As we will see throughout this series, the business of adding known deadly toxins like lead to an already dangerous product like gasoline would take a special kind of amorality and disregard for human life and the environment. America’s new corporate form proved uniquely suited to such reckless commercial endeavors. Like Standard Oil, with its long years of ruthless acquisition and gross pollution, an even longer history of antipathy to human life prepared DuPont, which would come to control General Motors for more than half a century, for its next assault on the world’s living things – the manufacture and marketing of leaded gasoline. Today, we look at the chemical giant’s past and the essential prologue for great misdeed it provided.
People had been blowing things up happily enough for more than a thousand years before greatly expanded use of gunpowder during the 18th and 19th centuries arrived to catapult the explosive arts forward in dramatic fashion. Central to their development and expansion were the efforts of Eleuthére Irénée du Pont de Nemours, a French émigré to America. The organization he founded was to the low explosive which came to be known as black powder (a blend of charcoal, sulfur and nitrate, or saltpeter) and its many incendiary successor — up to and including atomic bombs — what John D. Rockefeller’s Standard Oil was to petroleum.
Today we think of the enterprise Eleuthére founded as the progenitor of toxic “forever” chemicals like per- and polyfluoroalkyl substance (PFAS) and perfluorooctanoic acid (PFOA, colloquially known as C8 and not to be confused with the 8th generation Corvette,) carcinogens pervasively used in Teflon, water repellant clothing and firefighting foam, and the subject lately of numerous lawsuits. But centuries before the slow, agonizing deaths their forever chemicals inflicted, famille du Pont were busy helping people kill people as quickly as possible.
Following a brief prison stay in France for his reactionary views after the French Revolution, du Pont decamped to the United States in 1799, with his politician father, Pierre Samuel, and family, where they had friends in Thomas Jefferson, Benjamin Franklin and Alexander Hamilton, among other founding fathers who’d made their acquaintance on missions to France. Observing that the newly independent nation’s explosives industry was backward compared to that of Europe, the du Ponts, who’d learned how to make gunpowder from Antoine Lavoisier — the so-called “father of chemistry” — before his beheading during the revolution, erected three years later America’s first black powder mill. Five miles north of Wilmington, Delaware, along the shores of the Brandywine River, it was an area (and state) they’d dominate for centuries.
With blossoming American demand for gunpowder –vital to guns, cannons, road and field clearing, canal excavation and mining — the du Ponts prospered mightily, supplying explosives without hesitation not just to the government of their new homeland but to anyone who was buying, including America’s opponents, the British, in the War of 1812. Above all, their fealty was to profit at any price, a regrettable trait that has characterized the company, which supplied explosives to both sides of many wars — ever since.
Growing volume meant accidental explosions were rising precipitously, not just on the world’s battlefields and in its mineshafts, but at the du Pont mill. Here, sudden disasters had grown so commonplace that the mill’s main structure was redesigned to accommodate them, with the new drawings calling for three sturdy stone walls and a single, relatively frail one, made of wood. In the event of an explosion, the wooden wall would instantly blow out, allowing the release of enough tension so as to permit the three stone walls to remain standing. The fourth, after its inevitable splintering, could be more easily and cheaply replaced. This and a related but grimmer certitude – a steady death toll among du Pont (later renamed DuPont) workmen when the wall blew out, along with frequent fatalities of the many unlucky (and often careless) users of its products — were prices the family willingly became inured to paying.
For the du Pont clan was in the unseemly business of blowing things up and fatal incidents were necessarily going to be a part of their world. It is tempting to say that this ready acceptance of death and dying — not to overlook governmental and public acceptance of the firm’s general lack of remorse — is central to understanding DuPont’s history and corporate character. It surely helps to answer the nagging question of what was on their minds as they transitioned from powder into dangerous chemicals, or the compound tetraethyl lead they’d help place in gasoline, or later the scourge of petrochemical-derived plastics and PFOA and PFAS, all of whose health risks were recognized early on and known to them.
