Looking East and West for Pulpwood, Pulp and Paper: Great Britain as an Anomaly in Europe, 1860–1960

1 Introduction

The years 1860 to 1960 witnessed the beginning and rapid expansion of the modern pulp and paper industry. In rather short order, it was fundamentally transformed from an artisanal into an industrial enterprise, one that relied on converting spruce and fir trees into paper on a massive scale. These dramatic changes made it essential for producers to acquire control over or access to enormous volumes of cost-effective conifer fibre, which was derived from trees that grew in the northern hemisphere’s temperate and boreal forests. Predictably, northern European nations that had relatively abundant supplies of the right species of trees for making paper became home to substantial pulp and paper industries. This was particularly true of newsprint, the production of which relied most heavily on spruce and fir fibre.

Great Britain represented Europe’s glaring exception to this developmental pattern, and this article explains why this was the case. For nearly one hundred years (c. 1860 to 1960), Britain was Europe’s largest newsprint producer even though it suffered from a desperate scarcity of conifers. British newsprint makers collectively achieved their preeminent standing in the papermaking industry by pursuing a unique strategy within the European economic sphere of the timber trade (Holzwirtschaftraum). Like other western European countries, Great Britain looked east to Scandinavia to address its lack of domestic wood supplies. Just as important, however, was Britain’s ability to exploit its imperial connection to a prodigious supply of conifer trees and pulps in the North American dominions of Canada and Newfoundland.^[1] Britain’s competitive advantage was political and not economic because tapping this distant source of raw materials was costly. Only due to the existence of a special set of circumstances could British newsprint makers benefit from their country’s close relationship with Canada. Beginning in the mid-19^th century, British newspaper publishers enjoyed enormous success in growing their circulation; Great Britain represented the largest newsprint market in Europe for most of the period under examination. In an effort to satisfy the exploding demand for paper, the publishers vertically integrated their industry by entering and then dominating the British newsprint industry.

However, British producers could not outrun the resource deficit forever. Changing market conditions after the Second World War ended the predominant standing of British newsprint makers in the world. Nevertheless, this study shows that, under the correct circumstances, the imperial project for securing raw materials could be economically successful even though costs were relatively high.

Cecil Rhodes, the paragon of the late 19^th century British imperialist, once argued that the British Empire was a “bread and butter question”.^[2] Throughout the imperial era, successive British governments encouraged the growth of British overseas trade.^[3] While some contemporary critics of the British Empire challenged this notion, and they had good reason for doing so,^[4] economic historians have demonstrated that the vast colonial empire that Britain had built since the mid-19^th century and the robust trade with the colonies that developed as a result, was a crucial source of national income that was manifested in Britain’s improved industrial performance.^[5] This was definitely true in terms of colonial raw materials, access to which proved fundamental to the British economy.^[6]Cotton is arguably the best known example, whereby access to enormous volumes of cheap raw material created the foundation upon which Britain built the world’s greatest textile industry.^[7] Scholars have also examined the benefits Britain enjoyed from its colonial exploitation of annual agricultural crops, such as cereals, sugar, tea, coffee, and tobacco.^[8]

There is a gap in the literature regarding how imperialism benefited the British pulp and paper industry, which historians have recently begun filling.^[9]This article aims to add to this historiography. Because Britain suffered from a deficiency in terms of raw materials to supply this industry, like other European nations, it was forced to look north and east to feed its paper mills. More than other European industrialists, British newsprint makers also looked west across the Atlantic for fibre to support its industry. They did so because they were able to capitalize on the colonial connection to Canada to obtain a reliable source of pulpwood and pulp.

There are several compelling reasons for examining the pulp and paper industry during the chosen timeframe. This period witnessed a revolution in the production process, one that made access to spruce and fir fibres and the pulp derived mechanically and chemically from these fibres, essential for the industry. Beginning in the 1960s the industry underwent another revolution, one that saw production gravitate to the southern hemisphere in pursuit of relatively rapid-growing deciduous species such as eucalyptus.^[10] This marks a natural end point to our examination. This article focuses especially on the newsprint sector in an effort to highlight just how Britain was truly a glaring anomaly in the pulp and paper sector. Of all the products that the pulp and paper industry produced during this period, newsprint required by far the greatest proportion of raw fibre or pulp. Newsprint is composed primarily of raw wood fibre, thereby necessitating the use of the highest quality conifers. Examining this sector’s development in Britain thus underscores even more how exceptional the country’s pulp and paper industry was in overcoming its lack of domestic resources. This study first assesses the broader developments across the industry in Britain. It then takes a deeper dive into the strategies that the leading firms pursued in their quest to supply their operations with raw materials. This section demonstrates the remarkably similar approaches – a two-pronged plan that looked both east and west – that the industrialists pursued.

2 The Rise and Expansion of the British Pulp and Paper Industry

Initially, Great Britain was ideally positioned to develop its own pulp and paper industry, specifically newsprint, without any offshore help. Prior to the mid- to late 1800s, paper was made largely from rags (i.e. old cotton and linen fabrics), and Britain was already well established as the world’s leading textile producer by the early nineteenth century. Having been on the vanguard of the Industrial Revolution, it also had the requisite capital and skilled labour force to support the growth of a domestic, mechanized papermaking industry. The latter has its roots in England in the early 1800s. Between 1803 and 1807, the Fourdrinier brothers (Henry and Sealy, wholesalers of stationery) worked with British engineer Bryan Donkin to develop a machine that used a series of rollers and wire screens that allowed for the continuous production of paper.^[11] Although initially very small, over the next few decades, this machine was upgraded (especially the width of the rollers and the speed at which they operated). Concurrently, technical developments connected to the invention of the steam-powered printing press allowed for the mass production of newspapers, journals, magazines, and books; the price of these reading materials thus came within reach of even the poorest members of society.^[12] The result was that the British paper making industry grew rapidly after its initial establishment in the early part of the nineteenth century. Although the available data for this period is sketchy, the available figures indicate that the output of British paper makers was 58,988 tons in 1849, whereas ten years later it had nearly doubled to 97,250.^[13] This expansion was driven in large part by Britain’s significant increase in population (it rose from roughly 9 to 29 million between 1800 and 1860) and the literacy rate (it rose from roughly 50 per cent to over 95 per cent between 1800 and 1900).^[14]

By the 1860s, however, the domestic demand for newsprint outstripped Britain’s capacity to produce it. A growing number of papermakers, who were generally operating larger-scale enterprises, could not obtain a cost-effective, sufficient volume of rags to supply their industry. At this point, Britain’s geography became a major factor in the development of the country’s pulp and paper industry in general and its newsprint sector in particular.

