The sun., 1916-11-29

hfuS - "
essays covering the manufacture Of
paper from the first leaf and fibre TO
a book by Teubner and the oxford
University Press. From Salzmann's
work on the mercantile economy of
the trade. Die Papierindustrie.' to
the technical and botanical treatise
Of Montessus, Fabrication des
C~elluloses." Is the range compassed
by professional writer's on paper maxi
ing: 1t might be ever truer to say
that a range through such sciences
as munitions and dyes is permitted
to any careful investigator who is
working this field.
II appears that the paper trade has
many interests. the fiscal. industrial,
structural. historic. chemical. military;
for paper is now used in making
shells. as Mr.. Phillips recently said in
his address on Paper Supplies as AZ
fected by the War" (the Journal Of
the Royal Society Of Arts. February
IS. 1876. Salzmann's work Is a book
in which the secret machinery Of the
trade is pictured. His method Is i'm
partial. On the one side he shows us
the effects Of combination. as repre-
sented by the trusts. and on the other
there is stability as represented by the
collectivism OF the news paper
union or "Druckpapierverband" OF
Germany and the subsidized units or
kartelle, as he calls them. which
are apparently small Independent on
Germs in a sort Of coalition to fix
prices and output. He approves this
system, which evidently has worked
well in Germany owing to the cheap
ness and abundance Of skilled labor.
It checked the downward movement
in the price OF news print paper.
which had brought 1t to a very low
level.
But. above all. the union OF the
fiiii SlhdbSu III IldhIiS q sluIlS
has tended to cure two evils OF the
trade. overproduction and overincrease
Of new factories. while 1t has en-
abled Germany to recover quickly
from the inevitable cycles OF depres-
sion which visit trade. A trust fails
to perform these primary functions
Of restricting production and main
tanning prices. At least. in Salzmann's
opinion, the history Of paper manufac-
ture shows hat trusts have not met
sudden requirements like those of the
present war or those Of tle Boer war
or those Of 1900, at which time the
price OF news" on account OF nat
ural and economic causes, rose SO per
cent. while the price OF wood pulp
rose so per cent. This evil influence
is not n thing OF yesterday. II com
menced in 1908. when the American
paper trust. with its restriction in out
put. produced. say. 10000 tons OF
Nv 'Nii iiiiiis
produced $4,000 tons. II the ac-
curacy and completeness Of Salz-
mann's Information may on occasions
be doubted, not so the substantial
truth of his statement. primarily and
essentially he is right. CreditIng
trusts with the utmost intelligence
and unscrupulousncss. he does not see
how they can educe permanent profits
from the present paper market \
good deal OF apprehension has been
aroused and traders feel unsettled.
Manufacture continues 10 expand
without any corresponding effect ON
prices.
The point in this situation that
strikes the economist most is the en-
phasis OF the fact that what tells in
international paper competition Is the
capacity TO produce IN a large scale at
a moments notice. Not only the raw
materials but the mills upon which the
paper trade depends are international
in extent. In the peculiar circum-
stances Of the present time large
orders. which are practically open to
tender, go TO any country, not because
its workmen are better than others,
but because upon short notice and
within the time OF contract they can
furnish the work. given adequate sup
plies OF materials. The capacity Of
rapid production depends simply upon
having "A large plant running always
at full pressure. This in its turn de-
ponds upon the certainty of the home
market. which enables the manufac-
turer Ia produce largely and therefore
economically. with dumping as a re-
source to fall back upon In periods III
depression caused by ~erproduction
or transportation. The weaker sort
~ trust magnate generally prldes him.
self amazingly on what he deems the
consistency of his business policy. He
is slyly i~ncredulous Of the heavy loss
inflicted upon the unloading company.
Dumping is ~ course injurious, but To
the market and retailer dumped on,
and not TO the trust which dumps.
The danger for the moment is closed.
1t is closed as much AS the double
danger Of competition from abroad
and ovcrproduction at home. Supplies
from Germany and Austria have been