Abstract

"Asking for the Impossible: Chile, the United States, and the Post Second World War Disposition of U.S. Government Ammonia Plants"

Richard Sicotte, University of Vermont (richard.sicotte@uvm.edu)

During the Second World War, the United States relied on an immense expansion of production in vital industries and imports of strategic materials from countries. To obtain supplies of chemical nitrogen, the U.S. Government invested more than two hundred million dollars in the construction of ten synthetic ammonia plants and imported about three million tons of Chilean nitrate at a cost of about $35 per ton. The Chilean nitrate industry viewed the expansion of the U.S. ammonia industry as an existential threat, and the Chilean Government spent much of the war trying to gain U.S. commitments to place restrictions on the postwar use of these plants. Ultimately, the U.S. Government offered to consult with Chile and to consider the impact of disposal on the Chilean nitrate industry. After the war the United States privatized nearly all the plants, which then produced ammonia fertilizer products that competed directly with Chilean nitrate. Chileans believed that they had been misled and were bitterly disappointed, but they were in no position to threaten or seek retribution. The business consequences turned out not to be as disastrous for Chile as feared. Axis countries’ ammonia plants were largely destroyed during the war. Also, farms throughout Europe and Asia received precious little fertilization during the war, leaving the soils depleted and starved for nitrogen. Supply was constrained, and demand was very high. In the medium to longer term fertilizer use worldwide grew by leaps and bounds. Nonetheless, Chilean nitrate’s high costs limited its participation in market growth, and the industry transitioned to specialty products. This paper contributes to the economic and business history of the Second World War and demobilization. It highlights ongoing business tensions and specifically illustrates the difficulty – if not impossibility – for countries like Chile to wring meaningful concessions from the United States. Research was conducted in archives in the United States and Chile, principally of the records of the Chilean Nitrate and Iodine Sales Corporation, the State Department, the War Production Board, and the War Assets Administration.