On this day in economic and business history…
The company popularly known as E I Du Pont De Nemours And Co (NYSE:DD) is a shortened form of “E.I. du Pont de Nemours,” itself a shortened version of the name Eluthere Irenee du Pont de Nemours, a Paris-born chemist with particular expertise as a gunpowder manufacturer. It was on July 19, 1802, on the banks of the Brandywine River in Delaware, that du Pont broke ground on the first gunpowder mills that gave rise to the DuPont chemical empire.
The E I Du Pont De Nemours And Co (NYSE:DD) family had arrived in Delaware at the turn of the 19th century after escaping the worst of the French Revolution. E.I. du Pont’s father had been a minor noble and successful politician before the Reign of Terror, and his defense of doomed King Louis XVI from a besieging mob in 1792 nearly cost him his head in the guillotines. The elder E I Du Pont De Nemours And Co (NYSE:DD) later wound up playing an important role in the Louisiana Purchase by negotiating much of the deal on behalf of President Thomas Jefferson.
Family connections offered the chemist E.I. du Pont the chance to meet a former French army officer working with the U.S. military to procure better gunpowder. The officer convinced E I Du Pont De Nemours And Co (NYSE:DD) to go into the gunpowder business, as American-made gunpowder was inferior to European product. After a return to France in 1801 to raise capital and procure the proper manufacturing equipment, du Pont had everything he needed to get started.
The company was initially capitalized at a value of $36,000 — roughly $780,000 today — and it was initially structured as a partnership under du Pont’s control. The mills produced E I Du Pont De Nemours And Co (NYSE:DD)’s first product after two years of construction and development, and his superior know-how soon established him as a prime source of gunpowder in the United States. The War of 1812 provided a major sales boost, and by the time of du Pont’s death in 1934, the company was one of the U.S. Army’s primary gunpowder suppliers. This relationship continued through the Civil War, when DuPont supplied half the powder used by the Union Army.
E I Du Pont De Nemours And Co (NYSE:DD)’s utter dominance of the exploding-stuff industries eventually led to an antitrust suit from the federal government, and the company was forced to divest much of its manufacturing operations in 1912. That didn’t stop the company from continuing to grow — two years later, DuPont began building a stake in General Motors Company (NYSE:GM), originally valued at $50 million, that would grow into a $2.7 billion hoard by the time another antitrust suit forced the two companies apart. During its period of ownership, DuPont had significant influence over the automaker — it’s largely thanks to DuPont that cars took on more colorful hues in the 1920s. DuPont also joined the Dow Jones Industrial Average (INDEXDJX:.DJI) in the 1920s, at which point it was already making nearly $100 million in annual revenue.
DuPont had begun experimenting with non-exploding chemicals after its 1912 divestiture order, but the 1930s brought some of its greatest successes: it introduced neoprene to the public in 1931, and began producing nylon in 1935. DuPont also rejoined the Dow that year — its first stay did not last long, but it has remained part of the Dow Jones Industrial Average (INDEXDJX:.DJI) since 1935. DuPont’s advances also proved essential to the Allied effort during World War II. Nylon was important in the production of many battlefield materials, but DuPont also helped build the facilities and reactors used in the Manhattan Project. After the war, DuPont developed a number of new synthetic materials, including Mylar, Dacron (polyester), Lycra (spandex), Kevlar, Corian, and Tyvek (the latter two are commonly used in housing construction).