Encyclopedia of american business history part 3 pps

63 C Carnegie, Andrew (1835–1919) industrialist Born in Dunfermline, Scotland, in 1835, Carnegie immigrated to the United States with his family in 1848. The family settled in Pitts- burgh, Pennsylvania, where Andrew went to work to help support the family rather than attend school. He took his first job in a factory when he was 13 for a salary of $1.20 per week. After working at a telegraph company and teaching himself Morse code, Carnegie went to work for the Pennsylvania Railroad, where he was the personal assistant to Thomas Scott, later to be the railroad’s president. He worked at the railroad for 12 years before striking out on his own. Recognizing that the cargo the railroad car- ried, especially crude oil, was more lucrative than railroading itself, Carnegie made some investments that increased his annual income to almost $50,000 per year during the Civil War. In 1862, he organized a company to build iron bridges, initially for the Pennsylvania Railroad. The company was later reorganized as the Key- stone Bridge Company and became one of the first companies to build bridges made of iron rather than wood, which had been the standard. The company supplied iron for the Eads Bridge over the Mississippi River in St. Louis and the Brooklyn Bridge over the East River in New York. In 1867, he organized the Keystone Telegraph Co. to lay telegraph wires alongside railroad lines, recognizing that the railroad phenomenon had created a communication as well as trans- portation revolution. In the early 1870s, Carnegie decided to expand into steel production. Steel had been improved significantly by the Bessemer process, developed in Britain by Henry Bessemer, and Carnegie decided to begin manufacturing it in the United States. Within a short period of time, he was producing steel for the RAILROADS and was quickly becoming one of the largest producers in the country. His first steel company was called Carnegie, McCandless & Co. His management style included a rigorous use of cost-cutting measures designed to make production as effi- cient as possible while keeping costs down. In 1889, he published the “Gospel of Wealth,” in which he held that the wealthy have an obligation to guard society because of their wealth and merit. He later changed his views on social matters to more egalitarian positions. Although highly suc- cessful, a future acquisition caused Carnegie 64 Carnegie, Andrew eventually to reconsider his involvement in the industry. In 1883, he acquired the Homestead steel- works in Pennsylvania but also inherited a labor dispute between the management of the com- pany and its union, the Amalgamated Associa- tion of Iron and Steel Workers. Henry Clay FRICK was manager of the Homestead plant after Carnegie acquired it and adopted a hard-line position concerning striking workers. Frick attempted to break the union’s hold on the plant and hired private Pinkerton detectives to guard against the workers. In the summer of 1892, a pitched battle broke out between the workers and guards. A total of 18 died in the battle before order was restored. The plant only reopened a year later in 1893. The public commotion caused by the affair brought labor practices in general, and Carnegie’s management of the plant specifi- cally, under close scrutiny. The conflict tore at his interest in promoting labor’s objectives on the one hand and cost efficiency on the other. Finally, Carnegie decided to sell what had become Carnegie Steel to J. P. Morgan in 1901. He was approached by Charles S CHWAB, a close ally of Morgan, about selling the steelworks and wrote the selling price on a piece of paper that Schwab immediately gave to Morgan. Morgan agreed to the $480 million purchase price, to be paid in bonds and stock, and the deal became the largest takeover in history. The resulting company became known as U.S. S TEEL and was the largest in the world. It was the first company whose bal- ance sheet was valued at more than $1 billion. As a result, Carnegie became the richest man in the world. He also became one of the most disconso- late, at least temporarily, when Morgan later con- fided to him that he could have received $100 million more if he had held out for a higher price. After selling Carnegie Steel, Carnegie engaged in philanthropy on a scale not yet seen in Ameri- can business. He founded the Carnegie Institute of Technology in 1900 and endowed thousands of public libraries, colleges, and universities through the Carnegie Endowment, established in 1911. He also established the Carnegie Endow- ment for International Peace in 1910. He died in Massachusetts in 1919. See also MORGAN, JOHN PIERPONT; STEEL INDUSTRY . Further reading Carnegie, Andrew. Autobiography of Andrew Carnegie. Boston: Houghton Mifflin, 1920. Krass, Peter . Carnegie. New York: John Wiley & Sons, 2002. Livesay , Harold C., and Oscar Handlin. Andrew Carnegie and the Rise of Big Business. 