Many papermakers around the globe were facing this problem at this time, and they began searching for a much more plentiful supply of raw material. Fibrous deciduous shrubs and trees (e.g. paper mulberry) had been used to make paper for thousands of years in the eastern world, and researchers in the western world soon turned their attention to wood fibre as another potential raw material. Trees were still relatively plentiful, at least in much of the western world, and they were thus seen as a potentially cheap and readily available source of stock for producing paper.^[15] It is helpful at this point to understand the technological revolution that the pulp and paper industry underwent during the mid- to late 1800s, the results of which remain with us today. Groundwood was the most common pulp manufactured during this period. It is produced by using great amounts of energy that is derived by friction to grind logs into their cellulose fibrous components. This pulp is relatively weak because it retains the waste elements of the wood (such as lignin) that are unfit for making paper. But this mix is relatively cheap, making it ideal for use in rough, high-consumption papers such as newsprint. Because there are no chemicals added to groundwood pulp to brighten or strengthen it, the colour and quality of the wood fibre used are critical. The whitest and strongest fibre comes from several species of conifers, especially spruce and fir trees, which are found predominantly in the northern boreal forest.

A variety of other pulps are manufactured using chemicals and heat instead of friction to break down logs into pastes. They are more expensive to produce, but are superior in quality (i.e., stronger and finer than groundwood) because the non-fibrous waste material is eliminated from the mixture through a cooking process. However, this produces less pulp from the raw logs. Sulphite pulp was the most popular chemical pulp manufactured during this period, and as with groundwood pulp, the tree best suited to making it was spruce. In contrast, sulphate pulp can be made from resinous conifers such as jack pine, which gives the product its distinct brown colour. The kraft paper (Swedish for strong) made from sulphate is used in products such as cardboard packaging, where strength and not colour is the most important consideration.^[16]

The pulp and paper mills that were based on this technological revolution could be configured in several ways. Some mills specialized in processing raw wood into one type of pulp, others, so-called conversion mills, started with pulp as their raw material and transformed it into paper, while still others began with raw wood and processed it first into pulp and then into paper, an arrangement that required several different manufacturing lines within one mill. Newsprint was originally made from four parts groundwood pulp and one part sulphite pulp. Producing it thus required three separate but integrated lines of production: one large one for making groundwood pulp, a much smaller one for making sulphite pulp, and one to mix the two together to make the final product.

As the global pulp and paper industry began converting to wood fibre beginning in the 1860s, British paper makers – particularly newsprint producers – needed to secure large volumes of either pulpwood (i.e. raw spruce or fir logs) or groundwood pulp.^[17] This is where geography presented them with a major problem, however. The group of islands off the coast of Europe that make up Great Britain represent a very limited land base, but their climate is highly conducive to tree growth. In fact, it originally supported a productive forest of mainly deciduous hardwoods, especially oaks. Nevertheless, the drive to clear land for farming and provide fuelwood for heating and industry, as well as significant population growth, led to widespread deforestation as early as the late Middle Ages. Michael Williams notes that the British Isles suffered from a “timber crisis,” and “for the near-hundred years of the reigns of Elizabeth I and James I (1558–1649) dozens of government commissions investigated the shortage, which resulted in legislation prohibiting or restricting cutting.”^[18] Even if Britain had retained significant forests, however, its woodlands would have been dominated by deciduous trees and not conifers, the latter being the tree of choice for the pulp and paper industry.

Faced with a dearth of domestic coniferous trees, British paper makers tried to develop alternatives to wood as the raw material for their industry. After experimenting with a number of plants, including straw fibre, the substitute on which they focused the most capital and time was esparto grass, which they imported from southern Spain and North Africa. Esparto fibre had more advantages over the numerous other exotic plants with which the British paper industry experimented. It has a high ink absorbency, its texture is relatively fine, isolating its fibres from their natural encrusting matter is relatively energy efficient, and the yield of pulp is relatively high. The main technical disadvantage of esparto was that it lacked the necessary tearing resistance and foldability of the sheet owing to its short fibre (this was also the case with straw). This compelled British paper makers to blend esparto pulp with coniferous sulphite or sulphate wood pulp, so it was not possible to entirely substitute esparto pulp for wood pulp.^[19] Despite its deficiencies, esparto made up some 12 percent of Britain’s pulp imports during the first half of the 20^th century.

British paper makers also experimented with using other plant fibres as substitutes for wood, but the impediments proved too great. One of the earliest British attempts to develop a plant-fibre-based pulp and paper industry was made in India in the 1830s. The inaugural project involved the creation of the Serampore Paper Mill in Bengal, India (today part of West Bengal, India, and Bangladesh), where the first Fourdrinier paper machine was installed in 1832.^[20] In India, the problem of knowing which raw material would prove most suitable for papermaking arose out of a lack of knowledge regarding the properties of the local tropical plants. The breakthrough discovery involved pulping indigenous Indian grasses, such as sabai, that had fibre characteristics similar to esparto. The results were promising, as sabai pulp produced high-quality printing and writing papers. Despite early technological success and the relative abundance of raw materials, however, the high extraction and transport costs of sabai eroded profitability. The rapid expansion of the wood pulp industry in Scandinavia, continental Europe, and North America after 1860 however, hindered the progress of the paper industry in Bengal. After the First World War, there was some interest in exporting bamboo pulp from India to Britain. This reflected the successful development work at the Forest Research Institute in Dehra Dun, India. However, what hindered the commercial exploitation of bamboo fibre was that it could not compete with esparto on the British market. The lower cost and higher quality of wood pulp from Scandinavia also made bamboo less attractive.

