Английская Википедия:Abitibi Power and Paper Company

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Abitibi Power and Paper Company Limited was a forest products business based in Montreal, Quebec, that was founded in 1914. The firm was a mainstay of the Canadian newsprint industry in the first half of the 20th century, and now forms part of Abitibi-Consolidated.

Formation and rise (1912Шаблон:En dash1932)

Файл:Abitibi Power and Paper Company - Iroquois Falls, Ontario, Canada (1930) (b).jpg

Abitibi mill at Iroquois Falls (1930)

Abitibi Pulp and Paper Mills Ltd. was provincially incorporated on December 4, 1912, at Iroquois Falls, OntarioШаблон:Sfn on the Abitibi River by Frank Harris Anson, who received initial financing from Shirley Ogilvie, heir to the Ogilvie Flour Mills fortune.Шаблон:Sfn On February 9, 1914, it was reorganized as the Abitibi Power and Paper Co. Ltd., which was incorporated under the Dominion Companies Act, in order to raise adequate capital for its plant and operations and to transfer its head office to Montreal. Its formation coincided with the passage of the Underwood Tariff in the United States, which allowed free trade for newsprint and prompted a northward rush from US publishers wanting to secure a cheap supply from Canada.Шаблон:Sfn

Файл:Howard Ferguson.jpg

Howard Ferguson

Файл:Frank Harris Anson.jpg

Frank Harris Anson, founder of Abitibi

Its expansion was greatly aided in 1919 when Howard Ferguson, Ontario's Minister of Lands and Forests, approved the reservation of Шаблон:Convert of pulpwood on Crown land for Abitibi's use.Шаблон:Sfn Ferguson declared, "My ambition has been to see the largest paper industry in the world established in the Province, and my attitude towards the pulp and paper industry has been directed towards assisting in bringing this about."Шаблон:Sfn After becoming Premier of Ontario in 1923, Ferguson reserved a further Шаблон:Convert to Abitibi.Шаблон:Sfn

Файл:Spanish River Pulp and Paper Company 1927.jpg

Spanish River Pulp and Paper Mills at Espanola (1927)

The company expanded to other locations in Ontario where it also built dams and operated hydro electric power stations. Integration of pulp and paper operations was encouraged by Anson's business partner, Alexander Smith, who became Abitibi's president upon Anson's death in 1923.Шаблон:Sfn Wherever the company built a mill, a new town sprang up around it and it even built radio stations such as CFCH in Iroquois Falls to serve these remote new communities. The company acquired other small lumber operations and grew to become a major force in the North American newsprint business, becoming the largest manufacturer in Ontario,Шаблон:Sfn and for a short time the largest pulp and paper company in the world.Шаблон:Sfn

Abitibi did not maintain a sales force, relying on the Mead Corporation to handle all marketing initiatives in the US.Шаблон:Sfn Abitibi also invested in new Mead initiatives,Шаблон:Sfn and in 1927 acquired the Spanish River Pulp and Paper Mills from Mead,Шаблон:Sfn in a transaction that was subsequently seen to be highly overvaluedШаблон:Sfn and having a conflict of interest that was ultimately detrimental to Abitibi's shareholders.Шаблон:Sfn Changing economic conditions forced the closure of the Spanish River facility in 1929.Шаблон:Sfn

Abitibi's power operations were further extended after 1926, when the Ferguson government gave its approval for the development of the Abitibi Canyon, the largest such development since the Niagara River, in preference to incurring more debt for Ontario Hydro.Шаблон:Sfn The development was encouraged through secret commitments for long-term purchases of electricity and indemnification of Hydro against any losses.Шаблон:Sfn Questions were asked at the time as to how the additional Шаблон:Convert in capacity would be used, as there were virtually no customers for it.Шаблон:Sfn

It increased its gross earnings to $5,650,264 in 1918 from $4,422,757 in 1917. Along with other paper manufacturers in Canada, Abitibi Power and Paper Company operated at 75% capacity in 1929. During the Great Depression, Manitoba Paper Mills, a subsidiary located in Pine Falls, Manitoba, was forced to close.

Receivership (1932Шаблон:En dash1946)

Файл:Abitibi Canyon Generating Station.jpg

Abitibi Canyon Generating Station

In 1927Шаблон:En dash1928, Abitibi financed a large redemption of its securities through a $55 million bond offering, while simultaneously promising an annual dividend of $4 million to its common shareholders.Шаблон:Sfn Between 1927 and 1934, newsprint prices fell from $70/tonne to $40/tonne.Шаблон:Sfn Abitibi was forced to run its mills at 28.4% of capacity in 1932 and 26.8% in 1933, Шаблон:Sfn as well as suspending its dividend payments.Шаблон:Sfn

Abitibi defaulted on its mortgage bond interest payments on June 1, 1932, and was placed in receivership.Шаблон:Sfn Many leases on its timber concessions were also expiring around the same time.Шаблон:Sfn On September 26, 1932, the company was declared insolvent under the Winding-Up Act and a provisional liquidator was appointed.

