THE PROBLEM OF NEWSPRINT - UNESCOunesdoc.unesco.org/images/0004/000439/043907eo.pdfCONTENTS ewe CHAPTER I PAPERMAKING 9 CHAPTER 11 PULPWOOD AND WOOD PULP. 17 . Pulpwood Wood pulp General

THE PROBLEM OF NEWSPRINT AND OTHER PRINTING PAPER

by the Intelligence Unit, “THE ECONOMIST”, London.

U N E S C O P A R I S 1 9 4 9

PRESS, FILM AND RADIO IN THE WORLD TODAY. Series of studies published by Unesco.

Publication No 594 of the United Nations Educational, Scientific and Cultural Organization.

Printed in France b y M. Blondin. Copyright b y Unesco, Paris.

F O R E W O R D

In sponsoring this series of studies on specific problems of mass communications, Unesco is complying at once with its constitutional obligation to “further b y all possible means the use of the instruments of mass communications in the work o/ advancing the mutual knowledge and understanding of peoples”, and with the repeatedly expressed desire of experts that Unesco should promote and sponser the publication of technical and sociological works dealing with mass communications questions. Surveys of the press, film and radio in the world have shown

that side b y side with purely material needs, which are linked up with the economic and technical development of each country or region, there exists a wide need for knowledge of the use that can be made, and the abuses that must be avoided, of these powerful means of reaching the mind, of influencing the opinions and the way of life, of modern man. The series covers a wide ground, ranging from the profes-

sional training of those who work in press, film and radio to ‘ the organisation of educational radio skrvices, the equipment and operation of mobile cinemas, and €he production, consumption and demand for paper for reading material. But. all -these studies have this in common, that their aim is to provide practical information and, in some cases, advice for all whose interests or whose work lie in the field of mass communications, and thus to spread knowledge of the highest standards that are being attained and the new techniques that are being evolved. To prepare these studies, Unesco has called upon specialists

throughout the world. It is recognised that some of the subjects mag be controversial, but the authors have been left completely free to express their own opinions and to speak with the full

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outhority of their personal experience., Even should they provoke disagreement, it is felt that only beneficial results can stem from the stimulation of thought and the casting of new light upon these different subjects. Among the dangers which can beset the press, the film and the radio, one of the greatest perhaps is that of routine and stagnation.

* **

Paper for printing books, magazines and newspapers is a material essential to the development of education, science and culture and to the effective enjoyment of freedom of information both within and between countries. It is for this reason that Unesco has, since its establishment, concerned itself with the problem of the production and distribution of paper, and especially newsprint, in quantities adequate to meet not only present demands but also the growing needs of the world. Shortages in supply and unequal distribution of paper impede the progress of that human welfare and understanding between peoples which are essential to peace.

It is from this point of view that Unesco has approached the problem at sessions of its General Conference, at meetings of its Commission on technical facilities and needs for the press and at conferences organised b y the Economic Commis- sions of the United Nations and b y the Food and Agriculture Organization. In a message to the Preparatory Conference on World Pulp Problems, Montreal, organized b y the Food and Agriculture Organization in association with the Canadian Government, the Director-General of Unesco said:

“It is not for Unesco to suggest here remedies for this situation. But it is Unesco’s duty to appeal on each occasion to the goodwill of all in order to correct as far as possible such inequality in the distribution of a product so essential for the intellectual and social progress of humanity.” The object of this study is to present in as non-technical

fashion as possible as many of the facts as possible and to indicate the nature and size of the problem both for today and tomorrow. The study, in this present form, has been prepared for Unesco b y the Intelligence Unit of the London Economist; this Unit had at its disposal all the information available from Unesco and from the Food and Agriculture Orzanization’s Forestry Division with which Unesco works closely in its endeavours to promote effective and appropriate action in fhin field.

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C O N T E N T S

e w e CHAPTER I PAPERMAKING .............................. 9 CHAPTER 11 PULPWOOD AND WOOD PULP. ................. 17 .

Pulpwood W o o d pulp General Europe North America Other regions International trade

CHAPTER III PRINTING PAPER .......................... 27 - Characteristics Importance of printing paper Location and structure of the paper industry

Production Capacity Producers output

Consumption Growth In equality

CHAPTER IV NEWSPRINT ................................. 37 Characteristics of the newsprint industry Production

Distribution of capacity Meaning of capacity The production problem output

Distribution of exports and imports Distribution arrangements

International trade

Consumption Growth Inequality Restrictions on consumption The newsprint balance

CHAPTER V DBMAND TRENDS ............................ 63 North America Consumption of printing paper and industrial activity Post-war boom Saturation United States demand and Canadian production

A rising pre-war trend Post-war economic revival Rising demand for paper resumed?

Other regions Political consciousness Literacy Industrialisation Expanding demand for paper for reading materials

Europe

Prices and costs

CHAPTER VI BASIC FACTORS AFFECTING THE SUPPLY IN THE FUTURE .......................... 91

R a w materials Softwood origin Newly developed raw materials

Capital and equipment Currency

............................................ CONCLUSION s 109

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C H A P T E R I

Papermaking

An ancient product

Paper is an age-old product, and its manufacture is a simple process, although nowadays it is mainly carried on by highly complex machinery. The fundamental principles of papermaking have changed little since its inception in China nearly two thousand years ago, although the basic raw materials are different. Fibres in the form of pulp and obtained from wood or other fibrous substances are inter-mixed with water and then passed over a screen through whose openings the water is drained off until a thin layer of inter-twined, moist fibre is formed on its flat surface. The thin layer which remains is paper. Paper has been defined as a substance made in the form of

thin sheets or leaves from disintegrated fibre derived from rags, straw, bark, wood or other fibrous material. True paper must necessarily be made from fibre which has been treated untir each individual filament is a separate unit. Papyrus, which was used centuries before paper, is not made from disintegrate& fibre. The product is obtained by slicing the stalks of the papyrus plant, and it is simply a laminated material. Like other writing materials of ancient origin such as parchment, papyrus is not classed as true paper. The conventional date normally given for the invention of paper

by the Chinese is A.D.105. For five hundred years the Chinese succeeded in keeping the art of making paper a well guarded secret. Thereafter it spread into Central Asia, Persia and South- ern Russia. In the early Middle Ages paper found its way into Arabia, Egypt and Morocco and thence, after another lengthy interval, into the Western Mediterranean. It was only in the thirteenth century that it was introduced into Northern Europe. Well over a thousand years thus elapsed before the invention completed its travels from East to West. It took many more years until it was firmly established as a handicraft in Europe, where at first it met with little favour. The early paper of Europe was more expensive and less resistant than parchment, which was used for book-making, and its uses were limited for a: long time. Moreover, its Moslem origin rendered the new art suspect to Christendom.