2nd ed. New York: Longman, 2000. Shippen, Katherine. Andrew Carnegie and the Age of Steel. New York: Random House, 1964. T edlow, Richard S. Giants of Enterprise: Seven Business Innovators and the Empir es They Built. New York: HarperBusiness, 2001. Andrew Carnegie (LIBRARY OF CONGRESS) cartel 65 Wall, Joseph Frazier. Andrew Carnegie. 2nd ed. Pitts- burgh: University of Pittsburgh Press, 1989. Carrier, Willis H. (1876–1950) engineer and inventor Born in Angola, New York, Carrier was from an old New England family; one of his ancestors was burned at the Salem witch trials. After finishing high school and teaching for sev- eral years he entered Cornell and graduated with a master’s degree in 1901. In the same year, he went to work for the Buffalo Forge Co. as an experimental engineer. While working at the company, he met Irving Lyle, who would later be his business partner. A year later, he made his first air-conditioning installation in a Brooklyn, N.Y., printing plant. For the first few years, air conditioners were used to cool machines, not buildings as is common today. Carrier was involved with air-conditioning throughout his life. He received his first patent for an “apparatus for conditioning air” in 1906. He presented his “Rational Psychrometric For- mulae,” the basis for calculations in air condi- tioning, to the American Society of Mechanical Engineers in 1911. Using their pooled savings of $35,000, Carrier and a group of like-minded engineers founded the Carrier Engineering Corp. in 1915. From the beginning of his career, Carrier was concerned not only with lowering temperature but controlling humidity as well. The first com- mercial enterprises to install his devices were movie theaters in Texas, using the machines to cool the environment rather than industrial machines. The era of modern air-conditioning engineering began in 1922, when he developed the first safe, low centrifugal, refrigeration air conditioner using a nontoxic refrigerant. In another coup for his invention, Congress installed air conditioners in 1928. By 1930, Car- rier had installed more than 300 air-conditioning units in movie theaters around the country. Carrier’s operations were moved from Newark, New Jersey, to Syracuse, New York, which lured him with local tax incentives and other induce- ments. In 1939, he developed a system capable of cooling SKYSCRAPERS. He held more than 80 patents during his career, including those for refrigerants as well as for mechanical innovations. Carrier’s inventions are credited with helping the United States develop its infrastructure and businesses uniformly throughout the country, regardless of climate. As air conditioners improved and became more affordable, they ceased to be a luxury item and became standard for new build- ings as well as existing structures. New areas of the country were opened for development, espe- cially in the South and Southwest, and a new phase of post–World War II migration began. Known as “The Chief,” he died in New York City at age 73. His company was bought by United Technologies Corporation and remains a UTC subsidiary. His invention is one of the most sig- nificant, but overlooked, American develop- ments of the 20th century. Further reading Cooper, Gail. Air-conditioning America: Engineers and the Controlled Enviroment, 1900–1960. Baltimore: Johns Hopkins University Press, 2002. Ingels, Mar garet. Willis Haviland Carrier: Father of Air Conditioning. New York: Country Life Press, 1952. cartel A group of companies banding together to control the price of goods or services by regu- lating the supply. By regulating the supply, they are able to control prices and quantity. Usually, the members of a cartel are the largest producers in the industry, which may otherwise have few other members of significance. More recently, the term shared monopoly has been used in place of cartel. Cartels originated during the mercantilist age when several companies sharing the same inter- ests banded together in order to control prices. During the early years of industrialization, cartels were common because there were not enough companies existing to provide competition in 66 chain stores some industries. The first cartel of significance in the United States was the South Improvement Co., formed in 1871 by John D. Rockefeller’s Standard Oil Co. and other oil producers. The company successfully negotiated rebates with the RAILROADS that would lower their haulage costs while at the same time paying them a kickback from the fees paid by nonmembers of the com- pany. When the new rates were accidentally posted before an announcement was made, many small oil producers discovered that their haulage rates had increased sharply and blamed the com- pany for their plight. When the S HERMAN ACT was passed in 1890, cartels became illegal in the United