The Press: Institute of Paper

From Canada last week came bad news for idealists. The Newsprint Institute of Canada, a co-operative pool of paper manufacturers supplying more than half the newsprint used in the U. S., formed to keep prices up and production stable, ap- peared doomed to go the way of many another group founded upon mutual trust.

Index to the probable disintegration was the resignation, as chairman of the Insti-ute, of Colonel John H. Price, president of Price Brothers & Co., Ltd., large producers of newsprint. Said he: "I have become convinced that the expressed purposes of the Institute and my efforts to accomplish them have been and are defeated by the unwillingness of members to conform to either the spirit or the terms of their mem- bership agreement."

Col. Price named no names, spoke of a general scrambling for markets by Institute members. But no observer failed to associate Col. Price's despairing message with last fortnight's announcement of the Hearst alliance with Canada Power & Paper Corp. (TIME, Sept. 29). In that announcement it was stated that Hearst-papers would pay market prices for their newsprint from C. P. & P. Nevertheless, many a disgruntled member of the Institute felt certain that some concession, involved perhaps in an exchange of stocks, had the effect of C. P. & P. "shading" the Institute's price of $55.20 per ton. The sight of that plum (approx. $26,000,000 prospective annual business) being so plucked made other Institute members feel they had been left suddenly in the cold. They at once began to assert themselves. Col. Price, whose company, a low-price producer, might be in the thick of any price war, declared that Price Bros, "now intends to adopt immediately whatever independence of policy and action it may be compelled to follow in order to protect its position and the interest of its stock-holders." Ernest Rossiter, president of St. Lawrence Corporation Ltd., gave simi- lar notice to the Institute. Meanwhile Quebec's Premier Louis Alexandre Tasch-ereau, who with Premier George Howard Ferguson of Ontario had much to do with the formation of the Institute (when they were trying to up the price to $60 per ton) declared himself "completely in the dark."

Whether or not the price war ensues, it was considered likely that one or two powerful groups of manufacturers would, by virtue of sheer strength, succeed the Institute as the influence to stabilize prices and regulate expansion of the industry. Armed with both Hearst and Rothermere contracts, the richest in the world, President James Henry Gundy of C. P. & P. loomed as logical Moses to lead the indus-try from its factional wilderness. Abitibi Power & Paper Co. and St. Lawrence Corp. would be possible allies of C. P. & P. in such a union. International Paper & Power Corp. might head another group; or—hav- ing lost the Hearstpaper business after 1933—might turn wholly to its major interest, Power, and pool its Canadian newsprint activities with other Canadian producers.