In quest for raw materials

The first milestone in the history of paper outside the Orient was the invention of the printing press. Although the design .of the early printing presses was strongly influenced by, and necessarily adapted to, the grades of paper then available, the growing use of the new invention created a permanently larger and expanding outlet for paper. The technique of making paper was steadily improved and the craft was eventually adopted in one European country after another. Until the second half ‘of the eighteenth century, however, all paper made in the West was fabricated exclusively from linen or cotten rags. While paper made from these materials was of high quality, its production became less and less able to satisfy requirements. The eighteenth century was an era of great intellectual ferment and saw a wide diffusion of popular knowledge, accompanied ’by a growing clamour for more books, newspapers and periodicals. Numerous books for general readership were published and many fresh newspapers, periodicals and popular magazines were established. The rise in the use of paper which ensued was unprecedented and caused a severe shortage of the product. Appeals for increased collection of rags were made throughout Europe and Norih America, but produced no tangible results. So keenly was the paper shortage felt that intensive researches

were conducted into the suitability of additional fibrous materials. There was no thought then of replacing scarce cotton and linen rags altogether. To supplement thc traditional materials, however, alternative fibres had to be not only more abundant, but also more economic to process and convert into paper. Evidently the need for the printed word in response to .a rising demand for reading matter had shifted the demand for paper from considerations of quality to quantity and cheap- ness. The quest for new papermaking materials yielded its Arst fruits in 1801. In that year an English papermaker was granted a patent for the manufacture of paper from straw, hay, thistles, waste and refuse of hemp and flax, and other kinds of vegetable fibres. Straw thus preceded the use of wood. The patentee founded a company and set up in London a paper mill, the Arst of its kind in the West, for the extensive utilisation on a commercial scale of vegetable fibres other than those of cotton and linen rags. The enterprise proved a costly financial failure and had to be abandoned after three years. Nevertheless, this venture in new raw materials was destined to be the precursor of the modern wood based paper industry, and it is rightly regarded as another milestone in the history of papermaking.

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The papermaking machine

The third milestone was the invention of the papermaking machine. Until the beginning of the nineteenth century all paper was made by hand. The tool employed was a sieve-like mould which~was dipped into a vat filled with macerated fibres floating on water. When the mould was lifted it was covered with a thin layer of matted fibres, that is, a sheet of paper. The size of the sheet was limited by the size of the mould which hand labour could conveniently handle. Paper, therefore, was dear and scarce as well as small in its dimensions. The urgent need for more and cheaper paper stimulated the search for cheaper papermaking materials, no less than for more effective and cheaper methods of paper production. In an age of rapid industrial change a mechanical device naturally suggested itself as the most appropriate method to raise productive efficiency. Foremost among the pioneers endeavouring to produce paner uy machine was a Frenchman, Nicholas-Louis Robert. This ingenious inventor was the first in the field to construct a machine designed to supplant the old and laborious hand processes. After several unsuccessful efforts his first workable model appeared in 1798, followed by various improvements in the next few years. Robert’s model was based upon the ancient practice of papermaking, and all future modifications of the paper machine, by himself and his successors, embodied the principles of his original model. But Robert’s device did not perform all stages of paper-

making by mechanical means. Although the moist sheets which it turned out were much cheaper as well as far greater in width and length than those made by hand, they still had to be taken from the machine by hand labour to be hung up to dry. Simul- taneous drying followed close on the invention of Robert’s machine, but the large-scale production of paper in the form of reels, instead of single sheets, belonged to a later age. This stage of manufacture was perfected towards the middle of the nineteenth century, coinciding with the advent of the rotary printing press. The rotary press, which nowadays print all newspapers with a large circulation, must, of course, be fed from paper delivered in reels. Moreover, operating at high speed, this type of press necessitates the use of paper grades able to meet more exacting specifications. Earlier printing presses, including flatbed presses, modernised versions of which are still in use for the publication of newspapers with small circulations, operated at much lower speeds, and the paper used for them needed neither the tensile strength nor the uniformity of quality required for high speed printing on the rotary press. One interesting fact about the paper industry is that its evolution is a record of constantly interacting inven- tions and improvements both in papermaking and printing.

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A place of prominence among the men who contributed to the perfection of the machine process is due to the Fourdrinier brothers, who were contemporaries of Robert. To this day the papermaking machine is named after them. The function of the Fourdrinier machine is to convert the mass of macerated fibres mixed with water and chemical solutions into a thin web of dry paper which is either cut in sheets, or as in the case of newsprint, wound off the machine into large reels containing as much as four miles of paper up to twenty-five feet wide. The important thing about the Fourdrinier machine is its continuity. From the forming of the mixture over an endless moving screen and the subsequent emergence of a moist sheet, through a variety of drying processes, to the final touches at the winding or cutting stage, this machine performs the whole process of paper manufacture in a series of continuous operations. Every Fourdrinier machine works on this principle, irrespective of the capacity, the price, and the grades of paper which it produces. Indeed the modern Fourdrinier machine is adapted to the production of any grade of paper. It speaks for the ingenuity of the inventors that the succession of refinements and improvements which engineers have added to the machine since it made its first appearance one hundred and forty years ago has left its basic structure unchanged. The width and opera- tional speed of the machine have immensely increased, its drying mechanisms have been steadily improved, the range of its products has become more and more diversified; yet its early design has stood the tests of time. The Fourdrinier machine made the modern paper industry, and the efficient application of the principle of continuity was its outstanding merit.

Harnessing wood and water

Before the industry could develop as a large-scale and low cost enterprise it had to surmount yet one more obstacle: the shortage of raw materials. So long as papermaking materials were scarce and dear, the applications of the Fourdrinier machine were inevitably few and confined to a small number of industrialised countries. To be economic this expensive machine has to be run as near as possible to capacity. But the dearth of raw materials prior to the use of wood severely limited the scope for production as well as the extent of the producers’ market. The very existence of the papermaking machine, however, made it imperative to search for new papermaking materials, Success w a s not long in coming. It was provided by the epoch-making discovery that paper could be made from wood, which was cheap and in apparently unlimited supp1y.l This discovery finally swept away all remaining ,obstacles to the paper

i. The discovery alone was not siimcient, since a way had to be found to extract the wood fibres by a grinding process.

