Herbert Dow: Reselling the German Bromide Cartel's Own Dumped Stock

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Herbert Henry Dow founded his chemical company in Midland, Michigan in 1897 to extract bromine from the brine deposits beneath the town. In place of boiling brine over wood or coal fires, he ran an electric current through it to release bromine as a gas and blew air through to capture it. By 1902 the plant made 72 tons of bleach a day, and British bleach makers answered by flooding the U.S. market at predatory prices. Dow matched them and lost $90,000 in income, which convinced him that a two-product company could be starved out and that diversification was his defense.

In 1905 the German bromide cartel, the Bromkonvention, dumped bromide in the U.S. at 15 cents a pound while charging 49 cents in Europe. Dow stopped making his own, had agents buy up the cheap German stock, repackaged it and sold it in Europe for 27 cents. He built a plant that turned byproducts into chlorine, phenol, dyes, agricultural chemicals and magnesium, and by 1918 about 90 percent of capacity served World War I. After the war, magnesium went into Dowmetal pistons, which powered the winner of the 1921 Indianapolis 500. Dow held more than 90 patents, received the Perkin Medal in January 1930, and died of cirrhosis on October 15, 1930 at the Mayo Clinic. His son Willard, 33, took control.

• Charles J. Strosacker joined the company in 1907 as it expanded.
• Wartime output included magnesium for flares, phenol for picric acid explosives, and bromine for tear gas and pharmaceuticals; the diamond logo dates from this period.
• Willard Dow was born in 1897, the year the company was founded, and was made to work through every department before becoming general manager in 1926.
• Under Willard the company kept investing in research during the Depression, commercializing ethyl cellulose in 1935 and mass-producing polystyrene in 1937.
• In eight months in 1940 and 1941 Dow built a Freeport, Texas plant that pulled magnesium from Gulf of Mexico seawater using dredged oyster shells, supplying metal for Allied aircraft in World War II.