HENRY FORD never felt comfortable in the tumultuous world of the 20th century which his horseless carriage helped to create. He found that modern cities were "the most unlovely and artificial sights this planet affords" and had a deep distrust for the giants of the oil industry who made their fortunes fueling his creation.

He was a farm boy from Dearborn, Mich., and he hated the endless rounds of chores which went with rural life. Machines, he hoped, would someday lighten the farmer's load and usher in a new era of rural prosperity. He urged industry to decentralize and predicted that "small [factory] plants would be put on every stream." Once this happened, he dreamed, the country would see "as great a development of farming as we have had in the past 20 years in manufacturing." And if Ford had his way, alcohol, not oil, would fuel this new rural renaissance.

Early in his career as an inventory, Ford realized the energy potential of farm alcohol. In the 1880s, when he worked as a chief engineer for the Edison Illuminating Co. in Detroit, he powered one of his earliest automobiles, the quadricycle, on alcohol.

By the time the first Model As were manufactured, he designed them so that they could be fueled by the farmers themselves. They came equipped with an adjustable carburetor specifically intended to permit the use of alcohol fuels in the engine.

John D. Rockefeller, who built the Standard Oil trust that destroyed Henry Ford's innocent hopes for an alcohol fuel industry, also grew up in 19th century rural America. While Ford was trying to build his first horseless carriage, Rockefeller was in the final stages of consolidating his oil empire. By 1875, he had absorbed or eliminated most of his rivals in the kerosene industry.

It would be difficult to create a U.S. alcohol industry capable of competing with Rockefeller's Standard Oil Trust. In 1900, the U.S. alcohol industry was nothing more than a few small family-owned distilleries scattered throughout the South. This alcohol, even when denatured and used for industrial purposes, was burdened with a liquor tax of 40 cents a gallon, which made it a far more costly fuel than gasoline.

But there was powerful political support in Washington for Henry Ford's efforts to make the farmer an energy producer. There was genuine concern that the changes sweeping through the country in the wake of the industrial revolution would destroy the agricultural base on which the nation was built.

Teddy Roosevelt was a staunch supporter of the small independent farmers.Elected to the White House in his own right in 1904, after bitterly attacking Standard Oil Trust's influence over the U.S. economy, Roosevelt did not want to see the oil industry gain control of the new market for automotive fuels. In 1906, he backed congressional attempts to lift the tax on industrial alcohol. Despite this show of support from Washington, the fledging alcohol industry was never able to seriously challenge the oil trust's rapid takeover of the automotive fuel industry.

By the time the Standard Oil Trust was broken up in 1911, it had already succeeded in monopolizing the automobile fuel market. A few unsuccessful attempts were made to sell alcohol, but the automotive magazine Horseless Age was reporting that "there is no sign of any extended application of denatured alcohol as an automobile fuel...." Gasoline sales, on the other hand, had soared and by 1911 topped kerosene as Standard Oil Trust's number one moneymaker.

The western oil boom, along with the automobile, was capturing the imagination of the nation. Over 400 oil companies sprang up out of the oil fields and their wealth financed the construction of new cities such as Tulsa and Houston. There were few people around who would pay much attention to Henry Ford's warning that alcohol, as well as oil, should fuel his automobile.

Ford's efforts to speak out on the great issues of the day were largely ridiculed by the eastern press. His early attempts at social reform, such as financing a book announcing the evils of cigarettes, were not very successful. The worst blow to his reputation, however, came from a bumbling campaign he directed to keep America out of Wolrd War I.

In 1926, Ford found an effective spokesman - a brilliant Ohio-born chemist named William Jay Hale. Throughout the 1930s, Hale and the "power alcohol" movement he founded (with Ford's generous financial support) would launch the strongest challenge the oil industry had yet encountered.

Hale, a chemist for the Dow Chemical Co., had attended Miami University of Ohio, Harvard and went to Berlin for formal training in chemistry. He was fascinated by agriculture and its prospects for producing energy and chemicals for the industrial world of the 20th century. After several years of research, he finally drafted a magazine article, "Farming Must Become a Chemical Industry," spelling out his emerging philosophy, which he called "chemurgy."

When other Americans were enjoying the Roaring Twenties, Hale was warning of the dangers farmers would soon face from crop overproduction. One of the best solutions, Hale believed, was to send the crops to the distillery for production of alcohol fuels.

