THE Dow CHEMICALCOMPANY

MIDLAND,MICHIGAN

ANNUAL REPORT
FOR YEAR ENDED
MAY 31,1941
 ( Incorporated in Michigan 1
Founded in 1897

Executive Office - - - Midland, Michigan

New York Office - - - 30 Rockefeller Plaza
Chicago Office - - - - - Field Building
St. Louis Office - - Second and Madison Streets
Houston Office - - - - Commerce Building
San Francisco Office - - - 310 Sansome Street

Midland Division

Plants-Midland, Michigan

Great Western Division

San Francisco Office - - - 310 Sansome Street

Seattle Office - - - - 1201 Textile Tower
Los Angeles Office - - 415 1 Bandini Boulevard
Plants - Pittsburg, California
Seal Beach, California
Venice, California

Texas Division

Plant - Freeport, Texas

Subsidiaries

Dowel I I ncorpora ted -

Executive Office - - - Midland, Michigan
General Office - Kennedy Building, Tulsa Oklahoma

Dowell, S. A. - - - Tampico, Tamps-Mexico

Cliffs Dow Chemical Company -

Executive Office - - - Midland, Michigan
General Office - - - Marquette, Michigan

Midland Ammonia Company -

Office and Plant - - - Midland, Michigan

Associated Company

Ethyl-Dow Chemical Company -

General Office - - Wilmington, North Carolina
Plants-Kure Beach, North Carolina
Freeport, Texas
 THE DOW CHEMICAL COMPANY
MIDLAND, MICHIGAN

Directors
E. 0. BARSTOW E. W. BENNETT
W. H. DOW J. T. PARDEE
J. S. CRIDER W. R. VEAZEY
L. I. DOAN
G. E. COLLINGS
C. J. STROSACKER

Officers

Chairman of the Board - - - - J. T. PARDEE

President and General Manager - - - W. H. DOW
Vice President - - - - G. E. COLLINGS
Vice President - - - - - J. T. PARDEE
Vice President, Sec’y and Treasurer - E. W. BENNETT
Vice President and General Sales Manager - L. I. DOAN
Assistant Treasurer - - - - J. S. CRIDER
Assistant General Manager - - - A. P. BEUTEL
Auditor and Assistant Secretary - L. A. CHICHESTER
Assistant Auditor and Assistant Secretary F. H. BROWN
Assistant Secretary - - - - R. L. CURTIS
Assistant Secretary - - G. M. McGRANAHAN
Assistant Auditor - - D. J. LANDSBOROUGH

Registrars

The New York Trust Company

100 Broadway
New York City

The National City Bank of Cleveland

Cleveland, Ohio

Transfer Agents

Guaranty Trust Company of New York

140 Broadway
New York City

The Cleveland Trust Company

Cleveland, Ohio
 --

TO THE STOCKHOLDERS OF
THE DOW CHEMICAL COMPANY:

The forty-fourth annual report of your Company is presented herewith. The

consolidated financial statements for the fiscal year ended May 31, 1941 have been
audited by Messrs. Haskins 5 Sells, whose certificate is reproduced as part of
this report, /

FINANCIAL STATEMENTS-

The consolidated balance sheet May 31, 1941, statement of consolidated

income for the year ended May 31, 194 1 and statement of consolidated earned
surplus for the year ended May 3 1, 1941 are shown herein. The total assets of
your Company and its Subsidiaries amounted to $80,550,620.30, which figure
includes current assets amounting to $17,927,721.80. Compare this with the total
assets at the end of the fiscal year 1940 amounting to $48,185,010.09. Current
liabilities this year amounted to $13,877,532.70, compared with $5,151,315.07 last
year. The ratio of current assets to current liabilities at May 31, 1941 is less than
in previous years, because of the unusually large construction program requiring
the investment of current funds. Most of these plants ‘are just beginning to
produce and a favorable return is expected on these investments.

EARNINGS-

The consolidated net income of the Company and its Subsidiaries for the
year ended May 31, 1941 amounted to $7,770,547.1 1. After deducting dividends
on the preferred capital stock of $300,000.00, the consolidated net income was
equivalent to $6.58 per share on the number of shares of common capital stock
outstanding at the end of the year. This compares with $7,159,167.12 or $6.65
per share after deducting preferred stock dividends for the year ended May 31, 1940.
The consolidated income of the Company and its Subsidiaries for the year ended
May 31, 1941, amounted to $13,546,638.50 before provision for depreciation and
for amortization in the amount of $3,776,843.05 and Federal income and excess
profits taxes of $1,999,248.34.

