1941: Paper And Pulp Industry

The domestic pulp and paper industry was probably the first of the civilian industries to experience direct effects of the war in Europe. Dependent upon Northern Europe for a substantial portion of its wood pulp, the pulp consuming portion of the paper industry found that its imports decreased steadily through 1940, became a mere trickle early in 1941, and ceased completely by the third quarter of 1941. Coupled with the cessation of imports of European wood pulp was an unprecedented demand for paper and paperboard created by the United States defense activities and the lend-lease program. Other domestic problems arose as defense and lend-lease requirements cut into the paper and pulp industry's consumption of such chemicals as chlorine, titanium dioxide, formaldehyde, various pigments, and more important, into critical metals such as copper and steel. The impact of the curtailment of items of materials and equipment was, of course, felt by all civilian industries as well as the pulp and paper industry although it must be said that, in general, the latter fared comparatively well due to recognition by the Government of its essential position in both war-time and civilian economy. However, as new problems of supply and distribution were created almost overnight for the pulp and paper industry in 1941, various economic adjustments occurred which will have a profound effect upon its future structure and operations.

Pulpwood.

The availability and cost of pulpwood is probably the key factor in the international location of the pulp and paper industry. With no tariff barriers in existence on pulpwood, wood pulp or newsprint paper, a large part of the domestic requirements of pulpwood under ordinary conditions of world trade is supplied in the form of wood pulp and paper imports. From the standpoint of pulpwood requirements, it is immaterial in what form this raw material is obtained, for imports of wood pulp and paper merely replace an equivalent amount of wood which would otherwise be cut in the United States. Thus, the United States consumption of pulpwood has been determined to a great extent by international competition in the finished and semi-finished products. With the cessation of wood pulp, and to a lesser extent paper, imports from Europe, the domestic requirements for these commodities must now be met by production within the United States from pulpwood cut within the United States and Canada.

Although these quantities of pulpwood are tremendous there exists no likelihood of an insufficient supply of timber in the forest. Woods labor, however, became increasingly scarce as the year 1941 progressed and as migration of woods workers to defense industries became prevalent in the New England and Central States. This situation, together with the difficulties of transportation which are being created by the curtailment of rubber tires and trucks, has already driven the price of pulpwood sharply upward.

Wood Pulp.

Imports of wood pulp from Northern Europe were almost wholly in the so-called chemical grades. Since the stoppage of these imports, the domestic production of chemical wood pulp has increased steadily and at the present time is approaching what appears to be a maximum point. Increases in production of this commodity were not so much due to new equipment (which was not generally available in 1941) as to more efficient use of existing facilities. Total productive capacity of wood pulp in the United States in 1941 was somewhat over 11,000,000 tons compared with a figure of 10,200,000 tons in 1940.

Stringencies of chemical wood pulp have been felt in certain individual cases where paper mills were formerly wholly dependent upon European sources of supply and who, early in 1941, found it necessary to shift their purchases to an already overloaded market.

Waste Paper.

Increased paper and paperboard requirements in 1941 emphasized the necessity for additional recovery of waste paper to supplement fresh supplies of wood pulp. United States consumption of waste paper during the period 1937-39 averaged 4,132,000 tons. This recovery was increased to 4,590,000 tons in 1940 and reached some 5,000,000 tons in 1941.

Paper.

It was quite generally conceded by competent authorities that sufficient paper productive capacity existed in 1939 to meet normal expansion of domestic requirements for at least ten years under a normal economy. Actually, these productive capacity estimates were conservative for they were based on only 17,500,000 tons of effective annual capacity. Present surveys, however, show that effective productive capacity is actually about 18,500,000 tons annually. Under present conditions, which require large quantities of paperboard and wrapping paper for packaging military and lend-lease supplies, this total capacity has proved to be somewhat inadequate due to a maladjustment in various sections of the industry.

Supplies are currently available at an annual rate of more than 21,000,000 tons annually, which is over 4,500,000 tons in excess of the quantity available in 1940.

It is difficult to predict what the future demand for paper will amount to. It appears unlikely that combined civilian and war demands in 1942 will exceed those of 1941. Defense requirements of paper will undoubtedly increase, but it is indicated they will be balanced by an almost certain lessening of civilian demand, brought about by a restriction of civilian industries and a reduction of real purchasing power.