There were other major deterrents working against British interests establishing a pulp and paper industry in the tropical regions of the world. Technical hazards affected operations that might have shown promise during pulping trials and service tests but would later prove not to be commercially viable at greater volumes. Lack of familiarity with the language and customs of the local workforce were also obstacles. Superintendence, which comprised technicians and supervisors, required bonus payments for working in tropical countries. There was also insufficient knowledge of the properties of the raw materials that could potentially be utilised, of the processing methods best adapted to each species, and of the methods of managing the resource. Fear of political upheaval leading to unreasonable costs, or even expropriation, mostly accounted for the reluctance to develop subtropical and tropical resources after the Second World War. Tariff advantages partially offset these deterrents, leading to limited successes.^[21] The fact remained, however, that there was no better raw material than wood fibre for mass-producing paper, especially newsprint.

3 Looking Offshore for Wood Fibre

The scarcity of conifer trees in Great Britain and lack of viable alternative raw materials forced British paper makers to look offshore for wood fibre in both its raw and processed forms, a venture in which they proved highly successful. In fact, British producers were so adept at overcoming their natural resource deficit that they were able to build their business into the world’s largest mechanised paper industry by the end of the nineteenth century, and they continued to be global leaders until well after the Second World War.

Considering the proximity of northern Europe to Britain, it was natural that its pulp and papermakers – just as the country’s lumber manufacturers had done – turned to the Baltic and Scandinavia to meet their needs for both raw pulpwood logs and conifer-based pulps.^[22] Starting in the late 1800s, they imported rapidly rising volumes of logs and pulps. For example, they sourced pulpwood from Norway, but it was much more expensive to import raw logs than pulps. By the eve of the Great Depression, Finland, Sweden and Norway were delivering 1,300,000 tons of wood pulp to Britain,^[23] whereas British mills were churning out only 209,000 tons of groundwood pulp.^[24] Backed by natural advantages – abundant pulpwood resources, cheap hydro-electric power, myriad networks of rivers, lakes and ports, and geographical proximity, Scandinavian producers were able to use price policy to build their dominance of the British market. A prominent example of this development was the cartelization of the Finnish forest industry. Soon after Finland gained independence in 1917, Finnish producers established the Central Association of Finnish Forest Industries to co-ordinate their sales policies.^[25] The collapse of the Russian Empire and the Allied blockade of trade in the Baltic during the Great War had blocked Finnish producers’ traditional export markets in Russia and Germany, leading to efforts to open up markets in Britain for their wood products. Initially, devaluation of the Finnish Mark in 1919 gave Finnish producers an advantage over their Norwegian and Swedish rivals, allowing Finnish pulp producers to dominate British markets.^[26]

Relying on Finland, Sweden and Norway for pulpwood and pulp came with some significant risks for British paper makers, however. One problem for British newsprint manufacturers during the interwar era was the fact that the Scandinavian countries were becoming important papermakers and exporters of paper to Great Britain. Already by 1930, the Scandinavian trio produced 616,000 tons of newsprint, which was only 59,000 tons less than paper mills in Britain manufactured in the same year (675,000 tons).^[27] Although Britain had a long history of buying logs and timber products from Norway, for example, British industrialists remained outsiders, operating in a region that had previously implemented laws to restrict foreign ownership and involvement in the domestic economy. On at least one occasion, a Scandinavian government (the Finnish) rejected a mill project that a British pulp and paper maker had proposed.^[28] Unease over this issue increased in the 1910s when officials in Finland, Norway and Sweden expressed serious concerns about the rate at which they were harvesting their domestic timber supplies. Under these circumstances, their governments were under pressure to prohibit the export of raw logs in an effort to foster the domestic pulp and paper industry.^[29] Furthermore, when the British went to buy pulps from Scandinavian producers, they knew that they were dealing with firms that were party to price-fixing and market-sharing agreements. Thus, for British pulp and paper makers there was good reason to look for alternative sources of raw materials.^[30] For British manufacturers, Canada proved an enticing option. Britain’s tight political, legal and business connections to its largest dominion made Canada an attractive source for British newsprint producers. Spruce and fir trees grew in abundance in Canada; the boreal forest runs in a thick belt across the country, and spruce was its dominant species. In addition, many large waterways crisscross Canada’s boreal forest and are ideal for generating hydro-electricity to power pulp and paper mills.

The British commercial connection to Canada had deep and strong roots, and it predates official British control over Canada. In 1670, King Charles II issued a royal charter to what would become the Hudson’s Bay Company (HBC), Canada’s oldest business enterprise. The charter gave the HBC monopoly rights on the fur trade within a vast tract of what was referred to at the time as ‘wilderness’ in what is now northern Canada. Within this area of 1.5 million square miles, HBC was the de facto government, even though the French claimed the southern, settled part of Canada. In 1763, the British officially acquired British North America (BNA) under the Treaty of Paris, and HBC continued to control its enormous domain in the north. Over the next few decades, Canada served largely as Britain’s fur supplier.^[31]

