribution to the field remained strong, and they still made dyes better and more cheaply, but Americans increasingly competed as equals and moved ahead in the newer developments.
In addition to brilliant scholarly insights, in this book you'll come across answers to such vital questions as:
• Why did a German U-boat sneak under the British blockade in the Atlantic Ocean and arrive in Baltimore in July 1916? And did anyone dye?
• Why did Alexander "Gold Tooth Marty" Martin and fellow thugs steal German dyes from a warehouse in Hoboken? And is it true the secret service officers were led to the cache of stolen dyes by a stray cat with an extraordinarily orange tail? "O Orange Cat! thy color scheme put kibosh on the bandit-dream," begins a suggestive poem.
• During Prohibition, did manufacturers of synthetic ethyl alcohol break the law?
As you can see, it is a very delightfully complex story, full of intrigue and irony and requiring a great big book to narrate, but what is the point? In the book, my primary purpose is to explore the relationship between government and industry: what steps did the different parts of the federal government take? in what ways did industry and government work together, or not? what measures did Americans think were appropriate? and, to what extent did the measures work? In this case, the United States was an underdeveloped nation in synthetic organic chemicals relative to Germany, and it pursued policies not unlike other underdeveloped nations. I also explore two other themes in the book. First, how does the American story fit into the international context? With wartime allies and enemies, reparations, global trade and competition, and the migration of people and ideas across borders, this is an intensely international story. Second, historians of technology (and increasingly many other historians) have long studied the different ways technological ideas and know-how diffuse from one place to another, whether from parent to child or from one end of the world to the other. The United States, which had become one of the leading industrial countries by World War I, struggled to figure out how to make these complicated chemicals. Americans could read the scientific literature, hire experienced European chemists, confiscate patents and plants, expand chemistry and chemical engineering programs at American colleges and universities, but the long experience of the Germans was very difficult for Americans to match.
I would like to thank the National Science Foundation, Chemical Heritage Foundation, and the Hagley Museum & Library for major funding of this project over the years. More formally: This material is based upon work supported by the National Science Foundation under Grants No. 9212816, 9411742, and 0080496. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the National Science Foundation.
For further reading:
For my publications, click here, but there are many other historians who have written on similar topics, and you might want to check them out, too.
Fred Aftalion, A History of the International Chemical Industry: From the "Early Days" to 2000. 2nd ed. Philadelphia: Chemical Heritage Press, 2001.
• This is a good first stop on just about any development in the chemical industry. Aftalion has synthesized an enormous amount of history into a very readable and inclusive book. Treat the book as an encyclopedia or other reference work; there are no notes and the bibliography won't take you far, but the information will point you in the right direction.
John J. Beer, The Emergence of the German Dye Industry. Urbana: University of Illinois, 1959.
• An oldie but goodie, and John's a great guy. Still the best introduction and overview in English on the vaunted German synthetic dyes industry before World War I.
Alfred D. Chandler, Jr. Shaping the Industrial Century. Cambridge: Harvard University Press, 2005.
• The master business historian tackles the twentieth-century U.S. chemical and pharmaceuticals industries in this book by focusing on the firms that were largest by the 1980s and 1990s. His argument about the significance of "barriers to entry" in the chemical industry certainly finds resonance in the story of the U.S. synthetic organic chemicals industry, 1910-1930.
Robert Friedel. Pioneer Plastic: The Making and Selling of Celluloid. Madison: University of Wisconsin Press, 1983.
• There aren't too many scholarly works on the history of plastics, but this is one of them.
L.F. Haber. The Chemical Industry During the Nineteenth Century. Oxford: Clarendon Press, 1958; reprinted, 1969.
L.F. Haber. The Chemical Industry, 1900-1930. Oxford: Clarendon Press, 1971.
• L.F. Haber was the son of Fritz Haber, the famous German chemist who worked out the first viable method for nitrogen fixation. These two are classic works, which cover both Europe and the United States. He also wrote Poisonous Cloud, about WWI gas warfare.
Peter Hayes, Industry and Ideology: I.G. Farben in the Nazi Era. New York: Cambridge University Press, 1987.
• The classic on Germany's giant chemical firm in which Hayes assesses the degree of I.G. Farben's management's complicity with the Nazis, 1933-1945.
David A. Hounshell and John K. Smith, Jr. Science and Corporate Strategy: Du Pont R & D, 1902-1980. New York: Cambridge University Press, 1988.
Thomas P. Hughes. "Technological Momentum in History: Hydrogenation in Germany, 1898-1933." Past and Present 44 (August 1969):106-132.
Charles C. Mann and Mark L. Plummer. The Aspirin Wars. New York: Alfred A. Knopf, Inc., 1991.
• Historians get cranky about journalistic histories not quite providing a rich historical context for their stories, but this is a good read. A pleasant place to learn about Bayer aspirin.
Peter Morris. The American Synthetic Rubber Research Program. Philadelphia: University of Pennsylvania Press, 1989.
Johann Peter Murmann. Knowledge and Competitive Advantage: The Coevolution of Firms, Technology, and National Institutions. New York: Cambridge University Press, 2003.
• A concise and well-written synthesis of the literature on the history of the synthetic dyes industry before World War I. Peter is a practitioner of evolutionary economics, a subfield trying to return the light of history to the dismal science.
Peter Spitz. Petrochemicals: The Rise of an Industry. New York: John Wiley and Sons, 1988.
Anthony Stranges. "Germany's Synthetic Fuel Industry, 1927-1945," The German Chemical Industry in the Twentieth Century, ed. John E. Lesch (Dordrecht: Kluwer Academic Publishers, 2000), 147-216.
Also look for publications by Anthony S. Travis, Carsten Reinhardt, Raymond Stokes, Jeffrey Johnson, Ernst Homburg, Gottfried Plumpe (Bayer), Werner Abelshauser (BASF), and David Mowery (R&D). And there are more yet. If you don't know how to look up citations for secondary sources, see the Dragon's Guide.