¹ See sources for Table 2, footnote 65.Google Scholar

² The details of this story can be found in a number of places. See, for example, Studley, James D., The United States Pulp and Paper Industry (Washington, D.C., 1938), pp. 1–7;Google ScholarStevenson, Louis T., The Background and Economics of American Papermaking (New York, 1940), chapter 1;Google ScholarSmith, David C., The History of Papermaking in the United States (New York, 1970), chapters 1–6.Google Scholar

³ See Smith, David C., “Wood Pulp and Newspapers 1867–1900,” Business History Review, 38 (Autumn 1964), 328–45,CrossRefGoogle Scholar and Guthrie, John A., The Newsprint Paper Industry (Cambridge, Massachusetts, 1941), chapter 2.Google Scholar

⁴ See Weeks, Lyman H., A History of Paper Manufacturing in the United States 1690–1916 (New York, 1926)Google Scholar, chapters 12–14, and Studley, The U. S. Pulp and Paper Industry, p. 59.Google Scholar

⁵ See Studley, The U. S. Pulp and Paper Industry, pp. 76–87.Google Scholar

⁶ See Stevenson, The Background and Economics of American Papermaking, chapter 4.Google Scholar

⁷ See Whitney, Simon N., Anti-Trust Policies, American Experience in Twenty Industries (New York, 1958), chapter 6, especially pp. 355–58,Google Scholar and Cummins, J. G., Concentration and Mergers in the Pulp and Paper Industries of the Untied States and Canada 1895–1955, unpublished Ph.D. dissertation, Johns Hopkins, 1960.Google Scholar

⁸ See Kellogg, R. S., Newsprint in North America (New York, 1948), pp. 10–27.Google Scholar

⁹ See Carruthers, George, Paper-Making, Part II: First Century of Paper Making in Canada (Toronto, 1947).Google Scholar

¹⁰ See Studley, The U. S. Pulp and Paper Industry, pp. 79, 85.Google Scholar

¹¹ See Lewis, R. G., “Development of the Pulp and Paper Industry from 1900 to 1925,” Pulp and Paper Magazine of Canada (February 1927), p. 187;Google ScholarStudley, The U. S. Pulp and Paper Industry, p. 60,Google Scholar and Kellogg, R. S., Pulpwood and Woodpulp in North America (New York, 1923), Appendix, pp. 230–32.Google Scholar

¹² See Studley, The U. S. Pulp and Paper Industry, pp. 70, 78;Google ScholarUrquhart, M. C. and Buckley, K., Historical Statistics of Canada (Toronto, 1965), p. 334,Google Scholar and Kellogg, Pulpwood and Woodpulp in North America, pp. 224–29.Google Scholar

¹³ A good historical summary of Canadian and U. S. production and consumption data is provided in Canadian Pulp and Paper Association, Reference Tables (Montreal, 1951).Google Scholar

¹⁴ Data on the early Canadian mills can be found in the Lockwood Trade Journal Co., Lockwood's Directory of Paper and Allied Trades (New York, annually from 1884–1985), and in Carruthers, First Century of Paper Making in Canada.Google Scholar

¹⁵ See Guthrie, The Newsprint Paper Industry, p. 9.Google Scholar

¹⁶ See Kellogg, Pulpwood and Woodpulp in North America, p. 230.Google Scholar

¹⁷ See United States Tariff Board, Pulp and News-print Paper Industry, Senate Document no. 31, 62nd Congress, 1st Session (Washington, D.C., 1911), pp. 77ff. and Guthrie, The Newsprint Paper Industry, chapter 9.Google Scholar

¹⁸ See Kellogg, Pulpwood and Woodpulp in North America, p. 226 and Studley, The Pulp and Paper Industry, p. 78.Google Scholar

¹⁹ See Canadian Pulp and Paper Association, Reference Tables, Table 67, p. 24.Google Scholar

