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Product Diversification in the U.S. Pulp and Paper Industry: The Case of International Paper, 1898–1941

Published online by Cambridge University Press:  13 December 2011

Thomas Heinrich
Affiliation:
THOMAS HEINRICH is assistant professor of business and industrial history atBaruch College, New York.

Abstract

During the years 1918 to 1941, International Paper (IP) launched a massive product diversification effort. Engineered by three successive presidents, diversification turned the company from a newsprint producer based in the northeastern United States into an international manufacturer of southern kraft grades, Canadian newsprint, hydroelectric power, and specialty papers. With the exception of kraft paperboard and converted products, however, the new product lines failed to provide IP with a firm foothold in markets for consumer nondurables, where nimbler competitors thrived even during the 1930s. IP and firms in other “maturing industries” that clung to traditional products and stagnant markets contributed to the length and severity of the Great Depression.

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Articles
Copyright
Copyright © The President and Fellows of Harvard College 2011

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References

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4 The amount and scope of primary sources pertaining to the company's history leaves much to be desired. IP's historical archives, maintained by the History Factory in Chantilly, Virginia, consist mostly of photographs and company publications (minute books, correspondence, and other manuscript sources have been destroyed or lost). IP generously granted this researcher access to the collection. Other sources were culled from the Wilmington Trust Company Collection at the Hagley Museum and Library Manuscripts and Archives Department, as well as collections of the Library of Congress, the New York Public Library, the University of Washington, the National Library of Canada, the National Archives of Canada, and the Fisher Library at the University of Toronto.

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11 Ibid., 1026–7, 1139–46.

12 PTJ, 26 Sept. 1901.

13 60th Congress, Pulp and Paper Investigation Hearings, vol. 1, 1081; on market share, see International Paper Company After Fifty Years, 1898–1948 (New York, 1948), 17Google Scholar; on the New York Tmies–Kimberly-Clark venture, see F. J. Sensenbrenner, “Kimberly-Clark Corporate History,” 38–39A, MSS, Kimberly-Clark Collection, Record Group 8, Box 73, Folder 3, History Factory, Chantilly, Virginia.

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29 Hughes, Thomas P., Networks of Power: Electrification in Western Society, 1880–1930 (Baltimore, Md., 1983)Google Scholar; one of the earliest cooperative ventures between utilities and paper companies was launched in 1920 by a group of seven former newsprint producers, which acquired the Northern New York Utilities Company and developed an integrated system of hydroelectric power plants and distribution networks in upstate New York; Amigo and Neuffer, Beyond the Adirondacks, 65.

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31 International Paper Company, 25th Annual Report (New York, 1923), 11Google Scholar; PTJ, 18 Aug. 1927.

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35 Ibid.; Smith, History of Papermaking, 403–5.

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44 Ibid., 229.

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54 “Fifteen Paper Companies,” 196.

55 Armstrong, George S., Crown Zellerbach Corporation: A Survey (San Francisco, Calif., 1937), 34–5Google Scholar; “Fifteen Paper Companies,” 135; PTJ, 14 May 1931, 15 Feb. 1934, 17 May 1934.

56 Ellis, Print Paper Pendulum, 160; Guthrie, Newsprint Paper Industry, 248.

57 Ibid., 108–11; PTJ, 28 Nov. 1929, 21 May 1931, 2 July 1931, 10 Dec. 1931; NYT, 16 June 1933; see also Boothman, Barry E. C., “High Finance / Low Strategy: Corporate Collapse in the Canadian Pulp and Paper Industry, 1919–1932,” Business History Review 74 (Winter 2000): 611–56CrossRefGoogle Scholar.

58 PTJ, 16 Jan. 1936, 5 Nov. 1936; Guthrie, Newsprint Paper Industry, 110–14; Smith, History of Papermaking, 445–54.

59 NYT, 6 Aug. 1930, 16 Sept. 1930; PTJ, 12 June 1930; International Paper Company, 41st Annual Report (New York, 1939), 56; Guthrie, Newsprint Paper Industry, 69Google Scholar.

60 International Hydro-Electric System, 3rd Annual Report (Boston, Mass., 1932)Google Scholar; International Hydro-Electric System, 4th Annual Report (Boston, Mass., 1933)Google Scholar; International Hydro-Electric System, 5th Annual Report (Boston, Mass., 1934)Google Scholar; International Paper & Power, 6th Annual Report (Boston, Mass., 1934), 78Google Scholar; “International Paper & Power,” 134.

61 Ibid., 136.

62 PTJ, 18 Feb. 1932, 22 Feb. 1934, 21 Feb. 1935, 16 Jan. 1936, 20 Feb. 1936, 24 Feb. 1938; “Fifteen Paper Companies,” 189–90; International Paper Company, 47th Annual Report (New York, 1944), 10.Google Scholar

63 International Paper & Power Company, 4th Annual Report (Boston, Mass., 1932), 12Google Scholar.

64 PTJ, 29 Oct. 1931, 18 Feb. 1932, 20 Feb. 1936, 10 Dec. 1936; International Paper Company After Fifty Years, 66.

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66 Ibid., 89–90.

67 NYT, 5 Feb. 1936; PTJ, 6 Feb. 1936.

68 PTJ, 9 Apr. 1936, 14 May 1936, 19 Nov. 1936; International Paper Company After Fifty Years, 89–90; House Committee on the Judiciary, Study of Monopoly Power, 631.

69 Zieger, Rebuilding the Pulp and Paper Workers' Union.

70 PTJ, 20 Aug. 1936, 18 Mar. 1937, 22 Apr. 1937, 13 May 1937, 12 Aug. 1937, 16 Sept. 1937; “International Paper & Power,” 231–2.

71 International Paper Company, 41st Annual Report (New York, 1939), 810Google Scholar; PTJ, 9 Feb. 1939, 4 July 1940; NYT, 14 July 1940, 25 June 1941.

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73 International Paper Company, 44th Annual Report (New York, 1942)Google Scholar; PTJ, 4 Jan. 1940.

74 Bernstein, Great Depression, 56; Wright, Annette C., “Strategy and Structure in the Textile Industry: Spence Love and Burlington Mills, 1923–1962,” Business History Review 69 (Spring 1995): 56–7CrossRefGoogle Scholar.

75 Business Week, 2 May 1977, 19 Mar. 1979; Wall Street Journal, 23 Nov. 1977; NYT, 24 Mar. 1979, 12 Oct. 1988.

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