ORGANIC CHEMICAL INDUSTRY — STINE 179 



as the late John E. Teeple so aptly expressed it. I cannot speak 

 for the entire industry, but I do know that during the early years 

 in which the du Pont Company conducted intensive work with dye- 

 stuffs and other organic chemicals, an outlay of more than $40,000,- 

 000 was made — without 1 cent of profit being realized. This outlay 

 represented plant investments, operating losses, and research expen- 

 ditures. I am quite sui-e our experience was not unique. 



During the past 25 years research has come to be recognized as 

 the most valuable tool available to the chemical industry. It is the 

 only tool with the power to create. While reliable data for the 

 entire industry are not available. Fortune Magazine reports that 

 American Cyanamid, Dow, du Pont, Eastman, and Monsanto spent 

 $12,600,000 on research in 1937, corresponding to about $2.80 of each 

 $100 of their aggregate net sales.^ Fortune's figure is, I believe, 

 conservative, since in recent years the research bill of the du Pont 

 Company has been an appreciably greater ratio of sales. 



The industry as a whole is reported to have spent $20,000,000 for 

 research in 1937, corresponding to an estimated $2.25 out of each 

 $100 of sales of inorganic chemicals, and $4.30 out of each $100 of 

 sales of organic chemicals.^ Only the steel and petroleum industries, 

 spending an estimated 50 and 40 cents, respectively, per $100 of sales,* 

 are reported as having research expenditures at all commensurate 

 with those of the chemical industry. But let us not be puffed up 

 with pride over our national state of mind — research expenditures 

 by American industry as a whole, if estimated correctly at $250,000- 

 000 a year, are lower than the nation's annual bill for cosmetics by 

 about $150,000,000.« 



The rise of our organic chemicals manufacture might be portrayed 

 either by cold statistics, or by showing the important role of Ameri- 

 can organic chemicals today in our whole industrial and everyday 

 life. For the most part I propose to follow the latter method, but 

 for the benefit of the statistically minded a few production figures 

 might be given. It might also be interesting to show how prices have 

 been reduced as production increased. 



In 1914 this country produced only about 10 percent of the dyes 

 consumed, and even that small proportion was based almost wholly 

 on imported intermediates. In 1938, by contrast, we produced about 

 96 percent of the dyes consumed in this country, and had an export 

 balance of some 5 million pounds. Our production of other organic 

 chemicals in 1914 was insignificant, so for data on which to base 

 further comparisons, let us consider 1919, when the manufacture of 



* Fortune, March 1939, p. 58. 



= Chem. and Metallurg. Eng., September 1937, pt. 2, p. 545. 



a Readers Digest for March 1939, p. 18, gives the approximate figure of ?400,000,000 for 

 our 1938 cosmetics bill. 



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