Evening star. [volume] (Washington, D.C.) 1854-1972, 1947-07-20
Outlook Bleak
For Newsprint
Canada's Manufacturers
Predict Five More
Lean Years
By Robert BunneIle

By Robert BunneIIe
OTTAWA. - Canadian newsprint
manufacturers, widely besieged
with orders, are cautiously increas-
ing production by only fractional
amounts and leaders Of the industry
estimate it may be as much as five
years before newspapers can get all
the paper they want.
The Newsprint Association OF
Canada, an organization formed by
the manufacturers to safeguard
their mutual interests, reports the
Canadian makers probably will pro-
duce 4,349, TOO tons of newsprint in
1947 as compared with 4,279,000 in
1916 and 1900, 300 in 1945. And, of
this amount, probably something in
the neighborhood of 80 per cent will
so to the United States.
American publishers, who rely on
Canadian newSprint makers for
that per cent of their requirements,
are expected to use up to 100000
IONS of paper this year and would
like to use more if they could get it..
Aware of i. S. Needs
The Canadian newSprint manu-
facturers are keenly alive to the
needs of American newspapers,
leaders in the industry insist, and
they are fully aware of the i'm
portance OF the American market.
But they are sticking to the policy
Of caution as to productive capacity
and OF collective price setting and
ALLEGATION Of supplies. They say,
largely because of recollections of
the collapse which followed wild
prices and over-expansion of the in
dustry after World War I.
Actually, the Canadian news
print tycoons say, it would be diff
cult for the industry to expand
production in q hurry by great
amounts even if 1t wanted to do so.
At the end Of World War I, the
Canadian manufacturers had total
capacity of less than 100000 tons
yearly. There were immense forest
areas and hydro-power resources
awaiting development and Canadas
provincial governments were eager
to encourage this.
Under pressure OF the buyers,
prices zoomed to $11260 per ton of
newsprint in 1920 and there were
wild periods Of stock t1otations and
development Of new paper mills.
Some Obstacles
Now the Canadian neWSprint in
dustry has a total productive ca
pacity Of 4.349,7 tons, but there
are relatively few timber limits and
power sites suitable for new mill
construction or feasible for new
mill development at present costs
and prices, leading newsprint manu-
facturers say.
BY suitable timber limits, news
print industrialists explain, they
mean areas where there is enough
timber on a sustained basis to justify
the heavy capital investment re-
quired for new mills. For provin-
cial governments generally are in
sisting that only as much wood can
be cut as is replaced by new growth.
Some of the manufacturers take
the view that there is nothing in
the existing 1947 price level of 800
per ton for newsprint delivered in
New York to attract speculative cap
ital for new-mill expansion as after
World War I.
Then prices whipped upward from
$40 ton in 1915 to the $11260 level
in five years, an increase Of l65 per
cent. Now prices have risen from
$50 per ton in 1912 by only 80 per
cent to the 500 level, in a comparable
period.
Trying to Expand
And" said the president of one
of Canada's largest newsprint en-
terprises, who asked not to be quoted
by name, 'if you think we weren't
making a lot more money per dollar
of investment at $112.60 per ton in
1920 than we are making at 500 per
ION in 1s47 you are living in dream
world"
The Canadian newsprint manu-
facturers in general argue that the
most economical and effective ex-
pansion of capacity at the present
time Is by improvement of existing
mills. The Canadian industry, its
representatives say, is currently
spending many millions of dollars"
on such expansion.
One typical newsprint manufac-
turer. who likewise declined use OF
his name. said that by overhauling
old machinery, installing new equip
ment and generally speeding up the
Process, he had increased production
b. mere than>l5 per cent.
This manufacturer, whose state
mcnts were echoed in other quarters
O. the industry, said the Canadians
a'e Going everything they feel is
ls3'7cn My practical and sound to pro-
t. TIE American market because
i = "tthcir life blood"
{ -,n.ted by the Associated Press)