The situation changed significantly in the early 1800s, when Britain’s economic ties to its North American colonies deepened. When the Napoleonic blockade prevented Britain from accessing Baltic timber, Britain looked to BNA to supply it with the wood that it needed for its Royal Navy and to meet the domestic demand for building materials.^[32] To jump start this trade, the British implemented a tariff regime that levied prohibitive duties on Baltic timber, making it economically viable to ship large volumes of wood all the way from BNA to British ports. This artificial stimulus caused the volume of timber being exported to Great Britain to shoot up abruptly. BNA’s wood industry migrated from its initial beachhead in the easternmost forests of New Brunswick and Nova Scotia deeper into BNA’s interior. Engaging in this business thus required ever-greater amounts of capital, and its control became concentrated in the hands of a few wealthier merchants, many of whom were based in Scotland.^[33]Soon, the trade had penetrated up the St. Lawrence and Ottawa Rivers, and into watersheds that drained to the Great Lakes.^[34] BNA became what Arthur Lower aptly dubbed “Great Britain’s woodyard”.^[35]

During the nineteenth century, the British industrialists who drove the timber trade in BNA moved seamlessly between Great Britain and the colonies, and some even became ensconced in what was increasingly referred to as Canada. They were able to do so because BNA quickly became populated with thousands of immigrants from the British Isles; the ships that carried timber from BNA to Britain often returned full of immigrants to the New World. These new residents contributed to creating a colony that closely resembled Great Britain (at least outside Quebec). Most of its residents shared the same British citizenship, currency, Protestant religion, English language, education, culture and customs.

The story of William Price illustrates just how easily British business interests could operate in BNA.^[36] Born in England, Price travelled to Quebec City in 1810 to represent the Christopher Ides Company, a British timber-importing firm. Price was responsible for obtaining sufficient supplies of square timber and planks in the colonies, and by the next decade he had established his own firm while continuing to work for Ides. A good part of his operations involved selling timber to the British Admiralty, and he became increasingly involved in building and operating sawmills in the Saguenay River valley in Quebec and selling lumber in Great Britain. By 1850, Price had built up a major timber fiefdom in the region under the name of William Price and Sons; doing so had entailed attracting over 10,000 Euro-Canadians to settle in this former wilderness. By the end of the century, Price’s sons had built pulp and paper mills, which were major suppliers to British publishers.^[37]

The Atlantic timber trade changed in the mid-1800s. The British decision to convert to free trade from a mercantilist economy led to abolishing the tariffs on Baltic timber; they disappeared entirely by 1866.^[38] The volume of timber being shipped from BNA to Britain thus peaked in the mid-1860s and declined thereafter. Despite this radical shift in trade policy, wood imported from BNA could still compete with wood from the Baltics. However, trade volumes shifted. Britain now imported more from Scandinavia,^[39] while American demand for wood from BNA had begun diverting an enormous volume of timber products to the United States.^[40]

When a different generation of British industrialists in the forest sector eyed Canada’s forests again in the early 1900s, BNA had become a very different place. In 1867, BNA had become the country of Canada, but it remained an enthusiastic British dominion and fostered the tightest possible relationship with its mother country. For example, high-ranking Canadians both actively sought and were granted peerages by the British government well into the 1930s. Even after Canada’s economy had become ensconced in the American orbit by the 1920s and Canada had shed its status as a dominion in 1931, it still had close trade relations with Britain. For example, the Imperial Preference system, implemented after the Ottawa Conference in 1932, guaranteed countries within the new British Commonwealth that they would continue to enjoy preferential tariffs and other trade benefits, thus reinforcing the pre-existing trade relations between Canada and Great Britain.^[41] Even in Quebec, a province with a large majority of Catholic Francophones, the leading business interests were overwhelmingly Protestant Anglophones. Prior to 1960, Quebec’s provincial government demonstrated a habitual inclination to offer American and British capital generous incentives to invest in developing the province’s resources.^[42] Pro-Britishness in Canada was so strong, that when Canadian Prime Minister Lester B. Pearson replaced Canada’s original flag, which had included a Union Jack, with the maple leaf design in 1965, he faced widespread protests from the country’s imperialists.^[43]

The ties between Britain and Newfoundland, which was part of BNA but did not become part of Canada until 1949, were even closer. British fishing ships had begun frequenting Newfoundland’s waters by the 1500s, and immigrants from the British Isles began settling The Rock over the next few centuries. Newfoundland became an official colony of Britain in the early 1800s, and its population grew both endogenously and through immigration almost exclusively from the British Isles. As a result, the colony remained steadfastly connected to Britain, and it likely would have chosen to retain its colonial status indefinitely had it not been for the British government’s move to cut ties with its overseas possessions after the Second World War. As a result, Newfoundland joined Canada in 1949.^[44]

Canada remained decidedly British in outlook throughout the period under consideration in this article, and the shared social, political and economic environment made this a highly desirable location in which British pulp and paper makers would choose to do business. Legislation aimed at restricting foreign investment in Canada, for instance, did not apply to British industrialists because they were not considered foreign. This practice was not simply a function of a nostalgic feeling of kinship. British businessmen had the same legal rights as Canadian colleagues, because until 1947, all Canadians had British citizenship.^[45]Laws did exist in Canada that sought to restrict the export of raw pulpwood and, occasionally, pulps. Nevertheless, British pulp and paper makers, just like their American colleagues, were well versed in the ruses needed to circumvent these edicts.^[46] Canada and especially Newfoundland were both aware that they needed outside capital to finance the exploitation of their bountiful natural resources. Although they could look to their closest neighbour, the United States, for investors, and they certainly did so in a major way, a much more desirable option was to attract capital from the Great Britain, with which they shared so many traits.^[47]

Several compelling incentives drew British pulp and paper makers to Canada, and these points of attraction were strictly practical. The first was the relative high volume of spruce and fir forest that was available. In contrast to the Nordic countries, such as Finland and Sweden, where annual harvests were exceeding growth rates by the interwar years, it seemed as though Canada’s pulpwood stores had barely been tapped.^[48] Canada’s share of boreal forest, which was many times larger than that found in Scandinavia, contained what seemed like an inexhaustible supply of pulpwood. Moreover, although pulp and paper makers in both Scandinavia and Canada boasted about the quality of their products, British buyers tended to favour Canadian products during the first decades of the twentieth century, apparently believing that Canadian mills made better paper and Canadian conifer fibre was superior to that which came from Scandinavia.^[49]

