Paper: The Uses of Adversity

Of all the paper profits that were made on Wall Street until Blue Monday, few in recent years have come from the once prosperous paper industry itself. Cursed by too much plant capacity since the null U.S. paper companies have undercut one another's prices in an effort to keep their big machines rolling full speed. The result: between 1956 (when the nation's paper mills operated at 92% of capacity) and 1961 (when they were down to 85% of capacity), the industry's profits fell from $680 million to $580 million.

Last week, with production...