Financial History Issue 130 (Summer 2019) | Page 20
by gender and years of service, with the
women who did much of the office work
earning less than the men who worked
the production lines. From levels of 52–57
cents per hour (approximately $25–30 per
hour today), the men saw their pay sliced
by 7.5 cents per hour across all pay grades
—a stunning 14.3% cut for the lowest pay
grade. From levels of 29–34 cents per
hour, pay for women was cut by three
cents—a slightly lower percentage—from
this lower pay rate. The decline in com-
pany and worker outlook in just 15 short
months must have been sobering.
These financial difficulties were occur-
ring just as the company was preparing
to introduce its first new and improved
product. Company leaders had been
working with an inventor in Pennsylva-
nia named Francis Okie, who had sent
them an odd letter many months before
expressing interest in buying samples
of their granules. Subsequent conversa-
tions revealed that Okie had developed a
waterproof coating to anchor the granules.
Sandpaper manufacturers near Okie in
Pennsylvania were willing to allow him to
use their production lines to make small
experimental runs, but they refused to
sell him large quantities of their granules
to expand his production. Okie wrote the
only other sandpaper manufacturer he
could identify, little 3M Company way out
west in St. Paul.
3M employees knew well that use of the
company’s sandpaper sent dust airborne,
dust that was hardly a salutary addition to
the workplace. A waterproof sandpaper
held out the possibility of sanding in water,
which would allow users to wash away the
dust rather than sending it into the air. They
immediately agreed to work with Okie, and
Okie sent five-gallon pails of his chemical
coating from Pennsylvania to St. Paul. Batch
quality varied in a matter that frustrated all
involved, and Okie eventually moved to St.
Paul to be closer to the production process.
May 1921 saw the first sales of this new
product—called WETORDRY™—to Max-
well (now Fiat Chrysler) and Buick Motors.
Automobile makers and automobile body
repairmen soon developed the technique of
running water over the area being sanded—
“wet sanding”—with WETORDRY sand-
paper, which washed away the dust and
prevented it from accumulating around the
granules on the paper.
The 3M shipping room in St. Paul, Minnesota, circa 1920.
The deflationary depression that
clouded the introduction of WETORDRY,
with all its distress and slashed wages, was
sharp and sudden—and short. Interest
rates were lowered and business activ-
ity bottomed in mid-year 1921, although
consumer prices continued downward.
Prices declined a little further in 1922, but
GNP jumped 6.6% from 1921 levels, and
the rebound in business activity trumped
the decline in prices. Leveraged measure-
ments of economic activity jumped even
higher: The earnings of the Dow Indus-
trial companies increased by over 300%
in 1922 from the depressed levels of the
year before, and the number of busi-
nesses reporting 1922 profits in excess of
$100,000 increased 66% from their num-
bers in 1921.
One of those companies was Minnesota
Mining and Manufacturing. Sales snapped
back. The WETORDRY product helped
bring the yearly sales total to over $2 mil-
lion in 1923, with profits for the year greater
than those inflation-fueled levels of 1919.
The 1920s would roar on. The 3M Com-
pany created a research laboratory in
1924, initially to monitor the quality of
their new waterproof coating and sandpa-
per. The following year, their researchers
18 FINANCIAL HISTORY | Summer 2019 | www.MoAF.org
branched out to develop and introduce
masking tape, the first version of what
the company later called Scotch™ tape,
an adhesive in place of the base coating
applied to a paper backing that permit-
ted auto workers to quickly mask off and
control paint areas to create “two-tone”
automobiles. In 1930, they introduced a
cellophane tape—popular now for gift
wrapping (Magic™ tape)—by substituting
a water-resistant film to support the adhe-
sive, their first of thousands of consumer
products. It was a tremendous decade of
growth for the company: Minnesota Min-
ing and Manufacturing increased sales
over five-fold during the period 1921–1930,
and by the end of the decade the company
name wasn’t quite so presumptuous.
These variations on the general method
used to make the original sandpaper prod-
uct were possible because the company
weathered the financial storm that was
1920–1921. Faced with the financial difficul-
ties of that wicked, seemingly bottomless
depression and deflation, 3M had the flex-
ibility to quickly adjust its labor expenses in
line with demand and general prices.
The early months of the downturn that
began eight years later, in 1929, were actu-
ally much less severe than the downturn