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industry’s expansion. But it did more than that. The introduction of the new material linked the future of paper production to’ a set of entirely new industries which spring up all over the vast forest areas of the Northern Hemisphere. It allowed the papermaking machine to come into its own once raw materials were abundant and cheap. It made possible a steep increase in output at fast decreasing costs precisely at the time when paper was becoming daily more essential for industrial and domestic uses alike. Wood pulp revolutionised paper making: its coming w a s the fourth milestone in the history of paper. Thereafter nothing could arrest the rise of the modern paper industry. The use of wood pulp reinforced the importance of water to

the paper industry. Papermaking in the wood pulp age requires water for three purposes: as a means of transportation, as an agent in manufacturing and as a source of power. Pulpwood is bulky and costly to transport overland, and in densely forested Scandinavia and Canada, with their wealth of waterways, rivers are normally used to float the logs down to the mills. Most of the early mills were, in fact, erected on the banks of streams. Secondly, water of fine quality is an essential ingredient in the manufacture of both pulp and paper. As a papermaker once declared: “the manufacture of paper consists of putting water into wood and taking it out again.” Chemical treatment has diminished the importance of water, but has by no means dispensed with its use. Thirdly, pulp and paper mills are enormous users of energy, and water is by far the cheapest source of power. In Canada, for example, the pulp and paper industry consumes more than one-third of all the electric energy generated. Without ample and advantageously located resources of hydro-electric power the paper industry could never have developed as a low cost producer.

Wood pulp The commercial use of wood pulp in papermaking began in the eighteen-fifties, following a century of pioneer attempts and vain experiments. At first the change-over from rag to all wood paper was slow and uneven. For many years wood pulp was mixed with pulp made from straw, rags and other fibrous materials. The transitional period was spread over several *

decades. But the use of wood pulp was destined to expand until it achieved a virtual monopoly among papermaking materials. By 1870 cotton and linen rags had already ceased to be the principal soiirce of supplies. To-day wood pulp accounts for more than 90 per cent of the virgin pulp fibre consumed by the world‘s paper and board industries and is the chief, or sole, constituent of the principal paper products, including newsprint. Cotton and linen rags are now used only for the finest papers,

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and even these may contain up to 50 per cent wood pulp. The . other raw materials, including esparto 'grass, which is grown mainly in North Africa, and straw are only of minor importance. Periodic attempts to utilise straw whose production- though, unfortunately, not its transportation-is gratuitous, have never been very successful. Small quantities of straw go into certain grades of ordinary paper other than printing paper and newsprint, but the chief product is straw board. Wood is the most versatile and least homogeneous of raw

materials. It has easily the widest range of applications running into tens of thousands, and timber exists in uncounted varieties, of which about three thousand are in commercial use. But all woods can be divided in two main groups; hardwoods and softwoods. Hardwoods are an immense group which comprises beech, oak, ash, maple and other species of the temperate zone, and various tropical woods including teak and mahogany. Hard- woods possess great strength, toughness and durability, and are eminently suited for the manufacture of furniture and for heavy constructional work. Softwoods comprise the less numerous species of the conifer family whose principal members are the spruce, fir, larch and cedar. Softwoods are, as the name implies, easy to work, and are used in light manufacturing processes and building. Wood pulp is at present made mainly from softwood species, and in particular from spruce. But experiments, before the war in Germany and the United States, and more recently in Sweden, Australia and French West Africa, have suggested the possibility of utilizing more hardwood which at one time was widely held to be quite unsuit- able for pulping. A new and important source of pulp which was unused before the nineteen-thirties is the Southern pine.1 For several years Kraft wrapping paper and fibre boards have already been made successfully from the pulp of the southern pine, and the production of newsprint from this material is now emerging from the experimental stage. Pulp production is a comparatively small user of timber and absorbs rather less than 10 per cent of world timber supplies. Even in Canada, the world's largest producer of paper, papermaking has never accounted in any one year for a large proportion of the tqtal lumber felled. Wood pulp is processed chemically or mechanically from

pulpwood for use in the manufacture of paper, rayon or other cellulose products. Pulpwood is the name given to woods suitable for the manufacture of pulp; it is unprocessed material stripped of the bark and is usually supplied in the form of logs. Pulp obtained by the mechanical process is merely ground wood reduced to fibre by revolving grinders under cold or hot treatment and with the application of quantities of water. Mechanical pulp, or groundwood as it is sometimes called, is

1. So called because it was nrst used for pulp manufacture in the Southern States of the U. S.

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made from the softer woods, contains a fairly high percentage of impurities and lacks permanence. Paper manufactured from mechanical pulp is liable to deterioration after exposure to light and air; on the other hand it is cheap and possesses great absorbency. Mechanical pulp is used extensively in the manufacture of newsprint, book paper and other printing grades. Chemical pulp is produced by cooking pulpwood cut into small chips with a chemical agent which readily dissolves most of the impurities binding the fibres. Several cooking processes have been devised, but the two most usual ones are the sulphite and the sulphate processes. Chemical treatment is more expensive than grinding and produces higher grade pulps more or less free from impurities, the top grades approaching cellulose in a purified state. Chemical pulps vary considerably in their physical properties and their uses vary accordingly, from writing papers which require softness and smoothness to Wrap- ping and industrial papers which require strength and durability. A few printing papers are made wholly from chemical pulp, and many contain admixtures in varying degrees. The best grade of chemical pulp is used in the manufacture of rayon, plastics, cellophane and photographic films. When used for theses purposes it is known as dissolving pulp or simplv cellulose.

