Biotechnology in the Chemical

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BIOTECHNOLOGY IN THE CHEMICAL
INDUSTRY
BIOTECHNOLOGY
IN THE CHEMICAL
INDUSTRY
Towards a Green and
Sustainable Future

Pratima Bajpai
Consultant-Pulp and Paper, Kanpur, India
Elsevier
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 Dedication

“Dedicated to my beloved parents and family,” for their love, endless support, encouragement
and sacrifices.
 List of figures

FIG. 1.1 The industrial biotechnology value chain. 3

FIG. 2.1 The triple P bottom line (DSM, 2004). 19
FIG. 5.1 (A) Stirred tank fermenter. (B) Air-lift fermenter with an internal loop cycle of
fluid flow and with an external recirculation pump. (C) Fluidized bed bioreactor
https://www.kisspng.com/free/­fluidized-bed-reactor.html. (D) Fixed bed bioreactor.
(E) Bubble column reactor. Parts A, B and E: Reproduced with permission from
Najafpour (2007). Part D: Reproduced with permission from essentialchemicalindustry.org. 40-42
FIG. 6.1 Production of L-lysine HCl via a conventional fermentation process
(www.chemengonline.com/l-lysine-hcl-production-glucose/). 72
FIG. 6.2 Growth in L-lysine production over the past several decades
(www.chemengonline.com/l-lysine-hcl-production-glucose/). 72
FIG. 6.3 Structure of food-grade pigments. Reproduced with permission from Venil et. al., 2013. 100
FIG. 6.4 Stages of bioethanol fuel production. Reproduced with permission from Achinas
and Euverink, 2016. 146
FIG. 6.5 Different types of forest biomass. Reproduced with permission from Achinas and Euverink, 2016. 147
FIG. 6.6 Schematic of a biochemical cellulosic ethanol production process. Reproduced with permission
from Achinas and Euverink, 2016. 147
FIG. 6.7 An overview of combinatory methodologies for bioremediation. Reproduced with permission
from Sharma et al., 2018. 156

ix
 List of tables

TABLE 1.1 Industrialization of biology—benefits. 2

TABLE 1.2 Color code differentiating the main areas of biotechnology. 2
TABLE 1.3 Some historical developments in industrial biotechnology. 3
TABLE 1.4 Environmental and economic benefits of biotechnology. 5
TABLE 1.5 Defining technologies of modern biotechnology. 5
TABLE 1.6 A vision for 2025. 8
TABLE 1.7 Advantages of biotechnology in chemical production. 11
TABLE 3.1 Renewable energy. 24
TABLE 3.2 Fossil fuels. 24
TABLE 3.3 Average world market price of some fossil and renewable resources. 27
TABLE 3.4 Industrial sectors supplying the most important renewable raw materials. 29
TABLE 4.1 Products from the chemical industry in 2014 by category (%). 33
TABLE 4.2 Subsegments of the chemical industry. 33
TABLE 5.1 Advantages of bioprocesses. 38
TABLE 5.2 Different types of sparger. 43
TABLE 5.3 Advantages of submerged fermentation over surface fermentation. 44
TABLE 5.4 Disadvantages of submerged fermentation over surface fermentation. 44
TABLE 5.5 Advantages of solid-state fermentation over submerged fermentation. 46
TABLE 5.6 Disadvantages of SSF. 47
TABLE 5.7 Traditional SSF processes. 48
TABLE 5.8 Products produced by SSF technology. 48
TABLE 5.9 Types of solid-state fermenters. 49
TABLE 5.10 Major factors affecting microbial synthesis of enzymes in a SSF system. 50
TABLE 5.11 Advantages of using enzymes. 51
TABLE 5.12 Specificity of enzymes. 52
TABLE 5.13 A selection of enzyme types used in industrial processes. 53
TABLE 5.14 Enzyme classes and types of reactions. 54
TABLE 6.1 Important bioprocessing systems for the production of commodity chemicals. 59
TABLE 6.2 Product groups currently produced commercially using fermentation. 59
TABLE 6.3 Products in developmental stage. 60
TABLE 6.4 Uses of citric acid. 62
TABLE 6.5 Microorganisms with the ability to produce citric acid. 63
TABLE 6.6 Speciality foods produced by lactic acid fermentation. 65
TABLE 6.7 Uses of lactic acid. 66
TABLE 6.8 Uses of L-lysine. 71
TABLE 6.9 Companies producing glutamic acid. 75
TABLE 6.10 Enzymes used in food industry. 77
TABLE 6.11 Environmental benefits of using glucoamylase enzymes for the conversion
of starch to glucose. 80
TABLE 6.12 Type of feed enzymes. 84
TABLE 6.13 Advantages of supplementing feed with enzymes. 84
TABLE 6.14 Prerequisite of enzymes used in animal nutrition. 84
TABLE 6.15 Mode of action of different feed enzymes. 86
TABLE 6.16 Biofertilizers and soil conditioners used in agriculture. 87
TABLE 6.17 Biopesticides. 88
TABLE 6.18 Types of biopesticides. 89

xi
xii List of tables

TABLE 6.19 Biopesticides of botanical origin. 89

TABLE 6.20 Biopesticides from microorganisms. 90
TABLE 6.21 Advantages of using biopesticides. 90
TABLE 6.22 Few commercial biocontrol products for use against soilborne crop diseases. 91
TABLE 6.23 Substances with pest control properties. 96
TABLE 6.24 Possible reasons for the use of colorants in food substances. 97
TABLE 6.25 Naturally derived colors from plants sources. 97
TABLE 6.26 Naturally derived colors from microorganisms. 98
TABLE 6.27 Microorganisms producing pigments. 98
TABLE 6.28 Application of biocolors. 102
TABLE 6.29 Application of bacterial pigments. 102
TABLE 6.30 Production of food colors from plants using biotechnological methods. 103
TABLE 6.31 Important features of some biocolors. 103
TABLE 6.32 Benefits of biocolorants. 104
TABLE 6.33 Limitations of biocolorants. 104
TABLE 6.34 Flavors from plant cell culture. 106
TABLE 6.35 Food aroma compounds produced by microorganisms. 107
TABLE 6.36 Enzymes used for the production of aroma compounds. 108
TABLE 6.37 Solid-state fermentation applications in food aroma production. 109
TABLE 6.38 Use of solvents in different sectors. 112
TABLE 6.39 Organic chemicals utilized as solvents. 112
TABLE 6.40 Methods to produce solvents from biomass. 113
TABLE 6.41 Biobased solvents. 113
TABLE 6.42 Industrial biodegradable solvents. 114
TABLE 6.43 Advantages of using biobased solvents. 114
TABLE 6.44 Few established fermentation products. 119
TABLE 6.45 Vitamins produced by biotechnological methods. 120
TABLE 6.46 Microorganisms producing vitamin B12. 121
TABLE 6.47 Few selected biopharmaceuticals. 122
TABLE 6.48 A few examples of enzymes in industry. 123
TABLE 6.49 Use of enzymes in cosmetics. 129
TABLE 6.50 Four classes of enzymes are generally used in detergents. 133
TABLE 6.51 Advantages of using enzymes in detergents. 134
TABLE 6.52 Enzymes used in detergents (laundry and dishwash). 135
TABLE 6.53 Types of bioplastics. 139
TABLE 6.54 Market drivers. 139
TABLE 6.55 Bioplastic opportunities. 139
TABLE 6.56 First-generation and second-generation feedstocks for bioethanol. 145
TABLE 6.57 Enzymes involved in biofuel production. 146
TABLE 6.58 Enzymes used in the processing of fats and oils. 150
TABLE 6.59 Advantages of bioremediation. 153
TABLE 6.60 The disadvantages of bioremediation. 156
TABLE 6.61 Microbial enzymes involved in bioremediation. 157
TABLE 6.62 Biotechnological processes for removing VOCs from gases. 158
TABLE 6.63 Enzymes used in the bioremediation of different harmful chemical compounds. 158
TABLE 6.64 Advantages of transgenic plants. 170
TABLE 6.65 Major commercial players in plant biotechnology. 170
TABLE 7.1 The impact of industrial biotechnology on the environment. 196
TABLE 7.2 The impact of industrial biotechnology on the economy. 196
TABLE 7.3 The impact of industrial biotechnology on society. 197
TABLE 7.4 Companies using industrial biotechnology for improving manufacturing processes. 199
TABLE 8.1 Recent investments and developments in biotechnology sector in India. 207
TABLE 8.2 Major initiatives taken in India. 207
TABLE 9.1 Reasons for slow commercialization of biotechnology. 210
 List of tables xiii
TABLE 9.2 Challenges facing industrial biotechnology. 211
TABLE 9.3 Comparison of industrial biotechnology and chemical technology. 212
TABLE 9.4 Problems to be solved for making industrial biotechnology competitive to chemical
technology. 212
TABLE 10.1 Industrial biotechnological applications with a high probability of reaching the market
by 2030. 219
 Preface
Industrial biotechnology is the modern use
and application of biotechnology for the sus-
tainable processing and production of chem-
icals, materials, and fuels. It uses enzymes
and microorganisms to make in a wide range
of industrial sectors including chemicals,
pharmaceuticals, food and feed, detergents,
paper and pulp, textiles, energy, materials,
and polymers. Mankind has already bene-
fited from biotechnology for a long time, but
with the advance of new technologies and a
much deeper understanding of cell metab-
olism and materials science, many new op-
portunities have been identified, and others
are continuing to emerge. The application of
biotechnology across various industry sec-
tors has invariably led to both economic and
environmental benefits including less expen-
sive processing, enhanced product quality,
entirely new products, and environmentally
xv
sustainable processing relative to conven-
tional operations. Economic drivers are the
main factor for increasing acceptance of bio-
processing and bioproducts, but sustainabil-
ity considerations are playing an increasing
role. This book focuses on achievements
and future prospects for biotechnology in
sustainable production of goods and ser-
vices, especially those that are derived at
present mostly from the traditional chemical
industry. It looks into the future impact of in-
dustrial biotechnology and lays out the ma-
jor research areas, which must be addressed
to move from a flourishing set of scientific
disciplines to a major contributor to a suc-
cessful future knowledge-based economy. It
focuses in particular on the research needed
to underpin three broad topics: biomass,
bioprocesses, and bioproducts, including
bioenergy.
 Acknowledgments
I am grateful for the help of many people,
companies, and publishers for providing in-
formation and granting permission to use
their material.
Some excerpts were taken from Sunar
K, Kumar U, Deshmukh S (2016). Recent
Applications of Enzymes in Personal
Care Products. In: Dhillon, G. Singh,
Kaur, S. (Eds.), Agro-Industrial Wastes as
Feedstock for Enzyme Production: Apply
and Exploit the Emerging and Valuable
Use Options of Waste Biomass. Academic
Press, 279–298. ISBN: 9780128023921, with
kind permission.
Some excerpts were taken from Kirk
O, Borchert TV, Fuglsang CC (2012).
Industrial enzyme applications. Curr
Opin Biotechnol;13:345–51, with kind
permission.
Gavrilescu M, Chisti Y (2005).
Biotechnology—a sustainable alternative for
chemical industry. Biotechnol Adv;23:471–
99, with kind permission.
Ahmad P, Ashraf M, Younis M, Hu X,
Kumar A, Akram NA, Al-Qurainy F (2012).
Role of transgenic plants in agriculture and
biopharming. Biotechnol Adv;30:524–540,
with kind permission.
Woodley JM, Breuer M, Mink D (2013). A
future perspective on the role of industrial
biotechnology for chemicals production.
Chem Eng Res Des;91(10):2029–36, with kind
permission.
Bajpai Pratima (2018). Biermann’s
Handbook of Pulp and Paper: Volume 1:
Raw Material and Pulp Making, with kind
permission.
xvii
Bajpai Pratima (2018). Biermann’s
Handbook of Pulp and Paper Volume 2: Paper
and Board Making, with kind permission.
Bajpai Pratima (2015). Pulp and Paper
Industry 1st edition—Chemicals, with kind
permission.
Bajpai Pratima (2009). Xylanases in
“Encyclopedia of Microbiology, Third
Edition”, (M. Schaechter and J. Lederberg,
eds) Vol. 4. Academic Press, San Diego, pp.
600–612, with kind permission.
Bajpai Pratima (2018). Biotechnology for
Pulp and Paper Processing, Springer Nature,
with kind permission.
Novozymes (2011). Enzymes at work
http://www.novozymes.com/en/about-us/
brochures/Documents, with kind permission.
Bajpai Pratima (2013). Pulp and paper bi-
oprocessing. Encycl Ind Biotechnol, pp. 1–17,
with kind permission.
Erickson B, Nelson JE, Winters P (2012).
Perspective on opportunities in Industrial bio-
technology in renewable chemicals. Biotechnol
J;7(2):176–185. doi:https://doi.org/10.1002/
biot.201100069, with kind permission.
Soetaert W, Vandamme E (2006). The im-
pact of industrial biotechnology. Biotechnol
J;1:756–69. doi:https://doi.org/10.1002/
biot.200600066, with kind permission.
Bajpai P (2018). Industrial Enzymes—An
Update, first ed. Bookboon. ISBN: 978-87-
403-2129-6, p. 118, with kind permission.
Chen GQ (2012). New challenges and
opportunities for industrial biotechnology.
Microb. Cell Fact;11:111. doi:https://doi.
org/10.1186/1475-2859-11-111, with kind
permission.
 C H A P T E R