States as they were considered to be organizations formed to restrain trade and fair competition. Other ANTITRUST laws, notably the CLAYTON ACT, also attempted to control cartel for- mation and behavior. While antitrust laws forbid cartels in the United States, they do operate internationally, often controlling the supply and affecting prices of commodities. The best-known international cartel is OPEC (Organization of Petroleum Exporting Countries), a group of oil producers, mainly from the Middle East and Asia, that con- trols the output of oil from their countries. It is an example of a government-controlled cartel, organized to protect the prices and supply of the countries’ major export. Further reading Geisst, Charles R. Monopolies in America. New York: Oxford University Press, 2000. Wells, W yatt. Antitrust and the Formation of the Post- war W orld. New York: Columbia University Press, 2002. chain stores The name given to retail stores that establish branch operations in multiple loca- tions, often across state lines. Originally, the term was applied to department and grocery stores that began expanding and later was applied to large all-purpose stores that sold more than one line of merchandise. Usually the stores were an expanded form of a well-known, established retailer. Chain stores were established in the late 19th and early 20th centuries, but the 1920s proved to be crucial to their development. After World War I, many stores began expanding into branches in order to capitalize on the prosperity of the 1920s. Among the first were retailers that had started as catalog merchants. SEARS, ROEBUCK opened its first branches in 1925; Montgomery Ward began in 1926. The grocery, or food, chains were already operating extensive branch operations. The GREAT ATLANTIC & PACIFIC TEA CO. had 14,000 branches nationally by the late 1920s, while Safe- way and Piggly Wiggly Stores expanded region- ally. Clothing retailers such as J. C. PENNEY also expanded rapidly during the decade. The expansion of the stores was aided greatly by the popularity of the automobile, which allowed people to drive to the stores in order to shop. The combination of the two helped revolu- tionize American life and contributed to the development of the suburbs. Most of the original stores were located in major cities, and they viewed the development of the suburbs as a nat- ural expansion of their urban business. But the movement was not without its critics, many of whom maintained that the stores were destroy- ing the small-town character of rural and semi- rural American life. The stores began a political and public information campaign to fight these attacks in the 1920s. Many of the chain stores were financed by smaller Wall Street investment banks in the 1920s such as Merrill Lynch, GOLDMAN SACHS, and LEHMAN BROTHERS. Critics held that Wall Street was helping to destroy small-town America and that the chain stores were behaving like monopo- lies. The same criticism was also leveled at banks and movie theaters, both of which were also expanding. The chains became a major public policy issue in the 1930s, with critics claiming that they were destroying the American way of life by ruining small businesses while sending Chase Manhattan Bank 67 profits out of the community to big cities such as New York and Chicago. There was also an ele- ment of anti-Semitism in this attitude since simi- lar arguments were leveled against Jews in Germany, who either owned or operated many large retail establishments. Banks and cinemas ultimately faced either antitrust charges or antiexpansion legislation designed to prevent them from crossing state lines or insisting on exclusivity by showing only studio-produced films. The M CFADDEN ACT was seen as an antibank expansion law by many when it was passed in 1927. In 1936, the chain stores faced their greatest challenge when the ROBINSON-PATMAN ACT passed Congress. The act was aimed directly at the chains and became known as the “chain store act.” The stores kept expanding after World War II despite the protests and legal challenges. The stores moved into the suburbs with the general expansion of the suburbs in the 1950s and 1960s and became anchors at many newly built shop- ping malls. The major chains developing in the post-1970 period, such as Wal-Mart, heard simi- lar complaints as they expanded around the country in the 1970s and 1980s. Their critics maintained that they were driving small mer- chants out of business by undercutting prices and establishing themselves through economies of scale that smaller merchants could not match. See also K-MART; MERRILL, CHARLES; WALTON, SAM;WARD, AARON MONTGOMERY. Further reading Hendrickson, Robert. The Grand Emporiums. New York: Stein & Day, 1979. Mahoney, Tom, and Leonard Sloane. The Great Mer- chants. New York: Harper & Row, 1966. Chase Manhattan Bank In 1799, a water company named