Printing paper Printing grades and newsprint are often put into a category apart from the rest of the paper products. Newsprint has been defined as the grade of paper used in ,the regular editions of daily and weekly newspapers. It is normally composed of 75 per cent to 85 per cent of mechanical pulp and 25 to 15 per cent of unbleached chemical pulp made by the sulphite process. Book paper and certain other printing grades frequently contain a higher proportion of chemical to mechanical pulp. High quality book paper is made from bleached suplhite pulp.' The properties peculiar to newsprint are light weight and

rapid ink absorbing power combined with great tensile strength to enable the product to withstand the strain of running on fast newspaper presses. Where newspapers are printed on rotary presses, as most of them are, newsprint must be supplied in reels. Other printing grades are also made in reels but are often cut up by the makers and delivered to the printers in sheets adapted to flatbed presses on which all books, most magazines and some periodicals are printed. Modern flatbed

i. AS a result of the many different grades of printing paper as opposed to newsprint it 1s often dflflcult to obtain complete or accurate information upon them. Most nations consume about three times as much newsprint as all other types or printing paper.

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presses are often used to print newspapers and can be fed from reels at great speed. Newsprint is a mass product and the largest and fastest paper

machines are employed in its manufacture. The largest newsprint machines ever constructed have a capacity of 50,000 tons a year and turn out newsprint at the rate of 2,000 feet per minute.

,

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C H A P T E R I 1

Pulpwood and wood pulp

Pulpwood Pulpwood is usually the by-product of forest use, and the proportion of pulpwood within the total annual cut varies greatly, according to forest management. Good forest management means heavy thinnings and yields a lot more pulpwood than if indifferent forest management simply allows a tree to grow without much care. An increasing amount of the raw material needs for pulp is being supplied from logging, sawmill, and other industrial waste. As a result it follows that production is somewhat elastic. The vast bulk of the world’s principal raw material for pulp

and paper manufacture is produced and processed in North America, Europe and the Soviet Union. In 1937 these three regions accounted for 48 per cent, 41 per cent and 7 per cent respectively of a total pulpwood output of nearly 100 million cubic metres (Table I). Canada alone supplied 40 per cent of world exports, followed by the Soviet Union with 30 per cent, Finland 16 per cent, Austria 5 per cent, ‘Czechoslovakia 4 per cent and Poland 3 per cent. All but about 2 per cent of Canada’s exports was taken by the United States, while most of the Soviet Union’s large exportable surplus, constituting 42 per cent of the annual supply, was available to meet Europe’s equally large deficiency. World output has appreciably expanded since 1937. It

amounted to 111 million cubic metres in 1947 including the Soviet Union, and to an estimated 120 million cubic metres in 1949. To this figure should be added an amount around 10 million cubic metres for the Soviet Union, for which no accurate statistics are available. Owing to a great many factors, including the war, North America has become the centre of production. But in 1949 Europe’s output was substantially below the 1937 level and its share of the world total was only one-third, whereas North America’s output was almost double the 1937 level and constituted roughly two-thirds of the world total. Pre-war levels were regained in Sweden, Europe’s largest producer of pulpwood but remained distant in such countries

’

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TABLE I PULPWOOD (Thousand cubic metres solid volume)

1 9 3 7 * I 9 4 9 - Provisional

Country

~

Estimated World Totals ....... Europe ........................ of which: Sweden ....................... Finland ....................... Norwag ....................... Germany ...................... Czechoslovakia ................ Austria ....................... Poland ........................ Italy .......................... France ........................ United Kingdom ................ Belgium ...................... Switzerland ................... u.s.s.1i. .................... North America ................ United States .................. Canada ** .................... Latin America ................. Asia .......................... nf which: Japan *** ..................... Oceania ....................... of which: Australia ......................

99,500 47,960 -3.600

18.200 - 170 10.400 +1,540 5,300 - 560 5,700 -3,140

1,900 + 500 1.200 + 340 800 - 600 - 800 - 330 - 180

240 - 120 6,700 +2,820 40,800 + 230 20,800 -3,820 20.000 +4,050

200 - 3,800 - 3,500 -

2.300 + 370

- -

- -

120,285 120,680 42,115 41,685 + 4ii 17.000 8,000 3,950 6,020 1.800 1,050 800 850 910 90 175 450

17,200 7,500 4,000 4.870 1,240 1,400 800 850

1,960 210 190 450

200 500 50

,150 5 60 I50 - - ,050 120 15 -

... ... 76,530 76,610 - -86 45,645 50,490 -4,845 30,885 26,120 +4.565

1,645 1,700 - 53 340 340 - 311 311 -

* Consumption flgures by countries are not available. World consumption is estimated at 98,000,000 ciibic metres solid volume.

** Includlng Newfoundland. *** Jauan Drouer. ... Not aviilgble. Source: Report of the Prwaratory Conference on World Pulu Problems. 1949.

as Finland, Norway, Czechoslovakia and Poland. The recent increase in the output of pulpwood in Germany was determined by the temporary overcutting of German forests. In the near future Germany as a whole will produce substantially less pulpwood than before the war. By comparison, production in Canada was up by about one-half and showed a twofold increase in the United States. United States consumption, however, has expanded faster than has domestic production, and the resultant deficit is larger, therefore, than it was in 1937. In 1939 it equalled the whole of the Canadian surplus. The same trend incidentally, is also visible in woodpulp and newsprint. The decline in European pulpwood consumption in the post-

war period has been aggravated by the virtual disappearance of Russian exports, and it has been accompanied by a contraction of the intra-European pulpwood trade. In 1949 Europe consumed less than one-third of the world's pulpwood

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production, against an estimated one-half in 1937. Post-war figures for Russian output are not available, but it is known that the rehabilitation of devasted areas and the development of a domestic pulp industry absorb large quantities of available timber resources. In consequence, the pulpwood supplies of the rest of Europe are now to a greater extent dependent on the size of the current output, although diversions to relieve shortages of coal, pitprops and timber as well as for reconstruction purposes, are now smaller than during the immediate post- war era. The interruption of German pulpwood imports has reduced

the impact of suspended Russian exports on European consumption. Germany has in fact exchanged its pre-war r61e as Europe’s largest pulpwood importer against that of Europe’s largest exporter, the French zone contributing a very large proportion to total European exports. Exports from Czecho- slovakia have improved and are considerably larger than in 1937. On the other hand, exports from Finland have sharply declined, and the large pre-war surpluses available for export from a number of European countries have been transformed into deficits. None of the other regions produces at present much pulp-

wood. Before the war Japan had a sizeable output, but in the early post-war period, when all Japanese industry was in eclipse pulpwood output fell to a fraction of the pre-war level, although it has made some recovery since. In Oceania the first pulp and newsprint mills were erected during the war and pulpwood production from hardwood species was undertaken simultaneously. Australia already accounts for 3 per cent of world output of pulpwood. Vast forest areas are located in Africa, but they are virtually undeveloped, except in parts of the Union of South Africa, and are almost wholly covered by hardwood species. Latin America’s forests are vaster still, but the pulp industry of this continent is so undeveloped that few local outlets for pulpwood production exist at present. The current share of this region of the world is only 4 per cent. The n’ear East and North Africa are almost bare of forested areas.

