Herbert Henry Dow: Difference between revisions
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With his new company and new technology, Dow was able to produce bromine very cheaply, and began selling it in the United States for 36 cents per pound. At the time, the government-supported German bromine [[cartel]], [[Bromkonvention]], had a near-[[monopoly]] on the supply of bromine, which they sold for 49 cents per pound. The Germans had made it clear that they would flood the American market with cheap bromine if Dow attempted to sell the element abroad. In 1904 Dow defied the cartel by beginning to export his bromine at its cheaper price to England. A few months later, an angry Bromkonvention representative visited Dow in his office and reminded him to cease exporting his bromine.<ref name="monopoly">{{cite web | last = Folsom | first = Burton W. | coauthors = | title = Herbert Dow, the Monopoly Breaker | work= | pages = | language = | publisher = Mackinac Center for Public Policy | date = May 1, 1997 | url = http://www.mackinac.org/article.aspx?ID=31 | accessdate = 2007-04-05}}</ref> |
With his new company and new technology, Dow was able to produce bromine very cheaply, and began selling it in the United States for 36 cents per pound. At the time, the government-supported German bromine [[cartel]], [[Bromkonvention]], had a near-[[monopoly]] on the supply of bromine, which they sold for 49 cents per pound. The Germans had made it clear that they would flood the American market with cheap bromine if Dow attempted to sell the element abroad. In 1904 Dow defied the cartel by beginning to export his bromine at its cheaper price to England. A few months later, an angry Bromkonvention representative visited Dow in his office and reminded him to cease exporting his bromine.<ref name="monopoly">{{cite web | last = Folsom | first = Burton W. | coauthors = | title = Herbert Dow, the Monopoly Breaker | work= | pages = | language = | publisher = Mackinac Center for Public Policy | date = May 1, 1997 | url = http://www.mackinac.org/article.aspx?ID=31 | accessdate = 2007-04-05}}</ref> |
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Unafraid, Dow continued exporting to England and Japan. The German cartel retaliated by flooding the US market with bromine at a mere 15 cents a pound in an attempt to put him out of business. Dow, unable to compete with the attempt at [[predatory pricing]] in the U.S., instructed his agents to quietly buy up hundreds of thousands of pounds of the German bromine locally at the low price. The Dow company then turned the tables on the cartel by repackaging the bromine and exporting it to Europe, including Germany, at 27 cents a pound. The cartel, expecting Dow to go out of business, was unable to comprehend what was driving the enormous demand for bromine in the U.S., and where all the cheap imported bromine flooding their market was coming from. They even suspected their own members of violating their price-fixing agreement and selling in Germany below the cartel's fixed cost. The befuddled cartel continued to slash prices on their bromine in the U.S., first to 12 cents a pound, and then to 10.5 cents per pound. Dow continued selling the dumped bromine in Germany at 27 cents per pound. When the cartel finally caught on to Dow's tactic, they realized they could not keep selling below cost, and were forced to increase their prices worldwide. Dow's triumph has been used as an argument that [[predatory pricing]] is an irrational practice that would never work in the real world.<ref name="monopoly"/> |
Unafraid, Dow continued exporting to England and Japan. The German cartel retaliated by flooding the US market with bromine at a mere 15 cents a pound in an attempt to put him out of business. Dow, unable to compete with the attempt at [[predatory pricing]] in the U.S., instructed his agents to quietly buy up hundreds of thousands of pounds of the German bromine locally at the low price. The Dow company then turned the tables on the cartel by repackaging the bromine and exporting it to Europe, including Germany, at 27 cents a pound. The cartel, expecting Dow to go out of business, was unable to comprehend what was driving the enormous demand for bromine in the U.S., and where all the cheap imported bromine flooding their market was coming from. They even suspected their own members of violating their price-fixing agreement and selling in Germany below the cartel's fixed cost. The befuddled cartel continued to slash prices on their bromine in the U.S., first to 12 cents a pound, and then to 10.5 cents per pound. Dow continued selling the dumped bromine in Germany at 27 cents per pound. When the cartel finally caught on to Dow's tactic, they realized they could not keep selling below cost, and were forced to increase their prices worldwide. Dow's triumph has been used as an argument that [[predatory pricing]] is an irrational practice that would never work in the real world. However, this statement needs to be qualified in a sense that the product was a commodity that had the capacity to be mass-produced, standardized, and bought or sold at large quantities.<ref name="monopoly"/> |
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==== World War I ==== |
==== World War I ==== |
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Revision as of 05:11, 10 February 2012
Herbert Henry Dow | |
|---|---|
 Herbert Dow, founder of Dow Chemical | |
| Born | February 26, 1866 Belleville, Ontario, Canada |
| Died | October 15, 1930 (aged 64) |
| Alma mater | Case School of Applied Science |
Herbert Henry Dow (February 26, 1866 – October 15, 1930) was a Canadian born, American chemical industrialist. He is a graduate of Case School of Applied Science in Cleveland, Ohio. His most significant achievement was the founding of the Dow Chemical Company in 1897. He was a prolific inventor of chemical processes, compounds, and products, and was a successful businessman.