the Manhattan Company was founded in New York. Part of its original charter also provided for a banking company, which was begun as the Bank of Manhattan Company. Among its founding members were Alexander H AMILTON and Aaron Burr. The bank quickly became established in New York City and origi- nally made loans to New York State to finance expansion of the ERIE CANAL. After the Civil War, John Thompson founded the Chase National Bank, named after Salmon P. Chase, secretary of the Treasury during the war. The bank obtained its charter as a national asso- ciation through the N ATIONAL BANK ACT of 1864, designed to rationalize the banking system. In 1927, it became the largest bank in the country, with assets of $1 billion. Along with some other large banks, the bank delisted its stock from the NEW YORK STOCK EXCHANGE in 1928, ostensibly to prevent speculation. In 1930, Chase bought the Equitable Trust Company from the Rocke- feller family, which received a substantial block of stock in return. From that time, Chase became known as the “Rockefeller bank.” David Rocke- feller later became chief executive of Chase in 1961. The bank’s reputation suffered in the early 1930s as it became one of the focal points of dis- content after the Crash of 1929 and the early years of the Great Depression. During Senate hearings in 1933, Albert Wiggin, president of the bank during the 1920s, testified about his own activities during the stock market bubble. It was revealed that he had often traded the bank’s stock for his own account even when it appeared to run counter to the bank’s interests. It was he who had the stock delisted from the stock exchange, and the specula- tion occurred during the same period. As a result of his revelations and those of others, the BANKING ACT OF 1933 was passed. His successor, Winthrop Aldrich, helped heal the image of the bank, and he became one of the few bankers supporting finan- cial reform during the NEW DEAL. After the new law was passed, Chase divested itself of its securi- ties affiliates and chose the path of commercial rather than INVESTMENT BANKING like J. P. Morgan, which also chose COMMERCIAL BANKING. Throughout the 20th century, much of the bank’s growth came through MERGERS. The Bank 68 chemical industry of Manhattan Company bought the Bank of the Metropolis in 1918; Chase purchased it in 1955 and changed its name to the Chase Manhattan Bank. By 1955, the bank had purchased more than 20 smaller banks. Like many other large banks in the 1950s and 1960s, Chase wanted to expand to the suburbs, outside its Manhattan base, but was initially constrained by local New York banking laws. The bank created a HOLDING COMPANY, the Chase Manhattan Corporation, in 1969 in order to diversify its holdings and expand; that same year a change in New York State banking laws allowed banks to cross county lines, something they had been prohibited from doing in the past. As a result, the bank opened branches in Long Island and other boroughs of the city. The bank also listed its stock on the stock exchange again after an absence of 40 years. As part of its expansion in large retail bank- ing, the bank developed the New York Cash Exchange (NYCE), the first successful major attempt at automated teller machines (ATMs), in 1985. The bank maintained a mix of retail and wholesale banking functions. In 1996, it merged again, this time with the Chemical Banking Corp. to again form the largest bank in the coun- try. It lost the top spot shortly thereafter when CITIBANK merged with Travelers Group. In 2000, it completed its best-known merger when it purchased J. P. Morgan & Co. in order to gain entrance into investment and wholesale bank- ing. The $36-billion stock-only deal closed in December 2000, ending J. P. Morgan’s long history of independence. The new entity was named J. P. Morgan Chase, with the Morgan side conducting investment banking and wholesale banking busi- ness while the Chase side emphasized retail bank- ing in its many forms. The new bank ranked as one of the top-five banking institutions in the country. See also BANK OF AMERICA;BANK OF NEW YORK; MORGAN, JOHN PIERPONT. Further reading Rockefeller, David. Memoirs. New York: Random House, 2002. Wilson, John Donald. The Chase: The Chase Manhattan Bank N.A., 1945–1985. Boston: Harvard Business School Pr ess, 1986. chemical industry The U.S. chemical indus- try owed a great debt to Europe, where an inor- ganic chemical- and coal-based industry, with emphasis on synthetic dyestuffs, started to develop well before it did in this country. The domestic industry came into its own when hydrocarbons from American refineries and nat- ural gas started to be used as feedstock for an organic chemical industry, while Europe’s organic chemicals were still based on coal. World War II gave a further impetus to this so-called petrochemical industry, as North American com- panies built