Wood pulp GENERAL

The location of a pulp industry is primarily determined by consumer needs and has caused in turn the development of the pulpwood resources. It is marked by the preponderance of North America and Europe. Pulp consumption is largest in industrialised countries with a high national income and shows a similar regional distribution. With the outstanding exception of the United Kingdom, which imports 90 per cent of its pulp

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requirements, and the Netherlands, many of the important consuming countries are themselves substantial pulp producers, For wood pulp, like pulpwood, the effects of the war have

caused a profound regional redistribution resulting in the emergence of North America as the world’s largest producing and by far the largest consuming region.

~~

Production Consumption Per cent of Per cent or world total world total

1937 1940* 1937 1949’

Europe .......................... 49 31 42 29 North America .................. 46 65 51 65

* Provisional.

In terms of tonnages the setback was less severe for Europe.

Production Consumption

Europe .......................... 11.6 8.7 -32 9.8 8.1 --2I North America .................. 11.0 18.4 4-67 12.1 18.9 -+56

* Provisional.

The rest of the world has a current output of about 2 million tons, of which one half is produced in the Soviet Union, and it consumes about half a million tons more. At 28 million tons in 1948, world production (Table 11) was

well above the 1947 quantity and slightly in excess of world consumption (Table III), while both achieved all-time records. By comparison, production and consumption in 1937, the best pre-war year, balanced each other. A further increase in production has been reported for 1949,

but despite this new record some 3 million tons of pulp producing capacity are at present surplus to requirements as measured by effective demand. At the same time many countries outside North America are unable to obtain enough pulp to allow their paper industries to operate at capacity. This paradox is explained by physical shortages of pulpwood limiting pulp production in Europe combined with shortages of currency required for the import of raw materials.

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TABLE I1 CAPACITY - PRODUCTION OF WOODPULP (Thousand metric tons)

1 9 3 7 1 0 4 8

Chemical Mechanical W ~ ~ ~ ~ t l p

Estimated WOTld total 14480 10,000 24 480 19 720 18 650 1 1 800 9 580 31 520 28.230

Europe ...... 7i360 4,320 11:680 61140 5:020 3:830 2;580 9:970 7,600 of which :

Sweden ..... 2,790 734 3,524 2.Y46 2,224 800 625 3.546 2,849 Finlan& ..... 1.481 820 2,301 1,466 1,040 1,060 400 2,526 1.440 Norway ..... 552 543 1.095 621 386 695 400 1,316 786 Germany .... 1,349 f,l34 2.483 . . . . . . . . . . . . . . . . . . France ...... 105 251 356 194 171 350 291 544 462 Czecho- slovakia ... 270 73 343 319 241 inn 74 419 315 .....

Italy ........ 37 150 187 64 54 150 140 214 194 Netherlands . 50 71 121 60 25 70 15 130 40 Austria ...... 304 110 414 294 145 110 70 404 215 llnltcrl Kingdom ..

Switzerland . . Poland ...... Belgium ..... U. S. S. R. .. North Ame7tca United States . Canada ...... Newroundland. Latin America.

or which : Brazil ....... Mexico ...... Near East and North Africa

Africa ....... South and East A s h .. of which :

Japan ....... Oceania ..... of which :

Australia ....

18 55 93 - 435

6,150 4,502 1,594

53

530

526 -

183 201 15 5 2&0 35 90 75 75 60 81 174 . . . . . . . . .

66 32 28 45

4,800 10,950 12,3iO 12.7iO 6,GO 1461 5 963 9 414 9 703 2 468 31071 41665 2:785 21940 4:128 268 321 136 98 322 25 25 120 75 135

53 25 87 5 5 64 47 30

5 5 15 5 5 15 15 -

460 990 425 140 455

375 901 426 141 454 60 60 50

60 60 36

- 405 840

_ _ - -

- - _ _

52 225 57 60 135 135

45 77 73 . . . . . . . . .

6 3 0 19,iGo ia.iii 1,974 11,882 11.67'1 3,951 6,913 6,891 299 458 397 115 255 190

80 140 105 I8 94 65

5 20 10 - 15 15

200 880 340

191 880 332 45 110 105

34 96 94

... Not available. Source : Report of the Preparatory Conference on World Pulp Problems, 1040.

EUROPE

The decline in output has been sharpest among some of the countries in Europe with the largest pulp industries: Germany, Norway and Finland, for example. One immediate cause, has been the shortage of raw materials, reflecting equally the decline in imports and the depletion of local forests, and, to a smaller degree, the use of pulpwood as a fuel and constructional material. But the Scandinavian industries were also hampered

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TABLE 111 CONSUMPTION OF WooUPuLP (l'houssnd metric tons)

1 9 3 7 1 9 4 8

9,995 24,470 18,800 9,200 28,000 4,040 9,775 4,400 2,600 7.000

Estiniated World Totals. Europe ................ United Kingdom ....... Germany ...............

of which :

France ................. Sweden ................ Finland ................ Norway ................ Italy ................... Netherlands ............ Czechoslovakia ......... Belgium ................ Aufitria ................. Poland ................. Switzerland ............ i3.S.S.R ............. North Amerlca ......... United States .......... Canada ................. Newfoundland .......... Latin Amerlca .......... Brazil .................. Mexico ................. Argentina .............. Wear East arid North Africa ................

Africa .................. South and South East Asia ..................

Japan .................. China .................. India ................... Oceania ................ Australia ............... N e w Zealand ...........

of which :

of which :

14,475 5,735

...

... 603 600 302 221 ... ... ... ... 144 ... ...

7,180

6,192 986

185

32

-

...

- ... ... ... ... ... ... ... ... ...

...

... 409 382

237 538

...

...

...

... 88 ... ...

4,875

1.650 2,907

60 - ... 14 - ... ... ... ... ... ... ... ... ...

