Halogen Hardships

Herbert H. Dow at the age of 22. From the Dow Historical Collection, CHF Archives.

Herbert Dow tried and failed several times before finding the formula for chemical success.

Just as in the business boom of the 1990s, start-up companies in the 1890s lived on venture capital. Before the turn of the 19th century, Midland, MI, sitting atop an alkali basin, was inhabited mostly by tough men looking to make a buck in the budding bromine business. Herbert Dow was one of those ambitious young men, trying and trying again to build a business on what was then a new, almost frontier, region.

Like the young dot-com entrepreneurs of the 1990s, Herbert Dow was just months out of college when he started his first company. In 1889, Dow was a 23-year-old graduate of Case School of Applied Science (now Case Western Reserve Univ.). As a college project, he had developed a method for extracting bromine from brine in a one-step process, instead of the multi-step process of evaporation, oxidation and distillation required at that time.

With the ink barely dry on his diploma, Dow convinced a group of investors in Canton, OH, to form the Canton Chemical Co. and produce bromine based on his new process. The company opened for business, produced a little bromine, and shut down. While the process showed promise, the new company ran out of money long before it had worked through all the bugs in Dow’s method of bromine extraction.

Bromine battles
The next year, 1890, Dow went to Cleveland, found new investors, and raised enough money to start the Midland Chemical Co. on the banks of the Tittabawassee River, in Midland, MI. This time the process worked, and the plant produced bromine in commercial quantities. But the fledgling company shortly ran into trouble because Dow, now 24, refused to deal with the bromine cartel that controlled the market in Michigan. Dow was promptly fired. The new plant superintendent worked with the cartel, and the profits from the plant went to the investors — not the inventor.

Undaunted, Dow moved into a barn down the street from the plant that ousted him and started company number three. By this time, Dow had developed an electrolytic process to produce chlorine. As with the bromine process, he was sure the chloralkali process would be a commercial success. He was further convinced that chloralkali would eventually eclipse bromine in commercial value — an intuition borne out by today’s annual production figures, which show that chlorine production in the U.S. is almost 50 times greater than bromine production. The company that bears the Dow name today is also the world leader in chloralkali production. Unfortunately, an hour after Dow threw the switch on this start-up, the production cell exploded.

Dow left the wreckage in Midland, returned to Cleveland, and raised still more money. This time he set up a plant in Navarre, OH, just south of Canton, and edged closer to complete success. He brought the process to commercial viability, but the business failed.

By now Dow was convinced that the process was right and that Midland was the best place for the business. Dow was also convincing. In 1897, Dow, just 31 years old, persuaded an even larger group of Cleveland investors to back him in building a chloralkali business in Midland. This last start-up would be known as The Dow Chemical Co.

Sweet revenge
As the twentieth century dawned, The Dow Chemical Co. was firmly in charge of business in Midland. As Dow predicted, chlorine demand had grown quickly. In a moment of revenge granted to few entrepreneurs, the 34-year-old Dow bought Midland Chemical Co. from the folks who ousted him a decade earlier.

In the decades that followed, Dow expanded his business. In addition to chlorine and bromine, Dow Chemical Co. produced calcium, magnesium, iodine and sodium compounds and became the world’s largest producer of then-popular Epsom salts. As the blockade of Germany during World War I caused shortages in many critical chemicals, the company produced dyes, metals and other products critical to the U.S. economy and war effort.

The post-war economic boom greatly increased demand for cars and, as a result, for gasoline, the production of which used large quantities of bromine. With domestic bromine reserves dwindling, Dow invented a process for extracting the high-demand halogen from seawater. It was to be the last chemical innovation he made before his death in 1930.

Business history of the 1990s is full of stories of people who were millionaires one month, scratching for backing the next, and millionaires again a year later. More than a century earlier, Herbert Dow did the same, walking the hard road of turning good ideas into good business.

This article is based on a speech given by Herbert D. (Ted) Doan on his acceptance of the 2002 Petrochemical Heritage Award. Doan is a former chairman of The Dow Chemical Co., and grandson of the Herbert Dow.

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