plants to produce aromatics for high-octane aviation gasoline, synthetic rubber for tires, and a variety of plastics all based on hydrocarbon feedstock. Petrochemical produc- tion processes became the growth engine for chemical production throughout the world, with the United States leading in the development and commercialization of many new technologies in this area. As chemical engineering, the science that led to the construction of very large and eco- nomical plants, was also pioneered in the United States, the country became the worldwide leader in growing a robust chemical industry. It made synthetic products—polymers and plastics, syn- thetic rubber, fibers, solvents, adhesives, and many other products—available at relatively low cost to consumers, thus spurring rapid growth of the industry as natural materials—wood, cellu- lose, glass, paper, metals—were increasingly replaced by synthetics. Europe and Japan built a similar petrochemi- cal industry, often based on U.S. technologies. Later, other regions and countries started to build plants of this kind, a trend that accelerated as a number of countries in the Middle East and elsewhere started to industrialize, in some cases based on inexpensive local hydrocarbons from crude oil and natural gas. The U.S. chemical chemical industry 69 industry, which had undergone an unprece- dented wave of innovation, development, and growth between 1940 and 1970, entered a more mature phase by the 1980s, when technology development slowed and international competi- tion started to become a factor. Many petrochemical processes had started to reach the limit of further improvement, and so researchers turned their attention increasingly to pharmatechnology and biotechnology, to elec- tronic chemicals for computers and other high- tech equipment, and to other such specialties, which had greater potential for profit. At the mil- lennium, the U.S. chemical industry was in intense competition with many other countries and had largely lost the advantages it had origi- nally enjoyed due to low-cost feedstocks avail- able on the U.S. Gulf Coast. The industry is now considered largely mature, in a manner similar to that of the cement, steel, and paper industries, but it has remained one of the biggest and most important domestic industries. The domestic chemical industry can be said to have started in the Philadelphia area when D UPONT DE NEMOURS built its first black powder plant in 1802, followed a couple of decades later by a sulfuric acid plant built in Bridesburg. In Baltimore shortly thereafter, a superphosphate plant was built, which treated bones with acid. In 1839, Eugene Grasselli, an Italian immigrant, built a lead chamber sulfuric acid plant. Tar dis- tilleries, based on coal tar from coke ovens, started being constructed later in the 19th cen- tury, separating from tar wastes and off-gases a number of organic chemicals, such as benzene, phenol, creosotes, naphthalene, and higher aro- matic chemicals, as well as ammonia. Coal-based town gas for household uses also started being produced, yielding similar materials as chemical byproducts. The Solvay process for the produc- tion of soda ash, developed in Europe, was placed into production near Syracuse, New York, in 1884, and two other plants of this kind were built at the turn of the century to supply the new plate glass industry. A Canadian, T. L. Willson, built an electric furnace to make calcium carbide, leading to the production of acetylene and cal- cium cyanamide in North America in 1905, a notable producer being American Cyanamid. Europe’s chemical industry led that of the United States in a number of ways, based on a traditionally greater emphasis on chemical research in Germany, France, England, and other countries. In the late 1700s and 1800s, researchers such as Lavoisier, Berthelot, Gay-Lussac, Kekule, Sabatier, Woehler, Liebig, Perkin, Nobel, and others made many breakthrough developments that led to the establishment of plants to produce synthetic dyestuffs, human-made fibers, explo- sives, soda ash, solvents, and medicines, such as acetylsalicylic acid (aspirin). Synthetic dyestuffs such as alizarin and indigo, to supplant and eventually replace imported natural dyes, began production in England, Germany, and France in the 1860s and 1870s using raw materials from coal distilleries. The German chemical industry in particular became paramount not only in its own market but also in exporting to other coun- tries including the United States. Eventually the I. G. Farben CARTEL became so powerful that it dominated world production in many chemicals, as it also established plants, joint ventures, or other cooperative arrangements (such as selling cartels) with U.S. producers DuPont, Allied Chemical, and others. The development of dyna- mite production by Alfred Nobel, based on nitro- glycerine, led to another worldwide