1
General background and introduction
O U T L I N E

1.1 The impact of industrial 1.2.3 Fine and speciality chemicals 10

biotechnology 8 1.2.4 New materials 10
1.2 Products of industrial References 12
biotechnology 9
Relevant websites 13
1.2.1 Bulk chemicals 9
1.2.2 Biofuels and bioenergy 10 Further reading 14

For many decades, chemical manufacturers have depended on complex and often environ-
mentally damaging processes for synthesizing a variety of diverse products from petroleum
and natural gas, to plastics and process chemicals, to vitamins and nylon. The chemical in-
dustry is facing increasing pressure for making chemical production more ecologically sound
because of its dependence on fossil resources, its environmentally harmful production pro-
cesses, and generation of toxic waste and by-products. But due to innovations in the recent
years, biotechnology has entered into the industrial sector. This has created a new field gen-
erally referred to as “white biotechnology” or “green chemistry” (Kafarski, 2012). The indus-
trialization of biology offers several advantages at both the national and international scale
(Table 1.1) (National Research Council, 2015).
The international biotechnology market has grown in the last decade (Barcelos et al., 2018).
This is fueled by the following factors (Barcelos et al., 2018):
- Economic recovery
- Increased research funding
- Government endeavors
The United States is the first country in the development and application of biotechnology,
but developing countries like Brazil and India are also making significant efforts in promot-
ing biotechnology, especially agricultural and industrial biotechnology (Ramos et al., 2016).

Biotechnology in the Chemical Industry 1 © 2020 Elsevier Inc. All rights reserved.
https://doi.org/10.1016/B978-0-12-818402-8.00001-X
2 1. General background and introduction

TABLE 1.1 Industrialization of biology—benefits.

Driving the innovation economy and sustainable economic growth

Enabling sustainable and next-generation manufacturing

Contributing to the solutions to some of the societal grand challenges of our time,
like helping to provide clean, affordable, and sustainable energy

Creation of new skills and jobs to benefit generations of today and tomorrow
Based on National Research Council, 2015. Industrialization of Biology: A Roadmap to Accelerate the
Advanced Manufacturing of Chemicals. The National Academies Press, Washington, DC, https://doi.
org/10.17226/19001.

The main areas of biotechnology are differentiated according to the color code developed
by Kafarski (2012) (Table 1.2).
Industrial biotechnology (also referred to as white biotechnology) uses biological systems
for producing chemicals, materials, and energy. This technology uses biocatalysis (the use of
enzymes to catalyze chemical reactions) and fermentation technology (use of microorgan-
isms), in combination with breakthroughs in enzyme and metabolic engineering and molec-
ular genetics (Tang and Zhao, 2009; Carole et al., 2004; Philp et al., 2013; Barcelos et al., 2018;
DSM, 2004; European Union, 2003; EuropaBio, 2003; OECD Report, 2001; William et al., 1999).
Industrial biotechnology usually results in cleaner processes with minimum generation of
waste and use of energy. Some of the historical developments in industrial biotechnology are
presented in Table 1.3. Red biotechnology focuses on medical sector, whereas green biotech-
nology focuses on genetically modified crops.
The three major drivers for industrial biotechnology are listed later (Bull et al., 1998):
- Economic (market forces)
- Governmental policy
- Science and technology
Fig. 1.1 shows the industrial biotechnology value chain.
Raw materials, including crops and organic by-products, from agricultural sources and
households are converted into sugars. From these sugars, desired product can be produced

TABLE 1.2 Color code differentiating the main areas of biotechnology.

White (industrial)

Green (agricultural)

Blue (marine and freshwater)

Red (pharmaceutical)

Brown (desert biotechnology)

Purple (patents and inventions)

Yellow (insect biotechnology, an emerging field of applied entomology that

covers the use of insects in drug discovery)
Based on Kafarski, P., 2012. Rainbow code of biotechnology. Chemik 66, 814–816.
 1. General background and introduction 3
TABLE 1.3 Some historical developments in industrial biotechnology.

Pre-1940s
Solvents
Baker's yeast
Organic acids
Amino acids

Pre-1980s
Antibiotics
Prebiotics
Biopolymers
Single cell proteins
Enzymes
Biosurfactants
Enzymes

Post-1980s
Biopharmaceuticals
Recombinant proteins
Monoclonal antibodies
Plant bioactive compounds
Recombinant vaccines
Biofuels
Based on Singh, R.S., 2014. Industrial biotechnology: an overview. In: Singh, R.S., Pandey, A.,
Larroche, C. (Eds.), Advances in Industrial Biotechnology. IK International Publishing House Pvt.
Ltd, India, pp. 1–35.