DIVIDENDS-

Your Company distributed four equal quarterly dividends, aggregating $3.00

per share, to the common stockholders during the year. Including dividends on
the preferred capital stock of $300,000.00, the dividends disbursed to shareholders
amounted to $3,628,16 1.75.

NEW CAPITAL-

In the early fall of 1940 the Company engaged in new financing under
which the fifteen year 3% debentures outstanding at the beginning of the year in
the amount of $5,000,000.00 were redeemed with a portion of the proceeds received
from the sale of new debentures bearing lower interest rates. The new obligations
sold consisted of ten year 21/..% debentures due September 1, 1950 in the amount
of $7,500,000.00 and serial debentures in the amount of $7,500,000.00 which mature
in amounts of $750,000.00 annually from September 1, 1941 to September 1, 1950
and which bear varying low rates of interest.

At the time of the sale of the new debentures, 103,199 additional shares
of common capital stock were offered to stockholders of record September 20, 1940
on the basis of one new share for each ten shares held. The new shares were sold
for $10,339,437.50, which was credited to the capital stock account. This increased
the number of common shares outstanding to 1 ,135,187.
SURPLUS-
The net increase in consolidated earned surplus for the year amounted to
$3,941,289.28, bringing the consolidated earned surplus as of May 31, 1941 to
$18,933,844.35. A charge against surplus of $201,096.08 was made during the
year because of the retirement of the previously outstanding 15 year 3% debentures.

NET SALES-
Net sales for the year ended May 3 1, 1941 amounted to $46,907,950.27,
as compared to $37,743,546.64 for the year ended May 31, 1940.

PLANT AND PROPERTY-

Additions to plant and property amounted to $32,382,988.87 during the
year ended May 3 1, 1941. The major expenditures were for additions to existing
plants, improvements to processes and construction of new plants. Attention is
called to the statement in our balance sheet where it is shown that $13,371,405.91
was invested in emergency facilities for National Defense, which are being amortized
on a five-year basis. The amortization provided on completed projects this year
amounted to $406,8 17.53.
Not reflected in our property accounts is the current construction of a
United States Government plant located adjacent to our Midland plant, which will
be operated under our direction. In Texas, an addition to the original Magnesium
plant was built and financed by the British Government. A British expansion was
also made to the Midland Magnesium plant. A second addition, which will double
the capacity of the Texas Magnesium plant, is now under construction. This is
financed by the Defense Plant Corporation, a subsidiary of the Reconstruction
Finance Corporation. It is estimated the total cost of the above projects will be
approximately $13,000,000.00.

TAXES-
Total major taxes for the year amounted to $3,543,903.70, which represents
an equivalent cost per share on common stock of $3.12.

GREAT WESTERN DIVISION-

The Great Western Division plants are operating most satisfactorily. Demand
for all of the products is steady and increased capacities have had to be added ta
satisfy the needs of our customers. At Pittsburg, California a new design Carbon
Tetrachloride plant was built and is now operating successfully. This plant is a
radical new departure from standard practice, since natural gas is used as the raw
material and chlorinated to Carbon Tetrachloride, Methylene Chloride, Chloroform
and Methyl Chloride, along with by-product Hydrochloric Acid, Other additions and
plant improvements were also made.
Our Iodine plant was moved from Long Beach to Seal Beach, California
and provides increased capacity.

TEXAS DIVISION-
The plant at Freeport, Texas has been generally publicized for the production
of Magnesium. For Magnesium production in Texas, we pump raw ocean water,
precipitate Magnesium Hydrate with Lime made from oyster shells and produce
Magnesium as ingot metal,-actually the first time in the history of the world
where metal is produced commercially from raw ocean water. This is unquestion-
ably another milestone in scientific achievement. It is not unfair to mention that
The Dow Chemical Company also accomplished a previous recognition when Bromine
was extracted commercially from raw ocean water for the first time in 1934 at
Kure Beach, North Carolina. Also in Texas, we are now producing Ethylene Glycol,
Ethylene Dichloride, Caustic Soda and Chlorine from raw materials readily available
at our plant.
GENERAL-
The foregoing information briefly summarizes some of our more important
activities, and the financial statements indicate the results of a considerable expan-
sion in manufacturing facilities, requiring the utilization of current funds and new
financing last October in the form of the sale of debentures and additional shares
of common capital stock. While this plant expansion program has in part resulted
from the present activities for National Defense, the major portion of the increased
capacity will
be used for the production of chemicals salable after the termination
of the emergency period. In the opinion of the management, the expansion program
is being followed on a sound basis and will result in permanent future benefit to the
Company.