cartel, which included two plants in the United States by 1873. Nitric acid was first produced by the Merri- mac Chemical Company in 1905 and aniline by the Benzol Products Company in 1912. Synthetic phenol via the chlorobenzol process was made by DOW CHEMICAL shortly after World War I, taking over from a less efficient phenol process. The first plastics developed in England were based on nitrocellulose and camphor and known as Xylonite. In the United States, John Wesley Hyatt, looking for a substitute for the ivory used in billiard balls, established a plant in Newark, New Jersey, to make this type of polymer in 70 chemical industry 1872, giving it the name Celluloid. It was soon used to make knife handles, films, collars and cuffs, and other products. It became the most important plastic produced until 1909, when Leo Baekeland, a native Belgian who had immigrated to the United States, discovered another plastic material based on phenol-formaldehyde, which was termed Bakelite. Monsanto had been established in 1902, first as a producer of saccharin, then of other organic and inorganic chemicals. Cellulose was also ini- tially used to produce so-called manmade fibers and films. Cellulose acetate, first produced in France, did not become commercially important until acetone could be used as a solvent, leading to so-called acetate silk, manufactured in the United States and elsewhere around the turn of the century. The first highly successful manmade fiber, viscose rayon, based on wood or cotton pulp, was developed by Courtaulds in England in 1895 and was first produced in the United States by Avtex Fibers in 1910. By 1914, the U.S. chemical industry had become relatively self-sufficient, with the excep- tion of having to import potash and nitrates, as well as having essentially no dyestuffs industry. Chlor-alkalies were being produced in quantity at Niagara Falls and elsewhere, with Hooker Chemical, Niagara Alkali, and Dow as important producers. The Frasch sulfur mining process developed on the Gulf Coast, where large deposits had been discovered, started to yield large quantities of sulfur for sulfuric acid produc- tion and other sulfur compounds. Borates were produced by U.S. Borax in the West. Stauffer Chemical was making acids and phosphates, and a British firm, Albright and Wilson, was produc- ing phosphorus and sodium chlorate. Industrial gases were produced by Air Reduction Company, affiliated with Air Liquide in France, and by Linde Air Products Company. Union Carbide and Chemicals acquired the Presto-Lite company, which had for some time produced acetylene from calcium carbide for use in automobile headlights and street lights. Union Carbide also bought an interest in Linde and started experimenting at Linde’s plant in Tonawanda, New York, to crack hydrocarbons in order to make both acetylene and ethylene from ethane, plentiful in natural gas. A commercial plant was built near Charleston, West Virginia, in 1921, and by 1927, the firm was making ethylene glycol for a product needed in antifreeze protec- tion for automobiles. In 1923, Ethyl Corporation introduced tetraethyl lead to raise gasoline octane, making possible the development of high-compression car engines. High-pressure synthesis work in Germany just before the war was responsible for one of the biggest chemical industry breakthroughs, the development of a process to make synthetic ammonia from hydrogen and nitrogen. While the process was patented and therefore not readily available to U.S. companies, within a decade Shell Chemical in Martinez, California, and DuPont at Belle, West Virginia, were able to build synthetic ammonia plants with successful opera- tions achieved in 1930, using a somewhat lower pressure to skirt the BASF patents. Dow Chemical, incorporated in 1892, had become a large producer of bromine from wells in the Midland, Michigan, area. A joint venture with Ethyl Corporation at Kure Beach, North Carolina, used a process to extract and purify bromine from seawater. In the late 1930s, Dow built the first large-scale outdoor chemical com- plex on the Texas Gulf Coast to extract bromine and magnesium from seawater, also making chlo- rine-caustic, ethylene, ethylene glycol, and ethyl- ene dibromide, used as a solvent for tetraethyl lead (TEL). Thermal cracking plants installed by refiner- ies were yielding increasing quantities of ethyl- ene, propylene, and aromatics, all ideally suited as petrochemical feedstocks. The first so-called petrochemical plant was built by Esso (now Exxon) at the Bayway, New Jersey, refinery, mak- ing isopropyl alcohol via the hydrolysis of refin- ery propylene, using sulfuric acid to effect the reaction. Esso at that time had strong relations chemical industry 71 with Germany’s I. G. Farben combine, whereby the know-how for a number of technologies developed by the two entities was shared. For example, the German firm provided