It also bears mentioning that the du Ponts succeeded repeatedly in having their way with the world’s environment not just because they were insensitive, selfish creeps with very thick skins, which they were, but also on account of the fact that they were tops at their game, maintaining an uncanny edge through successive generations and hundreds of years, in imagination, technique, financial results and sheer chutzpah.
Building upon the family’s early American success, Eleuthére’s university-trained grandson, Lammot, advanced the family fortune by revolutionizing black powder manufacture when he learned to substitute sodium nitrate for potassium nitrate. DuPont would go on to supply almost 40 percent of all the powder the Union used in the powder-fueled and legendarily deadly Civil War.
Later, Lammot crucially defied company president General Henry duPont by setting off to manufacture (as the Repauno Chemical Company) a new, still more powerful explosive invented in 1866 by the Swedish industrialist, Albert Nobel. It was called dynamite and its manufacture called for mixing hugely volatile nitroglycerin — discovered by the Italian chemist Ascanio Sobrero in 1846, — with silica, to make a more malleable and easily employed paste. The entire process, from start to finish, was fraught with danger as nitroglycerin suffered the impurities that frequently attended its manufacture badly, often causing it to explode at the wrong time.
While the elder du Pont didn’t care for dynamite, the market did. Paradoxically, the mind-boggling power and gruesome deadliness of its explosive force was part of the appeal. A nitroglycerin explosion instantly achieves a temperature of 3,500 degrees centigrade, making it capable of melting diamonds or causing men and other, weightier matter to disappear instantly. Such enormous strength captured the imagination of a nation busy moving mountains, building railroad tunnels and dams and drilling for oil and other mineral riches deep beneath the earth’s huge and often unyielding surface. Which is not to mention the world’s armed forces which hastened to advantage themselves with stronger explosives.
Numerous firms sprung up to supply burgeoning American demand, each claiming a patent-beating formula and a name like Hercules, Ajax, Vulcan, Samson or Neptune to uniformly convey the product’s explosive force by reference to mythology. Through the years, dynamite became a generic name, even as Nobel steadily improved his own original product’s strength and safety. He achieved a major breakthrough when he discovered that nitroglycerine could be transported with improved safety if frozen.
The debugging of the explosive and the temptingly huge market for it led Repauno (since incorporated into the Eastern Dynamite Co.) and a vindicated Lammot to return to the du Pont fold, bearing nitro. Black-powder’s old champion had a new product, and DuPont was prosperous and well situated enough to enter the high explosive fray in the first tier. Ironically, it was a nitro explosion that would claim Lammot du Pont’s life along with five others when an 1884 experiment to accelerate production went horribly wrong.
That nitroglycerin would inevitably lead to death and human suffering was not lost on any of the players. Like an early Robert Oppenheimer renouncing the atomic bomb he’d help develop during World War II, Sobrero was horrified by his own invention and repulsed by Nobel’s refinement of it, speaking out strongly against dynamite. With three-quarters of a century of powder-making behind it, DuPont, on the other hand, was emotionally prepared for the next step in explosive force.
Dynamite was immensely useful in a world gone mechanical, dependent as it was on ever-greater quantities of raw materials and energy. Railroad builders loved dynamite, and among other reasons for its growing popularity was the fact that it could be readily formed into cylindrical shapes, which were ideal for stuffing down drill holes, such as the ones used in mining and petroleum production. Demand would never slacken. The construction of the Panama Canal (which didn’t open until 1914,) to give but one example, called for over 61 million pounds of high explosives alone.
Recognizing that some degree of cooperation was useful in the cut-throat international world of high explosives manufacture, DuPont arranged to ally itself contractually with the powerful Nobel-Dynamite Trust Company, Limited in 1897, as David A. Hounshell and John Kenly Smith recount in Science and Corporate Strategy: DuPont R&D, 1902- 1980. In so doing, it not only afforded itself access to superior expertise, it established a pattern of “enlightened” cooperation and orderly market sharing which would extend to the rest of the international, largely German, chemical cartel, a jovial association that an ensuing two world wars failed to extinguish.
