One century ago this month, Herbert Dow founded his tiny chemical company over an underground sea of brine near Midland, Michigan. Seven years later he got the world’s attention by breaking a powerful monopoly.
Dow invented a way to extract a chemical from the brine—bromine—which he sold for 36 cents per pound to sedative and photographic supply makers.
But German chemical companies dominated the bromine market and sold theirs 13 cents higher, at 49 cents per pound. Unless Dow agreed not to compete with them overseas, the Germans threatened to flood the American market with cheap bromine until tiny Dow went broke.
Dow refused to yield, and the Germans dumped bromine into America at 15 cents per pound—21 cents under Dow’s price.
Dow sent an agent to secretly buy up tons of the cheap German bromine, which he then resold in Germany’s backyard at a profit! The confused Germans finally had to give up their monopolistic strategy or risk going broke themselves.
Without government assistance, Herbert Dow broke the bromine monopoly and lowered prices worldwide. His story is a great example of the spirit of freedom and American enterprise.
For the Mackinac Center, this is Catherine Martin.
The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government. Through our research and education programs, we challenge government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams.
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