The Status of the Chemical Industries in the United States at the End of 1915

The Aniline Color, Dyestuff and Chemical Conditions
from
August 1st, 1914,
to
April 1st, 1917.
A series of Addresses and Articles
Compiled by:
I. F. Stone
1917Address Before the American Chemical Society, New York Section, October 8th, 1915.

I. F. Stone

MR. CHAIRMAN AND GENTLEMEN: When your chairman asked me to address you on the status of the chemical industries in the United States at the end of 1915, I considered the subject with much trepidation, and felt that if I tried to speak on this subject I would be falling into a teeming cauldron of trouble, as with conditions so abnormal as they are today, any one trying to describe these conditions as they are, and as they may be for the next year or more, is very likely to prove a false prophet. But notwithstanding these conditions, I will do the best I can, and hope anything I may have to say will be of interest to you. Right after the beginning of the war there was an immediate demand from all sides for products which had formerly been supplied from Europe, which were apt to be scarce as a result of the war, buyers attempting to secure as large supplies as possible in order to carry them through during this war, might it be long or short, and as a result the prices of European products immediately commenced to advance and finally reached the most fabulous figures. Those of us connected with the lines of business dealing in these products, then thought that no more abnormal and exciting condition could be possible. But strange enough, now, a year after the war, conditions are more exciting than ever, in that most of the European products which were then procurable in some quantity have practically disappeared, while the demand for them still continues to a great extent, but is impossible to meet.

The products manufactured in America, not dependent entirely on Europe, did not follow immediately the advance of the European products, but gradually, as the manufacturers commenced to see how things were developing and what their cost of raw material would likely be in the near future, they advanced their prices until they are now many times the normal in a good many instances.

American manufacturers also began to consider the question of manufacturing larger quantities of what they were already making, and also taking up new products which formerly could only be obtained from Europe, and I am glad to say that a great deal of progress has been made along these lines. I can say definitely that the chemical industries in the United States at this time are developing rapidly, and are in a stronger and better condition at this time, the end of 1915, than ever in the past, and many of the products which are now being manufactured will, in my opinion, continue to be manufactured after normal conditions are again in vogue, and we need no longer be dependent on Europe for such products. I will be more specific as I go along, but simply wanted to mention the fact at this time that the condition and progress of the chemical industries had developed and are now in a stronger position than ever before.

At the time of the war, or just before the war, the two most important chemical products furnished by Europe to the United States, in this case by Germany, were potash and coal tar products. We were entirely dependent on Germany for muriate and sulphate of potash, which as you know are used very largely for fertilizers, and in a smaller way for the manufacture of potash products such as bichromate of potash, yellow prussiate of potash, caustic potash, and so on, the manufacture of which was dependent on Germany for their supply of raw material. Unfortunately, since the war and the embargo on the shipment of potash to the United States, none now being received, no substitute has been found, and in spite of the reports from the Department of Commerce that large quantities could be secured from a seaweed called kelp, which is in beds or meadows along the Pacific Coast, belonging to this Government, nothing so far has been practically done to recover it. There are reputed deposits of potash in Utah and California, but again nothing practical has ever been done with them, so that at the present time consumers of potash or potash products are entirely dependent on what is left of the German shipments before and right after the war, and when these stocks are exhausted, no one knows what can be done.

