Evening star., 1928-11-20
PAPER TRADE WAR
END IS DEMANDED
Canadian News Print Com.
panieS Warned by Premier.
U. S. Capital Invested.
BY the Associated Press.

BY the Associated Press.
TORONTO, Ontario, November co.
Premier G. Howard Ferguson OF
Ontario, has warned oficialS of pulp
and paper companies operating in the
province that unless reforms in man.
agement are made the government will
be compelled to give serious and inn
mediate consideration TO what action
It should Ike" Much American cap
ital is invested in the companies.
In letter to the officials the premier
said that the government was much
disturbed" over the condition of the
news print industry and that what has
been segarded as q very critical Situa-
tio'," has been receiving careful study.
A few years ago, the letter says, the
government concluded that "if finan-
cially strong industries were created
they would be able to continue opera
tions, maintain pay rolls and markets.
as well as protect thousands of invest
ors all over Ontario through periods OF
depression.
Revised Contracts.
ut was with this end In view and
10 bring this about that the government
q few years ago revised the existing
contracts. with the companies and en-
larged their scope.
Substantial urban communities were
built up and large agricultural areas
we're developed practically dependent
upon the forestry industries.
Notwithstanding the assistance the
government has given to the paper
business, as indicated above, the whole
industry today finds itself in very
unfortunate condition. During the
greater portion of the past year this
government has hoped that the good
sense of the people in charge of this
great industry world stabilize condi-
tions and enable every one to carry on.
It Is apparent however. that no serious
effort along this line has been at
tempted. Methods have been pursued
that have created what appears to be
condition Of chaos"
Ruinous Competition.
The companies have been engaging
In ruinous competition. the premier
charges. Calling attention to the fact
that the companies all hold contracts
with the province, the letter concludes:
May I request that you inform me
promptly what immediate action is
contemplated by your company and
the others engaged in the industry to
fectify the present Situation?"
Explaining the financing OF the
companies, tie premier Sald tnaL De-
tween $250,000,00o and $500, ,o00, 900
had been invested in the companies,
the securities being held throughout
the United States, Canada and Great
Britain. He described the industry as
the second largest in Canada.
Reluctant to Interfere.
1--WE have been reluctant to interfere
with business built up with private
capital-although we furnish the raw
material" he said. But there is settle
ment, employment and prosperity de-
pendent upon it in a large way and the
government has made up its mind |
that If in the next few days these |
companies do not give up the plan OF |
assassination We are going to take a !
hand"
Z. w. Backus. a paper manufacturer !
Of Minneapolis, who was in Toronto on |
his way to attend newsprint meeting !
III Montreal. said There Is a large |
overproduction in the industry. Some |
mills are operating close to capacity, |
but others are running only 50 to so |
per cent capacity and some are closed |
down entirely, bringing hardships In . 4
number of communities"