²⁰ The developing interest of U. S. investors is recounted in Marshall, H., Southard, Frank A., and Taylor, Kenneth, Canadian-American Industry (New Haven, 1936), pp. 35–53, 330. About half the industry was U. S. owned by 1930.Google Scholar See also Aitken, H. G. J., American Capital and Canadian Resources (Cambridge, Massachusetts, 1961), pp. 37, 42–43, 70–71.CrossRefGoogle Scholar

²¹ Growing concentration in Canada is described by Guthrie, The Newsprint Paper Industry, chapter 5; Reynolds, Lloyd G., The Control of Competition in Canada (Cambridge, Massachusetts, 1940), pp. 23ff.;CrossRefGoogle ScholarBladen, V. W., An Introduction to Political Economy (Toronto, 1944), pp. 162–83, and Cummins, Concentration and Mergers.Google Scholar

²² See Ankli, Robert E., “The Canadian Newsprint Industry, 1900–1940,” in Dalgaard, Bruce R., ed., Variations in Business and Economic History, Essays in Honor of Donald L. Kemmerer (Greenwich, Connecticut, 1982),Google Scholar and Reynolds, The Control of Competition in Canada, p. 99.Google Scholar

²³ See Reynolds, The Control of Competition in Canada, pp. 173–75,Google Scholar and Nelles, H. V., The Politics of Development (Toronto, 1974), pp. 443–64, and chapter 12.Google Scholar

²⁴ See Birch, J. W., The Changing Location of the Wood Pulp Industry in the United States and Canada: 1900–1956, unpublished Ph.D. dissertation, Johns Hopkins, 1961.Google Scholar

²⁵ See Reynolds, The Control of Competition in Canada, p. 100.Google Scholar Some of the considerations that weigh heavily in the equilibration process are discussed in Fell, C. P., “The Newsprint Industry,” in Innis, H. A. and Plumptre, A. W. F., eds., The Canadian Economy and its Problems (Toronto, 1934), pp. 40–53.Google Scholar

²⁶ See Glover, J. G. and Cornell, W. B., The Development of American Industries (New York, 1941), pp. 145–50, and Stevenson, The Background and Economics of American Paper Making, chapter 4.Google Scholar

²⁷ See sources noted in footnotes 8 and 14.Google Scholar

²⁸ For prices from 1862 to 1939, see Bladen, An Introduction to Political Economy, pp. 153–54, 159, and Kellogg, Newsprint in North America, p. 49.Google Scholar

²⁹ For a detailed account of this progressive encounter, see Ellis, L. Ethan, Print Paper Pendulum (New Brunswick, New Jersey, 1948), chapters 1–5,Google Scholar and his Reciprocity 1911 (New Haven, 1939), chapter 3.Google Scholar

³⁰ See Ellis, Print Paper Pendulum, chapter 3.Google Scholar

³¹ Ibid., pp. 88–89.

³² See Guthrie, The Newsprint Paper Industry, p. 179.Google Scholar

³³ See Bliss, John W. M., “Another Anti-Trust Tradition: Canadian Anti-Combines Policies 1889–1910,” Business History Review, 47 (Summer 1973), 39–50,CrossRefGoogle Scholar and Reynolds, The Control of Competition in Canada, pp. 169–70.Google Scholar

³⁴ See Federal Trade Commission, Report on the News-print Paper Industry (Washington, D.C., 1917),Google Scholar and Merchant, O. E., “The Government and the Newsprint Paper Manufacturers,” Quarterly Journal of Economics, 32 and 34 (02 1918 and February 1920), 238–56 and 313–28.CrossRefGoogle Scholar

³⁵ For accounts of regulation, see Guthrie, J. A., “Price Regulation in the Paper Industry,” Quarterly Journal of Economics, 60 (02 1946), 194–218,CrossRefGoogle Scholar and Traves, Tom, State and Enterprise, Canadian Manufacturers and the Federal Government 1917–1931 (Toronto, 1979), chapter 3.Google Scholar