On the other hand, on coal tar products, it was immediately discovered by investigation in this country that we had large quantities available if they only could be recovered and developed. In other words, the production of benzole, which is the principal base for the manufacture of most coal tar products and chemicals, could be immediately increased, and this was and is being done. Some of the large steel works, who formerly did not recover their benzole, are now producing it, and the production, which was about 3,000,000 gallons before the war, is now increased to about 15,000,000 gallons, and while unfortunately its demand for war purposes in the manufacture of explosives, etc., is so great that even the present supply is not sufficient, and prices are almost too high for manufacturers to use it for the manufacture of ordinary products not connected with war products, yet the fact remains that this product has increased in production over five times, and this production is here to stay, and at normal prices will be largely used for the manufacture of other products, which will develop with it. There is one use for benzole, for instance, which is practical and sure, and that is its use for motive purposes in automobiles in place of gasoline. It is being largely used in Europe for this purpose, and the only reason it has not been used here has been the limited production and the higher price, it normally being about double the cost of gasoline. With the present immense production, however, the cost has been reduced until now I believe that it can be manufactured and sold at a profit at the proportionate price of gasoline, and that this will be done as soon as the present war is over. When I say proportionate price I mean that careful experiments for automobile purposes show that benzole has a motive power about 25 per cent better than gasoline, consequently would have 25 per cent advantage at the same price, so that even with benzole 25 per cent more in cost it would still be money value, but I also really believe that it could be actually produced now and sold at the same price as gasoline if it were necessary to do so. Therefore the importance of this matter is obvious. Not only is the above true, but it is a fact that the use of gasoline for automobile purposes is so large that it is very difficult for the oil companies to produce enough to meet the demand, consequently the entrance of the new product for the same purpose will be very important, and a great relief.

Another large increase in production through the present conditions is the manufacture of aniline colors and other coal tar products in this country, which will be much to the relief of consumers who at the present time are unable to get anything like the supply of colors which they need in the conduct of their business. The five factories already established in this country before the war are all extending their production to their utmost capacity in keeping with safety for their investment, and I believe that in 1916 the production of aniline colors in this country will be at least three to four times the production before the war. This production could again be largely increased if the manufacturers were sure of some protection from the Government in the way of higher tariff, or Government manufacture of intermediate materials, which would enable them to get same at the same price as paid by European manufacturers; and then again the putting into effect some anti-dumping clause which is now promised by the Government, to prevent the dumping into this country of colors at lower prices than they are sold elsewhere, for the purpose of preventing their development and manufacture here. Whatever the Government may finally decide to do towards the protection of this industry, there remains the fact that 152

a great impetus in the development is already under way, with the hope of Government protection, so that the Europeans will find them strongly entrenched in any event after the close of the war. I am speaking now of the factories already in operation, but in addition to those there are many new factories projected, and some in operation. I have a list of twenty-three new factories, the last of them with a proposed capital of $15,000,000, and while a good many of these may not materialize, something will surely come of some of them. Up to now none have actually manufactured any aniline colors, but some are operating with a production of some intermediate products like aniline oil, beta naphthol, paranitranilin, etc., and, speaking of aniline oil, with the one factory established before the war and the increase in its works since the war, and the number of new factories making or about to make aniline oil, it looks as if the production of this product would be 8,000 to 10,000 tons as against the normal consumption of about 4,000 tons; in other words, the proposed manufacture seems larger than the consumption, but as the consumption is also increased, possibly the whole amount projected can be used. At any rate there will be enough manufactured in this country to take care of the whole consumption, so that Europe need not be depended upon.

Another article which has increased largely in production is carbolic acid, the consumption of which in the United States is about eight to ten million pounds yearly. It is true, however, that this has not been aavilable for ordinary use, as most of the new factories have used their product for the manufacture of picric acid, which is sold for war purposes, with the exception, perhaps, of the works of Thos. A. Edison, who, in an interview, said that his production was about 12,000 pounds daily, which is used for his records. The point about this article is that practically none of it was manufactured here prior to the war, but it is now produced in large quantities, and after the demand for picric acid is over, for war purposes, then the production can be used for other commercial purposes to the advantage of the country, and so relieve them of depending on Europe for their supply.