Biography
Early years
Herbert Henry Dow was born in 1866 in Belleville, Ontario (Canada), the eldest child of Joseph Henry Dow, an inventor and mechanical engineer. Six weeks after his birth, the family returned to their hometown of Derby, Connecticut.[1] They moved again in 1878, this time to Cleveland, Ohio (USA) to follow his father's job with the Derby Shovel Manufacturing Company.
Dow was a precocious child, often helping his father with mechanical problems, and inventing an incubator for chicken eggs before he was 12. Several years later he and his father coinvented a small steam turbine which the United States Navy used for many years in torpedo propulsion.[2]
After graduating from high school in 1884, Dow enrolled in the Case School of Applied Science (now known as Case Western Reserve University). While at Case, he became a member of the Phi Kappa Psi fraternity. He began specialized research into the chemical composition of brines in Ohio and nearby areas. He discovered that brine samples from Canton, Ohio and Midland, Michigan were very rich in bromine, which at the time was a primary ingredient in medicines and was used heavily in the fledgeling photographic industry.[2] Following his graduation from Case in 1888, Dow worked for a year as a chemistry professor at Huron Street Hospital College in Cleveland, still continuing his research into the extraction of chemicals from brine.
Business Career
In 1889 Dow received his first patent after inventing a more cost-effective and streamlined process for bromine extraction. He quickly formed his own company, but was bankrupt within the year. His associates were impressed with his work and in 1890 helped him to found the Midland Chemical Company in Midland, Michigan.[1] Dow continued his work extracting bromine and by early 1891 he had invented the Dow process, a method of bromine extraction using electrolysis to oxidize bromide to bromine.[2]
Foundation of Dow Chemical
Dow was not content with simply improving the bromine extraction process, but wanted to expand his research of electrolysis to yield other chemicals. His financial backers did not approve of his continued research and fired him from the Midland Chemical Company.[3] He continued his research, developing a process to extract chloride and caustic soda from sodium chloride. After seeking funding from potential backers in Cleveland including family friends and former Case School of Applied Science classmates, Dow secured funds from James T. Pardee, Albert W. Smith, J. H. Osborn, and Cady Staley. In 1895, Dow moved his family to Ohio and founded the Dow Process Company to develop the production mechanism for his process.[4] The following year he returned to Midland, where he formed the Dow Chemical Company as successor to the Dow Process Company. The Dow Process Company was ]incorporated with 57 original stockholders[5]. Within three years, his new company had purchased the Midland Chemical Company.[2]
Breaking a Monopoly
With his new company and new technology, Dow was able to produce bromine very cheaply, and began selling it in the United States for 36 cents per pound. At the time, the government-supported German bromine cartel, Bromkonvention, had a near-monopoly on the supply of bromine, which they sold for 49 cents per pound. The Germans had made it clear that they would flood the American market with cheap bromine if Dow attempted to sell the element abroad. In 1904 Dow defied the cartel by beginning to export his bromine at its cheaper price to England. A few months later, an angry Bromkonvention representative visited Dow in his office and reminded him to cease exporting his bromine.[6]