2,018 2,501 1,012 982 831 458 437 231 216 216 232 195 104 840

12,055

7,842 3.893 318 245

100 46 55

15 ...

1;495 1,375

96 21 50 46 4

585

370 717 300 263 222 127 183 147 110

145

...

...

12,ii.o

11,345 1,374

51 340

133 91 58

io 15

165 152 10 3

i10 97 13

272 857

347 717 ... ...

399 1,116 300 600 175 438 141 363 59 186 73 256 86 233 69 17Y ... ... 63 208

6,190 18.i66

2,230 13,575 3,664 5.038 298 349 120 460

85 218 18 109 6 64

5 15 15

...

- 200 365 191 343 6 16

3 45 155 34 131 1 1 24

-


indirectly by currency shortages in their European markets, and to a certain extent the dislocation of their economy. In Finland there have been territorial losses, in Norway reduced forest yields in the north and the competition from sawmill industries in addition have been major factors.1 Moreover, Scandinavia produces relatively more pulp for rayon and less for paper than before the war. German pulp output has inevitably declined with political and industrial disruptions. The United Kingdom also produces much less pulp than before the 1. This situation was particularly true for the years 1945-48, and has much improved during 1949.

22

war. France, the Netherlands, Switzerland and Belgium, on the other hand, have improved upon their pre-war output. In Europe as a whole pulp producing capacity to the extent of 2.5 million tons is at present unused. The decline in pulp consumption has been greatest in the

United Kingdom and Germany, which were before the war Europe’s largest consumers. Current British pulp consumption is running at only 60 per cent of the 1937 level. In Finland, France, Italy and the Netherlands consumption has also fallen. In Switzerland, Belgium, Czechoslovakia and Sweden - Europe’s largest pulp exporter - consumption has exceeded the pre-war level, and in the first it has more than doubled.

NORTH AMERICA

A number of new mills have increased the pulp capacity of North America within the last ten years. Compared with 1937, production in 1948 had risen by about two-thirds, and the increase in consumption was equally striking But 1948 was a peak year, and 1949 saw the first signs of

contraction. In the United States, the business recession took its toll of the pulp producing and consuming industries, and the demand for pulp fell off slightly, to recover more recently. The Canadian pulp industry was affected not so much by reduced United States import requirements as by the trading policies adopted by European countries. Owing to the dollar shortage, certain European governments were constrained to impose further restrictions on pulp imports from Canada, while others endeavoured to foster pulp exports to the United States. The situation on North American pulp markets was, however, stabilised during the last half of the year.

OTHER REGIONS

Outside Europe and North America only the Soviet Union and Japan possess large pulp industries. The Soviet Union produced 840,000 tons in 1937, and its current output is believed to be over l million tons a year.i Consumption closely approximates to these figures. Japanese pulp production was reduced from 900,000 tons in

1937 to 340,000 tons in 1948, and consumption by over two- thirds. Unused capacity amounted to about 450,000 tons in 1948. The only other Asiatic countries producing and consuming wood pulp are China and India, but the tonnages are negligible. Production and consumption in Africa and the Near East

is a matter of about 30,000 tons annually. Latin America with n population of 150 million, about the same as that of North

i Various sources give double this flgure for the present production estimate.

23

America, consumes little pulp - just under half a million at present-and produces less. Yet the pulp and paper industries of this region have made great strides since 1937, consumption having risen twofold and production tenfold. Development in Oceania has also been quite fast, following the establishment of the first local pulp mills during the war, and current production is around 100,000 tons a year.

INTERNATIONAL TRADE

Pulp exports come from three regions: Europe, North America and the Soviet Union. Of these, Europe is much the most important, for it is the only one with a large net balance available for exports (Table VI). North America imports considerably more pulp than it exports. Russia’s surplus over domestic requirements is small and is mainly sold to Eastern European countries, so that little Russian pulp enters world trade. Most of the pulp trade of North America is carried on with-

in the boundaries of this continent, and only a minute proportion of North American pulp exports finds its w a y at present to countries outside North America. But more than a third of European exports go overseas. The pulp imports of the rest of the world, amounting to about 400,000 tons in terms of effective demand, are thus covered to a very large extent by exports from Europe, especially from Scandinavia.

Scandinavia and Canada between them account for 90 per cent of world exports (Table IV). The other net exporters are

TABLE IV EXPORTS OF WOODPULP (Thousand metric tons)

Country 1937 1947 IQ48

Estamated World Totals .......... 6,480 4,550 4.618 Europe .......................... 5,390 2,830 ...

Sweden .......................... 2,553 1,797 1,681 Finland .......................... 1,470 731 800 Norway .......................... 656 241 346 Germany 166 - ... Austria .......................... 186 9 39 Czechoslovakia ................... 136 44 24 Belgium 24 ... U . S . S . R . ...................... ... 20 ... North America .................. 1.090 1,700 1,710

Canada ........................... 793 1.581 1,633 United States ................... 2Y 3 118 75


Austria, Germany and Czechoslovakia. The bulk of Canada’s exports is taken by the United States, while Scandinavian shipments are widely dispersed all over the world. Prominent among importing countries are the United States and the United Kingdom (Table V). These two countries absorb at least 60 per

of which :

.........................

......................... -

of which :

24

TABLE V IMPORTS OF WOODPULP (Thousand metric tons)

country 1937 1947 19118

Estimated World Totals .......... 6,450 4,620 .... 3,490 2,020 ... 1,824 876 1.16f 662 361 244 251 182 Q@

........................ 175 207 , 130 ................. 112 135 151 ............... _. 184 ................. 50 m SF

Hungary ......................... 42 - f 36 32 .’. $1 6t 70

Greece ........................... 24 7 10: 22 ... ...

................... 24 15 ...

................. -. 6 19 1Q.i 13 .... Portugal -

U . S . S . R . ......... 5 120 ... North America ................... 2,190 2,140 2.005

United States .................... 2;172’ 2.1 15 1,974: Latin America - 21 0, 270

Brazil ........................... 100 104 .... Argentina ........................ 43 64 .... Mexico ........................... 36 39 ... Chile ............................ 15 24 ....

99 -

....................... -.

of which :

of which : ................... ...

...

. ..-

...

IO. 5

500

Cuba ........................... Near East and North Africa ...... South and East Asia .............

Japan ............................ of which :

China .......................... I-

India and Pakistan .............. Oceania ..........................