Fine
chemicals
Biochemicals

Physico-chemical
treatment Microorganisms
Agricultural
Sugars
(by) products and/or enzymatic or enzymes Biomaterials
treatment

Biofuels Bulk
chemicals

FIG. 1.1 The industrial biotechnology value chain. Reproduced with permission from DSM, 2004. Industrial (White)
Biotechnology—An Effective Route to Increase EU Innovation and Sustainable Growth. Position Document on Industrial
Biotechnology in Europe and the Netherlands, http://www.sustentabilidad.uai.edu.ar/pdf/tec/industrial_white_biotech.pdf, 20 pp.
4 1. General background and introduction

by tailor-made microorganisms or enzymes. Many countries have a good hold in this value
chain, due to the presence of several important key players in the chemical and food industry
and agribusiness.
Biotechnological processing uses enzymes and microorganisms for making products in
a several industries including chemicals, pharmaceuticals, food and feed, detergents, paper
and pulp, textiles, energy, materials, and polymers (Hatti-Kaul et al., 2007; Chen, 2012; Chen
and Kazlauskas, 2011; Industrial Biotechnology Industry Report, 2011). Humankind has al-
ready benefited from biotechnology for a long time, but due to the advancement of new tech-
niques and a thorough understanding of cell metabolism and materials science, several new
opportunities have been identified, and others are continuously emerging. The term “white
biotechnology,” proposed by European Union, is also gaining momentum now. This covers
the field of industrial biotechnology, with “white” also referring to the favorable environ-
mental aspects associated with the use of industrial biotechnology (Soetaert and Vandamme,
2006; Dale, 2003; Bachmann, 2003; Sørup et al., 1998; Brundtland, 1987; William et al., 1999;
Eggersdorfer et al., 1992; Campbell, 1998; Okkerse and Van Bekkum, 1999; Vandamme et al.,
2006; Wilke, 1995; Demain, 2000; Lens et al., 2005; Griffiths, 2001; Carlson, 2003; Ahmann and
Dorgan, 2007; Bang et al., 2009; Philp, 2011; Singh, 2011; BCC Research, 2011a, b; Kircher, 2010;
Carole et al., 2004; Philp et al., 2013; Hatti-Kaul et al., 2007; Chen, 2012; Chen and Kazlauskas,
2011; Industrial Biotechnology Industry Report, 2011; Erickson et al., 2012; Tang and Zhao,
2009). “White biotechnology actually has a lot to offer to our society. Now, it is our challenge
to develop and exploit that on time” (DSM, 2004).
Researchers are exploring methods for producing chemicals from renewable resources
without depending on the conventional chemical methods. As an alternative to this, they
plan to explore specially designed microorganisms and new molecules for producing prod-
ucts from biomass substrates. The cost can be reduced by reducing generation of waste and
emission of greenhouse gases, energy consumption, and effectively aligning economic in-
centives with broader social and environmental objectives (www.eesi.org/articles/view/
can-white-biotechnology-help-create-a-green-chemicals-industry).
Biotechnology is an all-round technology providing powerful routes for cleaning in-
dustrial products and processes and is playing a powerful role. Biotechnology is at an
early stage in the chemical industry. But it has the potential as a major driver to the future
of industry. Industrial biotechnology has been identified as a major emerging technology
area. It is the application of scientific and engineering principles to the processing of ma-
terials by biological agents and can provide the process tools for biobased production of
chemicals. Biotechnology has led to cleaner processes with reduced generation of wastes
and reduced energy consumption in some areas. Biotechnology is found to be capable of
producing huge wealth and affecting every important sector of the economy. “Industrial
penetration of biotechnology is increasing as a result of advances in recombinant DNA
technologies. It has already significantly affected healthcare; production and processing of
food; agriculture and forestry; environmental protection; and production of chemicals and
materials. New products from industrial biotechnology show more functionality; the more
sophisticated chemistries enabled by biological catalysts lend themselves to “smarter”
products for the consumer at little high cost” (Ghisalba et al., 2009). Table 1.4 presents
the benefits of biotechnology, and Table 1.5 presents the defining technologies of modern
biotechnology.
 1. General background and introduction 5
TABLE 1.4 Environmental and economic benefits of biotechnology.

Substantially reduced dependence on nonrenewable fuels and other resources

Sustainable production of existing and novel products

Safely destroys accumulated pollutants for remediation of the environment

Better economics of production

Reduced potential for pollution of industrial processes and products

Based on Gavrilescu, M., Chisti, Y., 2005. Biotechnology—a sustainable alternative for chemical industry. Biotechnol. Adv. 23, 471–499.

TABLE 1.5 Defining technologies of modern biotechnology.

Genetic engineering

Metabolic engineering

Cells of animals and plants

Culture of recombinant microorganisms

Hybridoma technology

Bioelectronics

Bioseparations and bioreactor technologies

Nanobiotechnology

Protein engineering

Transgenic animals and plants

Tissue and organ engineering

Immunological assays

Genomics and proteomics

Based on Gavrilescu, M., Chisti, Y., 2005. Biotechnology—a sustainable alternative for
chemical industry. Biotechnol. Adv. 23, 471–499.

Industrial biotechnology is one of the most promising approaches to pollution prevention,

resource conservation, and cost reduction (Industrial Biotechnology Industry Report, 2011).
It is often referred to as the third wave in biotechnology. “If developed to its full potential,
industrial biotechnology may have a larger impact on the world as compared to health care
and agricultural biotechnology. It offers businesses a way to reduce costs and create new mar-
kets while saving the environment. Also, since many of its products do not need the lengthy
review times that drug products must undergo, it's a faster, easier pathway to the market.
Today, new industrial processes can be taken from lab study to commercial application in two
to five years, in comparison to up to a decade for drugs” (www.bio.org).
“The application of biotechnology to industrial processes is not only transforming how we
produce products but is also providing new products which could not even be imagined a
few years ago. Because industrial biotechnology is so new, its advantages are not well known
or understood by industry, policymakers or consumers” (www.bio.org).
6 1. General background and introduction

Industrial biotechnology has integrated product improvements with prevention of pol-

lution from the very beginning. Industrial biotechnology has solved the phosphate water
pollution problems in the 1970s, which was caused by the use of phosphates in laundry de-
tergent. Biotechnology companies developed enzymes that were able to remove stains from
clothes better than phosphates. This allowed the replacement of a polluting material with a
nonpolluting biobased product; the performance of the end product also improved. This new
method substantially reduced phosphate related algal blooms in surface waters around the
globe and allowed consumers to get their clothes cleaner with reduced temperature of wash
water and energy savings.
“Primitive industrial biotechnology actually dates back to at least 6000 B.C. when Neolithic
cultures fermented grapes to produce wine, and Babylonians used microbial yeasts for mak-
ing beer. Over time, mankind's knowledge of fermentation increased, allowing the produc-
tion of cheese, yogurt, vinegar, and other food products. In the 1800s, Louis Pasteur proved
that fermentation was the result of microbial activity. Later in 1928, Sir Alexander Fleming
extracted penicillin from mold. In the 1940s, large-scale fermentation methods were devel-
oped for producing industrial quantities of this wonder drug. After World War II, the biotech-
nology revolution started, giving rise to modern industrial biotechnology” (www.bio.org).
For a long time, industrial biotechnology has been producing enzymes for the manufac-
turing sector and also for daily use. For example, meat-tenderizing enzyme and some contact
lens cleaning fluids contain enzymes that remove sticky protein deposits. Industrial biotech-
nology involves the enzymes, produced by microorganisms. These are specialized proteins
and have evolved in nature to be high performing biocatalysts that facilitate and accelerate
complex biochemical reactions. These incredible enzyme catalysts make industrial biotech-
nology a powerful new technology.
Industrial biotechnology actually works with nature for maximizing and optimizing exist-
ing biochemical pathways that can be utilized in manufacturing. The industrial biotechnol-
ogy revolution rides on several developments in three areas of study of detailed information
obtained from the cell genomics, proteomics, and bioinformatics. As a result, researchers can
use novel methods to different types of microorganisms—bacteria, yeasts, fungi, marine dia-
toms, and protozoa.
Industrial biotech companies use certain specially designed methods for finding and im-
proving enzymes in nature. Information from genomic studies on microorganisms is helping
scientists to capitalize on the wealth of genetic diversity in microbial populations. Scientists
first search for microorganisms producing enzymes in the natural environment and then use
DNA probes for searching at the molecular level for genes producing enzymes with specific
biocatalytic abilities. After isolation, the enzymes can be identified and characterized for their
ability for functioning in specific industrial processes. Biotechnology methods can be used to
improve these enzymes if needed.
Several biocatalytic tools are becoming available rapidly for industrial applications due to the
significant advances in biotechnological methods. In several cases, the biocatalytic or whole-cell
processes are so new that most chemical engineers and product development specialists in the
private sector are not yet aware that they are available for deployment. “This is a good example
of a technology gap where there is a lag between availability and widespread use of a new tech-
nology. This gap must be overcome to accelerate progress in developing more economic and
sustainable manufacturing processes through the integration of biotechnology” (www.bio.org).
 1. General background and introduction 7
According to Carlson (2012), in the United States, biobased product markets are significant,
represented more than 2.2% of gross domestic product or more than $353 billion in economic
activity in 2012. “To date White biotechnology has had its greatest economic impact in human
health and in agriculture, bio-based chemicals are neither entirely new, nor are they a his-
toric artifact. Current global bio-based chemical and polymer production is already estimated
to be about 50 million tons each year, and bioprocessing techniques (such as fermentation,
baking, and tanning) have been used throughout much of human industrial history. Agilent
Technologies estimates that United States business-to-business revenues from industrial bio-
technology alone reached at least $125 billion in 2012” (Solomon, 2013; www.nap.edu).
“Bio-based chemical applications accounted for about $66 billion of that activity with
biofuels adding another $30 billion. Lux Research estimates that industrial chemicals made
through synthetic biology represent a $1.5 billion market in 2013 and that this likely will
expand at a 15%–25% annual growth rate for the foreseeable future” (Cha, 2013). Based on
a 2009 Organization for Economic Cooperation and Development (OECD) analysis, a USDA
report shows that biobased chemicals will comprise higher than 10% of the chemical market
in 2014 (Golden and Handfield, 2014).
Several companies, including DSM, DuPont, Novozymes, and BASF are using biotechnol-
ogy for replacing old production processes. DSM is conducting commercial production of
succinic acid. The name of the product is Biosuccinium. It is sold globally since 2012, and this
technology is also offered under license to value chain partners and coproducers (https://
reverdia.com/about/company-overview/). Biosuccinium is an important biobased chemi-
cal building block that offers the chemical industry a good alternative to various oil-based
diacids. This product is based on a patented technology with a best environmental footprint
and has a diverse range of applications in packaging, footwear, and also cosmetics. In 2012,
Reverdia started the world’s first dedicated, large-scale plant for succinic acid production
from renewable raw materials in Cassano, Spinola, Italy. This plant has a capacity of 10,000
tonnes/year and used yeast. Since that time, the company has surpassed its planned technical
milestones. It has grown up from a biotechnology company to a codevelopment powerhouse.
“For supporting the emerging biomaterials industry, the United States government formed
the BioPreferred procurement program in the Farm Security and Rural Investment Act of
2002. Expanded under the Food, Conservation, and Energy Act of 2008, the bill gives federal
procurement preference to bioproducts, including those obtained from white biotechnology.
In addition, the legislation creates a voluntary labeling program, set to be unveiled in 2009,
to identify items that meet USDA-determined thresholds for the inclusion of biobased ma-
terials. To date, BioPreferred has identified 2541 products across 33 item types that meet the
required threshold. Applications of white biotechnology have already started achieving re-
ductions in carbon emissions and fossil fuel use. Production of plastics with biobased innova-
tions already stands at 1 billion pounds (out of an 80 billion pound market). A 2004 industry
report projected that if all plastic production were met using biotechnology, United States
oil consumption would reduce by 90–145 million barrels per year. DSM has estimated that
moving to biobased chemical production across the industry could account for up to 20% of
the global Kyoto greenhouse gas emissions reduction target. This significant carbon reduc-
tion potential, coupled with its ability to reduce costs for chemical producers and reduce
dependence on fossil fuels, marks white biotechnology as a promising option in efforts to
harmonize economic goals with climate goals. An important question remains whether this
8 1. General background and introduction