As explosives technology matured, the duPont business became less of a milling operation and more of a chemical enterprise, leading to the establishment in 1902 of the firm’s first formal research and development facility. The corporate research era had dawned and in coming years DuPont would branch out of explosives, developing expertise in dyes, paints, textiles and industrial chemicals. Lest there be any question, it was hardly giving up on explosives, actively growing and maintaining these interests into the 1990s. But it was moving on.
Also in 1902, control of the hundred-year-old firm passed to three thirty-something cousins, T. Coleman, Alfred I., and Pierre S. du Pont. Purchasing it from elder relations who apparently possessed little idea of what the company earned or what it might be worth, a new generation of duPonts had arrived to, once again, drag it into a changed and arguably nastier world. Despite a lack of management experience, they short-circuited their elders’ plan to sell out to a leading powder competitor, as Ernest Dale and Charles Meloy wrote in their 1962 article Hamilton MacFarland Barksdale and the DuPont Contributions to Systematic Management, paying only $2,400 in cash, or $800 apiece for their shares, backed by $12 million in bonds. Coming with more than 4,000 acres of prime river real estate in Delaware, Pennsylvania and New Jersey, as the New York Times reported, it was a pretty good deal.
A new corporation was formed and within three years, the cousins, following a vigorous campaign of horizontal and vertical merger, had cornered 75 percent of the U.S. explosives market and taken what historians Alfred D. Chandler, Jr., and Stephen Salsbury called “a cartel of many family firms” and transformed it into a “modern, centrally administered corporation, with its own operating, sales, and auxiliary departments.”
As historian Alfred Chandler wrote, “When Pierre joined the Du Pont Company in 1890 it was a loosely-run family gunpowder establishment with assets of $13,276,213 and an annual business of 4 percent of this amount. Through his astuteness and initiative in the areas of finance and management, the next 29 years saw Du Pont grow into a giant, vertically integrated corporation with assets of $308,846,397 and an annual business of $329,121,607.”
Also central to DuPont’s growth was T. Coleman’s acquisitive nature and Hamilton Barksdale, an old Repauno retainer and self-styled management expert who while rising to DuPont’s presidency would integrate the many businesses acquired in a crash program of horizontal and vertical merger by establishing the central controls which distinguished DuPont, making it the envy of other corporatists. Among other things, Barksdale is credited with the first use of the modern corporation’s general executive committee.
DuPont’s product lines when the cousins arrived were still few in number: black powder (a dying business); dynamite (a growing endeavor and quite profitable) and smokeless powder (just getting going, though shortly to prove very profitable.)
But the company quickly became the archetypical 20th Century American corporation — not just because it was centrally administered and tightly run by expansionist owners. Classic status was guaranteed because DuPont was almost exclusively engaged in noxious and deadly businesses. Incorporated in Delaware, the state that took the mantle from New Jersey and reset the bar —first and always lowest — in governance of soulless corporate conduct, DuPont in large measure wrote the book (as well as the laws and codes) on the use of the newly empowered corporate form to pollute, that is, to avoid personal responsibility for actions that might otherwise create liability, sometimes criminal. It has shined for more than a century as one of the seminal American corporate polluters, thanks, in large measure, to the work of this generation of duPonts and their minions.
For his part, T. Coleman, the eldest cousin, served as the new corporate entity’s first president, overseeing the acquisition of more than 100 companies, including several of its powder competitors.
Pierre, born in 1870, was the youngest cousin. Graduated from MIT, he came back to Brandywine to run the firm’s expanded powder operation. A strong advocate of the diversification, he’d spend much of his early career “chained to a desk,” but would assume responsibility for the new corporation’s “Experimental Station” in 1908, having by this time also become DuPont’s treasurer, as Hounshell and Smith recount in their history of DuPont’s R&D.
Alfred, who is credited with dreaming up the cousins’ purchase, started as a vice president, only to fall out with his relations, whom, he felt, were venturing too incautiously into new businesses. Ironically, Alfred’s own immoderate streak — evidenced in a marriage to a divorced cousin, (one of three trips to the altar,) and his notorious and vocal attraction to lunatical right-wing political campaigns — did not smooth matters with his partners. Though they held similarly strident views, they were not as readily prepared to be causing public scenes.