Australia ......................... N e w Zealand ......................

of which :

474% 16 1 1 59

46 1.

15 5 20

6 8 5

45

34 10

* Bizone only. ... No1 available. Source : Report or the Preparatory Confierence on. World, Pulp Problems,

...

...

...

...

...

1940:

cent of world exports. Next in importance come France, Bel- gium, the Netherlands, Italy, Brazil, Argentina, and before the- war Japan. The Latin American countries are becoming increasingly important importers. World exports in 1948 totalled 4.6 million tons, or 1.9 million

tons less than in 1937, and world imports suffered a similar- decline. Scandinavia’s expaft fell from 4.6 to 2.8 million tons, whereas Canada’s exports increased from 790,000 tons to 1.6 million tons. United States impo-rts were reduced by only 10 per- cent to 2 million tons, but imports by the rest of the world dropped by nearly 40 per cmt from 4.3 million tons to 2.6 million tons. The principal short-term victims of this drastic decline are Britain, France and Japan, although its effects are even more serious in minor importing countries with new paper industries. Indeed, compared with 1937, imports into Asia, Latin Smerica and Africa show a decrease of about 30 per cent. The,

25

TABLE VI W O R L D PULP BALANCE (Thousand Metric Tons) ~ ~ ~~

1 9 3 7 I 9 4 9 (Provisional)

Estimated World total . 23,665* 23,840' + 635 28.345* 28.265' - 80 Europe ................ 9,790 11,670 +1.880 8,150 8.900 + 750 U.S.S.R. ............... ... + 195 - + 50 North America ........ 12,055 13.950 -1,105 18,& 16,485 - 445 Latin America ......... 245 25 - 220 540 295 - 248 Near East 15 5 - 10 20 15

15 15 Africa - - - Asia ................. 1,525 1,190 - 335 630 545 - 85 Oceania .............. 50 - - 50 160 110 - 50

- .............. - ...............

* Excludin U.S.S.R. ... NO^ amifable. Source : Report of the Preparatory Conference on world Pulp Problems, 1949.

ability of importers in these regions to cover their pulp requirements in Europe is evidently prejudiced by Europe's dollar drive, which seeks to direct a larger share of a smaller volume of pulp exports to dollar countries. Until recently, European pulp found a ready market in the United States, and not un- naturally, European exporting countries were unwilling to divert a dollar earning export to markets where no hard currency can be earned. Whether the recent devaluation of Scandinav- ian currencies against the dollar will have the effect of reviving a flagging United States demand for European pulp, is to be seen. The shrinking of the world's trade in wood pulp has been

associated with the virtual elimination of a free world pulp market. Private enterprise in the pulp trade has frequently been superseded by the operations of public authorities whose prime consideration more often than not, is the availability of currency. Currency fluctuations and artificial exchange rates have added their influence to that of bulk buying under long- term contract and monetary restrictions in distorting the international pattern of pulp distribution.

:26

C H A P T E R I 1 1

Printing paper Characteristics

IMPORTANCE OF PRINTING PAPER

This chapter is devoted to book paper, magazine paper and other printing grades excluding newsprint. It differs appreciably in treatment and length from the next chapter which deals exclusively with newsprint. Greater emphasis on newsprint does not, of course, imply that other printing grades merit less consideration. In fact, printing grades other than newsprint are, in a sense, even more important to the problems posed in this report, which discusses both the world’s growing demands for paper for reading purposes and the producer’s ability to meet these demands. The newspaper is the largest single outlet for printing paper, but it is not always the most suitable medium for imparting knowledge and information in print. Books are more fundamental to education than newspapers and education is fundamental to literacy, without which there can be no demand for newsprint. Unesco’s special obligations lie in the field of education,

and it would have been desirable, therefore, to present a comprehensive picture of the demand for, and the supply of, book paper and similar printing grades. That other printing paper should receive less consideration than newsprint in this report is unfortunate but unavoidable. Newsprint is a well organized and articulate industry. It consists, in the main, of large units producing a much publicised commodity and it easily overshadows the other sections of the paper industry. Data about newsprint exist in abundance. Not so with other printing papers. These comprise a wide variety of grades for books, magazines and periodicals, rarely standardised and frequently made with glossy, de luxe and other special finish. They are produced by a great many manufacturers, large and small, who are less organised and less practised in making statistical returns than are the newsprint manufacturers. More- over, returns often include writing paper, tissue paper, other fine paper, and similar items, and it is impossible to split the totals. In sharp contrast, newsprint is in a distinct category and can be readily separated from other paper products, much the same as wrapping paper and cardboard. The products of the paper industry fall into four main groups,

newsprint, other printing and writing paper, wrapping and

27

industrial paper, and cardboard, the first accounting for about 40 per cent and the other three for about 20 per cent each. Printing and writing paper, though different products, are frequently given as one total, but the share of writing paper is small and probably amounts to less than 5 per cent of total paper output.

LOCATION AND STRUCTURE OF THE PAPER INDUSTRY

The world's paper industries do not quite conform to the pattern which characterises the pulp industries, either in respect of their geographical distribution or their structure. Pulp production is based mainly on local resources of wood and water, and the world's pulp industries are accordingly located close to their sources of raw materials, that is in the vast forest areas of the Northern Hemisphere. Moreover, in pulp production, the large unit predominates. For papermaking, however, such considerations as the availability of skilled labour and fuel-where cheap hydro-electric power cannot be obtained the degree of industrial technique and the extent of the domestic market may be as important as the proximity of raw materials in determining the location of the mills. Some of the world's largest paper industries, indeed, rely in large measure on imported raw materials. The British paper industry is almost entirely dependent on imports for its pulp requirements, and the Netherlands, traditionally an important producer of pulp and paper, produces no pulpwood. Geographically, then, papermaking is much more widespread than pulp production and, indeed, common in all but a few newly-developed countries with little secondary production. Paper mills exist in practically every European country, and in several Latin American and Asiatic countries, although only few are able to operate up-to-date machinery, and fewer still can satisfy all the needs of their domestic markets. It should be noted however, that while paper for books and magazines is often made in comparatively small mills, it is evident that nations with a small consumption cannot manufacture their o w n supplies of newsprint, simply because the machinery would be idle for a large part of the year. The structure of the paper industry exhibits equally

distinctive features. Large-scale methods are not essential, though perhaps desirable, in the manufacture of paper other than industrial paper and newsprint. Capital requirements vary considerably with the type of product, but for many types of printing paper they are not heavy-again in contrast with newsprint. Paper mills, therefore, are numerous and widely scattered. They range in size from old-fashioned establishments with less than 50 workers, and for many decades in family ownership to giant companies equipped with Fourdrinier machines. It significant that both extremes of industrial enter-