to Esso its know-how in hydrogenation reactions, while Esso shared its knowledge of making TEL. In the late 1930s, Esso started high-temperature steam cracking of crude oil fractions to ethylene and higher olefins, related to the work that Union Carbide had been doing in Charleston. Hydro- genation was used to remove sulfur from refinery streams going into gasoline and fuel oils. Shell Chemical at its Emeryville, California, research laboratories was developing techniques to make high-octane blending components (e.g., isooctane) from propylene and butylenes using a dimerization catalyst. Other developments com- mercialized by Shell in the 1930s included syn- thetic glycerin and methyl ethyl ketone, which became an important paint solvent. The 1930s also saw considerable progress in the field of plastics. Union Carbide and B.F. G OODRICH developed techniques to soften polyvinyl chloride (PVC) resin, the product formed by copolymerization with vinyl acetate, the latter by the development of so-called plasti- cizers. PVC became the first important thermo- plastic resin, finding a myriad of uses in piping, seat covers, shower curtains, toys, and other applications. Meanwhile, Dow was working on technology to produce styrene, leading a few years later to production of polystyrene resins, which have much greater clarity than PVC. Dow polystyrene was put on the market in 1937. The much-heralded work by Wallace Carothers at DuPont led in the late 1930s to the development and commercialization of a number of synthetic polymers and fibers, notably nylon. Somewhat earlier, DuPont had built a plant to make neoprene, a specialty rubber. Teflon, an inert plastic with many uses, was also developed by DuPont around the same time. An important shift in plant design saw the construction of chemical plants in open-air sites, starting on the U.S. Gulf Coast at such places as Freeport, Texas (Dow), Texas City (Union Car- bide, Monsanto), Baton Rouge (Esso, Ethyl Cor- poration), Orange (DuPont), and Lake Charles (PPG, Conoco). Previously, following European tradition, plants had generally been built inside buildings. The 1930s also saw the end of U.S. chemical companies’ participation in several cartels that had their origin in Europe. The Justice Department and the FEDERAL TRADE COMMISSION attacked these cartels as being monopolistic and in restraint of trade. Only export cartels, as allowed under the Webb-Pomerine Act, were allowed from that point forward. The Second World War was a crucible for the North American chemical industry, as it became one of the most essential industries supporting the war effort. With imports of natural rubber from Japanese-controlled Malaysia no longer possible, several domestic companies developed synthetic rubbers for tire and hose production based on styrene, butadiene, and acrylonitrile. Some of this technology had also come from Esso’s exchange of technical information with I. G. Farben. Work on dimerization, dehydrogenation, and aromatization of hydrocarbon fractions pro- duced massive amounts of high-octane blend- ing components for aviation and automobile gasoline. Fighter planes in particular required high-octane for rapid takeoffs. A number of synthetic polymers and fibers were produced in increasing quantities, including nylon for para- chutes, polyethylene for radar equipment, spe- cialty solvents, and many other “petrochemicals.” Antibiotics, more powerful than the sulfa drugs then in use, were developed during this period, with production of penicillin by Merck, Pfizer, Squibb, and Commercial Solvents Corporation, among others. The Manhattan Project, which in 1945 resulted in the capitulation of Japan due to the bombs dropped on Hiroshima and Nagasaki, was one of the most significant achievements, as chemical engineers learned how to separate and 72 chemical industry concentrate uranium isotopes to produce fission- able materials. The end of the war, with its shortages of con- sumer products and an even longer pent-up demand as a result of the Great Depression, brought about an unprecedented buying wave in durable goods such as housing, automobiles, and appliances. With synthetic materials becoming broadly available to factories that shifted their output from war materials to consumer goods, petrochemicals started a period of “double digit” growth that lasted until the late 1960s. Now, a number of companies wanted to make petro- chemicals, which were rapidly replacing, in many applications, such conventional materials as glass, wood, natural rubber, iron, copper, alu- minum, and paper. A number of old-line compa- nies making these traditional materials (e.g., U.S. STEEL, Goodyear, B.F. Goodrich, Georgia Pacific, Pittsburgh Plate Glass) and others now entered the manufacture of petrochemicals, using tech- nologies licensed from engineering firms and competing with the traditional chemical compa- nies that were loath to let in these newcomers. Most of the oil companies now also established a petrochemical division. By the end of the 1960s, Dow production plant for Saran Wrap (LIBRARY OF CONGRESS) [...]