Products and Prosperity
As the American industrial revolution swept the nation in the second half of the
19th century, New Jersey emerged as an undisputed leader in the new industrial
heartland of the Northeast. By 1910, Winton C. Garrison, chief of the New Jersey
Bureau of Statistics and Labor, was quoted in The New York Times as saying, “The
past 20 years (of manufacturing growth) was far greater proportionately (in New
Jersey) than in any other state in the US.”
World War I greatly impacted the world’s economy and directly contributed
to New Jersey’s growth as a leader in manufacturing. When the war cut off the
chemicals made in Germany, New Jersey’s chemists worked to discover that country’s chemical secrets. These “discoveries” turned New Jersey into the nation’s largest producer of chemicals.
In 1917, New Jersey’s manufacturers met at the Robert Treat Hotel in Newark to learn how they could serve the government and protect their individual interests by retaining employees and producing war essentials. As a result, manufacturing flourished during the First World War and into the 1920s.
Germany’s advances during WWI shocked the industry into research, with New Jersey leading the way. In 1922, researchers at the Westinghouse Lamp division in Bloomfield discovered how to refine uranium while looking for a substitute for tungsten lamp filaments. Although uranium did not work as a filament, the knowledge of its metallurgy made the lamp laboratory, for many years, the sole producer of the pure uranium used in early experimental work. In 1942 the laboratory was able to increase its uranium production from a few ounces to over five hundred pounds a day, and it supplied more than three tons of uranium for the world’s first nuclear reactor.
In the 1920s, Bell Labs was established, automotive safety glass was developed, and, in Newark, a factory pioneered the manufacture of a new non-flammable plastic (cellulose acetate) which made injection molding possible. This led, among other things, to molded toys in 1938, opening the door for the development of a $40 million a year toy industry by 1955.
Although the Depression saw 600 New Jersey factories close, many companies forged ahead. In the 1930s, millions of dollars in “risk capital” was invested in chemical research. Merck & Company started vast programs, as did Hoffman La Roche, Schering, Squibb and Ciba.
In 1932, Bakelite, one of the first plastics manufacturers, merged its operations. It had 270 employees, which was estimated to be 180 more than it really needed. Because of the tough times, Bakelite chose to keep its payroll as full as possible.
The Depression waned in 1937, but it wasn’t until World War II, when the US began providing war supplies to allies, that the economy rebounded. The manufacture of ammunition, weaponry, air/sea craft and other war supplies helped New Jersey recover. Dupont’s Arlington plant manufactured the first commercial acrylic resin, which would soon be used for the transparent enclosures in military aircraft.
While much of the economic rebound came from the manufacture of military supplies, other manufacturing continued. Using a secret formula, an entomologist created a new industry converting butterflies and moths into ornaments for apparel. The factory employed eight young women and housed 50,000 butterflies.
Material shortages created a need for synthetics, sparking the growth of the state’s plastics industry. New Jersey manufactured approximately 40 percent of the plastics during WWII. Camden’s R.M. Hollingshead developed a liquid plastic that would protect mothballed ships valued at $16 billion, keeping them ready for the Korean War. Boonton Molding Company, meanwhile, manufactured 250,000 pounds of military buttons out of Melamine, which was also developed here.
In 1939, there were 13 plastic concerns in the state, in 1947 there were 32 and by 1954 there were 39 companies providing raw materials and 136 manufacturing finished products. Within 10 miles of Newark, the majority of plastic equipment and machinery had been developed.
World War II was a catalyst for many new initiatives. Newark’s Eisler Engineering entered a field of manufacturing never attempted before on a large scale in the US — pharmaceutical equipment and machinery. Germany and Austria held the worldwide monopoly, but with the war, access to these machines had been cut off.
Manufacturers were given the job of developing new types of engines, gas turbines and new technologies. Monroe Calculating developed a device for instantaneous mapmaking in the field. The Odograph Land M-1 plotted the course of a moving vehicle to create a map, and Monroe became the prime contractor for its production.
Postwar New Jersey was able to rebuild its manufacturing base because of domestic market demands. “Reconversion,” moving a production from the military market back to the civilian market proved to be easy for some manufacturers. They cleared their plants of war materials and government equipment and moved quickly back into their traditional businesses. Hyatt Bearing, a division of General Motors, was fully converted in several months and soon was producing roller bearings needed for railroad modernization.
For others, it was difficult. Johnson & Johnson could no longer get materials from pulp mills so the company undertook research to develop synthetic substitutes though faced with a shortage of trained researchers. Worthington Pump, a manufacturer of industrial and mining pumps, had a backlog of civilian orders that could not be filled due to the shortage of copper and pig iron. Worsted Mills had difficulty changing from the limited assortment of military fabrics to an extensive commercial line.
Demand was high; returning veterans wanted new clothes. Old machinery and the shortage of new machines made production difficult. For others, training and the turnover of employees was the biggest bottleneck. Aluminum and steel sheets were almost impossible to buy, making production difficult for many manufacturers. In spite of the challenges, New Jersey’s manufacturing sector grew after the war. By 1986, the state led the nation in pharmaceuticals; it was ranked second in chemicals and fifth in plastics. Pharmaceuticals, chemicals and plastics still play a major role in the state’s economy. Fifteen of the world’s 20 largest pharmaceutical companies have major facilities here. The earnings of New Jersey’s pharmaceutical
and medical technology industries have continued to grow. The chemical industry ranks third in the state for employment, generating $47.9 billion in earnings. The plastics industry’s direct payroll, including captive plastic products, is $1.3 billion. Plastics-dependent industries add another $20.6 billion to the state’s private-sector payrolls.
Although our manufacturers today face many challenges in New Jersey – such as over-regulation, stringent environmental requirements, and high taxes and labor costs – they also have many reasons to stay here. New Jersey sits at the center of the nation’s East Coast corridor. One hundred million consumers with the collective purchasing power of $2 trillion live within a 24-hour drive. The state’s strong warehousing and distribution channels, coupled with the seaports and airports provide access to domestic and international markets. New Jersey’s extraordinarily diverse and highly skilled labor force ranks seventh in the nation for Ph.D. scientists and engineers per 1,000 workers, which contributes to manufacturing’s high productivity here. According to a 2008 Economics Policy Institute Briefing Paper, manufacturing productivity between1997 and 2005 was 60 percent higher than in the state’s private, non-farm economy as a whole.
As far back as 1790, Alexander Hamilton, then Secretary of the US Treasury, delivered a message to Congress stressing the importance of a domestic manufacturing capability. Soon after, New Jersey’s legislature established the charter of The Society for Establishing Useful Manufactures (S.U.M.).
Unfortunately, the importance of manufacturing has been lost with the passing decades. Today, state and federal governments are coming back to the idea that you create wealth when you make things, mine things and grow things. This changing philosophy is leading the way for new industries, just as moths, butterflies and a secret formula helped create employment 67 years ago.
About the Author
Bob Loderstedt is the President of the New Jersey Manufacturing Extension Program (NJMEP). NJMEP has worked exclusively with New Jersey manufacturers to lower manufacturing costs and improve competitiveness.
*Many thanks to the staff of the Charles F. Cummings New Jersey Information Center at the Newark Public Library for their assistance with the research for this article.