³⁶ See Ellis, Print Paper Pendulum, pp. 51, 56–57.Google Scholar

³⁷ See Constant Southworth, “The American-Canadian Newsprint Paper Industry and the Tariff, Journal of Political Economy, 30 (10 1922), pp. 681–82;CrossRefGoogle ScholarSmith, The History of Paper Making in the United States, pp. 316, 347; Stevenson, The Background and Economics of American Paper Making, p. 195; Weeks, A History of Paper Manufacturing, p. 317; Johnston, Richard and Percy, Michael B., “Reciprocity, Imperial Sentiment and Party Politics in the 1911 Election,” Canadian Journal of Political Science (December 1980), p. 715, and Nelles, The Politics of Development, p. 346.Google Scholar

³⁸ See Guthrie, The Newsprint Paper Industry, p. 46, and Bladen, An Introduction to Political Economy, p. 155.Google Scholar

³⁹ See Traves, State and Enterprise, p. 30.Google Scholar

⁴⁰ See, for example, Southworth, “The American-Canadian Newsprint Industry and the Tariff,” p. 694, and Smith, The History of Paper Making in the United States, p. 209.Google Scholar

⁴¹ See Guthrie, The Newsprint Paper Industry, p. 46;Google ScholarAitken, H. G. J., “Defensive Expansion: The State and Economic Growth in Canada,” in Easterbrook, W. T. and Watkins, M. H., eds., Approaches to Canadian Economic History, Carleton Library no. 31 (Toronto, 1967), p. 212,Google Scholar and Nelles, The Politics of Development, p. 104.Google Scholar

⁴² See Guthrie, The Newsprint Paper Industry, chapter 8, and Guthrie, “Price Regulation in the Paper Industry,” pp. 198–200.Google Scholar

⁴³ See Guthrie, The Newsprint Paper Industry, chapter 5.Google Scholar

⁴⁴ See Guthrie, J. A., An Economic Analysis of the Pulp and Paper Industry (Pullman, Washington, 1972), chapter 2,Google Scholar and Guthrie, The Newsprint Paper Industry, chapter 7.Google Scholar

⁴⁵ See Stevenson, The Background and Economics of American Paper Making, chapter 4.Google Scholar

⁴⁶ See Guthrie, The Newsprint Paper Industry, pp. 93–94; Guthrie, “Price Regulation in the Paper Industry,” p. 197; Guthrie, An Economic Analysis of the Pulp and Paper Industry, p. 187; Bladen, An Introduction to Political Economy, pp. 159–61, and Stevenson, The Background and Economics of American Paper Making, chapter 6. Despite the impressive growth in size of plant and the technological progress of the industry after 1910, the present writer is unaware of any study that attempts to establish scale economies on the basis of anything more than casual empiricism. To be successful, such a study would have to define scale in a way to take into account the multi-product nature of the industry.Google Scholar

⁴⁷ See Guthrie, The Newsprint Paper industry, chapters 1 and 6 and pp. 122–24; Guthrie, “Price Regulation and the Paper Industry,” p. 196, and Stevenson, The Background and Economics of American Paper Making, pp. 139–40.Google Scholar

⁴⁸ See Kellogg, Newsprint in North America, pp. 7–9, and Studley, The United States Pulp and Paper Industry, pp. 74–75.Google Scholar

⁴⁹ See Glover and Cornell, The Development of American Industries, pp. 147–48.Google Scholar

⁵⁰ See Guthrie, “Price Regulation and the Paper Industry,” p. 202.Google Scholar

⁵¹ See Guthrie, “Price Regulation and the Paper Industry,” pp. 214–15,Google Scholar and Forsey, E. A., “The Pulp and Paper Industry,” Canadian Journal of Economics and Political Science, 1 (02 1935), p. 506. All contract prices were made subject to a provison that the price shall not be higher than that charged to any customer by any mill with an annual capacity no less than 100,000 tons, a provision highly conducive to price cutting.CrossRefGoogle Scholar

⁵² See Guthrie, The Newsprint Paper Industry, chapter 8. While International managed to hold onto its position as dominant firm, its share of the market was reduced over the sample period from about 25 percent to about 10 percent.Google Scholar