In 1911 Alfred duPont was relieved of any responsibility for black powder manufacture at the Brandywine yards, and by 1915 he’d leave the company entirely, unsuccessfully suing Pierre and his now seasoned younger brother, Irénée, who’d quickly sailed up the ranks. When Coleman departed in the same year to pursue political aspirations, Pierre and Irénée would together take the reins from Barksdale, who’d assumed the presidency in 1913.
Alfred, angered by perceived slights from other family members, exiled himself to Florida, where he publicly allied himself with the Ku Klux Klan. Not that he was alone in his extreme views. By way of example, in a speech before the American Chemical Society in 1926, company chairman Irenée duPont advocated the creation of a race of “supermen” controlled by mind-stimulating drugs. With great excitement he related a truly scary capitalist sci-fi fantasy for the assembled. “[B]y injecting proper compounds into an individual, we can make his character to order,” he proclaimed, for the purpose of heightening worker productivity and consumption. “Such a discovery could add some 50 percent to both our hours of production and our hours of pleasure, and by its complete accomplishment would greatly decrease the cost of housing and the capital per unit of production of all those factories which today do not operate on a twenty-four hour schedule.”
Of course, that was well after the du Ponts helped sabotage a League of Nations disarmament conference during WWI, but before they supported an effort to overthrow the Franklin Roosevelt government or helped fund clandestine and violent, KKK-like, racist anti-union vigilante groups like the Sentinels of the Republic or the Black Legion, which killed labor organizers at duPont-controlled GM’s Ohio and Michigan factories. One of those murdered: the Rev. Earl Little, Malcolm X’s father, whose house was burned down earlier.
In the years preceding the First World War, those in Washington decrying trusts had naturally turned on the “powder trust” DuPont now constituted. Huge income from powder (as many different varieties of explosives were then generically known) afforded DuPont numerous paths to diversification, however, in the period 1911-1921, an impulse tweaked when a federal prosecution begun four years earlier ended in DuPont’s 1913 conviction for restraint of trade in violation of the Sherman Antitrust Act. The verdict forced it to break its black powder and dynamite business into three separate explosives entities, DuPont, Hercules and Atlas.
As Pierre’s younger brother Lammot would later remark, dissolution “was a very powerful influence for branching out into other fields. “ Which they did, as Ernest and Meloy recount, under Barksdale’s watchful eye, the three explosives firms — separate on paper — continued to be enormously profitable for primary shareholders, who overwhelmingly remained the members of a family named… duPont.
The following year, however, Pierre S. acquired his cousin T. Coleman’s many shares in DuPont, the elder cousin going on to become a United States Senator from Delaware and a leading light in the Republican National Committee. Serendipitously for Pierre and Irénée, the assassination of Archduke Ferdinand meant World I would follow closely on the heels of this investment. Meaning there were suddenly even huger profits to be realized in smokeless powder, while at the same time there appeared to be a markedly diminished government interest in harassing monopolists with whom it now wished to conduct big business, like this maker of smokeless powder.
DuPont, which had begun to diversify and even briefly planned on putting all its powder work into one plant, suddenly found itself expanding its facilities, from which it would go on to supply forty percent of all Allied munitions used in the Great War. Like Standard Oil, Dupont found military contracting in time of war worked well to first call off, then quarantine the dogs of government intrusion.
It cannot be gainsaid, DuPont’s military custom increased at a furious rate, multiplying 276 times during the War. Sales and profits skyrocketed from $25.2 million and $5.6 million in 1914, to $131.1 million and $57.4 in net earnings in 1915, to $318 million in sales, with profits of over $82 million in 1916 – more than $2 billion today and more than the combined totals for all the years since the younger generation took the business over, fourteen years earlier. Between 1915 and 1918, employment at DuPont rose from 5,300 to 85,000, per Pap Ndiaye’s Nylon and Bombs: DuPont and the March of Modern America, while its profit through World War I totaled $250 million or activity equivalent to more than 126 years of its previous peacetime business.