MAGNESIUM HISTORY-

In view of the indictment against the Company and two of its officers charging
violation of the Sherman Anti-Trust Act,it seems proper to review for the benefit
of our stockholders a portion of our history. The activity of The Dow Chemical
Company in its early history proceeded much as it has in recent years,-as a matter
of fact, the historical activity of our Company
is a fair cross-section of the history
of the Chemical Industry in the United States. Our activity has always consisted
of research, development, buildings, expansion, new products, new application, new
products again and more buildings4t-r unending cycle of change and growth.

At the beginning of World War No. 1, we had developed a good stride in

this direction. Our Company was then a leader in the rapidly growing Chemical
Industry of that day. For a number of years prior to World War No. 1, we had
concentrated on the extraction and separation of Calcium Chloride and Magnesium
Chloride. We were producing and selling Calcium Chloride, and with the outbreak
of the war in 1914, Magnesium Chloride was cut off from further importation
from Germany. Our Company rushed the construction of a plant. The big use for
Magnesium Chloride at that time was for Magnesium Oxychloride cements. This
product was used extensively; the tonnage was large and the demand was critical.
We were complimented many times on our ability to produce this necessary product
in a time of emergency. Actually, 1914 marked the culmination of many years of
experimentation and research. We became established in the Magnesium Chloride
business,+ new product for us, which throughout the many years since has
represented a substantial volume of business.

With Magnesium Chloride in production, our Company looked with fascina-

tion on the manufacture of Metallic Magnesium and research began. Some small
quantity of Magnesium was produced as early as 1916 but we did not really consider
ourselves in commercial production until 1918. Producing and marketing a metal
was an entirely new enterprise with us, as heretofore our whole activity had been
concerned with the production and sale of inorganic and organic chemicals.
Development of a metal Ii ke Magnesium meant the knowledge of its metallurgy
and its possible applications. A metallurgical staff began making alloys, after first
learning how to make a metal that was capable of being alloyed. Alloying Mag-
nesium with one metal in varying percentages, as well as determining the physical
properties of these alloys, was a big job and then, to run the same gamut of testing
on binary, ternary, quaternary and more alloys was a stupendous undertaking. This
work was started in the early 20’s and has continued, uninterrupted, ever since.

Production of metal was the first step and from the time of our first sale
until the present time, there has been a continual effort on the part of a large staff
of engineers and research personnel to improve our process of production. Not a
single element of assistance in this whole process was contributed by any agency,
either domestic or foreign, outside our own Company organization. Any statement
to the contrary is an insult and is unjust to the loyalty, integrity, perseverance
and forethought of the industrious men who developed our manufacturing process
for Magnesium production.

As the production of Magnesium proceeded, simultaneously the alloying and

metallurgical experience developed and fabrication of salable products resulted. In
addition, we were introducing a new, little known, metal to a skeptical public.
Giving due consideration to the many thousands of Dowmetal automobile pistons
which were successfully used by thousands of customers, the Magnesium Industry
was still not a successful enterprise. More and better applications had to be found.

About this time, other methods of fabrication were started, such as die
casting and extrusion. Rolling of sheet came a little later and with a diversification
of salable products, permanent uses began to grow. In 1918, the commercial use
for Magnesium was almost exclusively for flashlight powder. A period of about
fifteen years elapsed before it became accepted commercially in the form of com-
plicated sand castings, die castings, sheet and forgings. Successful welding also
followed these developments. This was approximately the status of the Magnesium
Industry of Dow Chemical in the early 1930’s.

