Wright spent over a year experimenting with different combinations of chemical compounds, hoping to produce a synthetic, “hard rubber” silicone that could withstand the high heat of jet engines or the freezing cold of nights on Navy ships. Towards the end of the summer in 1943, he and his team tried adding boron nitride as filler to an experimental silicone compound. But the scientists then learned that the substance they thought was boron nitride was actually a mixture of other chemical compounds, including boric acid. So they tried adding just boric acid.
The rest, as they say, is history. The resulting substance was gooey, not hard. Frustrated, Wright threw the goop onto the floor and to his surprise, it bounced right back up at him. A reporter from the Saturday Evening Post described the scene in a story (which, alas, is not online): “‘Golly,’ the scientist exclaimed as he dropped a ball of silicone putty, ‘look at it bounce!’”
They weren't sure what to do with the stuff, but they had fun playing with it. Read how this mistake became the classic putty toy we all know and love. http://www.gereports.com/the-amazing-origin-of-silly-putty/