Britain’s special connection to Canada also meant that its investors were typically warmly welcomed by Canadians. A few other European countries were able to access Canadian fibre by establishing mills (e.g. the Belgo-Canadian Pulp and Paper Company, owned by Belgian interests) and buying Canadian pulpwood, but Canadians hardly embraced the leading non-British European pulp and paper players. Producers from Scandinavia were portrayed and seen as competitors, whereas the British were considered consumers of Canadian pulpwood, pulps, and papers. Moreover, when Russians tried selling pulpwood in Canada and the United States, and the Scandinavians marketed their newsprint in North America and Britain in the early 1930s, the Canadian producers launched a concerted campaign against the foreigners, alleging that the only way they could sell their wares in North America was by having employed “sweat labour conditions” in their operations.^[50]

Two factors underscore the advantage that the British newsprint makers enjoyed in accessing raw materials in Canada, however. The first is that Canadian supply helped to satisfy the enormous British demand; locating a massive supply of raw materials was an existential issue for British newsprint makers by the late 19^th century. During the mid- to late 1800s, Britain became a country of newspaper readers to such an extent that its appetite for newsprint grew to be second only to the United States. The data for newsprint consumption per country is incomplete for the 1860–1960 period – usually, it lists consumption of all types of paper, however newsprint made up by far the largest type of paper consumed during this time. Among the European countries with the largest populations, Great Britain became the leading consumer of paper/newsprint (see Table. 2). This reflects newspaper publishers’ successful campaigns to grow their circulations. To maximize control over their media business, newspaper proprietors vertically integrated their enterprises. They bought or constructed their own pulp or newsprint mills and tried to squeeze out competitors. By 1930, newspaper publishers controlled roughly three-quarters of Britain’s newsprint capacity (see Table 3). As William Reader aptly puts it in reference to the situation during the interwar years, “indeed, it is almost true to say that no newsprint mill of any consequence was independent of newspaper interests.”^[51] Satisfying this practically insatiable demand compelled the British newsprint industry to grow exponentially. By the late 1920s, it was the third largest newsprint maker in the world after Canada and the United States, and it was soon out-producing the Americans. Over the next few decades (except during the Second World War), Great Britain remained Europe’s leading producer of newsprint (see Table 4).^[52]Establishing itself in this preeminent position required the British newsprint industry to have a sufficiently large supply of raw material; it made sense to source some raw materials from Canada as well.

Apart from access to abundant resources, the second advantage that the British newsprint makers enjoyed in Canada was primarily economic. While obtaining raw materials from Canada and Newfoundland instead of Scandinavia was more expensive, due to high shipping costs, it was still well worth it. British newsprint makers sought to increase their productive capacity, and they needed a large, secure and dependable supply of high quality fibres. They could afford to pay more for fibre, if it meant that their industry would be built upon a firm foundation, thus avoiding one-sided dependencies. Moreover, the industry was overwhelmingly vertically integrated, so it had the ability to absorb higher costs when it came to buying raw materials.

The procurement behaviour of the British newsprint industry was also influenced by the North American newsprint market. Since the turn of the twentieth century, the United States represented the world’s largest newsprint market. However, American newspaper publishers’ relations with paper manufacturers had been defined by what seemed like never-ending conflicts. During the first half of the twentieth century, the newspaper owners continually alleged that the paper manufacturers in the US were reaping huge profits by charging inflated prices for their paper, and occasionally denying them a sufficient supply of paper. The newsprint makers were able to exert such control over the market, the newspaper publishers asserted, because the mainly Canadian producers had been operating as an illegal trust. Once the United States had become dependent on Canada for newsprint in the 1920s, the American newspaper publishers charged that the newsprint industry hid its monopolistic behaviour behind the international border (i.e. the Canadian mills were beyond the reach of the American Sherman Anti-Trust Act). The newspaper lobby succeeded in pushing the American government to launch a series of Congressional investigations into the newsprint industry; in fact, the US government initiated more anti-trust investigations into the North American newsprint industry than any other business. These inquiries typically only deepened the enmity between the two sides.^[53] British newspaper publishers no doubt saw this constant economic battle as an example of how not to run their businesses. They realized the danger of buying their newsprint on the open market, which was subject to the whims of foreign producers who controlled access to their raw materials. British newspaper publishers often commented on their willingness to pay more for their raw materials, if it meant buying certainty in terms of supply.^[54] Understanding this context explains why the British newspaper publishers looked west to Canada and Newfoundland for both pulpwood and pulps.

4 British Newsprint Companies and Their Strategies for Obtaining Raw Fibre, Pulps and Paper

Edward Lloyd Limited’s (Lloyd) involvement in mill projects around 1900 was one of the earliest examples of a newspaper publisher turned paper manufacturer. The London publishing firm’s leading newspaper, The Daily Chronicle, enjoyed exponential growth in circulation during the late 1800s, and with this came a need to secure a large volume of fairly priced and high quality newsprint.^[55] Realizing that newsprint production depended on converting conifers into paper, the company bought hydro rights and several pulp mills in southern Norway, which was then part of Sweden, in the early 1890s and expanded operations there later in the decade. However, the growing circulation of its newspapers drove Lloyd to seek additional supplies of raw materials.^[56] In the late 1890s, the company looked to Canada, and bought a small groundwood mill in Sturgeon Falls, Ontario, with the intention of expanding it into a large, fully integrated newsprint mill. Litigation surrounding the terms of acquisition, however, sent the project into abeyance for a few years. The dust settled by 1903, and the newsprint mill was built and began supplying Lloyd – and other newspapers in Australia and the United States – with paper. Problems continued to beset the enterprise, however, and the mill went into receivership a few years later.^[57]Nevertheless, Lloyd continued to produce large volumes of newsprint by feeding its mills in England with pulp imported from its operations in Norway. By the late 1920s, the firm’s newspapers were owned by a publicly traded company (United Newspapers), and the paper-selling agent W.V. Bowater & Sons (Bowater) acquired Lloyds’ newsprint mills roughly one decade later.^[58]

