Why do factories have tall chimneys?

The purpose of the chimneys is to carry the smoke from the furnaces to the air. It may be that if the chimneys are tall, it makes a better draught for the furnaces, but that is not the important thing. The point is that, according to our present way of burning coal, a large amount of the coal is wasted, and simply blown up the chimney without being burnt in the form of smoke. In the air this injures everybody and everything – men, animals, plants, houses and all. But the higher it is sent into the air, the better is its chance of being blown away and thinning out before it settles. Evidently it would not do to have a chimney discharging factory smoke at the level of somebody’s bedroom window, for instance.

Tall chimneys are essential for yet another reason. Even when the fuel is burnt in the factories in a proper way, there must always be carbonic acid gas produced, since the chief element in fuel is carbon, and since carbonic acid gas is completely burnt in carbon. This gas is a poison to us if there is too much of it in the air, and so it must be sent into the air as far away from our mouths as possible.

Additional reading:
Chimney (Wikipedia)

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