⁵³ See footnote 35.Google Scholar

⁵⁴ See footnote 22. The Newsprint Association of Canada's record of rated capacity is found in Ellis, L. Ethan, Newsprint Producers, Publishers, Political Pressures (New Brunswick, New Jersey, 1960), Table III, pp. 240 and 243.Google Scholar See also Safarian, A. E., The Canadian Economy in the Great Depression (Toronto, 1959), p. 44.Google Scholar

⁵⁵ Price uniformity in the United States was an objective of the contract system. See Coughlin, C. R., The Newsprint Industry in Canada, unpublished M. A. Thesis, McGill University (Montreal, 1939), p. 105. A coefficient of correlation of 0.7 or better between Canadian and U. S. prices was obtained by regresssion.Google Scholar

⁵⁶ An elaboration of this type of model in different contexts is pursued in Fogel, Robert W. and Engerman, Stanley L., eds., The Reinterpretation of American Economic History (New York, 1971), pp. 98–115. The symbols used in equations (1) to (6) and in all equations henceforward are listed and defined in Table 1.Google Scholar

⁵⁷ See Guthrie, The Newsprint Paper Industry, chapter 12.Google Scholar

⁵⁸ Details of the derivation of the supply function can be seen in Fogel and Engerman, The Reinterpretation.Google Scholar

⁵⁹ Some machines installed before 1900 were still in operation in 1930. See Glover and Cornell, The Development of American Industries, p. 145.Google Scholar

⁶⁰ Factor shares can be computed for every year after World War I, and for every three or four years before then, from cost data assembled in the manufacturing censuses of Canada and the United States.Google Scholar

⁶¹ See equation (9).Google Scholar

⁶² See Joskow, Paul L. and McKelvey, Edward F., “The Fogel-Engerman Iron Model: A Clarifying Note,” Journal of Political Economy, 81 (09/10 1973), 1236–40.CrossRefGoogle Scholar See also Wright, Gavin, “Econometric Studies of History,” in Intriligator, M. D., ed., Frontiers of Quantitative Economics (Amsterdam, 1970), pp. 449–53.Google Scholar

⁶³ See Joskow and McKelvey, “The Fogel-Engerman Iron Model,” p. 1240.Google Scholar

⁶⁴ See Canada, Dominion Bureau of Statistics, Canadian Forestry Statistics Reference Paper (Ottawa, 1959), Table 18, p. 43,Google Scholar and United States, Bureau of Labor Statistics, Census of Manufacturing (Washington, D.C., 1919, 1920, and 1929), pp. 433, 553, and 541 respectively.Google Scholar

⁶⁵ Canadian and U. S. production data are obtained from the Canadian Pulp and Paper Association, Reference Tables, Table 45, p. 19 and Table 51, p. 20.Google Scholar Relative newsprint prices were obtained by deflating newsprint prices by general retail price movements and indexing to a Canadian dollar base of 1926=100. The underlying series are New York contract prices from Kellogg, Newsprint Paper in North America, pp. 49–50Google Scholar, and Canadian retail prices from Dominion Bureau of Statistics, Prices and Price Indexes 1913–25, and Prices and Price Indexes 1913–27 (Ottawa, 1925 and 1927), pp. 88–89 and 66–67.Google ScholarThe deflators used are Series E-135 from U.S. Bureau of the Census, Historical Statistics of the United States, Vol. 1 (Washington, D.C., 1976),Google Scholar and a combination of Canadian Department of Labour index revised by Bertram, Gordon and Percy, Michael in their “Real Wage Trends in Canada, 1900–1926: Some Provisional Estimates,” Canadian Journal of Economics (02 1979), p. 306,Google Scholar and Series J-128 from Urquhart and Buckley, Historical Statistics of Canada. The exchange rate between Canadian and U. S. dollars is recorded in Series H-627 from Urquhart and Buckley, Historical Statistics of Canada. Newspaper circulation for the United States is from Lee, A. McC., The Daily Newspaper in America (New York, 1937), pp. 726–27Google Scholar and from the Canadian Pulp and Paper Association, Reference Tables, p. 22.Google Scholar Newspaper circulation for Canada is from Dominion Bureau of Statistics, Canada Year Book (Ottawa, 1935), p. 771,Google Scholar and McKim, A., Canadian Newspaper Directory (Montreal, 1909 and 1919), pp. 258–60 and 307–09.Google Scholar Canadian population is Series A-1 from Urquhart and Buckley, Historical Statistics of Canada, and U. S. population is Series A-22 from Historical Statistics of the United States, Vol. 1.Google Scholar