Thus the large market for farm crops, lost when the grain-fueled horse was replaced by the automobile, tractor and truck, could be restored through the use of the "power alcohol" distilled from grains. With the aid of the chemist's magic touch, the agriculture surpluses could also be transformed into raw materials for industrial America.

Hale dreamed of a day when international trade would be kept to a minimum, with each country growing most of what it needed. Failure to harness agriculture to this great task, Hale was convinced, would result in the collapse of the American economy.

The grim prophecy for U.S. agriculture in Hale's article was rudely fulfilled after the 1929 stock market crash. Farm prices plunged, and the nation sank deep into the Depression. The farmers, who were producing bumper crops, couldn't get more than 25 cents for a bushel of wheat, 7 cents for corn and a dime for oats. Cotton was selling for a nickel a pound and beef for less than 3 cents a pound.

Hale's call for the creation of new industrial markets for farm crops, which found plenty of support in the U.S. agricultural community, also sounded like a good idea to Henry Ford. In the early 1920s he also was predicting that cars would one day be made chiefly from agricultural products, and he hired a boyhood friend, chemist Edel Ruddiman, to do research on how to develop plastics from soybeans. Ford helped finance Hale's proposal for the First Annual Joint Conference on Agriculture, Industry and Science in Dearborn in 1935.

In front of the 300 chemists at the conference, Hale unveiled his controversial power alcohol program. According to a reporter, "the introduction of this subject into the chemurgic program was the spark that produced the most stormy sessions. They actually became struggles for power between two groups - the present suppliers of fossil power [petroleum] and the agricultural leaders who proposed that farmers should again supply at least a part of the raw material...in internal combustion engines."

In July 1936, Hale published the book "Prosperity Beckons," in which he proclaimed the imminent arrival of the "alcohol era." He declared all-out war on the oil industry, which he denounced for selling the "poison-spreading gasoline" he believed caused cancer. He denounced the suggestion that the United States import oil from abroad, demanding to know "what self-respecting nation would permit its fuel problem to be laid in the hands of foreigners."

By the time Hale's book was published, his power alcohol movement had already gathered momentum in the Midwest. The Chemical Foundation financed the remodeling of an old Kansas distillery and set up the Atchison Agrol Plant. By 1938, some 18 million gallons of grain alcohol (ethanol) were distributed to 2,000 independent service stations who proudly marketed the blends of 10 percent alcohol and 90 percent gasoline. The service stations owned by the major oil companies would rarely touch the stuff.

The Agrol plant produced alcohol from a mixture of barley, rye, corn, grain, sorghum, Jerusalem artichokes and blackstrap molasses. The Agrol Company ran a vigorous advertising campaign and sales increased rapidly. The distillery managed to earn a slim profit on its 25-cent-a-gallon alcohol by maintaining a large sales volume.

These sales began to drop off sharply after an army of traveling "experts" began showing up at Agrol service stations and performing a neat little demonstration to prove that the fuel would not work. A small glass test tube was filled with alcohol and gasoline and then shaken. The two fuels immediately separated into two layers, proving that gasoline and alcohol do not mix.

This test worked like a charm because the "expert" always made sure to wash the test tube out with water before the experiment. A few drops of water left in the tube caused the alcohol and gasoline to separate. The "experts" insisted that if this happened on the road a car's engine would stall. Motorists, however, seldom experienced problems with "phase separation" when driving, unless low-proof alcohol was used.

Other, more devious means were employed to destroy the Agrol plant. Dr. Leo Christenson, the Chemical Foundation scientist who directed the plant, told a 1939 Senate sub-committee that "disaster struck the Agrol plant in the form of a false and I think malicious rumor" that its alcohol was made from imported blackstrap molasses. Since most of the Agrol distributors were farmer cooperatives, Christenson explained, "Sales dropped very, very rapidly."

Still, the power alcohol movement was far from dead. In Washington, there was growing support for bills that would mandate the sale of a power alcohol blend across the country. The oil industry decided it was time for a counteroffensive.

The first attacks on power alcohol had come from the descendants of the Standard Oil Trust. John D. Rockefeller's creation by then had split up into several separate oil companies. But these companies could agree on one thing: Power alcohol was not good for America. They denounced it in their trade publications and provided ammunition for business magazines to do the same. They armed their service station attendants with anti-alcohol propaganda.