Another article which has increased largely in production here is naphthaline, which is also a coal tar product. Before the war the production in this country was about 2½ million pounds, while now it has increased to something like 7,000,000, perhaps more, the normal consumption being about 9,000,000, and the difference between what was produced in America and the total was obtained from England and Germany, which countries hereafter should be practically unable to ship over here, by reason of the new large production here. This is about all I will say in connection with aniline or coal tar products, but as it is obvious that there is a great development taking place in this industry, it is certainly a very satisfactory condition at this time. Now, to leave the aniline industry, and go to other products not connected with aniline, but the development of which has gone on very quickly since the war, I will refer first to barytes and barium products. Before the war there had been a yearly average importation to this country of crude barytes of about 40,000 tons coming from Germany, practically all of which was used in the manufacture of lithophone, which was about the only product of barytes made largely in this country prior to the war. There are now six manufacturers who are turning out large quantities, and the business on this product will remain with the American factories. I wish to say, however, that since the beginning of the war no barytes has been coming in from Germany but it has been supplied from mines and deposits in the States of Tennessee, Kentucky, Virginia and Missouri, and possibly some others, and now the thing to do is to continue to use this American product and keep away from the European barytes. Formerly there was a duty of $1.50 per ton on foreign barytes, but this was reduced in the last tariff to 15 per cent, which was only about half. The German barytes was formerly delivered at a cost of about $5 per ton at such ports as Philadelphia and New York, the duty of 15 per cent per ton included, and the American barytes under normal conditions could not compete and can only sell now because no German goods can be secured. The German barytes tests higher in barium sulphate content, averaging about 96 per cent and almost free from objectionable impurities, and the consumer obtains a better yield at a lower cost than by the use of the available American barytes, which only analyzes from about 83/95 per cent barium sulphate, averaging say 92 per cent and much of which is contaminated with iron. The point is, then, that a duty should be placed on foreign barytes high enough to offset the difference in quality and price, and insure the continued use of American barytes by American manufacturers. In other words, the duty should be advanced, instead of standing at the present duty of 15 per cent per ton. In addition to using the American barytes for the manufacture of lithophone, since the war four or five responsible factories have started up to manufacture other barium products such as chloride of barium, carbonate of barium, hydrate of barium, nitrate of barium, and binoxide of barium, which means an increased use of the crude barytes, giving still further production to American producers, possibly double the quantity formerly used, and it is important that American producers should continue to furnish the crude barytes to these factories in spite of the German competition, which is bound to come again after the war, and as far as I know an additional duty is the only way it can be done. With the manufacture in this country of the products just mentioned, viz., chloride of barium, carbonate of barium, hydrate of barium, nitrate of barium and binoxide of barium, most of which were never made in this country before successfully, we have a practically new industry created, which will make us independent of Europe in the future, some of these factories being already in operation successfully, and the full production of all of them will undoubtedly be on the market before very long. This makes the barytes and barytes products in this country practically a new industry and one which could be held in the future, and is of great importance.

Another product, the manufacture of which has increased largely in this country since the war, is carbon tetrachloride, which was formerly made exclusively in Germany, but later taken up by American manufacturers, who at the time the war began were probably producing half the consumption here. Since the war they have increased their plants very largely so that they are now supplying all of the American trade, and while still somewhat short of the requirements, new factories are being constructed so that in the end the whole consumption of the country will be manufactured here. This article is perhaps not so well known, but is one of considerable importance, and the consumption is continually increasing in view of the many purposes for which it can be used.

I have given up to now the situation on such articles for which we formerly depended largely on Europe, but the manufacture of which has increased largely in this country, which gives a distinct advantage and increase in our chemical industry. I will therefore now refer to a number of products which have always been produced largely in this country, and not so susceptible to European competition, simply to advise you the condition of the manufacture of these articles and the present and future conditions regarding them.

First in importance, I presume, is the manufacture of such acids as sulphuric acid, nitric acid and muriatic acid, which are the basic materials for practically all of the great chemical industries of the country, and on which there has never been any foreign competition because largely of the heavy expense of transportation, and the fact that American manufacturers were able to make such prices as to render the importation unprofitable. Up to within a few months ago they were able to supply the demand of the country as usual, but as the war ran on, and the demand for ammunition and explosive purposes became larger and larger, the demand for acids increased to such an extent that at this time the manufacturers are absolutely unable to supply it, and as a consequence American consumers find themselves unable to get enough to conduct their business, or, when they do get enough for their present business, are unable to obtain any additional quantities for an increased business, so that the general situation on acids is very serious at this time. Many increases are planned and under construction, but it will be a number of months before they can be completed, and not much relief is looked for for some time to come.