Before the War, the American firm had been on better than cordial terms with the German chemical industry, its longstanding alliance with the Nobel alliance pointing the way. But with the Royal Navy’s blockade of Germany, DuPont was presented with a rare opportunity to grow its chemical business by stepping into fields suddenly vacated by German firms. It could not resist. Sidelining the earlier idea of diversifying through homespun expertise in nitrocellulose as used in explosives, DuPont chose instead to forge headfirst into the vast unknown world of dyestuffs and related organic chemicals, for which major demand existed.
DuPont had depended on Germany for diphenylamine – a component in smokeless powder but also an important dye intermediate. Now they’d be forced to learn to make diphenylamine themselves. Understandably, they wondered, why not make the dyes, too?
DuPont’s dye factory, the Chambers Works — named after A.D. Chambers, who wrote the first internal report arguing for entry into the dyestuff market in 1915 — was erected in 1917. Over the course of the next several years it proceeded to answer the question why they shouldn’t have made dyes themselves.
Built at DuPont’s new, 1,440-acre facility at Deepwater, N.J., along the Delaware River, in Carney’s Point, not far from Penn’s Grove, (the river town actor Bruce Willis once planned to save,) the Delaware Memorial Bridge and Wilmington, DE, Deepwater consistently lost money, making the location aptly named, historian David Hounshell and John Kenly Smith have observed, at least in its early years. Before long, the emergence and commercialization of two new products, tetra-ethyl lead and the refrigerant Freon, both of which were manufactured at Deepwater, would reverse the site’s financial fortunes, sending it reliably into the black while forever immortalizing it in the annals of corporate shame.
Building a dye business from the ground up didn’t prove near so easy as the DuPonts had hoped, taxing their organization mightily. Still, when WWI ended, the company was enormously flush, and delighted that under the terms of Germany’s surrender, American industry was permitted to rifle through the files of the vanquished country’s leading industrial firms, free to pluck their chemical and manufacturing patents and secrets as victor’s spoils. The DuPont organization’s allegiance to its German competitors had not wavered during the war, however. The expectation and the reality were that close and coordinated relations could and would be resumed at the War’s end. At that time, a fair division of the world market could be concluded, with trade secrets freely exchanged in the purest warm and fuzzy spirit of mutual admiration and advantage.
In the meantime, the reigning duPonts had decided the way to grow was to acquire more going concerns and inject into them their organization’s increasingly celebrated managerial and R&D magic.
The advanced familiarity with organic chemistry acquired in the dye business led to the formation of an Organic Chemicals Department, as Hounshell and Smith recount, which would later help make leaded gasoline and Freon possible. In later years, DuPont would make billions and become one of the world’s largest chemical companies with discoveries in the new petroleum-based chemistry that would displace coal-based research, bringing to market synthetic fibers like nylon and rayon.
But that would be many years after the riches of war allowed duPont interests to buy into in Billy Durant’s General Motors.
The goal of Barksdale’s executive committee concept had been to prevent control of the corporation in one duPont’s hands, but ultimately power at the corporation rested in two sets of hands, those of Pierre and Irénée. Not only could they overrule the executive committee on relatively small matters, such as the firm’s uneconomic move some years later from Wilmington to the Empire State Building, a premium money-losing enterprise in which both Pierre and his one-time deputy John Jakob Raskob had invested. Often, the brothers would make really big decisions on their own, too, like moving the company into the automobile business, on their own, though Raskob, who’d begun as Pierre’s personal secretary in 1901 and ascended to become DuPont’s treasurer, then vice president of finance, was never far away.
The company’s first entry into the new field of automobiles, still viewed as a dubious enterprise by many in the financial community, occurred in 1909, when it purchased the Fabrikoid Company of Newburgh, New York, the country’s largest maker of artificial leather, a material used in automotive seating. The purchase nominally sought to take advantage of DuPont’s surplus nitrocellulose capacity, but it brought the company closer to an industry that was to become the 20th Century’s largest.