The brothers Alfred and Harold Harmsworth, who had launched – among other publications – The Daily Mail in 1896, which quickly become Britain’s leading newspaper, followed a very similar approach to Lloyd in constructing a newsprint-producing empire. Initially, the Harmsworths had contracted to purchase all their paper through Bowater, but by the early years of the twentieth century, they had decided to integrate their business vertically.^[59] In doing so, they looked to North America. The Harmsworths knew about Newfoundland’s bountiful resources, but they had initially looked to the United States as a location for building a new pulp and paper mill. They opted for Newfoundland instead, however, out of fear of future tariffs; they entertained no such concerns about operating in Newfoundland. Moreover, the Newfoundland colonial government was so anxious to facilitate this major industrial development that it paved the Harmsworths’ way. It granted them access to practically an unlimited tract of pulpwood forest (they would eventually acquire over 2,300 square miles of land) and, astoundingly, they did not need to pay dues for cutting their timber. By 1909, the Harmsworths had opened a major pulp and paper mill at Grand Falls in Newfoundland, and it was connected to a deep-water port by a recently completed railway. Their mill, which they called the Anglo-Newfoundland Development Company (ANDC), had an annual capacity of 30,000 tons of newsprint and 56,000 tons of sulphite and groundwood pulps. As James Hiller states, “it was, at the time, the biggest and most modern pulp and paper complex in the world.”^[60] Soon ANDC absorbed another nearby pulp and paper development, thereby guaranteeing the Harmsworths a supply of newsprint and pulp; they could convert the latter into newsprint in Great Britain. In 1910, they bought the Imperial Paper Mills at Gravesend, England. A decade later, they bought another paper plant in Greenhithe, England, thereby expanding their domestic newsprint-making capacity. At both mills, they converted pulp imported from their plants in Newfoundland into newsprint. Hiller describes how the Harmsworths’ acquisitions “made them the third largest pulp and paper manufacturing concern in the United Kingdom.”^[61]

But the Harmsworths were not finished there. In the early 1920s, Harold Harmsworth, now Lord Rothermere, teamed up with Bowater to build a new newsprint mill in Northfleet, England, in order to guarantee the Daily Mirror Newspapers Limited a dependable supply of high quality groundwood pulp and newsprint through two Canadian projects. The first involved purchasing the Clarke Pulp and Paper Company on the north shore of the Gulf of St. Lawrence in Quebec. The second entailed building a large newsprint mill at another deep-water port on the St. Lawrence River, at Quebec City, and creating the Anglo-Canadian Pulp and Paper Mills Company to run it. By the end of the decade, Rothermere had also acquired a significant interest in Reed Paper and was able to produce roughly 265,000 tons of newsprint per year, a figure that represented over a quarter of England’s total capacity.^[62]

Another British newspaper baron soon trod down this same path, and he personified the tight connections that linked so many British and Canadian business interests in general and pulp and paper industrialists in particular. W.M. “Max” Aitken (later Lord Beaverbrook) was born outside present-day Toronto in 1879 and it was said that he had made his first million before the age of 30 and quickly outgrew the opportunities available to him in Canada. Just before departing for Britain, however, his financial interests underwrote the floating of a relatively large issue of new securities to support the expansion plans of a leading Canadian newsprint maker, Price Brothers (previously William Price and Sons). In England, Aitken befriended Andrew Bonar Law and won a seat in the British Parliament. He furthered his political ambitions and business agenda during the interwar years by exploiting his position as one of England’s leading newspaper proprietors. His Daily Express had a daily circulation of over 2,300,000 copies and was reputedly the most popular newspaper in the world by 1939. To supply his rapidly increasing demand for paper, Aitken entered into long-term contracts with several leading Canadian producers, including Price. In addition, he sought to control his own supply of newsprint through several ventures. He undertook one with Rothermere and Bowater: they built a 60,000-ton newsprint mill on the Mersey River near Manchester in northern England in 1929. The other venture he initially pursued with a partner, the American behemoth International Paper Company. Together, they considered buying the newsprint mill in Follum, Norway, an endeavour that they ultimately abandoned.^[63]

William Berry (later Lord Camrose) also built his newspaper publishing empire into a vertically integrated business during the 1920s by engaging in newsprint production. Having started with a handful of publications, by the mid-1920s the Berry Group acquired Lloyd’s pulp and paper mills and a host of additional newspapers from Lord Rothermere. Thereafter, the Berry Group became the dominant player in the British papermaking and newspaper industries, fighting intensely against Lord Rothermere to maintain supremacy until well after the Second World War. It was only in 1959 that the family sold the newspaper business to Canadian media magnate Roy Thomson.^[64]

