January 31, 1898: International Paper Incorporated
January 31st is more than just Super Bowl Saturday here in the U.S. It’s also the anniversary of the founding of International Paper.* On this day in 1898, fourteen paper companies came together and incorporated as International Paper (IP). Capitalized at almost $40 million dollars, IP included seventeen pulp and paper mills operating 101 paper machines with close to 1,500 tons of daily output capacity. The new company supplied 60 percent of all American newsprint in the world’s largest market for printing paper. Company executives hoped the large-scale merger would bring some stability to a volatile market that had seen the huge rise in production output far outstrip demand in the last decade of the nineteenth century. Several issues and factors, however, contributed to IP’s market share plummeting from that initial 60 percent in 1898 to 26 percent by 1913.
The latter year saw the passage of the Underwood Act, which abolished tariffs on Canadian newsprint imports and made newsprint the first major commodity to enter the U.S. virtually duty free. Abolishing the tariff fundamentally changed the industry and initially caught IP unprepared for the rapid changes. With an infinitely larger supply of spruce trees for turning into newsprint pulp, Canadian producers began turning out newsprint for much less than IP and other American companies. IP responded by shifting its newsprint production to Canada. During the 1920s, IP went on a building and buying spree in Quebec and the Maritime Provinces, including completing a mill at Three Rivers, Quebec, in 1922 and one in Gatineau, Quebec, in 1927.
The mills at Gatineau, Dalhousie, and Three Rivers (seen above) were operated by Canadian International Paper (CIP), a wholly owned subsidiary formed in 1925. Again, factors and trends worked against IP and made it difficult for IP to realize an adequate rate of return on its $60 million investment in Canadian newsprint. All this occurred just before the onset of the Great Depression, when IP’s foray into Canada nearly wiped out the company. Long story short, the company survived because of its production of kraft paper and other consumer goods and still thrives today. In fact, today it is a Fortune 500 company. But IP’s survival and revival is a story for another day.
What does this have to do with the Super Bowl? Frankly, nothing. I just wanted to get your attention by mentioning it and then rhetorically ask, Arizona? Really?
But the emphasis on the Canadian side of IP’s story is no accident. It’s an excuse to draw your attention to some holdings in our archives relating to Canadian International Paper. For your listening enjoyment, archivist extraordinaire Eben has pared down audio files we have of programs done for radio broadcast in 1948. The programs were sponsored by CIP and, not coincidentally, are about CIP operations. The first clip highlights the newsprint creation process at the Gatineau, Quebec, paper mill and the second clip provides a profile of the same plant and its importance as a CIP mill town. Both clips are about four minutes long. So, phone the neighbors and wake the kids! Gather them around the computer speakers and listen to these exciting stories of yesteryear!
* This entry borrows heavily and shamelessly from Thomas Heinrich’s fine article, “The Case of International Paper, 1898-1941,” Business History Review Vol. 75, No. 3 (Autumn 2001): 467-505. For an overview of the history of International Paper, see “A Short History of International Paper: Generations of Pride,” Forest History Today, 1998. For more on the history of newsprint and the history of Canada’s forest industries, check out these two FHS publications: the Issues Series book Newsprint: Canadian Supply and American Demand by Thomas Roach, and Lost Initiatives: Canada’s Forest Industries, Forest Policy and Forest Conservation by R. Peter Gillis and Thomas Roach and co-published with Greenwood Press.