Perhaps the next important manufactures in volume and value are caustic soda, soda ash and bleaching powder, all of which are now manufactured largely in this country, the quantity I am told being from 1,250,000 to 1,400,000 tons of the three products together. For a short time after the war, the manufacturers were able to continue their supply in their ordinary way, but the stopping of shipments from European countries to other countries by reason of the war led to a demand for American manufactures to supply the shortage, that is, countries who had formerly bought from England and Germany and who could not get any from Germany at all and not enough from England, turned to America for their supply, and this created a large export business which brought the manufacturers to their full production and has kept them very busy up to this time. By reason of this unusual export demand, and the consequent shortening of stock, the condition of these products means great prosperity to the American manufacturers.

Other products manufactured largely in this country are such products as yellow prussiate soda and potash, chlorate of soda and potash, bichromate of soda and potash, the manufacturers of which hold the whole American trade, as there are practically no importations from Europe. The manufacture of yellow prussiate potash, however, is somewhat limited owing to the inability of manufacturers to get muriate of potash from Germany, so most of them are working almost exclusively on soda, and the paint manufacturers, who are large users, are now trying to make their Prussian blues from soda instead of potash, and if successful, as some of them seem to be, the soda will probably be used exclusively for a long time to come, and there will be no need to depend on European sources for potash.

The manufacture of chlorate soda and bichromate soda continues without hindrance, and in increasing quantities, but chlorate potash and bichromate potash are apt to be some what limited owing again to their inability to get proper quantities of the muriate potash, these manufacturers depending, as far as I can find out, on muriate potash which was brought in from Germany before or just after the war, and while they are fortunate in having enough to go on with their manufacturing, it must be evident that sooner or later their potash products must stop, and soda products substituted wherever possible.

The condition of another potash product is also interesting, speaking now of caustic potash, the manufacture of which was commenced in this country some years ago and up to the time of the war was constantly gaining in importance and production. Unfortunately, however, the manufacturers were dependent entirely on Germany for their muriate potash, and when shipments of this were stopped the factory was compelled to slow up, and is now in a position where they can only make such a quantity of caustic potash for which they can secure the raw material. Should the muriate potash be found or produced in America, then this caustic potash could be made largely, but while depending on Germany muriate potash must necessarily continue to be limited.

Another important article the manufacture of which has developed in this country is oxalic acid. The factory established some years ago, but up to the time of the war, having trouble to compete with European product on account of the reduction of duty in the last tariff, was not liable to develop the production as they wished, but since the war, and the importation of foreign acid practically stopped, they have taken care of practically the whole American consumption, and will continue to do so to the limit of their ability. They are not yet able to produce the full quantity, so there is a considerable shortage in supplies, consequently the price is very high, but eventually there is no reason why this product should not be manufactured to the full extent of the American consumption, and the business held here.

There are many other chemical products which are manufactured in this country, but not of enough importance to enumerate separately, so all I can say in finishing is that the status of the chemical industries in the United States at this time is very satisfactory, practically every manufacturer being engaged to the limit of his capacity, and from every indication this prosperity will continue for the following year, for the reason that most of them have made contracts covering their production for this period.

You will notice in speaking of these various products manufactured in America, I have made frequent reference to tariff, and the necessity of advancing the duty if articles manufactured are to be developed successfully, and while I have no intention of making this an address on tariff, at this time, it is so obvious that the tariff should be reformed upward to retain the present manufacturers successfully, that I cannot help mentioning it.

I hope what I have said this evening will be of interest to you, and thank you for your attention.