Brine Business

Michigan is contiguous to more fresh water than any other State in the U. S. Four of the five Great Lakes provide all but two of Michigan's borders. Yet within 50 miles of fresh water in Michigan there is an inexhaustible supply of salt water. From briny depths 1,200 ft. or more beneath the earth's surface the 39-year-old Dow Chemical Co. daily pumps thousands of gallons of water from which it makes hundreds of products. Seat of the briny grand duchy of Dow is Midland, whose citizens once brought suit against Founder Herbert Henry Dow because his plant was filling the town with vile odors. Money-making Dow Chemical still rests firmly on its Midland salt wells, but in the last five years expansion has been going on in various parts of the U. S. and Mexico where the superior Dow processes could be put to good use. Last week, to replace capital spent during the past year principally for plant and laboratory construction, Dow Chemical offered for sale through Manhattan's Edward B. Smith & Co. a $5,000,000 issue of 15-year debentures which will yield only 3% per year.

Such cheap financing of an industrial concern was a record low in an era of cheap money. Despite its relative obscurity, success of the issue was assured because of Dow's impeccable position in its field. Dow Chemical Co. is not widely known to the public because it does not sell directly to the consumer. For example, Dow sells aspirin (acetyl salicylic acid) by the barrel or sack, lets someone else put an advertised name on the drugstore package. It sticks to the primary manufacture of essential ingredients, lets others make the trade names.

No longer do Midlanders rail against Dow Chemical Co. as they did in 1900, for today Dow is the biggest thing in Mid land. Most of the company's 3,700 employes, including 500 scientists and technicians, live there. The plant stretches over 250 acres, contains more than 300 buildings, 16 mi. of railroad track. From 125 wells which look like oil wells come the salts from which Dow refines the ele ments of bromine, chlorine, iodine and magnesium, then makes the chemical compound's which reach the consumer under a hundred different names.

From Midland, Dow indirectly serves the washwoman (with caustic soda in soap), the tiremaker (with sulphur chloride used in vulcanizing rubber), the shoe maker (sodium sulphide for tanning), the cleaner (chloroform and carbon tetrachloride), the dyer (synthetic indigo), the rayon maker (acetic anhydride).

At Long Beach, Calif., the lo-Dow Chemical Co. produces a substantial per centage of all U. S. iodine. At Tulsa, Okla., Tampico, Mexico and other oil-producing areas subsidiaries process oil and gas wells to make them more productive. At Bay City, Mich., 18 mi. from Midland on Lake Huron, Dow now makes a magnesium alloy that is one-third lighter than aluminum and good for airplane and machinery parts. At Marquette, Mich., on Lake Superior, a subsidiary called Cliffs Dow Chemical Co., in which the parent company has a 60% interest, makes charcoal, combustible gases and acids from wood. Near Wilmington, N. C., on the Atlantic Ocean, a big plant extracts bromine from the sea, manufactures ethylene dibromide for use in antiknock gasolines. Partner on a 50-50 basis in this venture is Ethyl Gasoline Corp., which uses the entire output of the seaside plant. For the last fiscal year Dow's profits from three year-old Ethyl-Dow Chemical Co. were $458.805.

Dow Chemical Co. has been a consistently good moneymaker. It paid dividends throughout the depression. Net profits for the fiscal year ending in May 1934 were $3,584,078, for 1935 $3,370,713, and last year $4,382,717, equal to $4.42 per share on 945,000 common shares outstanding. Assets figured for the last fiscal year were $29,041,380, and including the new financing its funded debt will be only $7,160,000 after Jan. 1.

President of Dow Chemical since his father died in 1930 has been Willard Henry Dow. 39, who last week was named a director of the American Chemical Society for 1938. A graduate of Michigan (Class of 1919), he worked as a Dow chemist for five years, became assistant general manager in 1926. Not the great chemist the late Dr. Herbert Henry Dow was, Son Willard Henry has maintained the secure and independent position of Dow Chemical Co. by proving himself a competent manager.

Founder Dow went to Midland in 1890. With a partner he bought a brine well, put into practice the chemical theories he learned at the Case School of Applied Science in Cleveland. Since its formation in 1897 the growth and prestige of Dow Chemical Co. has been continuous. Long before the World War, Dr. Dow's company had produced results which showed that certain German chemical monopolies were by no means permanent. In 1930, the year of his death. Dr. Dow was awarded the distinguished Perkin Medal for his part in the creation of a national chemical industry.

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