⁶⁶ See Guthrie, The Newsprint Paper Industry, chapter 13.Google Scholar

⁶⁷ All the data for wages, raw material prices, and capital stock are expressed in dollar values or index form in the sources used. The series in Table 4 derived from these data are deflated to a Canadian dollar base of 1926=100 using the same deflators employed in constructing the series in Table 2. See footnote 65. The underlying series for Canadian wages is from Dominion Bureau of Statistics, The Pulp and Paper Industry (Ottawa, annual),Google Scholar and for U. S. wages, see Stevenson, The Background and Economics of American Paper-making, pp. 62–63. For Canadian pulpwood prices, see Dominion Bureau of Statistics, The Pulp and Paper Industry, and Guthrie, The Newsprint Paper Industry, chapter 9. For U. S. pulpwood prices, see Kellogg, Newsprint Paper in North America, p. 64. For a Canadian hydroelectricity price index, see Series J-132 in Urquhart and Buckley, Historical Statistics of Canada, and for the United States, see Series S-116 in Historical Statistics of the United States. The capital series are, in principle, stock values from the U. S. manufacturing census and from Dominion Bureau of Statistics The Pulp and Paper Industry. For productivity change, Canada and the United States are assumed to have followed the same path in the absence of discriminating studies.Google Scholar The benchmark figures provided by Kendrick, John, Productivity Trends in the United States (New York, 1961), p. 471,Google Scholar were interpolated using times series of patents taken from Schmookler, Jacob, Invention and Economic Growth (Cambridge, Massachusetts, 1966), p. 225.CrossRefGoogle Scholar

⁶⁸ See Learner, Edward and Stern, Robert M., Quantitative International Economics (Boston, 1970), pp. 8–17.Google Scholar

⁶⁹ It might be argued that a domestic (United States) supply variable ought to be included in equation (30) on the grounds that it properly belongs in (19) under the current interpretation. In defense of the estimators sought in (30), it should be noted that they are designed mostly to deal with the problem of simultaneity raised by Orcutt, G. H., “Measurement of Price Elasticities in International Trade,” Review of Economics and Statistics, 52 (05 1950), 117–32.CrossRefGoogle Scholar In this case, recognition is also given to the excess demand property of import demand by treating simultaneity within a closed North American economy where Canadian output and exports expanded for precisely the same reasons that U. S. output did not, namely, the substitution of a low- for a high- cost producer of newsprint. Deriving export supply and import demand curves using domestic elasticities presents a problem with the current sample since the consumption and production shares to be applied change radically over the years of the sample. Fortunately, a reasonably stable outcome can be obtained by this method for the Canadian export supply elasticity in the neighborhood of 3.

⁷⁰ These actual rates of change are the result of regressing the logarithms of the variables on time.Google Scholar

⁷¹ If the foreign demand elasticity is too low, domestic protection protects the “wrong” industry. See Metzler, Lloyd A., “Tariffs, the Terms of Trade and the Distribution of National Income,” Journal of Political Economy, 57 (02 1949), 1–29.CrossRefGoogle Scholar

⁷² See Kellogg, Pulpwood and Woodpulp in North America, p. 230.Google Scholar

⁷³ See Kellogg, Newsprint Paper in North America, p. 64.Google Scholar

⁷⁴ See Guthrie, The Newsprint Paper Industry, p. 149, and Dominion Bureau of Statistics, The Pulp and Paper Industry, (1917), Table U. The reported average value per cord is inflated by a factor of 1. 125.Google Scholar

⁷⁵ See Guthrie, The Newsprint Paper Industry, chapter 12.Google Scholar