Similar to the Berry Group and the other newspaper industrialists described above, Albert Reed developed a papermaking empire, however, his business thrived for the better part of a half-century strictly as a pulp and paper mill. By 1900, he was already the owner of seven newsprint mills in England and had incorporated Albert E. Reed & Company Ltd. (Reed), to operate the business. He also became closely connected to the Harmsworths, who eventually became partners in Reed’s firm. Reed initially looked to Norway to establish a new mill, but the Norwegian government rejected his project. Reed then turned to Canada in a quest to secure his firm’s future supply of pulp and paper. He purchased a small, existing groundwood pulp mill in Chatham, New Brunswick, and constructed another one in Newfoundland. Again, the latter colonial government was so keen to attract British capital that it granted timber to Reed under a 99-year lease, not charging any dues on the trees that Reed would cut. Reed sold both operations by 1920, with the Harmsworths buying the latter and incorporating it into their other Newfoundland mill operations.^[65] After Albert Reed died in 1920, his sons sold the last mills in England. Instead, they built a new mill in Aylesford, England, which would soon become Europe’s largest newsprint plant. Thereafter, Reed diversified into producing kraft paper and packaging, and although production was low during the Second World War, it took off again after the conflict. During the 1950s, Reed entered the publishing trade and the following decade saw it become a conglomerate that operated in a vast array of businesses. By this time, Reed had again established a major presence in the Canadian pulp and paper industry, with mills across the eastern part of the country.^[66]

Bowater became a dominant paper-maker in its own right after beginning its existence as a paper sales agent in England. Having sold newsprint to the Harmsworths since the late 1800s, Eric Bowater, the driving force behind the enterprise until his death in 1962, committed the family business to constructing its own newsprint-making plants, looking across the Atlantic for resources. After building its first mill at Northfleet on the River Thames estuary, Bowater collaborated with the colonial and imperial British governments in an enterprise, the Newfoundland Power & Paper Company, Limited, in Corner Brook, Newfoundland in the 1920s.^[67] Bowater also teamed up with Lords Beaverbrook and Rothermere later in the decade to erect a 60,000-ton newsprint mill in Mersey, England. Thereafter, Bowater oversaw a dramatic increase in capacity of their British paper mills. While failing in the mid-1930s to acquire the large Canadian newsprint maker, Price Brothers, but alternatively succeeding in buying Lloyd in 1936, Bowater thereby owned mills in Kemsley and Sittingbourne, England. Now called the Bowater-Lloyds Group, they diversified into making other paper products – everything from kraft liner to wallboard – and boasting roughly 500,000 tons of newsprint-making capacity. The enterprise faced a major challenge, however. It was the world’s largest buyer of the raw materials that were needed to make newsprint (both pulpwood and pulps), and it was extremely vulnerable to fluctuations in their price and their relative availability, particularly during a period when European and Scandinavian cartels controlled their production and marketing.^[68]

Bowater-Lloyds looked east and west to solve this problem. In 1937, they bought groundwood pulp mills in Sweden and formed a subsidiary – AB Umeå Trämassefabriker – to operate them. This move guaranteed the annual delivery of 135,000 tons of groundwood pulp and made another 25,000 tons available from another Swedish producer through a pre-existing contract. Two years later, Bowater-Lloyds acquired a 75,000-ton groundwood pulp mill in Norway, although it lost access to this supply after the Germans occupied the country during the Second World War. In the meantime, Bowater-Lloyds had negotiated a contract with the Newfoundland government in the late 1930s to secure access to several thousand square miles of pulpwood forest and export over 100,000 cords of raw wood annually in exchange for building a sulphite pulp mill in the colony. Of the roughly 75,000 cords of pulpwood that Newfoundland exported annually between 1937 and 1972, over 50,000 of them went to Bowater-Lloyds each year. Also during the late 1930s, Bowater-Lloyds bought International Power and Paper Company’s massive newsprint mill in Corner Brook, Newfoundland, and gained control over several major hydro developments and another 7,000 square miles of pulpwood.^[69]Bowater-Lloyds had secured masses of natural resources and pulp, and they ranked as one of the world’s largest newsprint makers.^[70]

British paper makers were the second most important customer of Canadian groundwood producers (see Table 5). Between 1890 and 1943, roughly two-thirds to four-fifths of Canadian production went to the United States, its most important trading partner since the 1920s. Many American pulp and paper firms had established branch plants in Canada for the specific purpose of obtaining access to the vast storehouse of high quality fibres north of the border. After the US, however, Britain imported practically all the rest of the groundwood pulp that Canada produced from the late 1800s until the years before the Second World War. The volume of groundwood pulp Britain imported from Canada, however, dipped significantly during the 1930s even though this decade saw the two countries establish closer trade ties. This aberration from the long-term trend is probably attributable to the very low prices at which Scandinavian producers sold their pulp during the Great Depression.

The British pulp and paper industry began facing significant challenges beginning in the 1920s, although some began intermittently and grew in both intensity and duration in the succeeding decades. For example, the years after the First World War saw the Canadian and American newsprint industries expand enormously and the volume of groundwood pulp that was available for export during the succeeding decades decline as a result.^[71] Moreover, the Second World War cut off supplies of raw materials and pulps and papers from Scandinavia. At the same time, the volume of Canadian imports of pulp to Britain rebounded (see Table 5). Some British newsprint makers felt that the Newsprint Supply Company, the agency that regulated production and allocation of newsprint orders during the war, favoured Canadian producers at the expense of domestic ones.^[72] Indeed, British production decreased dramatically during the war (see Table 4).^[73]

In response to these challenges, and to prevent them from arising again, some pulp and paper makers in Great Britain diversified their production. Bowater increased its involvement in the kraft pulp and paper and packaging sectors.^[74]They pursued a three-pronged growth strategy, which aimed to increase capacity in resource-rich North America. Bowater dramatically expanded its existing operations in Newfoundland, built one massive new newsprint paper and kraft pulp mill in Tennessee and another kraft pulp plant in North Carolina, both in the United States. They also bought a small newsprint mill in Nova Scotia, Canada, with an annual capacity of only 150,000 tons of newsprint, but which included 900 square miles of timberlands that held over 2,400,000 cords of pulpwood.^[75]Having secured greater supplies of pulp from overseas, Bowater also continued to expand and diversify its paper operations in Britain. And after Reed Paper entered into a cooperative arrangement with the American tissue-making giant Kimberly-Clarke (KC), Bowater formed a joint venture with KC’s major competitor in the United States, Scott Paper – the Bowater-Scott Corporation – to manufacture personal hygiene products for the British market.^[76] The post-war years also witnessed the major players in the British news and paper industry convert from being family-controlled enterprises into corporate, publicly traded entities.^[77]The impetus behind this move was the dire need to access greater capital.