Unafraid, Dow continued exporting to England and Japan. The German cartel retaliated by flooding the US market with bromine at a mere 15 cents a pound in an attempt to put him out of business. Dow, unable to compete with the attempt at predatory pricing in the U.S., instructed his agents to quietly buy up hundreds of thousands of pounds of the German bromine locally at the low price. The Dow company then turned the tables on the cartel by repackaging the bromine and exporting it to Europe, including Germany, at 27 cents a pound. The cartel, expecting Dow to go out of business, was unable to comprehend what was driving the enormous demand for bromine in the U.S., and where all the cheap imported bromine flooding their market was coming from. They even suspected their own members of violating their price-fixing agreement and selling in Germany below the cartel's fixed cost. The befuddled cartel continued to slash prices on their bromine in the U.S., first to 12 cents a pound, and then to 10.5 cents per pound. Dow continued selling the dumped bromine in Germany at 27 cents per pound. When the cartel finally caught on to Dow's tactic, they realized they could not keep selling below cost, and were forced to increase their prices worldwide. Dow's triumph has been used as an argument that predatory pricing is an irrational practice that would never work in the real world. However, this statement needs to be qualified in a sense that the product was a commodity that had the capacity to be mass-produced, standardized, and bought or sold at large quantities.[6]
World War I
The new company focused on research, and soon was able to extract many more chemicals from brine. The company was given a large opportunity to grow during World War I, when Britain blockaded the ports of Germany, which at the time included most of the world's largest chemical suppliers. Dow Chemical quickly moved to fill the gap, producing magnesium for incendiary flares, monochlorobenzene and phenol for explosives, and bromine for medicines and tear gas. By 1918, 90% of the Dow Chemical Company production was in support of the war effort.[2] During this time period, Dow also created the diamond logo that is still used by the Dow Chemical Company.[7]
Auto industry
Following the conclusion of the War, Dow began to research the benefits of magnesium, which the company had in large supply. He discovered that it could be used to make automobile pistons. The new pistons proved to give more speed and better fuel efficiency. The Dowmetal pistons were used heavily in racing vehicles, and the 1921 winner of the Indianapolis 500 used the Dowmetal pistons in his vehicle.[2]
Death
By the time of his death on October 15, 1930 from cirrhosis of the liver,[2] Dow had personally received over 90 patents.[8] Dow was survived by his wife, Grace, and five of their seven children.[9]
Commemoration
In 1925, Dow started the Dow Gardens in Midland, Michigan as a personal hobby.
H. H. Dow High School in Midland, Michigan, is named after Dow. Among his awards is the Perkin Medal, received in 1930.
His home in Midland, known as Herbert H. Dow House, was declared a U.S. National Historic Landmark in 1976.
See also
References
- ^ a b "Herbert H Dow". Ohio History Center. Retrieved 2007-04-05.
{{cite web}}: Cite has empty unknown parameter:|coauthors=(help) - ^ a b c d e f g "Herbert Henry Dow 1866-1930". Chemical Heritage Foundation. 2002. Retrieved 2007-04-05.
{{cite web}}: Cite has empty unknown parameter:|coauthors=(help) - ^ Brandt, E. N. (1997). Growth Company. Michigan State University Press. pp. 16–17. ISBN 0-87013-426-4.
- ^ Whitehead, Don (1968). The Dow Story (1st ed.). McGraw-Hill Book Co. pp. 24, 37–38. ISBN 0070699488. LCCN 68-0 – 0[dead link].
- ^ "Original Stockholder Agreement of Dow Chemical Company," 1897, File # 970041, Herbert H. Dow Papers, Post Street Archives, Midland, Michigan
- ^ a b Folsom, Burton W. (May 1, 1997). "Herbert Dow, the Monopoly Breaker". Mackinac Center for Public Policy. Retrieved 2007-04-05.
{{cite web}}: Cite has empty unknown parameter:|coauthors=(help) - ^ "Herbert Henry Dow". Michigan Walk of Fame. Retrieved 2007-04-05.
{{cite web}}: Cite has empty unknown parameter:|coauthors=(help) - ^ "Herbert Henry Dow". Invent Now. Retrieved 2007-04-05.
{{cite web}}: Cite has empty unknown parameter:|coauthors=(help) - ^ "Death Claims Noted Chemist". Detroit Free Press. October 16, 1930.
{{cite news}}: CS1 maint: date and year (link)