TABLE 1.6 A vision for 2025.

Using biotechnology, an increasing number of chemicals and materials are expected to be produced by the year
2025. Biotechnological processes will be used to produce chemicals and materials that are difficult to produce
conventionally or to make existing products in a more efficient way

Industrial biotechnology will enable a range of industries for manufacturing products economically and in an
environmentally sustainable way

Renewable resources can be used eco-efficiently by using biotechnology

Rural biorefineries would replace port-based oil refineries wherever economically feasible

Energy obtained from biomass based on biotechnology is expected to account for an increasing share of European
energy consumption by 2025

Green biotechnology will make a significant contribution to the efficient production of biomass raw materials

The industry in Europe will be innovative and competitive with sustained cooperation and support between the
research community, industry, agriculture and society
Based on https://www.europabio.org/sites/default/files/industrial_or_white_biotechnology_-_research_for_europe.pdf.

new chemical industry will help advance additional, major environmental and public health
and safety goals, as well” (www.eesi.org).
For the future competitiveness of European industry, the development and use of indus-
trial biotechnology is important. It provides a sound technological base for the sustainable
society of the future. Table 1.6 shows vision a vision for 2025.
OECD study (The Bioeconomy to 2030: designing a policy agenda, http://www.oecd.org/
futures/bioeconomy/2030) reports, “the industrial applications of biotechnology in 2030 will
be responsible for 39% of the economic value generated by Biotechnology, which shows the
healthy investment in research and development expected in this area” (www.bio.org).

1.1 The impact of industrial biotechnology

The environment benefits as biotechnological processes are efficient users of renewable
resources generating little end-of-pipe waste, which may be used as input into a further bi-
ological process. Also, shifting from chemical to biological processes can lead to substantial
reductions in the release of carbon dioxide, reduction in energy, and water consumption.
Economic benefits can be also achieved as biotechnology allows the use of more efficient
processes that consume less energy. Already, fermentation and enzymatic processes are gen-
erally used in the manufacturing of fine chemicals, vitamins, pharmaceutical intermediates,
and flavors. They are also making their entry into larger-volume segments such as poly-
mers, bulk chemicals and biofuels, and several other industrial segments. Some reports by
BCC Inc. (2005) and Freedonia Group Inc. (2005) predict annual growth rates of about 5%
for fermentation products in comparison with 2%–3% for overall chemical production in the
coming years, but other reports such as the one by McKinsey and Company (2003) predict
much higher growth rates and estimate biotechnology to be used in the production of up to
10% of all chemicals sold in the next 10 years. Although there is a difference in the numbers,
all studies show that industrial biotechnology will play a very important role in the chemical
and other manufacturing industries in the future. Both these environmental and economic
 1.2 Products of industrial biotechnology 9
advantages will contribute toward a more sustainable society, with better opportunities for
creation of job and retention, and less dependence on fossil fuels (https://www.europabio.
org/sites/default/files/industrial_or_white_biotechnology_-_research_for_europe.pdf).

1.2 Products of industrial biotechnology

Industrial biotechnology can be used for producing a wide variety of useful products.
These fall under the categories of bulk chemicals, fine chemicals, pharmaceuticals, food addi-
tives and supplements, colorants, vitamins, pesticides, bioplastics, solvents, bulk chemicals,
and biofuels. These products range from very cheap bulk chemicals (for instance, ethanol)
to extremely expensive fine chemicals (for instance, vitamin B12) (Soetaert and Vandamme,
2006). Industrial biotechnology is already being used in the production of fine chemicals and
pharmaceuticals, but bulk chemicals, biofuels, and bioplastics are also being produced to a
great extent by the use of industrial biotechnology (Wilke, 1995; Demain, 2000). In few cases,
a polymer building block is produced from fossil resources using enzymes. In other cases,
a completely biodegradable bioplastic can be produced from renewable raw materials; for
example, the biodegradable bioplastic PLA can be produced from corn. Industrial biotechnol-
ogy can be used in a single step in a chemical synthesis route or replace a complete cascade of
chemical synthesis steps with a single fermentation or biocatalysis step. Some examples are
presented later:
Biotechnology can replace the existing chemical processes and also allows the production
of new products. In the fine chemicals sector, several products can be produced using biotech-
nology. In this sector, highly specific and mild reaction conditions of enzymes and cellular
processes provide quality and efficiency benefits. But still, there are certain challenges to be
faced for allowing increased use of biological processes in this sector and also several oth-
ers. These—which must be addressed via the Strategic Research Agenda—include the sen-
sitivity of many biocatalysts to high concentrations of substrate and product concentrations
and their liking for an aqueous environment. Actually, in the aqueous requirement, most of
the chemical products have very limited solubility in water (https://www.europabio.org/
sites/default/files/industrial_or_white_biotechnology_-_research_for_europe.pdf). A brief
description of some industrial sectors is presented later. This shows the potential offered by
biotechnological processes:

1.2.1 Bulk chemicals

Several important chemicals are produced in very high volumes by using fermentation
processes. These include citric acid, l-glutamic acid, and vitamin C. Petrochemical resources
are becoming more expensive; therefore, this range is expected to increase significantly. New
bulk polymers such as biodegradable plastics and monomers (e.g., 1,3-propanediol for novel
polyester production) are also becoming available, and there is very good scope for further
development based on tailored enzymes and microorganisms. Looking ahead, new polymers
having better improved functionality can be manufactured using biotechnology. This would
allow the production not possible using the traditional processes. These could include im-
proved liquid crystals and materials having very high temperature resistance and mechanical
properties.
10 1. General background and introduction

1.2.2 Biofuels and bioenergy

Europe is dependent on energy imports to a greater extent, and local sources of energy will
play an important role in reducing this reliance. The European Union is using biofuels to a
small extent, but by the year, 2020 has planned to increase biofuel substitution of both petrol
and diesel to 20%. A biotechnological process to use lignocellulosic waste materials such as
straw and corn cobs as a substrate for bioethanol would be a major step forward, as would a
biological process for producing biodiesel. Biomass can be used for producing methane and
can be also used as a source of hydrogen in future.

1.2.3 Fine and speciality chemicals

Speciality chemicals often require complex and inefficient chemical processes for their
production. Therefore, it is not surprising that efficient and simpler bioprocesses are very
important for this sector.
Currently, industrial biotechnology is used to a large extent in the field of fine chemi-
cals and pharmaceutical (15%). Further development is in progress. The most important fine
chemicals are antibiotics and their intermediates. The global antibiotics market size is expected
to reach USD 62.06 billion by 2025 according to a new report by Grand View Research, Inc.
(https://www.grandviewresearch.com/press-release/global-antibiotic-market).
Antibiotics are almost entirely produced by fermentation processes with the help of certain
selected microorganisms. “The structural complexity of most antibiotics is so great that chem-
ical synthesis has never been a serious alternative. Only in the case of few semisynthetic an-
tibiotics are the building blocks obtained by fermentation and are chemically modified later
to obtain new antibiotic derivatives with better efficacy. These days, chemical modifications
are replaced by biotech methods to an increasing extent, with outstanding environmental and
economic benefits” (Soetaert and Vandamme, 2006).
Captopril is another example in the pharmaceutical sector. It is a angiotensin-converting
enzyme (ACE) inhibitor used for treating high blood pressure. Captopril is built from d-β-
hydroxy-isobutyric acid and l-proline. These building blocks are produced by fermentation,
with the yeast Candida rugosa and the bacterium Corynebacterium sp., respectively. Both build-
ing blocks are then linked using the conventional chemistry, which results in Captopril. In the
fine chemical sector, Lonza has developed a biotech route, which starts with conversion of
3-cyanopyridine to nicotinamide (niacin or vitamin B3), nicotinic acid, and 6- hydroxynico-
tinic acid. Currently, these intermediate products for several chemical syntheses are produced
using industrial biotechnology. Conversions are done by using enzymatic hydrolysis with
nitrile hydratase from Rhodococcus bacteria or by bioconversion with living bacterial cells. The
yields are almost quantitative, and the reactions are very specific.