Naturally, during the long years of development of this product and its
applications, we had applied for many patents covering our experience. It follows
that some of these were in interference with inventions of others, although our
greatest interference on patent applications was in the fabrication field with the
European interests in the United States Patent Office. In 1932, a lawsuit was filed
against us on alleged infringement of certain I. G. Farbenindustrie U. S. A. pat-
ents. This suit was finally settled on the basis of cross-licensing all of the Dow
fubricufion putenfs owned in the United States with all of the U. S. A. fchricofion
pufents of the I. G. and American Magnesium Corporation, a subsidiary of the
Aluminum Company of America, which patents were owned and controlled by
Magnesium Development Corporation, a United States organization jointly owned by
the I. G. Farbenindustrie and Aluminum Company of America. By this method of
procedure, any royalties paid for the use of the patents are paid by the manufacturer
of metal and there is no restriction whatsoever on production. This agreement
permitted customers to fabricate and use Magnesium products without fear of
infringement of patents from others, and results prove it to have been a con-
structive step in the development of the business. The Dow Company pays no
royalty on the production of metal. The Dow Chemical Company pays a royalty
of one cent per pound to the Magnesium Development Corporation on the Mag-
nesium used in the manufacture of fabricated Magnesium parts.

There are definitely two divisions to be considered in the Magnesium Indus-

try. The first is the production of Magnesium, which is a wholly Dow Chemical
American development, not assisted in any respect by any European or other Amer-
ican interest. The Dow Chemical Company is very proud of its record in the
development of the production of Magnesium. The second phase of the Magnesium
Industry is the fabrication step, where pure Magnesium Metal is alloyed and then
made into usable products, or as generally termed “fabricated”.

The incorrect impression in the minds of the general public, apparently re-
sulting from statements publicized and reprinted many times during the past year
concerning the status of the Magnesium Industry in America, has been extremely
distressing to us. The production of Magnesium Metal is the first step. The final
use of the metal for fabrication purposes is the second step. The same as in the
Steel Industry, the plant that reduces the ore to pig iron is comparable to our
production of metal from the salts obtained from native brines or ocean water.
The manufacture of steel products, such as boiler plate and other usable products,
where pig iron is taken as the raw material and made into alloys to produce the
proper steels, is comparable with our phase of operation, where we take the ingot
metal and then proceed to alloy and fabricate it into usable products. It is neces-
sary to bear in mind that there are two distinct steps in the complete Magnesium
picture, - 1, Production - 2. Fabrication.

There has been no limiting control in the sale or production of the metal,
either as ingot metal or as fabricated parts. Our selling expense has been consid-
erable and development costs have been large. We have retained an engineer in
Washington for ten years to assist in developing possible uses with the various
Government agencies and these development projects necessarily require a long
series of tests before satisfactory conclusions can be determined. Early in 1940, we
started the construction of a large new plant in Texas in anticipation of increased
requi remen ts, before any government agency estimated the requirements of Mag-
nesium. Not until the late spring of 1940 was general approval made for certain
specific Government uses and only within the last twelve months has there been the
urge to use more and more Magnesium and Dowmetal alloys in the various applica-
tions required for defense purposes. However, before the Texas plant was completed,
an addition was started for the Bri tish Government and shortly thereafter we were
requested by the United States Government to double the capacity of the Texas pro-
duction. This latest addition is now approaching completion, operating under a
Defense Plant Corporation contract. As of this date, The Dow Chemical Company is
the only producer of Magnesium in the United States. Recently, we have been asked
by the Government to grant a license and supply engineering knowledge to a number
of other companies for the production of additional metal by the Dow Electrolytic
Magnesium Chloride process. The Dow Chemical Company has expressed its will-
ingness to do this in the interests of National Defense.

ACKNOWLEDGMENT-

The Board of Directors wish to publicly express their appreciation to the large
number of employees who have shown unusual loyalty and perseverance during these
abnormal times, for the extra effort, the responsibility for the work in hand and for
the unfailing talent and capabilities they invariably show when we have difficult
problems to handle. The large sums we continually spend for research are justified
time after time in the solution of many problems constantly confronting us. It is
only through constant effort and highly skilled training that our Company has been
able to achieve its record of abnormal growth and meet the unusual conditions so
often expected of it.

WILLARD H. DOW,
President
Midland, Michigan
July 25, 1941
 NOTICE

Information presented on the following graphs

for fiscal years 1931-l 937 inclusive, apply to
The Dow Chemical Company only; information
for subsequent years is prepared from the Con-
solidated Statements of The Dow Chemical Com-
pany and its subsidiaries.

Earnings per share based on 945,000 Shares

common stock up to 1939.

1939 based on 981,245 Shares--average num-

ber shares outstanding.

1940 based on 1,031,988 Shares outstanding.

1941 based on 1,135,187 Shares outstanding.

