Word: newsprint
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Dates: during 1930-1939
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Monopoly? Homer Cummings and the Department of Justice have for the last few months been looking into the way the newsprint mills fix what to charge the publishers. Formerly newsprint prices fluctuated as restlessly as any lover of free competition could desire. But in more recent times (and consistently since the newsprint industry tasted the sweets of NRA) it has announced its next year's contract price all at once-and the price is generally the lowest asked by any mill turning out more than 100,000 tons a year. In the majority of cases this mill has been...
Many publishers in recent years have contracted for their newsprint on the condition that it was not to be above that asked by Great Northern. One-third of the newsprint used in the U. S. (3,700,000 tons last year) is made in the U. S.; almost one-third of the newsprint made in the U. S. is made by Great Northern. Great Northern's customers include Scripps-Howard, the New York Herald Tribune, the New York Sun and some 200 smaller papers. To them Great Northern's president, handsome William Arthur Whitcomb, has not been tough...
...surplus of $16,000,000. It has paid dividends regularly since 1909. In 1936 its profits were $1,200,000, an amount not remarkable for a company of its size but very comforting to Mr. Whitcomb when he reflects that not so long ago 40% of all North American newsprint capacity was bankrupt...
Most of the solvent mills operated at a net loss throughout the six years of Depression. Labor costs have gone up and it was inevitable that newsprint prices would go up too. But publishers put their trust in Great Northern at least to raise them gently. Last March, International Paper & Power, biggest paper company in the world and leader of the Canadian mills which would like still higher prices, beat Great Northern to it, announced a $50 contract price for the first six months of 1938. Great Northern's price, announced seven months later, was $48 for the first...
Many a publisher thinks that the paper industry is passing along not legitimate costs but costs of bad management. Newsprint financing has always been optimistic to the point of exultation. Big Abitibi Power & Paper Co. Ltd. of Canada once had 21 issues of bonds, notes and purchase-money obligations and an immense number of preferred stock issues. Between 1928 and 1930 it bought five other paper companies and went into the power business seriously. It is now in receivership. Even International, which made $5,000,000 in 1936, had to recapitalize last year so its stockholders could be paid "some...