1.2.4 New materials

“In the longer term, nature will serve as the inspiration for novel materials and manufac-
turing processes, for instance more efficient solar cell using controlled transport phenomena.
Bio-based performance and nano-composite materials will derive their properties from their
specific nano- (or micro-) scale structure, or will be produced using the principles of natural
self-organisation” (www.europabio.org).
Another random document with
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place. I was convinced that the greatest calamity that ever befell the
benighted nations of the ancient world was in their having passed
away without a knowledge of the actual existence of Duluth; that
their fabled Atlantis, never seen save by the hallowed vision of the
inspired poesy, was, in fact, but another name for Duluth; that the
golden orchard of the Hesperides, was but a poetical synonym for the
beer-gardens in the vicinity of Duluth. I was certain that Herodotus
had died a miserable death, because in all his travels and with all his
geographical research he had never heard of Duluth. I knew that if
the immortal spirit of Homer could look down from another heaven
than that created by his own celestial genius upon the long lines of
pilgrims from every nation of the earth to the gushing fountain of
poesy opened by the touch of his magic wand, if he could be
permitted to behold the vast assemblage of grand and glorious
productions of the lyric art called into being by his own inspired
strains, he would weep tears of bitter anguish that, instead of
lavishing all the stores of his mighty genius upon the fall of Illion, it
had not been his more blessed lot to crystalize in deathless song the
rising glories of Duluth. Yes, sir, had it not been for this map, kindly
furnished me by the legislature of Minnesota, I might have gone
down to my obscure and humble grave in an agony of despair,
because I could nowhere find Duluth. Had such been my melancholy
fate, I have no doubt that with the last feeble pulsation of my
breaking heart, with the last faint exhalation of my fleeting breath, I
should have whispered, “Where is Duluth?”
But, thanks to the beneficence of that band of ministering angels
who have their bright abodes in the far-off capital of Minnesota, just
as the agony of my anxiety was about to culminate in the frenzy of
despair, this blessed map was placed in my hands; and as I unfolded
it a resplendent scene of ineffable glory opened before me, such as I
imagined burst upon the enraptured vision of the wandering peri
through the opening gates of Paradise. There, there, for the first
time, my enchanted eye rested upon the ravishing word, “Duluth!”
This map, sir, is intended, as it appears from its title, to illustrate the
position of Duluth in the United States; but if gentlemen will
examine it, I think they will concur with me in the opinion, that it is
far too modest in its pretensions. It not only illustrates the position
of Duluth in the United States, but exhibits its relations with all
created things. It even goes further than this. It hits the shadowy vale
of futurity, and affords us a view of the golden prospects of Duluth
far along the dim vista of ages yet to come.
If gentlemen will examine it, they will find Duluth not only in the
center of the map, but represented in the center of a series of
concentric circles one hundred miles apart, and some of them as
much as four thousand miles in diameter, embracing alike, in their
tremendous sweep the fragrant savannas of the sunlit South and the
eternal solitudes of snow that mantle the ice-bound North. How
these circles were produced is perhaps one of those primordial
mysteries that the most skilled paleologist will never be able to
explain. But the fact is, sir, Duluth is pre-eminently a central point,
for I am told by gentlemen who have been so reckless of their own
personal safety as to venture away into those awful regions where
Duluth is supposed to be, that it is so exactly in the center of the
visible universe that the sky comes down at precisely the same
distance all around it.
I find, by reference to this map, that Duluth is situated somewhere
near the western end of Lake Superior, but as there is no dot or other
mark indicating its exact location, I am unable to say whether it is
actually confined to any particular spot, or whether “it is just lying
around there loose.” I really cannot tell whether it is one of those
ethereal creations of intellectual frostwork, more intangible than the
rose-tinted clouds of a summer sunset; one of those airy exhalations
of the speculator’s brain which, I am told, are very flitting in the form
of towns and cities along those lines of railroad, built with
government subsidies, luring the unwary settler as the mirage of the
desert lures the famishing traveler on, and ever on, until it fades
away in the darkening horizon; or whether it is a real, bona fide,
substantial city, all “staked off,” with the lots marked with their
owners’ names, like that proud commercial metropolis recently
discovered on the desirable shores of San Domingo. But, however
that may be, I am satisfied Duluth is there, or thereabouts, for I see it
stated here on the map that it is exactly thirty-nine hundred and
ninety miles from Liverpool, though I have no doubt, for the sake of
convenience, it will be moved back ten miles, so as to make the
distance an even four thousand.
Then, sir, there is the climate of Duluth, unquestionably the most
salubrious and delightful to be found anywhere on the Lord’s earth.
Now, I have always been under the impression, as I presume other
gentlemen have, that in the region around Lake Superior it was cold
enough for at least nine months in the year to freeze the smoke-stack
off a locomotive. But I see it represented on this map that Duluth is
situated exactly half way between the latitudes of Paris and Venice,
so that gentlemen who have inhaled the exhilarating air of the one,
or basked in the golden sunlight of the other, may see at a glance that
Duluth must be the place of untold delight, a terrestrial paradise,
fanned by the balmy zephyrs of an eternal spring, clothed in the
gorgeous sheen of ever blooming flowers, and vocal with the silvery
melody of nature’s choicest songsters. In fact sir, since I have seen
this map, I have no doubt that Byron was vainly endeavoring to
convey some faint conception of the delicious charms of Duluth
when his poetic soul gushed forth, in the rippling strains of that
beautiful rhapsody—
“Know ye the land of the cedar and the vine,
Whence the flowers ever blossom, the beams ever shine;
Where the light wings of Zephyr, oppressed with perfume,
Wax faint o’er the gardens of Gul in her bloom;
Where the citron and olive are fairest of fruit,
And the voice of the nightingale never is mute;
Where the tints of the earth and the hues of the sky,
In color though varied, in beauty may vie?”

As to the commercial resources of Duluth, sir, they are simply

illimitable and inexhaustible, as is shown by this map. I see it stated
here that there is a vast scope of territory, embracing an area of over
two millions of square miles, rich in every element of material wealth
and commercial prosperity, all tributary to Duluth. Look at it, sir,
(pointing to the map.) Here are inexhaustible mines of gold,
immeasurable veins of silver, impenetrable depths of boundless
forest, vast coal measures, wide extended plains of richest pasturage
—all, all embraced in this vast territory—which must, in the very
nature of things, empty the untold treasures of its commerce into the
lap of Duluth. Look at it, sir, (pointing to the map); do not you see
from these broad, brown lines drawn around this immense territory,
that the enterprising inhabitants of Duluth intend some day to
inclose it all in one vast corral, so that its commerce will be bound to
go there whether it would or not? And here, sir, (still pointing to the
map), I find within a convenient distance the Piegan Indians, which,
of all the many accessories to the glory of Duluth, I consider by far
the most inestimable. For, sir, I have been told that when the small-
pox breaks out among the women and children of the famous tribe,
as it sometimes does, they afford the finest subjects in the world for
the strategical experiments of any enterprising military hero who
desires to improve himself in the noble art of war, especially for any
valiant lieutenant-general whose
“Trenchant blade, Toledo trusty,
For want of fighting has grown rusty,
And eats into itself for lack,
Of somebody to hew and hack.”