The graphs appearing in this report are not to

be reproduced or used without the permission of
The Dow Chemical Company.
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HASKINS & SELLS
CERTIFIED PUBLIC ACCOUNTANTS THE NATIONAL SANK BUILDING

DETROIT
CI”IL N.O”LCOCI.C.l?*.

The Dow Chemicalcompany:

We have examined the consolidated

balancesheet of
The Dow Chemical Com~eny and its subsidiarycolqpanies as of Nay 31,
1941 and the related statementsof consolidated income and earned
surplus for the year ended that date, have reviewed the accounting
procedures of the ccmpanies, and have examined their accounting
records and other evidence in support of such financial statements.
Our examination was made in accordance with generally accepted audit-
ing standards apglicable in the circumstances and included all audit-
ing procedures we considered necessary, which procedures were applied
by tests to the extent we deemed appropriate in view of the systems of
internal control.

In our opinion, the accoqpaoging consolidated balance sheet

and statements of consolidated income and earned surplus fairly present
the financial condition of the companies at aday 31, 1941 and the results
of their operations for the year ended that date, in conformity with
generally accested accounting principles and practices applied on a
basis consistent with that of the preceding year*

July 18 S 1941.
 THE DOW CHEMICAL COMPANY
( Incorporated in Michigan)
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET, MAY 31, 1941

ASSETS
CURRENT ASSETS: ’
Cash __--____----_----------------------~-~------~--~~~ $ 3,892,077.26
United States Treasury bonds, 33/4% - at cost (face value,
$200,000.00; market value, $226,187.50) ----_----- ______-- 2 17,750.oo
Notes and accounts receivable :
Customers, $5,723,927.48; associated company,
$128,508.33; employees, $20,050.35; and
sundry, $139,889.33 ------------------- $ 6,0 12,375.49
Less reserves for doubtful receivables _--_-__-- 207,217.05 5,805,158.44

Billed and unbilled amounts receivable from agencies of the United

States Government for plant construction --_-----------_-_-- 582,821.05
Inventories:
Finished goods and work in process (at lower
of cost or market) _----_--_----------_- $ 4,077,623.47
Mazari;k:)and supplies (at cost--approximately
----------------------F--m--- 3,352,291.58 7,429,9 15.05

Total current assets --_--___-_---------_------------- $17,927,721.80

INVESTMENTS AND MISCELLANEOUS RECEIVABLES:
Notes receivable and capital stock (at cost) of
associated company (equity at May 3 1, 1941 as
shown by unaudited balance sheet of associated
company, $3,304,964.93 1 ----------------- $ 2,238,OOO.OO
lnstalment notes receivable, maturing 1942 to 1948 500,000.00
Miscellaneous securities and receivables (less re-
serve, $46,698.42 1 --w--w----------------- 5 18,425.69

Total investments and miscellaneous receivables ---___-_-- 3,256,425.69

ASSETS HELD FOR OTHERS UNDER TERMS OF CONTRACTS FOR
PLANT CONSTRUCTION :
Cash -_--_------------------------------- $ 337,978.53
Plant property costs incurred (net) ---------m-w 1,721,780.28

Total __--_-- ---- _---_-_-- -----_-___ $ 2,059,758.81

Liability for funds advanced - __-------------- 2,059,758.8 1

PROPERTY (including emergency facilities for na-

tional defense, completed and in progress, with a
gross book value (cost) of $13,371,405.91 subject
to amortization) :
Plant properties and equipment-at cost (less
reserves for depreciation and amortization,
$22,335,421.66) --_-----_---_-----m---w- $57,836,292.12
Housing properties--at cost (less reserves for de-
preciation and amortization, $7 1,551.29) ---__ 928,3 16.05
Patents---at cost or nominal value (less reserves for
amortization, $43,347.23 1 ---------------- 72,427.17

Total property -__-___-_---_------------------------ 58,837,035.34

DEFERRED CHARGES-Unexpired insurance premiums, unamortized
debenture discount and expense, deferred cost of power facilities, and
miscellaneous --_________-___---------------------------- 529,437.47

TOTAL ---______________--------------------- $80,550,620.30

 THE -DOW CHEMICAL COMPANY
( Incorporated in Michigan)
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET, MAY 31, 1941