5 The Demise of the British Pulp and Paper Industry

Although the British pulp and paper industry was still a major international player during the 1950s and into the early 1960s, more challenges lay ahead that increasingly weakened its global position as time passed. Firms like Bowater had certainly secured dependable supplies of the raw materials that they so desperately needed, and they had significantly expanded the scope and range of their operations, but these moves had also rendered them highly vulnerable to downturns in the industry and the consequent pressure that these dips exerted on their leveraged status. The dramatic decline in the cost of overseas shipping also undermined Britain’s papermaking industry. Other producers chose to locate their new capacity in far more attractive places, specifically amidst the raw materials upon which they depended. In particular, pulp and paper makers were realizing the extraordinary potential of establishing their operations in the southern hemisphere and in locations that were warmer than those in the northern boreal and temperate forests. In countries such as Brazil, Chile, and Uruguay, for example, industrialists could capitalize on converting fast-growing fibrous species like eucalyptus (these plantations also yielded exponentially more fibre per area than esparto grass) in new, state-of-the-art plants that produced on an unprecedented scale and were much cheaper to operate than mills that had been built decades earlier in the northern hemisphere. Similarly, American pulp and paper makers realized enormous competitive advantages by establishing capacity in the southern states. Not only did the climate in places like Texas and Alabama support relatively fast-growing conifers, but labour and other costs were much lower than in the northern states and Canada.^[78] Transferring productive capacity to these new facilities required enormous amounts of investment capital, however, at the very time when British pulp and paper makers had little to spare. Predictably, the Scandinavian firms that were on the cutting edge of technical developments in the pulp and paper sector after the Second World War were often the ones that could make these large investments.^[79] Moreover, Britain’s entry into the European Free Trade Association in 1960 rendered its pulp and paper producers subject to intense competition from these same Scandinavian producers, whose production costs were much lower. A significant rationalization of British capacity was the result, with the 1960s witnessing the closure of 35 mills in Great Britain. The situation was exacerbated because British pulp and paper makers were suffering from low profit margins, thereby making it practically impossible for them to reinvest in and upgrade their operations.^[80]

In addition to losing the battle over domestic pulp markets to the Scandinavian producers, the collapse of the traditional British export market further worsened the situation of the British producers. In the early twentieth century, demand for paper had increased in many countries of the British Empire (e.g. India, Australia and New Zealand), but they could provide for only a small portion of their needs with locally made paper products. Operating under a single financial regime facilitated the British papermakers’ creation of an important secondary market for their products in some of their most populous and prosperous colonies. In 1959, the former colonies, now part of the Commonwealth, still accounted for 75.7 percent of British paper exports.^[81] By the mid-1960s, however, this market had all but collapsed due to both the lack of purchasing power in the former colonies (e.g. India) and the lost battle for market share to domestic producers and new competitors (e.g. the Japanese in the case of Australia and New Zealand).^[82]

The available data attest to the deteriorating health of Britain’s pulp and paper sector during the post-war period. In terms of importing pulps (of all kinds) from Canada, Britain’s relative importance declined significantly during the late 1940s and 1950s. While the US was still by far the largest buyer of Canadian pulps, Great Britain no longer stood alone as the second most important buyer. With the British pulp and paper industry contracting significantly, its demand for Canadian pulp was shrinking concomitantly (see Table 6).

6 Conclusion

This decline in the 1960s shows that Britain was never well positioned to be a dominant or persistent player in the European timber market – the Holzwirtschaftsraum – that marked the modern pulp and paper industry beginning in the latter part of the nineteenth century. Britain could not win the fight over its lack of natural resources over the long term. It could solve the challenges that its geography presented to it, but it could do so only temporarily. Its deficiency in terms of domestic raw materials, specifically conifer fibre, put its paper makers at a distinct disadvantage that they were able to overcome for a remarkably long time. They did so by looking both east and west to source their supplies of pulpwood, pulps, and papers, especially newsprint. During this period, Britain benefited enormously from its links to Canada. However, British producers were not able to partake in the global paper industry trend to shift production south, particularly among new competitors who were based in these regions. Great Britain was left with a shrinking and struggling paper industry in the 1960s.^[83]Ultimately, the forces of nature and location caught up to the British industry, and thereafter Great Britain had no choice but to become a major importer of the paper products that its population needed.

This analysis of Britain’s pulp and paper industry from roughly 1860 to 1960 thus highlights the value of understanding the exceptions to the rule and the multiple insights that doing so can provide. Britain is arguably one of the least likely countries in Europe to be associated with the modern, resource-intensive pulp and paper industry. Nevertheless, reviewing its remarkably long tenure as a global powerhouse in this field, and focusing specifically on case studies of its leading companies, illuminates how it was able to achieve and maintain its preeminent standing and the extraordinary degree to which its dominant firms pursued parallel strategies to achieve their aims. This study also sheds light on a special chapter in British/imperial industrial history. Although it is hardly novel to argue that colonial ties played a central role in contributing to Britain’s overall prosperity, few historians have examined this dynamic in the area of pulp and paper. Although this lack of attention is understandable, because it is counter-intuitive to believe that a scarcely-forested country like Britain could become an international behemoth in an industry that required enormous volumes of wood fibre, this inquiry underscores the value of thinking against the grain. Ultimately, however, it also opens up as many questions as it answers. Areas meriting future investigation include the degree to which the leading British newsprint makers cooperated to control their markets during the twentieth century and the industry’s relative lack of investment in the southern hemisphere during and after the 1960s, a period during which so many dominant international firms were redirecting their resources to this new pulp and paper frontier.