The anti-alcohol movement became more coordinated when the oil industry trade association, the American Petroleum Institute (API), jumped into the fray.In March 1933, the API reprinted a Business Week article headlined "Farmers would make motorists pay for farm relief" in a pamphlet sent out for mass distribution. The article warned that "corn state farmers, bankers and merchants take it [power alcohol] very seriously indeed. Spontaneous support is considerable. Legislators, congressmen and editors are being bombarded with letters extolling the virtues of the mixture..."

Then in April, the API sent out a high priority memo to the members of its Industries Committee which spelled out its plans to intensify its anti-alcohol campaign:

"The situation is so critical that action must be taken at once. Make contact immediately with automobile clubs, motor transport interests, and similar organizations in your territory. Acquaint them with the real nature of this scheme and enlist their support in opposing this legislation.... Inform oil companies in your territory of the possible disastrous effects and urge them to do whatever they can to make all the facts known to their contacts, particularly customers....Urge individuals and organizations to write to their representatives in Congress, and in state legislatures where such legislation has been introduced, to oppose such legislation. Prompt action is necessary to counteract the aggressive and misleading propaganda of the proponents of the [alcohol] blending schemes."

The petroleum institute was aided in its attempts to discredit alcohol fuels by the American Automobile Association, which agreed to conduct a carefully supervised test to determine whether power alcohol made a good fuel when blended with gasoline. At noon on a sweltering day in June 1933, the test participants gathered. They included Secretary of Agriculture Henry Wallace, an ardent alcohol supporter; Rep. Everett Dirksen of Illinois; Agrol plant director Christenson and other dignitaries, including, of course, representatives of the oil companies.

The tests were run over a 10-mile circuit course just south of Alexandria. Five conventional stock cars were used. The AAA's technical findings proved to be potent ammunition for the oil industry.They reported that alcohol blends gave poorer mileage, less power and "separated from the gasoline after coming into contact with moisture from atmosphere."

Dozens of newspapers carried the AAA results, and they appeared to be in near unanimous agreement that power alcohol was not a good idea. The Grand Rapids (Mich.) Press declared that "road and laboratory tests of alcohol-gasoline blends recently completed by the American Automobile Association in cooperation with the government have produced results that should definitely set at rest all agitation for compulsory blending of the two fuels for motor use."

Three years later, however, equal public exposure was not given to the independent and more thorough evaluation of alcohol fuels by one of the key government scientists who supervised the AAA tests. In April 1936, Dr. Oscar C. Bridgeman of the National Bureau of Standards told a meeting of the American Chemical Society that "...if the need or desire for such [alcohol] fuels should arise in this country, sufficient technical information is available to insure that blends containing ethyl alcohol could be utilized satisfactorily as motor fuels, provided full advantage could be taken of the available technical information. For the most part, therefore, the problem is whether or not it is economically feasible..."

Henry Ford's support for alcohol fuels never wavered. In 1936 he supported a second conference on Agriculture, Industry and Science. The chemists were divided into two hostile camps. Leading the charge for the chemurgists was Francis Garvan, president of the Chemical Foundation, who had compiled a dossier of documents to rebut the oil industry's claims.

"We have been fed the volumes to the effect that power alcohol is not a practical fuel," Garvan said. "It upsets the motor. Were they [the oil industry] quite sincere? I think you can judge." He then handed out a booklet printed by Standard Oil of New Jersey's English subsidiary, Cleveland Discol.

Standard's English advertising pamphlet boasted that the blend of alcohol [ethanol] and gasoline had tremendous power, acceleration and anti-knock.The "phase separation," which both the AAA and the traveling "experts" insisted was such a problem, was miraculously solved with Standard's English mixture. "It is possible," the pamphlet reports, "to pour almost half a pint of water into a car trunk containing 10 gallons of Cleveland Discol without the slightest trouble, in fact, in some circumstances with better running." Standard also insisted that its alcohol fuel gave its motorists better miles per gallon and faster maximum speeds.

In addition to English alcohol, Garvan could point to a host of other power alcohol blends being sold on foreign markets. From Argentina to Australia, oil companies were peddling the fuel. The demand for alcohol was so great that International Harvester was running advertisements in the Philippine press boasting that: "International motor trucks are powered with engines especially designed to burn alcohol. These facts have been proven: They are absolutely dependable; they are more economical; they are free from carbon; there is no loss of power..."

Chrysler Motor Corp. declared itself "entirely neutral" in the alcohol debate and then shipped Detroit-made cars equipped for using pure alcohol to New Zealand. A Chrysler engineer said the only changes required in the cars were different carburetor jets and modification of the manifold.