Beginning in 1933, legislation was passed to allow Ontario Hydro to take control of several Abitibi power developments.Шаблон:Efn Certain dealings relating to the 1933 acquisition came to be known as the "great Abitibi swindle,"Шаблон:Sfn which resulted in the fall of the Henry government in the 1934 Ontario election, to be succeeded by that of Mitchell Hepburn.Шаблон:Sfn

Файл:Mitchell Hepburn2.jpg

Mitchell Hepburn

The Legislative Assembly of Ontario passed legislation in 1935 in order to bypass any subsequent application of the Companies' Creditors Arrangement Act.Шаблон:EfnШаблон:Sfn A liquidator was appointed on December 20, 1935. In addition, as any refinancing would be contingent upon reinstatement of Abitibi's timber limits, further legislation was passed to allow this to occur, subject to approval by the courts and the Lieutenant-Governor in Council. Hepburn felt this to be necessary in order to assure that any reorganization coincided with public policy, unlike what had happened in Quebec between Price Brothers Limited and the Taschereau administration.Шаблон:Sfn In March 1939, an order in council was passed that declared that any scheme receiving court approval would be considered acceptable to the government.Шаблон:Sfn When the Second World War broke out later in the year, and with public sentiment almost unanimous against foreclosure, the government withdrew its support but failed to rescind the order.Шаблон:Sfn Despite subsequent threats by Hepburn to cancel Abitibi's timber rights, a judicial sale of Abitibi's assets was ordered in 1940.Шаблон:Sfn

Hepburn appointed a royal commission to investigate the matter, in order to determine the best course of resolution.Шаблон:Sfn The Legislative Assembly imposed a moratorium in 1941,Шаблон:Efn which was ultimately upheld by the Judicial Committee of the Privy Council in 1943.Шаблон:Efn The commission's recommended plan was accepted by all creditors, but only after they accepted that prior consent would be required from the Province for any changes to Abitibi's production and conservation measures,Шаблон:Sfn and it would emerge from receivership on April 30, 1946Шаблон:Emdashone of the longest such receiverships in Canadian history, which was seen to have been extended by the Ontario government's actions which ensured protection of jobs at high-cost mills throughout northern communities, as well as for common shareholders.Шаблон:Sfn However, the company's operations remained diversified after reorganization, and the proportion of Canadian ownership was higher after the receivership ended than it was in 1932.Шаблон:Sfn

Disposal to KVP and aftermath

During the final years of the Hepburn government, it sought to stimulate employment in Northern Ontario in order to stabilize its political position.Шаблон:Sfn In that regard, it encouraged negotiations between Abitibi and Kalamazoo Vegetable Parchment Company of Parchment, Michigan, which resulted in the sale of Abitibi's Spanish River facility (at that time its largest non-economic asset) in 1943.Шаблон:Sfn It subsequently resumed operation as the KVP Company.

In 1948, KVP was sued for nuisance in allowing noxious effluent to be discharged into the Spanish River, and an injunction was issued barring it from making any further discharge. The order was appealed all the way to the Supreme Court of Canada without success. In 1950, the injunction was dissolved by an Act of the provincial legislature, which provided for any subsequent disputes with KVP to be taken to arbitration, which, together with other legislative changes, effectively curtailed chances for any further injunctions to be issued. The 1950 Act was not repealed until 2006.

The 1950 Act effectively gave KVP a limited licence to pollute, and serious cleanup efforts did not happen until the 1980s.Шаблон:Efn

Aftermath (1946Шаблон:En dash1979)

Файл:Moulin-Jonquiere.jpg

Price mill in Jonquière

Emerging from bankruptcy, the company prospered in the post-World War II industrial boom and in 1965 changed its name to the Abitibi Paper Company Ltd. However, significant competition from producers in the southern United States, starting in 1945, resulted in them providing for 29% of all newsprint demand by 1955,Шаблон:Sfn although Canadian and northern US overcapacity resulted in overall prices remaining low.Шаблон:Sfn From 1956 to 1970, Abitibi's capacity utilization rate trailed the Canadian industry average, indicating that it was running at higher-than-average costs.Шаблон:Sfn It opted to expand through acquisition, as its present capacity was relatively fixed and aging, and new investment would require a return on investment of 8%Шаблон:En dash10% in the economic climate of the early 1970s.Шаблон:Sfn

Its first acquisition elsewhere in the industry occurred in 1968, when it took over Cox Newsprint and Cox Woodlands, both subsidiaries of Cox Enterprises, and thus gained a foothold in the southern US. In 1974, Abitibi subsequently purchased a controlling interest in Price Brothers Limited, a low-cost producer with newer equipmentШаблон:Sfn which had extensive operations in the Province of Quebec and whose vast forestry business dated back to the William Price Company established in Quebec City in 1820. The merger of Abitibi and Price Brothers created the world's biggest newsprint producer, and in 1979 it changed its name to Abitibi-Price.

Further reading

• Boothman, Barry E. C. Corporate Cataclysm: Abitibi Power & Paper and the Collapse of the Newsprint Industry, 1912-1946. Toronto: University of Toronto Press, 2020.
• Шаблон:Cite conference (Section 14: Business History)
• Шаблон:Cite web
• Matthias, Philip. Takeover: The 22 Days of Risk and Decision that Created the World's Largest Newsprint Empire, Abitibi-Price. Toronto: Maclean-Hunter Limited, 1976.
• Шаблон:Cite book

External links

• Шаблон:Cite web