DuPont’s intimate association with automobiles didn’t really begin, however, until Raskob started purchasing General Motors shares for his own account in 1914. GM founder William Crapo Durant had come looking for investment and though reluctant at first, Raskob, now DuPont’s treasurer, would not only buy in, he’d soon be proselytizing on behalf of Durant and his firm, persuading Pierre duPont to buy into the loose amalgam of smaller firms assembled by Durant, a legendarily driven if inarguably flaky entrepreneur who’d come from nothing to become one of America’s dominant makers of horse-drawn carriages before segueing into the automotive age with GM.
Acquiring Buick in 1903, then Cadillac, Oakland, and Oldsmobile, Durant incorporated General Motors in 1908. A gambler, stock speculator and all-around high roller not immune to betting wrong, he added firms at a breakneck pace with the goal of creating an automobile trust but lost control of would-be giant in 1910, only to recover, in dramatic fashion, by acquiring Chevrolet, successfully floating it to the market, building the company up over the course of years, and then tapping its value to re-acquire control of GM. Throwing his lot in with the risk-taker Durant, Pierre was persuaded to double down his bet and by 1915 more than half of his non-DuPont holdings were GM shares.
Meanwhile, the Great War continued to consume powder at a fierce and tragic rate, and by 1917, with still more profits to burn, DuPont was able to invest more in GM, accepting Durant’s invitation to buy an additional $25 million worth of stock, recounted by Automotive News in the 1990s, when the Feds ordered DuPont to give up its stake in GM. A quarter of all outstanding GM shares, it was the largest financial transaction in U.S. history up to that point. Awash now in WWI profits, more than 126 years’ previous peacetime business, and a 1,130 percent business gain for the family over the prewar period, DuPont could well afford it, and proceeded to buy additional shares in 1918, bringing its stake in GM to 28.74 percent, before buying another $22 million in shares, to control 33 percent of the automaker.
Following the flamboyant Durant’s cue, Raskob had offered the duPonts three grounds for purchasing GM. First, inevitable booming demand for automobiles would make the carmaker more profitable and its shares more valuable. Raskob noted how much money GM, a comer in America’s fastest-growing business, had been made since Durant’s return to GM – earnings of $13,409,000 in 1915 to $27,740,000 in 1916 and at least $27 million again in 1917, after stiff war taxes (imagine that,) with even more expected in 1918.
Second, Raskob wrote, “After the war, it will be absolutely impossible for us to drop back to being a little company again,” as Ernest Dale recalled in his own history The Great Organizers. “[A]nd to prevent that, we must drop back, look for opportunities, know them when we see them and act with courage.”
Barksdale shared this concern as early as 1915 in a letter to Raskob, detailed by Dale and Meloy, “When the war is over our difficulty, in common with many American manufacturers, is going to consist in making a creditable show in earnings against the keen competition which will exist because of the huge increase in manufacturing facilities, and any increase in fixed charges, which do not increase earnings, will increase this difficulty.”
DuPont had to do something profitable after the war, they both had argued, and this was something to do. Which brought Raskob to his larger point. Writing in a 1917 letter to the DuPont Finance Committee, he explained:
“Our interest in the General Motors Company will undoubtedly secure for us the entire Fabrikoid [leather substitute], Pyralin, paint, and varnish business of these companies, which is a substantial factor....[I]t is the writer’s belief that ultimately the Dupont Company will absolutely control and dominate the whole General Motors situation.” But Raskob’s 1917 gushing missive, however accurate, would come back to haunt DuPont and General Motors when antitrust actions against them were brought in the 1950s.
Jamie Kitman is a NY-based lawyer, rock band manager, picture car wrangler, and automotive journalist. Winner of the National Magazine Award for commentary and the IRE Medal for investigative magazine journalism, he has a penchant for Lancias and old British cars, and is a World Car of the Year juror. Follow him on Twitter @jamiekitman and on Instagram @commodorehornblow.