page_title: Abitibi Power and Paper Company
section_title: Formation and rise (1912–1932)
hierarchical_section_title: Abitibi Power and Paper Company / Formation and rise (1912–1932)
caption_attribution_description: English: Photograph, glass lantern slide, Block pile, Spanish River Pulp &amp; Paper Company, ON, about 1927, Anonymous, Silver salts and transparent ink on glass - Gelatin dry plate process - 8 x 10 cm Français&#160;: Photographie, diapositive sur verre, Pile de billots, Spanish River Pulp &amp; Paper Company, Ont., vers 1927, Anonyme, Plaque sèche à la gélatine, 8 x 10 cm
context_page_description: Abitibi Power and Paper Company was a forest products business based in Montreal, Quebec, that was founded in 1914. The firm was a mainstay of the Canadian newsprint industry in the first half of the 20th century, and now forms part of Abitibi-Consolidated.
context_section_description: Abitibi Pulp and Paper Mills Ltd. was provincially incorporated on December 4, 1912, at Iroquois Falls, Ontario on the Abitibi River by Frank Harris Anson, who received initial financing from Shirley Ogilvie, heir to the Ogilvie Flour Mills fortune. On February 9, 1914, it was reorganized as the Abitibi Power and Paper Co. Ltd., which was incorporated under the Dominion Companies Act, in order to raise adequate capital for its plant and operations and to transfer its head office to Montreal. Its formation coincided with the passage of the Underwood Tariff in the United States, which allowed free trade for newsprint and prompted a northward rush from US publishers wanting to secure a cheap supply from Canada.
  Its expansion was greatly aided in 1919 when Howard Ferguson, Ontario's Minister of Lands and Forests, approved the reservation of 1,500 square miles (3,885 km²) of pulpwood on Crown land for Abitibi's use. Ferguson declared, "My ambition has been to see the largest paper industry in the world established in the Province, and my attitude towards the pulp and paper industry has been directed towards assisting in bringing this about." After becoming Premier of Ontario in 1923, Ferguson reserved a further 3,000 square miles (7,770 km²) to Abitibi.
  The company expanded to other locations in Ontario where it also built dams and operated hydro electric power stations. Integration of pulp and paper operations was encouraged by Anson's business partner, Alexander Smith, who became Abitibi's president upon Anson's death in 1923. Wherever the company built a mill, a new town sprang up around it and it even built radio stations such as CFCH in Iroquois Falls to serve these remote new communities. The company acquired other small lumber operations and grew to become a major force in the North American newsprint business, becoming the largest manufacturer in Ontario, and for a short time the largest pulp and paper company in the world.
  Abitibi did not maintain a sales force, relying on the Mead Corporation to handle all marketing initiatives in the US. Abitibi also invested in new Mead initiatives, and in 1927 acquired the Spanish River Pulp and Paper Mills from Mead, in a transaction that was subsequently seen to be highly overvalued and having a conflict of interest that was ultimately detrimental to Abitibi's shareholders. Changing economic conditions forced the closure of the Spanish River facility in 1929.
  Abitibi's power operations were further extended after 1926, when the Ferguson government gave its approval for the development of the Abitibi Canyon, the largest such development since the Niagara River, in preference to incurring more debt for Ontario Hydro. The development was encouraged through secret commitments for long-term purchases of electricity and indemnification of Hydro against any losses. Questions were asked at the time as to how the additional 100,000 horsepower (75,000 kW) in capacity would be used, as there were virtually no customers for it.
  It increased its gross earnings to $5,650,264 in 1918 from $4,422,757 in 1917. Along with other
  paper manufacturers in Canada, Abitibi Power and Paper Company operated at 75% capacity in 1929.
  During the Great Depression, Manitoba Paper Mills, a subsidiary located in Pine Falls, Manitoba, was forced to close.
caption: Spanish River Pulp and Paper Mills at Espanola (1927)
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