LIABILITIES
CURRENT LIABILITIES:
. Notes payable-Banks _______ - ____ - _______________________ $ 4,200,OOO.OO
Accounts payable-Trade and miscellaneous ------------------- 4,67 1,199.60
Federal income and excess profits taxes ____ - __________________ 2,015,597.87
Special customer’s deposit for purchase of product ______________ 635,850.OO
Serial debentures maturing September 1, 1941 ___--___-___--___ 750,000.00
Accrued liabilities:
Payrolls and bonus __________ - __________ -__---_-_--_---_ 645,822.35
Taxes (other than Federal income taxes) ________ - ____ - _____ 820,501.84
aI n terest
. ---------------------------------------------- 7 1,265.20
Sundry ----------------------------------------------- 67,295.84

Total current liabilities -- _____ - ____ --_---_---__- _____ $13,877,532.70

FUNDED DEBT:
Ten year 2% % debentures, due September 1, 1950 $ 7,500,OOO.OO
Serial debentures maturing in the amount of
$750,000.00 on September 1, 1942 and annually
thereafter until September 1, 1950 (debentures
maturing in 1941 included in current liabilities) 6,750,OOO.OO
.
Total funded debt ---------------------------------- 14,250,OOO.OO
RESERVES FOR FIRE AND ACCIDENT LOSSES, DAMAGE CLAIMS,
AND CONTINGENCIES __-____-_____-___ - ____ ---_---_----_ 368,085.12
MINORITY INTERESTS IN CAPITAL STOCK AND SURPLUS OR
DEFICIT OF SUBSIDIARY COMPANIES a__--___---_----__--__ 875,634.64
CAPITAL STOCK:
Preferred capital stock-5% cumulative (author-
ized and outstanding, 60,000 shares of $100.00
par value each) ------------------------- $ 6,000,000,00
Common capital stock (authorized, 2,000,OOO
shares without par value; outstanding, 1 ,135,187
shares) -------------------------------- 26,169,046.83

Total capital stock _---__---_---_-----___ _____ - _____ 32,169,046.83

SURPLUS:
Capital surplus (decreased during the year ended
May 3 1, 1941 by expenses in connection with
sale of additional shares of common capital
stock, $24,255.73) _- ________ ---L----em-- $ 76,476.66
Earned surplus - ____ -_-___-_- _____ -------__ 18,933,844.35

Total surplus -------------------------------------- 19,010,321 .Ol

TOTAL -------------------------------------- $80,550,620.30

 THE DOW CHEMICAL COMPANY
AND SUBSIDIARY COMPANIES
/
STATEMENT OF CONSOLIDATED INCOME

FOR THE YEAR ENDED MAY 31, 1941

SALES (net of returns, allowances, cash discounts, and freight) ___-__ $46,907,950.27
COST OF SALES _______-_____--_--_-____________________--- 32,957,4 12.88

GROSS PROFIT __________________-_____________________---- $13,950,537.39

SELLING AND GENERAL EXPENSES:

Selling and administrative expenses --------_---_ $3,642,865.70
Research and experimental expenses _----------- 2,262,697.07 5,905,562.77

PROFIT FROM OPERATIONS ____ ------_--------__- ___________ $ 8,044,974.62

OTHER INCOME:
Dividends, $1,9 13,236.00, and interest, $90,623.37,
from associated company ___________________ $2,003,859.37
Other interest earned, royalties, and miscellaneous 235,377.25 2,239,236.62

GROSS INCOME ________________________________________--- $10,284,2 1 1.24

INCOME CHARGES:
Interest and amortization of discount and expense
on debentures ---------------------------- $ 269,877.93
Other interest expense, loss on disposal of fixed
assets, and miscellaneous -_-_ -_--_--__-_---_ 88,641.76 358,5 19.69

NET INCOME BEFORE PROVIDING FOR FEDERAL INCOME AND

EXCESS PROFITS TAXES ---------------------------------- $ 9,925,691.55

PROVISION FOR FEDERAL INCOME AND EXCESS PROFITS TAXES:

Normal tax -------------------------------- $1,958,832.54
Excess profits tax --------------w-w---------- 40,4 15.80 1,999,248.34