Sir, the great conflict now raging in the Old World has presented a
phenomenon in military science unprecedented in the annals of
mankind, a phenomenon that has reversed all the traditions of the
past as it has disappointed all the expectations of the present. A great
and warlike people, renowned alike for their skill and valor, have
been swept away before the triumphant advance of an inferior foe,
like autumn stubble before a hurricane of fire. For aught I know the
next flash of electric fire that simmers along the ocean cable may tell
us that Paris, with every fibre quivering with the agony of impotent
despair, writhes beneath the conquering heel of her loathed invader.
Ere another moon shall wax and wane, the brightest star in the
galaxy of nations may fall from the zenith of her glory never to rise
again. Ere the modest violets of early spring shall ope their
beauteous eyes, the genius of civilization may chant the wailing
requiem of the proudest nationality the world has ever seen, as she
scatters her withered and tear-moistened lilies o’er the bloody tomb
of butchered France. But, sir, I wish to ask if you honestly and
candidly believe that the Dutch would have overrun the French in
that kind of style if General Sheridan had not gone over there, and
told King William and Von Moltke how he had managed to whip the
Piegan Indians.
And here, sir, recurring to this map, I find in the immediate
vicinity of the Piegans “vast herds of buffalo” and “immense fields of
rich wheat lands.” [Here the hammer fell.]
[Many cries: “Go on!” “go on!”]
 The Speaker—Is there any objection to the gentleman from
Kentucky continuing his remarks? The chair hears none. The
gentleman will proceed.
Mr. Knott—I was remarking, sir, upon these vast “wheat fields”
represented on this map in the immediate neighborhood of the
buffaloes and Piegans, and was about to say that the idea of there
being these immense wheat fields in the very heart of a wilderness,
hundreds and hundreds of miles beyond the utmost verge of
civilization, may appear to some gentlemen as rather incongruous, as
rather too great a strain on the “blankets” of veracity. But to my mind
there is no difficulty in the matter whatever. The phenomenon is very
easily accounted for. It is evident, sir, that the Piegans sowed that
wheat there and ploughed it in with buffalo bulls. Now, sir, this
fortunate combination of buffaloes and Piegans, considering their
relative positions to each other and to Duluth, as they are arranged
on this map, satisfies me that Duluth is destined to be the best
market of the world. Here, you will observe, (pointing to the map),
are the buffaloes, directly between the Piegans and Duluth; and here,
right on the road to Duluth, are the Creeks. Now, sir, when the
buffaloes are sufficiently fat from grazing on those immense wheat
fields, you see it will be the easiest thing in the world for the Piegans
to drive them on down, stay all night with their friends, the Creeks,
and go into Duluth in the morning. I think I see them, now, sir, a vast
herd of buffaloes, with their heads down, their eyes glaring, their
nostrils dilated, their tongues out, and their tails curled over their
backs, tearing along toward Duluth, with about a thousand Piegans
on their grass-bellied ponies, yelling at their heels! On they come!
And as they sweep past the Creeks, they join in the chase, and away
they all go, yelling, bellowing, ripping and tearing along, amid clouds
of dust, until the last buffalo is safely penned in the stock-yards at
Duluth.
Sir, I might stand here for hours and hours, and expatiate with
rapture upon the gorgeous prospects of Duluth, as depicted upon this
map. But human life is too short, and the time of this house far too
valuable to allow me to linger longer upon this delightful theme. I
think every gentleman upon this floor is as well satisfied as I am that
Duluth is destined to become the commercial metropolis of the
universe and that this road should be built at once. I am fully
persuaded that no patriotic representative of the American people,
who has a proper appreciation of the associated glories of Duluth and
the St. Croix, will hesitate a moment that every able-bodied female in
the land, between the ages of eighteen and forty-five, who is in favor
of “woman’s rights,” should be drafted and set to work upon this
great work without delay. Nevertheless, sir, it grieves my very soul to
be compelled to say that I cannot vote for the grant of lands provided
for in this bill.
Ah, sir, you can have no conception of the poignancy of my
anguish that I am deprived of that blessed privilege! There are two
insuperable obstacles in the way. In the first place my constituents,
for whom I am acting here, have no more interest in this road than
they have in the great question of culinary taste now, perhaps,
agitating the public mind of Dominica, as to whether the illustrious
commissioners, who recently left this capital for that free and
enlightened republic, would be better fricasseed, boiled, or roasted,
and, in the second place, these lands, which I am asked to give away,
alas, are not mine to bestow! My relation to them is simply that of
trustee to an express trust. And shall I ever betray that trust? Never,
sir! Rather perish Duluth! Perish the paragon of cities! Rather let the
freezing cyclones of the bleak northwest bury it forever beneath the
eddying sands of the raging St. Croix.
 Henry Carey’s Speech on the Rates of
Interest.

In the Pennsylvania Constitutional Convention, 1873.

