Business & Finance: Box Troubles

The Paperboard Industry is composed of the makers of:

1) Boxboard, made of matted wood or other substances such as straw.

2) Containers, used for freight and express shipments and using either solid or corrugated fibre.

3) Boxes, including folding boxes for grocery products and other merchandise, and "setup" (rigid) boxes, such as candy comes in.

In 1879 one Robert Gair patented multiple dies for cutting, creasing, folding paper. Last July the biggest U. S. paperboard makers traveled secretly to the home of George Gair, 57, president and general manager of Robert Gair Co., now dominant in the folding-box field. There they discussed means of saving the industry from the effects of overproduction and price-slashing, talked about choosing some Tsar to rule them. Generally favored for this position was Secretary of Labor James John Davis who has studied conditions in the industry and made suggestions that pleased the manufacturers. While to date little has come from this meeting, last week a deal took place which was widely looked upon as the first of many moves aimed at placing the Paperboard Industry upon its feet.

Container Corp. Robert Gair Co. is the leading folding-box maker. Container Corp. is dominant in containers, has boxboard mills with a capacity of 1,200 tons per day. Last week Container Corp. absorbed the $5,000,000 Sefton Mfg. Corp., whose products include folding-boxes. Through this deal Container Corp. became a complete unit in the industry, in a position to expand until it becomes "the U. S. Steel of Paperboard companies." Although many more mergers must take place before such a centralization can be effected, paperboard makers hope it will happen, believe that such is the desire of the financial backers of Container Corp.

Eventual climax of such pyramiding would of course be a merger between Container Corp. and Robert Gair Co., which would probably be done through the formation of a holding company to operate the two as "divisions." In this case the competing lines would be meted out and interchanged until the whole industry becomes efficiently specialized, profitmaking.

Conditions. Factors which have demoralized the Paperboard Industry are many. Chief of these have been the fact that continuous, 24-hour operation lowers costs tremendously, giving rise to a sales policy aimed more at gross than any consideration of price. A bullish item recited by Paperboard's manufacturers is that, while the total production is gaining too rapidly (Container Corp.'s sales went up 30% last year), new demands such as the frozen food business and air transportation, are being found.