NET INCOME BEFORE ADJUSTMENT FOR MINORITY INTERESTS

IN SUBSIDIARY COMPANIES ------------------------------ $ 7,926,443.21

MINORITY INTERESTS’ SHARE OF PROFITS OF SUBSIDIARY COM-

PAN I ES ------------------------------------------------ 155,896.lO

NET INCOME FOR THE YEAR -------------------------------- $ 7,770,547.1 1

NOTE: The provision for depreciation and the amortization (OS provided
under the Second Revenue Act of 1940) of emergency defense
facilities charged against income for the year ended May 31,
194 1 amounted to $3,370,025.52 and $406,8 17.53, respectively.
 THE DOW CHEMICAL COMPANY
AND SUBSIDIARY COMPANIES

STATEMENT OF CONSOLIDATED EARNED SURPLUS

FOR THE YEAR ENDED MAY 31, 1941

BALANCE, JUNE 1, 1940 ----------I------------------------ $14,992,555.07

CREDIT-Net income for the year ----------------------------- 7,770,54X 11

Total ---------------------------------------- $22,763,102.18

CHARGES:
Cash dividends :
Common capital stock - --_---- _ ____________ $3,328,161.75
Preferred capital stock _~~__~~__-~-_~___-___ 300,000.00

Total dividends ------- ____________ $3,628,161.75

Redemption premium and unamortized discount and
expense relating to fifteen year 3 % debentures
retired _---__---______~_-~~_____________ 20 1,096.08 3,829,25X83

BALANCE, MAY 3 1, 1941 ----------------------------------- $18,933,844.35

 DOW CHEMICALS IN INDUSTRY
- A PARTIAL LIST -

AUTOMOTIVE AND Sodium Sulphide

AIRCRAFT Sulphur Chloride
/ Xanthates
Carbon Tetrachloride F Reagent, Potassium Furfuryl Xanthate
Caustic Soda
Potassium Hexyl Xanthate
Dowmetal
Z-3, Potassium Ethyl Xanthate
Ethocel
Z-4, Sodium Ethyl Xanthate
Ethylene Glycol
Methanol Z-5, Potassium Amyl Xanthate
Perchlorethylene Z-6, Pentasol Xanthate
Thiokols Z-8, Secondary Butyl Xanthate
Z-9, Potassium Isopropyl Xanthate

EXPLOSIVES Zinc Ammonium Chloride

Ammonia
PAINT, VARNISH AND
Aniline
LACQUER
Charcoal, Pulverized
Diethylaniline Acetic Acid
Diethylene Glycol B is Phenol -A
Dimethylaniline
Carbon Tetrachloride
Diphenylamine
Cyclohexane
Hexachlorethane
Diethylene Glycol
Monochlorbenzene
Dowicides
Phenol
Dowtherm
Ethocel
LEATHER Ethylene Dichloride
Carbon Tetrachloride Methanol
Dowicides Methocel
Epsom Salt Methyl Acetone
Methylene Chloride
Ethocel
Iron Liquor Orthodichlorbenzene
Methocel Phenol
Plasticizers
Salt
Sodium Acetate Propylene Dichloride
Sodium Sulphide Styrene
Thiokols
Sulphur Dioxide
Triphenyl Phosphate

MINING AND METALLURGY

PAPER
Acetylene Tetrabromide
Ammonia Carbon Tetrachloride
Ammonium Chloride Caustic Soda
Chlorine, Liquid Chlorine, Liquid
Dehydrating salt solutions Dowicides
Ferrous Chloride Dowtherm
Flotation Oil (Wood Creosotes) Ethocel
Mining Salts Methocel
Muriatic Acid Plasticizers
Perchlorethylene Sodium Sulphide
p-Phenol Sulphonic Acid Zinc Hydrosulphite
 DOW CHEMICALS IN INDUSTRY
- A PARTIAL LIST -