In the Constitutional Convention, in Committee of the Whole on
the article reported from the Committee on Agriculture, Mining,
Manufactures, and Commerce, the first section being as follows:—“In
the absence of special contracts the legal rate of interest and discount
shall be seven per centum per annum, but special contracts for
higher or lower rates shall be lawful. All national and other banks of
issue shall be restricted to the rate of seven per centum per annum.”
Mr. H. C. Carey made an address in favor of striking out the section.
The following is an abstract of his remarks:—
Precisely a century and a half since, in 1723, the General Assembly
of Pennsylvania reduced the legal charge for the use of money from
eight to six per cent. per annum. This was a great step in the
direction of civilization, proving, as it did, that the labor of the
present was obtaining increased power over accumulations of the
past, the laborer approaching toward equality with the capitalist. At
that point it has since remained, with, however, some change in the
penalties which had been then prescribed for violations of the law.
Throughout the recent war the financial policy of the National
Government so greatly favored the money-borrower and the laborer
as to have afforded reason for believing that the actual rate of
interest was about to fall permanently below the legal one, with the
effect of speedily causing usury laws to fall into entire disuse. Since
its close, however, under a mistaken idea that such was the real road
to resumption, all the Treasury operation of favoring the money-
lender; the result exhibiting itself in the facts that combinations are
being everywhere formed for raising the price of money; that the
long loans of the past are being daily more and more superseded by
the call loans of the present; that manufacturer and merchant are
more and more fleeced by Shylocks who would gladly take “the
pound of flesh nearest the heart” from all over whom they are
enabled to obtain control.
Anxious for the perpetuation of this unhappy state of things, these
latter now invite their victims to give their aid towards leveling the
barriers by which they themselves are even yet to a considerable
extent protected, assuring them that further grant of power will be
followed by greater moderation in its exercise. Misled thereby,
money borrowers, traders, and manufacturers are seen uniting, year
after year with their common enemy in the effort at obtaining a
repeal of the laws in regard to money, under which the State has so
greatly prospered. Happily our working men, farmers, mechanics,
and laborers fail to see that advantage is likely to accrue to them
from a change whose obvious tendency is that of increasing the
power of the few who have money to lend over the many who need to
borrow; and hence it is that their Representatives at Harrisburg have
so steadily closed their ears against the siren song by which it is
sought to lead their constituents to give their aid to the work of their
own destruction.
Under these circumstances is it that we are now asked to give place
in the organic law to a provision by means of which this deplorable
system is to be made permanent, the Legislature being thereby
prohibited, be the necessity what it may, from placing any restraint
upon the few who now control the supply of the most important of all
the machinery of commerce, as against the many whose existence,
and that of their wives and children, is dependent upon the obtaining
the use thereof on such terms as shall not from year to year cause
them to become more and more mere tools in the hands of the
already rich. This being the first time in the world’s history that any
such idea has been suggested, it may be well, before determining on
its adoption, to study what has been elsewhere done in this direction,
and what has been the result.
Mr. Carey then proceeded to quote at great length from recent and
able writers the results that had followed in England from the
adoption of the proposition now before the convention. These may
be summed up as the charging of enormous rates of interest, the
London joint stock banks making dividends among their
stockholders to the extent of twenty, thirty, and almost forty per
cent., the whole of which has ultimately to be taken from the wages
of labor employed in manufactures, or in agriculture. At no time, said
Mr. Carey, in Britain’s history, have pauperism and usury traveled so
closely hand in hand together; the rich growing rich to an extent that,
till now, would have been regarded as fabulous, and the
wretchedness of the poor having grown in like proportion.
After discussing the effects of the repeal of the usury laws in some
of the American States, Mr. Carey continued:—
“We may be told, however, that at times money is abundant, and
that even so late as last summer it was difficult to obtain legal
interest. Such certainly was the case with those who desired to put it
out on call; but at that very moment those who needed to obtain the
use of money for long periods were being taxed, even on securities of
unexceptionable character, at double, or more than double, the legal
rates. The whole tendency of the existing system is in the direction of
annihilating the disposition for making those permanent loans of
money by means of which the people of other countries are enabled
to carry into effect operations tending to secure to themselves control
of the world’s commerce. Under that system there is, and there can
be, none of that stability in the price of money required for carrying
out such operations.
Leaving out of view the recent great combination for the
maintenance and perpetuation of slavery, there has been none so
powerful, none so dangerous as that which now exists among those
who, having obtained a complete control of the money power, are
laboring to obtain legal recognition of the right of capital to perfect
freedom as regards all the measures to which it may be pleased to
resort for the purpose of obtaining more perfect control over labor.
Already several of the States have to some extent yielded to the
pressure that has been brought to bear upon them. Chief among
these is Massachusetts, the usury laws having there been totally
repealed, and with the effect, says a distinguished citizen of that
State, that “all the savings institutions of the city at once raised the
rate from six to seven per cent.; those out of the city to seven and a
half and eight per cent. and there was no rate too high for the greedy.
The consequence,” as he continues, “has been disastrous to industrial
pursuits. Of farming towns in my county, more than one quarter
have diminished in population.” Rates per day have now to a great
extent, as I am assured, superseded the old rates per month or year;
two cents per day, or $7.30 per annum, having become the charge for
securities of the highest order. What, under such circumstances,
must be the rate for paper of those who, sound and solvent as they
may be, cannot furnish such security, may readily be imagined. Let
the monopoly system be maintained and the rate, even at its
headquarters, New England, will attain a far higher point than any
that has yet been reached; this, too, in despite of the fact that her
people had so promptly secured to themselves a third of the whole
circulation allowed to the 40,000,000 of the population of the Union
scattered throughout almost a continent. How greatly they value the
power that has been thus obtained is proved by the fact that to every
effort at inducing them to surrender, for advantage of the West or
South, any portion thereof, has met with resistance so determined
that nothing has been yet accomplished.
Abandonment of our present policy is strongly urged upon us for
the reason that mortgages bear in New York a higher rate of interest.
A Pennsylvanian in any of the northern counties has, as we are told,
but to cross the line to obtain the best security at seven per cent.
Why, however, is it that his neighbors find themselves compelled to
go abroad when desirous of obtaining money on such security? The
answer to this question is found in the fact that the taxation of
mortgages is there so great as to absorb from half to two-thirds of the
interest promised to be paid.
Again, we are told that Ohio legalizes “special contracts” up to
eight per cent. and, that if we would prevent the efflux of capital we
must follow in the same direction. Is there, however, in the exhibit
now made by that State, anything to warrant us in so doing? Like
Pennsylvania, she has abundant coal and ore. She has two large
cities, the one fronting on the Ohio, and the other on the lakes, giving
her more natural facilities for maintaining commerce than are
possessed by Pennsylvania; and yet, while the addition to her
population in the last decade was but 306,000, that of Pennsylvania
was 615,000. In that time she added 900 to her railroad mileage,
Pennsylvania meantime adding 2,500. While her capital engaged in
manufactures rose from 57 to 141 millions, that of Pennsylvania grew
from 109 to 406, the mere increase of the one being more than fifty
per cent. in excess of the total of the other. May we find in these
figures any evidence that capital has been attracted to Ohio by a
higher rate of interest, or repelled from our State by a lower one?
Assuredly not!
What in this direction is proposed to be done among ourselves is
shown in the section now presented for our consideration. By it the
legal rate in the absence of “special contracts” is to be raised to seven
per cent., such “contracts,” however ruinous in their character, and
whatsoever the nature of the security, are to be legalized; the only
exception to these sweeping changes being that national banks,
issuing circulating notes are to be limited to seven per cent. Shylock
asked only “the due and forfeit of his bond.” Let this section be
adopted, let him then present himself in any of our courts, can its
judge do other than decide that “the law allows it and the court
awards it,” monstrous as may have been the usury, and discreditable
as may have been the arts by means of which the unfortunate debtor
may have been entrapped? Assuredly not. Shylock, happily, was
outwitted, the bond having made no provision for taking even “one
jot of blood.” Here, the unfortunate debtor, forced by his flinty-
hearted creditor into a “special contract” utterly ruinous, may, in
view of the destruction of all hope for the future of his wife and
children, shed almost tears of blood, but they will be of no avail; yet
do we claim to live under a system whose foundation-stone exhibits
itself in the great precept from which we learn that duty requires of
us to do to others as we would that others should do unto ourselves.
By the English law the little landowner, the mechanic who owns
the house in which he lives, is protected against his wealthy
mortgagee. Here, on the contrary, the farmer, suffering under the
effects of blight or drought, and thus deprived of power to meet with
punctuality the demands of his mortgagee, is to have no protection
whatsoever. So, too, with the poor mechanic suffering temporarily by
reason of accidental incapacity for work, and, with the sheriff full in
view before him, compelled to enter into a “special contract”
doubling if not trebling, the previous rate of interest. Infamous as
may be its extortion the court may not deny the aid required for its
enforcement.
The amount now loaned on mortgage security in this State at six
per cent. is certainly not less than $400,000,000, and probably
extends to $500,000,000, a large portion of which is liable to be
called for at any moment. Let this section be adopted and we shall
almost at once witness a combined movement among mortgagees for
raising the rate of interest. Notices demanding payment will fly thick
as hail throughout the State, every holder of such security knowing
well that the greater the alarm that can be produced and the more
utter the impossibility of obtaining other moneys the larger may be
made the future rate of interest. The unfortunate mortgagor must
then accept the terms, hard as they may be, dictated to him, be they
8, 10, 12, or 20 per cent. Such, as I am assured has been the course of
things in Connecticut, where distress the most severe has been
produced by a recent abandonment by the State of the policy under
which it has in the past so greatly prospered. At this moment her
savings’ banks are engaged in compelling mortgagers to accept eight
per cent. as the present rate. How long it will be before they will carry
it up to ten or twelve, or what will be the effect, remains to be seen.
Already among ourselves the effects of the sad blunders of our great
financiers exhibit themselves in the very unpleasant fact that sheriffs’
sales are six times more numerous than they were in the period from
1861 to 1867, when the country was so severely suffering under the
waste of property, labor, and life, which had but then occurred. Let
this section be adopted, giving perfect freedom to the Shylocks of the
day, and the next half dozen years will witness the transfer, under the
sheriff’s hammer, of the larger portion of the real property of both
the city and the State. Of all the devices yet invented for the
subjugation of labor by capital, there is none that can claim to be
entitled to take precedence of that which has been now proposed for
our consideration.
Rightly styled the Keystone of the Union, one duty yet remains to
her to be performed, to wit: that of bringing about equality in the
distribution of power over that machinery for whose use men pay
interest, which is known as money. New England, being rich and
having her people concentrated within very narrow limits, has been
allowed to absorb a portion of that power fully equal to her needs,
while this State, richer still, has been so “cabined, cribbed, confined,”
that her mine and furnace operators find it difficult to obtain that
circulating medium by whose aid alone can they distribute among
their workmen their shares of the things produced.—New York,
already rich, has been allowed to absorb a fourth of the permitted
circulation, to the almost entire exclusion of the States south of
Pennsylvania and west of the Mississippi; and hence it is that her
people are enabled to levy upon those of all these latter such
enormous taxes. To the work of correcting this enormous evil
Pennsylvania should now address herself. Instead of following in the
wake of New Jersey and Connecticut, thereby giving to the monopoly
an increase of strength, let her place herself side by side with the
suffering States of the West, the South, and the Southwest,
demanding that what has been made free to New York and New
England shall be made equally free to her and them. Let her do this,
and the remedy will be secured, with such increase in the general
power for developing the wonderful resources of the Union as will
speedily make of it an iron and cloth exporting State, with such
power for retaining and controlling the precious metals as will place
it on a surer footing in that respect than any of the powers of the
Eastern world. The more rapid the societary circulation, and the
greater the facility of making exchanges from hand to hand, and
from place to place, the greater is the tendency toward reduction in
the rate of interest, toward equality in the condition of laborer and
employer, and toward growth and power to command the services of
all the metals, gold and silver included.
It will be said, however, that adoption of such measures as have
been indicated would tend to produce a general rise of prices; or, in
the words of our self-styled economists, would cause “inflation.” The
vulgar error here involved was examined some thirty years since by
an eminent British economist, and with a thoroughness never before
exhibited in reference to any other economic question whatsoever,
the result exhibiting itself in the following brief words of a highly
distinguished American one, published some twelve or fifteen years
since, to wit:
“Among the innumerable influences which go to determine the general rate of
prices, the quantity of money, or currency, is one of the least effective.”
Since then we have had a great war, in the course of which there
have been numerous and extensive changes in the price of
commodities, every one of which is clearly traceable to causes widely
different from those to which they so generally are attributed. Be
that, however, as it may, the question now before us is one of right
and justice, and not of mere expediency. North and east of
Pennsylvania eight millions of people have been allowed a greater
share of the most important of all powers, the money one, than has
been allotted to the thirty-two millions south and west of New York,
and have thus been granted a power of taxation that should be no
longer tolerated. The basis of our whole system is to be found in
equality before the law, each and every man, each and every State,
being entitled to exercise the same powers that are permitted to our
people, or other States. If the Union is to be maintained, it can be so
on no terms other than those of recognition of the existence of the
equality that has here been indicated. To the work of compelling that
recognition Pennsylvania should give herself, inscribing on her
shield the brief words fiat justitia, ruat cœlum—let justice be done
though the heavens fall!
 Speech of Gen. Simon Cameron.

