The Daily Alaska empire., 1930-12-05
JUNEAU PAPER PLANT WILL BE
 ERECTED SOON
Rustgard, After Talk with Kinzie, Says Project Sure
 Despite Handicaps

Harry Chandler will go right ahead with their program for the con- struction of pulp and paper mill near Juneau despite the unfavorable market conditions" declared Attor- ney General John Rustgard, who discussed the project with R. A. Kinzie, engineer in charge, during a recent visit to San Francisco
 MT Rustgard talked at some length with MT. Kinzie shortly be- fore the Federal Power Commission granted the final waterpower license covering developments at Speel Riv- CT and Dorothy Lake.
 Had Given Up Hope
 The Attorney General, as a re- suit of the conversation, was con- verted from pessimistic attitude to an optimist. T had given up hope for the paper, but after talk ing to MT. Kinzie I am satisfied that the Cameron interests will pro- ceed with their project in the fu- ture," he declared. But when it does come, it will not be entirely as a money making scheme Hope of financial profit to the investors is excluded by the restrictions inn posed by the Government. When it comes, it will do so as a dona- tion to the public by men whose ambition is to do something of last ing value to their country.
 Under the lease for waterpower, the investors are not permitted to earn more than six per cent on their invested capital. Whatever is earned over that ratio is split fifty fifty with the Government, and the latter reserves the right to fix the price on power from time to time so as to hold the profit down to six per cent"
 Market Is Upset
 The present newsprint market is not nearly so favorable for the project today as it was when the project was first launched, MT Rustgard pointed out. When the project was first started, news print was selling for S75 per ton in San Francisco" he said. To-day any newspaper can make long-term contracts for paper at maximum price of $50 per ton, and get the benefit of any decline in price during the life of the contract.
 "On the projected 300-ton mill at Juneau this represents reduction of $7,500 per day on the value of the output, or a reduction of over $2,700000 in the value of the an- nual output. Under such circum- stances whether the mill can oper- ate at profit at all is problematic. It may depend upon whether it can be installed and operated within the cost estimated in advance.
 When we take into consideration the fact that today good stocks yielding the investor from eight to ten per cent can be purchased in any quantity, it is obvious that the projected paper industry in Alas ka is not altogether money-mak- ing undertaking.
 Stocks Are Cited
 "Tha common stock of the Zel- lerbach Company is down to $6, and the cumulative seven per cent pre- ferred stock in it's operating com pany, Crown Willamette, is selling for $70, sure yield of 10 per cent on the market price, I do not see how, under these circumstances, there can be any financial induce ment for the Zellerbach people in this field.
 The public generally, however, underestimate the number of wealthy people who have quit &C., cumulating and are simply looking for an opportunity to be of the greatest possible service to the com munity Cameron and Chandler be- long to that type. Paper production in Alaska is their pet scheme and comes under that type of service. It is their baby"
 Sure to Come
 Despite all unfavorable conditions and restrictions, said MT. Rustgard in conclusion, he is certain that the local project will materialize. MT Kinzie did not give any intimation when the construction program would be initiated. At the time of the discussion, the Federal Power Commission had not acted on the for final license.
 MT. Kinzie was then doubtful if the license would be granted before the Commission underwent re-or- ganization, and when this would be perfected was a mere matter of Since then, the licenses have been issued on both the Ju- neau and Ketchikan projects.