page_title: Eli Lilly
section_title: Eli Lilly and Company founder
hierarchical_section_title: Eli Lilly / Career / Eli Lilly and Company founder
caption_attribution_description: Eli Lilly and Company's McCarty Street production plant in Indianapolis Indiana from an 1886 newspaper advertisement
context_page_description: Eli Lilly was an American soldier, pharmacist, chemist, and businessman who founded the Eli Lilly and Company pharmaceutical corporation. Lilly enlisted in the Union Army during the American Civil War and recruited a company of men to serve with him in the 18th Independent Battery Indiana Light Artillery. He was later promoted to major and then colonel, and was given command of the 9th Regiment Indiana Cavalry. Lilly was captured in September 1864 and held as a prisoner of war until January 1865. After the war, he attempted to run a plantation in Mississippi, but it failed and he returned to his pharmacy profession after the death of his first wife. Lilly remarried and worked with business partners in several pharmacies in Indiana and Illinois before opening his own business in 1876 in Indianapolis. Lilly's company manufactured drugs and marketed them on a wholesale basis to pharmacies. Lilly's pharmaceutical firm proved to be successful and he soon became wealthy after making numerous advances in medicinal drug manufacturing. Two of the early advances he pioneered were creating gelatin capsules to contain medicines and developing fruit flavorings.
context_section_description: On May 10, 1876, Lilly opened his own laboratory in a rented two-story building (now demolished) at 15 West Pearl Street and began to manufacture drugs. The sign for the business said "Eli Lilly, Chemist". Lilly's manufacturing venture began with $1,400 ($31,163 in 2015 chained dollars) in working capital and three employees: Albert Hall (chief compounder), Caroline Kruger (bottler and product finisher), and Lilly's fourteen-year-old son, Josiah, who had quit school to work with his father as an apprentice.
  Lilly's first innovation was gelatin-coated pills and capsules. Other early innovations included fruit flavorings and sugarcoated pills, which made medicines easier to swallow. Following his experience with the low-quality medicines used in the Civil War, Lilly committed himself to producing only high-quality prescription drugs, in contrast to the common and often ineffective patent medicines of the day. One of the first medicines he began to produce was quinine, a drug used to treat malaria, that resulted in a "ten fold" increase in sales. Lilly products gained a reputation for quality and became popular in the city. At the end of 1876, his first year of business, sales reached $4,470 ($99,499 in 2015 chained dollars), and by 1879 they had grown to $48,000 ($1,221,086 in 2015 chained dollars).
  As sales expanded rapidly he began to acquire customers outside of Indiana. Lilly hired his brother, James, as his first full-time salesman in 1878. James, and the subsequent sales team that developed, marketed the company's drugs nationally. Other family members were also employed by the growing company; Lilly's cousin Evan Lilly was hired as a bookkeeper and his grandsons, Eli and Josiah (Joe), were hired to run errands and perform other odd jobs. In 1881 Lilly formally incorporated the firm as Eli Lilly and Company, elected a board of directors, and issued stock to family members and close associates. By the late 1880s Colonel Lilly had become one of the Indianapolis area's leading businessmen, with a company of more than one hundred employees and $200,000 ($5,276,296 in 2015 chained dollars) in annual sales.
  To accommodate his growing business, Lilly acquired additional facilities for research and production. Lilly's business remained at the Pearl Street location from 1876 to 1878, then moved to larger quarters at 36 South Meridian. In 1881 he purchased a complex of buildings at  McCarty and Alabama Streets, south of downtown Indianapolis, and moved the company to its new headquarters. Other businesses followed and the area developed into a major industrial and manufacturing district of the city. In the early 1880s the company also began making its first, widely-successful product, called Succus Alteran (a treatment for venereal disease, types of rheumatism, and skin diseases). Sales of the product provided funds for company research and additional expansion.
  Believing that it would be an advantage for his son to gain a greater technical knowledge, Lilly sent Josiah to the Philadelphia College of Pharmacy in 1880. Upon returning to the family business in 1882, Josiah was named superintendent of the laboratory. In 1890, Lilly turned over the day-to day management of the business to Josiah, who ran the company for thirty-four years. The company flourished despite the tumultuous economic conditions in the 1890s. In 1894, Lilly purchased a manufacturing plant to be used solely for creating capsules. The company made several technological advances in the manufacturing process, including the automation of capsule production. Over the next few years, the company annually created tens of millions of capsules and pills.
  Although there were many other small pharmaceutical companies in the United States, Eli Lilly and Company distinguished itself from the others by having a permanent research staff, inventing superior techniques for the mass production of medicinal drugs, and forcusing on quality. At first, Lilly was the company's only researcher, but as the business grew, he established a research laboratory and employed others who w
caption: An 1886 drawing of Lilly's plant on McCarty Street.
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