On the benefits derived by Pennsylvania from the Policy of Internal

Improvements.
Any one will see, who will take the trouble to read the debates on
the location of the National Capital, that the decision of that question
seems to have been made solely with reference to a connection of the
East with the then great wilderness of the West. All the sagacious
men then in public life looked to the time when the West, with its
wonderful productive soil brought under subjection by industry,
would exercise a controlling influence on the destiny of the country.
Columbia, in the State of Pennsylvania, was at one time within one
vote of becoming the site of the Capital; and Germantown, near, and
now a part of, Philadelphia, was actually decided on as the proper
location by a majority of one. The first of these was favored because
it was believed to be a favorable point from which to begin a slack
water route to the west. Germantown near the Schuylkill, was chosen
for the same reason. All looked forward to a system of canals which
would accomplish this desirable object, and experience has fully
demonstrated their wisdom in that great design. About 1790, General
Washington and the great financier Robert Morris, traveled on
horseback from Philadelphia to the Susquehanna river, with a view
of deciding whether a canal could be built over that route.
Shortly after this, some gentlemen near Philadelphia actually
began building a canal to the west, did some work on its eastern end,
built one or two locks on the dividing ridge near Lebanon, and for
want of sufficient funds and knowledge of the subject the work was
stopped. The money expended on the enterprise was lost.
But the progressive men of the country, keeping their minds on the
subject, continued to agitate the popular mind on it until 1820, when
the Legislature of Pennsylvania chartered the Union Canal Company,
and appropriated one million dollars to aid its construction. In a few
years the canal was completed between the Schuylkill and
Susquehanna. Although very small, this improvement did a great
deal of good. And the most remarkable thing about it was its
unpopularity with the masses. Not only the members of General
Assembly who passed the bill, but Governor Heister, who signed the
act of incorporation, were driven from office at the first opportunity
legally presented for testing public opinion, and the party to which
they belonged went into a minority. I remember well what a mighty
sum a million dollars seemed to be; and the political revolution
caused by this appropriation showed me that the idea of its vastness
was not confined by any means to myself.
Our system of canals was completed, and the benefits derived from
them were incalculable. When they were commenced our State was
poor. Industry languished. The interchange of her products was
difficult. Population was sparse. Intelligence was not generally
diffused. Manufactures struggled weakly along. Work was not
plentiful. Wages were low. When they were finished the busy hum of
industry was heard on every hand. Our population had grown until
we numbered millions. Our iron ore beds were yielding their
precious hoards for human use. Coal mines, unknown or useless
until means were provided for transporting their wealth to market,
now sent millions of tons in every direction. Progress in every walk of
advanced civilization was realized, and we were on the high road to
permanent prosperity. But in the meantime a new and better means
of communication had been discovered, and the building of railroads
quickly reduced the value of canals, and the works we had completed
at so much cost, and with such infinite labor, were suddenly
superseded. We lost nearly all the money they had cost us, but this
investment was wisely made. The return to our State was many times
greater than the outlay.
Like all great projects intended for the public good, that of Internal
Improvement progressed. In 1823, the New York canal—which had
been pushed through against the prejudiced opposition of the
people, by the genius of De Witt Clinton—was opened. Its success
caused a revolution in the public mind all over the country. The
effect was so marked in the State, that in 1825 a convention was
called to consider the subject. Every county in the State was
represented, I believe. That body pronounced in favor of a grand
system of public works, which should not only connect the East and
West, but also the waters of the Susquehanna with the great lakes,
the West and the Northwest. Appropriations were recommended to
the amount of three millions of dollars, and in 1826, I think the work
began. This sum seemed to be enormous, and the estimates of the
engineers reached a total of six millions of dollars. Meeting an ardent
friend of the system one day, he declared that a sum of that
magnitude could never be expended on these works. I ventured to
reply, with great deference to his age and experience, that I thought
it would be insufficient, and before they were completed I would not
be surprised if ten millions would be found necessary. Looking at me
steadily for a few moments, he closed the conversation by
exclaiming, “Young man, you are a d——d fool!” I was thus left in full
possession of his opinion of me. But after we had spent
$41,698,594.74 in the construction of these works, I found my
estimate of his judgment was singularly in harmony with my opinion
of his politeness. His candor I never doubted.
In the convention of 1825, there were two gentlemen who voted for
railways instead of canals. One was professor Vethake of Dickinson
College, Carlisle; and the other was Jacob Alter, a man of very little
education, but of strong understanding. The professor was looked
upon as a dreamer, and was supposed to have led his colleague
astray in his vagaries. But they both lived to see railroads extended
over the whole world. As a part of our system of public works, we
built a railroad from the Delaware to the Susquehanna, from
Philadelphia to Columbia, and one from the eastern base of the
Allegheny mountains to their western base. They were originally
intended to be used with horse power. In the meantime the railroad
system had been commenced, and the Pennsylvania Railroad, under
the charge of a man of extraordinary ability, John Edgar Thompson,
was rapidly pushed to completion. Another great railway, the
Philadelphia and Reading, was built to carry anthracite coal from the
Schuylkill mines to the market. A railroad was built each side of the
Lehigh river, that another part of our coal territory might find a
market in New York. Another was built from the north branch of the
Susquehanna, connecting with the New York roads, and leading to
the northern coal field. And yet another was built along the
Susquehanna, through the southern coal basin, to the city of
Baltimore. The total cost of these roads, independent of the
Pennsylvania railroad, was $95,250,410.10, as shown by official
reports. Their earnings last year are officially given at
$24,753,065.32. Each of these was forced to contend with difficulty
and prejudice. All were unpopular, and all were looked upon with
suspicion until they actually forced their usefulness on the public
mind. Those who made the fight for canals were forced to go over the
whole ground again for railroads, and their double victory is greater
than the success generally vouchsafed to the pioneers in any cause.
These roads, with the Pennsylvania railroad and the lesser lines of
improvements running through the coal region cost over
$207,000,000.
The Reading Railroad will serve to illustrate the struggle of these
great schemes. Its stock, now worth over par, once sold for twenty
cents on the dollar; and at one time it was forced to sell its bonds at
forty cents on the dollar to pay operating expenses. The vindication
of the sagacity of the pioneers in these great enterprises is complete.
All these lines are now profitable, and it has been demonstrated
everywhere in the United States, that every new railroad creates the
business from which its stockholders receive their dividends. It
seems, therefore, scarcely possible to fix a limit to our profitable
railroad expansion. They open new fields of enterprise, and this
enterprise in turn, makes the traffic which fills the coffers of the
companies.
I cannot now look back to the struggle to impress the people with
the advantages of railways, without a feeling of weariness at the
seeming hopeless struggle, and one of merriment at the general
unbelief in our new-fangled project. Once at Elizabethtown in this
State a public meeting had been called for the purpose of securing
subscriptions to the stock of the Harrisburg and Lancaster Railroad.
This road was intended to complete the railway between
Philadelphia and Harrisburg, one hundred and five miles. A large
concourse had gathered. Ovid F. Johnson, Attorney-General of our
State, and a brilliant orator, made an excellent speech; but the effect
was not in proportion to the effort. I determined to make an appeal,
and I gave such arguments as I could. In closing I predicted that
those now listening to me would see the day when a man could
breakfast in Harrisburg, go to Philadelphia, transact a fair day’s
business there, and returning, eat his supper at home. Great
applause followed this, and some additional subscriptions. Abram
Harnly, a friend of the road, and one of the most intelligent of his
class, worked his way to me, and taking me aside whispered, “That
was a good idea about going to Philadelphia and back to Harrisburg
the same day;” and then, bursting with laughter, he added,—“But you
and I know better than that!” We lived to see the road built; and now
people can come and go over the distance twice a day, which Abram
seemed to consider impossible for a single daily trip.
The peculiar condition of the States then known as “the West” was
the subject of anxiety to many. They had attracted a large population,
but the people were exclusively devoted to agriculture. Lacking
diversified industry, they were without accumulated wealth to enable
them to build railways; nor were the States in condition to undertake
such an onerous duty, although several of them made a feeble
attempt to do so. At one time the bonds of Illinois, issued to build her
canals, sold as low as thirty cents on the dollar. So with Indiana. Both
States were supposed to be bankrupt. It became, therefore, an
important problem as to how means of communication should be
supplied to the people of the West. Congress, in 1846, gave a grant of
land to aid in building a railroad in Illinois. Every alternate section
was given to the Company, and each alternate section was reserved
by the Government. The road was built; and the one-half of the land
retained by the government sold for a great deal more than all was
worth before the road was constructed. This idea was original, I
think, with Mr. Whitney of Mass., who spent two winters in
Washington, about 1845, endeavoring to induce Congress to adopt
that plan for the construction of a Trans-Continental Railway.
He died before seeing his scheme succeed. Others have built a road
across the continent on the Central route. Another on the Northern
route is now progressing, and the wealth and enterprise of those
having it in charge renders its completion certain. And it yet remains
for us to give the people of the Southern route a road to the Pacific
which shall develop the magnificent region through which it will
pass, and give the country one route to the great ocean protected
from the ordinary difficulty of climate with which railroads must
contend over so large a part of our territory. But I am admonished by
the value of your space to confine myself to the limits of my own
State.
 I have said that the outlay we have made in building our public
works was of great benefit to us even when the canals had been
rendered almost valueless through the competition of railroads. This
is paradoxical, but it is true nevertheless. That expenditure gave our
people a needed knowledge of our vast resources. It familiarized
them with large expenditures when made for the public good. And it
showed them how a great debt may be beneficially incurred, and yet
not break down the enterprise of the people. We at one time owed
$41,698,595.74. By a steady attention to our finances, it is now
reduced to $31,000,000, with resources,—the proceeds of the sale of
public works—on hand amounting to $10,000,000. And while we
have been steadily reducing our State debt, we have built 5,384 miles
of railway on the surface of the earth, and 500 miles underground in
our mines, at a cost of not less than $350,000,000, for a mile of
railroad in Pennsylvania means something. We sent 368,000 men to
the Federal Army. And our credit stands high on every stock
exchange. Gratifying as this progress is, it is only a fair beginning.
There is a large part of our territory rich in timber and full of iron,
coal, and all kinds of mineral wealth, so entirely undeveloped by
railroads that we call it “the Wilderness.” To open it up is the
business of to-day, and I sincerely hope to see it done soon.
Forty years ago George Shoemaker, a young tavern-keeper of more
vigor and enterprise than his neighbors, came to the conclusion that
anthracite coal could be used as fuel. He went to the expense of
taking a wagon load of it to Philadelphia, a hundred miles away, and,
after peddling it about the streets for some days, was forced to give it
away, and lose his time, his labor and his coal. He afterwards saw a
great railway built to carry the same article to the same point, and
enriching thousands from the profits of the traffic. But his experience
did not end there. He saw a thousand dollars paid eagerly for an acre
of coal land, which at the time of his venture to Philadelphia, no one
would have, and he could not give away.
I have thought that a retrospective survey of our wonderful
development might point plainly to the duty of the future. For if the
experience of what has gone before is not useful to cast light on what
is yet to come, then it will be difficult indeed to discover wherein its
value lies. It teaches me to devote time and labor for the
advancement of all Public Improvements, and I trust it may have a