PETROLEUM RAYON lndol

Methyl Anthranilate
Ammonia Acetic Acid
MeA!;:aPienyl Carbinyl
Calcium Chloride Carbon Bisulphide
Caustic Potash Caustic Soda
Phenol
Caustic Soda Dowicides
Phenyl Ethyl Alcohol
Diethylene Glycol Epsom Salt
Salt
Dowel I Products Ethocel
Dowicides Methocel
TEXTILE
Dowmetal Muriatic Acid
Ethylene Dibromide Sodium Sulphide Acetic Acid
Inhibitors Ammonium Chloride
Muriatic Acid REFRIGERATION Calcium Chloride
Phenol Carbon Tetrachloride
Ammonia
Sulphur Dioxide Caustic Soda
Calcium Chloride
Chloroform
Ethyl Bromide
PHOTOGRAPHIC Dowicides
Ethyl Chloride Epsom Salt
Acetic Acid Methyl Bromide Ethocel
Ammonium Bromide Methylene Chloride Ethylene Dichloride
Carbon Tetrachloride Methyl Chloride Indigo and Brom Indigos
Ferric Chloride Salt Iron Liquor
Hydrobromic Acid Sulphur Dioxide Methocel
Iodine Perchlorethylene
Monochloracetic Acid RUBBER Phenol
Phenol Sodium Acetate
Acetic Acid Sodium Sulphide
Potassium Bromide
Acrylo Nitrile Sulphur Chloride
Sodium Bromide Ammonia Triphenyl Phosphate
Aniline Vat Dyes
PLASTIC AND RESIN Butadiene
Carbon Bisulphide AGRICULTURAL
Aniline
Carbon Tetrachloride
Bis Phenol-A Arsenate of Lead
Caustic Soda
Carbon Tetrachloride Charcoal, Pulverized Bordow
Caustic Soda Diphenylguanidine Calcium Arsenate
Charcoal, Airfloat Ethylene Dichloride Carbon Bisulphide
Chloracetamid Hardwood Pitch Caustic Soda
Diphenyl “Mike” Sulfur (ZzrDc) Granulated
Dowtherm Muriatic Acid
Ethocel Phenol Dowfume
Sodium Acetate Dowax
Ethofoi I
Sodium Sulphide Dowspray Dormant
Ethyl Chloride
Styrene Ethylene Dichloride
Ethylene Dichloride
Sulphur Chloride Ethylene Oxide
Hardwood Pitch K-383 (Fly Spray)
Thiokols
Methocel Lime Sulphur
Orthophenylphenol Magnesium Arsenate
SOAP
Paraphenylphenol Methyl Bromide
Para Tertiary Butyl Phenol Caustic Potash “Mike” Sulfur
Phenol Caustic Soda Paradow
Plasticizers Coumarin Paris Green
Saran Diphenylmethane Phenothiazine
Styron Diphenyloxide Special Garden Sprays
Thiokols Dowtherm Sulphur Dioxide
 DOW CHEMICALS IN INDUSTRY
- A PARTIAL LIST -

PHARMACEUTICAL AND Salicylates

AROMATIC Acetyl Salicylic Acid, U. S. P.
Ammonium Salicylate, U. S. P.
Acetanilid, Tech. ’ Antipyrene Salicylate
Acetanilid, U S. P. Ethyl Salicylate
Acetphenetidin, U. S. P. Ethyl Salicylate Carbonate
Ally1 Bromide Magnesium Salicylate
Ammonium Bromide, U. S. P. Methyl Salicylate, U. S. P.
Ammonium Chloride Salicylic Acid, U. S. P.
Aniline Salol, U. S. P.
Antipyrene, U. S. P. Sodium Salicylate, U. S. P.
Bromoform, U. S. P. IX Strontium Salicylate, N. F.
Cadmium Bromide, U. S. P. Sodium Acetate, U. S. P.
Calcium Bromide, U. S. P. Sodium Bromide, U. S. P.
Camphor, Monobromated, N. F. Strontium Bromide, N. F.
Carbon Tetrachloride, C. P. Styrene P- 100
Chloroform, U. S. P. Tetrachlorethylene, Purified
Coumarin Trichloracetic Acid, U. S. P.
Diphenylmethane Trimethylene Chlorobromide
Diphenyloxide
Dowicides WATER PURIFICATION AND
Epsom Salt, U. S. P.
SEWAGE DISPOSAL
Ethyl Bromide
Ethyl Chloride, U. S. P. Ammonia, Anhydrous
Ferric Chloride, U. S. P. Carbon, Activated
Glycine Chlorine, Liquid
Ferric Chloride
I ndol
Iodine
Isopropyl Bromide ELECTRICAL
Lithium Bromide, N. F. Carbon, Activated
Magnesium Bromide Dowicides
Methyl Anthranilate Hardwood Pitch
Methyl Phenyl Carbinyl Acetate Trichlorbenzene
Monochloracetic Acid Styron
Phenol, U. S. P.
Phenol Sulphonates LUMBER
Phenothiazine Creosote Oi I
Phenoxy Acetic Acid Dichlor Diphenyloxide
Phenyl Ethyl Alcohol Dowicides
Potassium Bromide, U. S. P. Orthodichlorbenzene