Brazil passed a law in 1931 requiring gasoline importers to mix their fuel with domestic Brazilian alcohol made from sugar cane. Chile required blends of 10 to 25 percent alcohol in its motor fuel, and China marketed a concoction called "benzolite" which contained 55 percent alcohol.

Almost all the major European countries - Czechoslovakia, Germany, Hungary, Sweden, Austria, France, Italy and Poland - had some sort of mandatory alcohol blending programs, as did a host of smaller nations. In 1938, nervous European governments, watching the Nazi military buildup, were hoping that alcohol fuels could provide them with some semblance of energy independence if another war should break out. Alcohol would also be a key ingredient in any wartime munitions industry. Prof. Gustave Egloff, a research director for Universal Oil Co., reported that "countries are conducting research feverishly to utilize their own potential motor fuels from coal, vegetables, cereals, would, natural gas and oil shale."

The alcohol programs, however, were not entirely for military purposes. They were also meant to help the European farmers, who, like their American counterparts, were hard hit by the Depression and happy to find new outlets for surplus corps.

Not all European alcohol fuels were accepted by motorists. Some were awkward blends of up to 50 percent alcohol mixed into the gasoline; these were bound to cause motorists some problems. In France, where the alcohol was distilled from the remains of the annual grape harvest, motorists complained about the fuel's performance. But the French program would hardly have served as a prototype for the United States, since the chemurgists were pushing only for 10 percent blends of alcohol.

Royal Dutch Shell sold "Shell-Kol" in Australia, while Cities Service sold "Kool Motor" in England. In Poland and a few other countries, alcohol fuels industries were able to develop even without government intervention. But, as in the United States, they had to first fight oil company opposition. M. M. Rosten, a Polish chemical engineer, told a U.S. Senate subcommittee that he had trouble selling the alcohol from the first distillery he built back in 1927 because of "large opposition from different industries," particularly "the petroleum industry" and "Standard Oil Company." But later, in 1932, Rosten's fortune took a sudden upsurge when a Swedish subsidiary of Standard Oil joined forces with him to help sell alcohol.

By 1939, over 40 nations had succeeded in blending their fuel base with alcohol fuels. But in the United States, the alcohol movement felt defeated. Its legislation had lost to the intense lobbying by the oil companies, the Atchison Agrol plant was virtually bankrupt and much of the press had come to regard the "chemurgists" as fanciful dreamers. William Hale, surveying the dismal health of the U.S. alcohol industry, concluded that "we are the boobs of the world."

With the outbreak of Wolrd War II, the struggle between the chemurgists and the oil companies entered a new phase, with higher stakes: the production of synthetic rubber for the U.S. war effort.

In 1942, the government awarded a $650 million contract to 25 major oil and chemical companies to produce 700,000 tons of oil-based synthetic rubber. The federal petroleum administrator, Harold Ickes, praised the oil industry's "exhibitions of patriotism and good faith." But by mid-1942 it was evident that the industry's crash effort would not produce all the materials needed for synthetic rubber.

Until then, the government had shown no interest in the chemurgists' insistence that they could produce synthetic rubber from alcohol. Now a Senate subcommittee heard a proposal from two Polish scientists for an alcohol-based synthetic rubber process that could be developed much more rapidly. A new government office of rubber was set up and ordered the construction of three new grain alcohol plants. The nation's whiskey distilleries were ordered to make industrial alcohol for the war effort. The old Atchison Agrol plant was rejuvenated and put back into full production.

By 1944 the United States was producing almost 600 million gallons of alcohol, nearly four times the 1942 level. About half of this alcohol was going into synthetic rubber; the rest went into other vital uses - gunpowder, aviation and submarine fuels, medicines.

But the chemurgists' victory was short-lived. With the war's end, the Commerce Department decided to drop government support for the wartime grain alcohol industry. Some of the giant distilleries were dismantled, and others converted back into beverage plants. One plant, in Bellingham, Wash., still produces alcohol from pulp byproducts. But by 1949, less than 10 percent of U.S. industrial alcohol was made from grain. It would take another world upheaval to revive talk of a vital role for industrial alcohol. CAPTION: Picture 1, no caption, By Hal Hoover - The Washington Post; Picture 2, Chemist William Jay Hale: "We are the boobs of the world." Chemical & Engineering News; Picture 3, The 1933 test of gasohol: from left, Rep. Everett M. Dirksen, contest chairman Col. Eddie Rickenbacker and Dr. H. C. Dickinson, president of the Society of Automotive Engineers. American Automobile Association