... Nescafé in 1 938 and quickly dominated the market By the 1960s, as much as one-third of homeprepared coffee was soluble Unfortunately, the 85 convenience of instant coffee undermined the quality of the brew Instant coffee mostly employed robusta coffee, a faster growing but more bitter species than the arabica The growth of the coffee market continued in the 20th century because of the rise of supermarkets... OPTIONS MARKETS Further reading Geisst, Charles R Wheels of Fortune: The History of Speculation from Scandal to Respectability New York: John Wiley & Sons, 2002 Lurie, Jonathan The Chicago Board of Trade, 1859–1905: The Dynamics of Self-Regulation Urbana: University of Illinois Press, 1979 Taylor, C H History of the Board of Trade of the City of Chicago Chicago: Robert O Law Co., 1917 Chrysler, Walter... underwent a revolution when, by the middle of the 19th century, Americans were each drinking more than five pounds of coffee a year, one of the highest amounts in the world By 1880, the per capita total reached 8.4 pounds, and by the end of the 19th century the United States was consuming 13 pounds per capita and importing more than 40 percent of the world’s coffee (This would grow to more than 60 percent... too, became a symbol of the beverage By 1917, more than 3 million bottles were sold per day A group of Atlanta businessmen bought the company in 1919 for $25 million Coke had already implemented its own unique distribution system of allowing independent bot- coffee industry 83 well established that by the 1960s the term CocaCola imperialism began to be used to identify the export of American pop culture... coffee market—General Foods, Proctor and Gamble, and Nestlé—and dominated much of the international market as well Nestlé alone bought 10 percent of the world’s coffee crop annually They used market power and advertising to dominate the coffee market By 1996, two enormous companies, Phillip Morris ($ 135 million) and Procter and Gamble ($95 million), spent twothirds of the America’s $35 4 million coffee... Crash of 1929 The period between 1921 and 1 933 witnessed a large number of bank failures, with almost 15,000 banks failing or merging with others Bank activities were severely curtailed by the BANKING ACT OF 1 933 , and those with securities operations were forced to divest The act defined the areas of finance that commercial banks were allowed to engage in The act prohibited commercial banks from participating... green coffee keeps for years, roasted coffee loses its aroma and taste quickly Ground roasted coffee dissipates even faster Consequently, roasters had to have regional distribution sites The packaged brand coffee spread after a major technical breakthrough came in 1898, when Edwin Norton invented vacuum packing, coffee industry which allowed roasted, ground coffee to retain its flavor This was part of. .. turn of the century as an outgrowth of the pure food campaign The decaffeinated coffee companies such as Koffee Hag and the cereal-based substitutes such as Postum challenged traditional coffee There was a continued advance of consumption from 8.4 pounds per capita in 1880 to 18.4 pounds in 1949, the high mark in U.S history A new coffee product, instant soluble coffee, also stimulated consumption The... president of his company from 1925 to 1 935 and after relinquishing the job remained as chairman of the board of directors until his death Further reading Chrysler, Walter P and Sparkes Boyden Life of an , American Workman New York: Dodd, Mead, 1950 Curcio, Vincent Chrysler: The Life and Times of an Automotive Genius New York: Oxford University Press, 2000 Chrysler Corp Traditionally the third-largest American. .. successful coffee companies They sold nationally with little attention to regional preferences A result of the growth of conglomerates and supermarkets was that a small number of roasters dominated that trade By the 1950s, the five largest roasters in the United States roasted more than one-third of all coffee and held 78 percent of all stocks By the 1990s, three companies were responsible for 80 percent of . The Chicago Board of Trade, 1859–1905: The Dynamics of Self-Regulation. Urbana: University of Illinois Press, 1979. T aylor, C. H. History of the Board of Trade of the City of Chicago. Chicago:. period. As a result of his revelations and those of others, the BANKING ACT OF 1 933 was passed. His successor, Winthrop Aldrich, helped heal the image of the bank, and he became one of the few bankers. chief executive of Chase in 1961. The bank’s reputation suffered in the early 1 930 s as it became one of the focal points of dis- content after the Crash of 1929 and the early years of the Great