28

prise exist peacefully side by side within the industry except the newsprint section. Dwarfed by the highly capitalised modern mill and enormously surpassed by it in operating emciency, the small family establishment has somehow managed to survive, confining itself to the production of high quality, special grades and relying on a long tradition of craftsmanship which can neither be copied nor readily utilised for mass produced lines. In a limited way, it has successfully held its own against the onslaught of price competition. Nevertheless, the small unit has not entirely resisted the

advance of modern industry. Even in the manufacture of printing paper there is a perceptible trend towards concentration, which is leaving its mark on both the geographical distribution and the structure of the paper industry. Evidently the existence of numerous small mills divorced from their raw materials is not conducive to high productivity and low costs. To realise in full the benefits of continuous-flow operations there must be a degree of integration between pulp production and papermaking, and such integration requires large-scale manufacture of paper. The need for vertical integration also underlies the trend towards greater concentration of papermaking in pulp producing countries. As is well known, pulp producers have attempted, in recent years, to develop the manufacture of newsprint, paperboard and a few other mass produced articles, and to augment their export trade in finished or semi-finished goods rather than of pulp. As a result, the pulp producing countries are becoming pre-eminent also as manufacturers and converters of paper.

Production

CAPACITY

It would be interesting to give capacity estimates and compare them With those shown in the next chapter for newsprint. But capacity figures by countries have never been published, and the preceding section partly explains why they cannot be determined with any accuracy. All capacity totals are in varying degrees conjectural, even for a mass product like newsprint. Other printing papers are still more dimcult to deal with, for two reasons. First, the printing paper section of the industry is not a

homogeneous entity. It is composed of a large number of mills, many of them very small, which make all sorts of paper, in addition to printing paper. The combined total capacities of such mills have never been assessed for more than a handful of countries and these, with some exceptions, are usually minor producers. The exceptions include the United States and Canada, both of which are discussed below in this chapter. Secondly,

29

calculations of capacity are complicated by grade-switching. Alternative use of plant is common to all sections of the paper industry, including newsprint manufacture. Newsprint, however, is normally produced by the Fourdrinier machine, and although this machine can be used in the manufacture of many grades of paper, there is no insuperable difficulty in ascertain- ing what portion of it is devoted to newsprint and other mass produced lines. But many manufacturers of printing paper operate on a small scale and cannot afford to use this vast and expensive machine. Their plant can, and frequently is, turned over to other uses, depending on the demands of the market and the relative profitability of the various products. It is impossible, therefore, to estimate the percentage of machine capacity used at any one time for printing paper or alternative products such as writing paper and tissue paper.

PRODUCERS

The largest printing paper industries are found in the principal pulp producing countries: the United States, Canada, Scandinav- ia and Germany. Other important producers are Britain, France, Belgium, the Netherlands, Austria and several non-European countries, including the Soviet Union, Brazil, Mexico, India and Australia. New capacity is being set up in Pakistan, Turkey, Argentina and other Latin American countries, while considerable extensions are planned in Eastern Europe, New Zealand and the Union of South Africa. Paper for reading and other purposes is foremost amongst the products benefiting from the diversification and spread of manufacturing industry throughout the world. The dispersion of the industry is thus considerable. This is

another characteristic in which printing paper differs from newsprint. Whereas four countries, Canada, the United States, Britain and Finland, represent between them some two-thirds of world newsprint capacity, there is no similar concentration for the rest of the paper industry. Again, a very large pmportion of newsprint output enters international trade. More than four- fifths of the Canadian and Scandinavian newsprint industries cater exclusively for export markets, and even some of the smaller newsprint producers, for example Austria, export a large proportion of their output. By the same token, many consuming countries, including major consumers, like the United States, and a host of minor ones, import thc bulk, or the whole, of their newsprint requirements. But printing paper is produced, in the first place, for the needs of the domestic market, and the balance absorbed by world trade is very much smaller, both relatively and absolutely, than for newsprint. For printing paper there is a degree of self-sumciency in many countries. Thus India imports all its newsprint but only one-half of all the other grades which it consumes, and Argentina has a size-

30

able output of printing paper, although it produces at present very little newsprint. It is very nearly accurate to say that no country which

produces newsprint is without corresponding mills for the production of other grades of printing paper. But in addition many nations which import all their newsprint supplies have mills producing paper for periodicals and books. This is true for Greece and Denmark, as well as for the Union of South Africa, Peru and Mexico, as some instances outside Europe.

OUTPUT

Production statistics are scanty and available for only a few countries (Table I). The world's largest producer of printing

TABLE I PRODUCTION OF PAPER IN THE U.S.A. (Thousand metric tons) --

1939 1948

Printing - Groundwood Type ........................... 74 490 Rook ........................... 1,392 2.072

Total printing .................... 1,466 2,562 Newsprint ...................... 865 186 Groundwood other than urintinr . 41 7 269 Fine 656 1,049 ........................... Coarse ......................... 1,966 2,851 Special industrial .............. 64 288 Building 598 i,i68 Sanitary and tissue ............ 588 1,082 Absorbent ...................... i l i 99

.......................... 58 other Total paper ...................... 6.Y89 10,154 -rota1 Board ...................... 5,465 9,844 'rota1 ........................... 12,254 19,998

.......................

- _ _ ~

-~

paper is the United States, with a current capacity of 2.7 million tons, and an output estimated at 2.5 million tons for 1948, against 1.5 million tons produced in 1939. This compares with a newsprint production currently averaging 800,000 tons a year. Printing paper at present contributes 25 per cent to the volume of the paper industry's output excluding cardboard, or 13 per cent if cardboard is included. In contrast with newsprint, printing paper has fully maintained its percentage share of a rising output of paper products during the past twenty years. In Canada the position is exactly the reverse. Newsprint

capacity has been augmented appreciably since 1918. News- print production has also expanded, and since 1939 rapidly so. Production of printing paper, on the other hand, did not show much net change between 1920 and 1939 (Table 11). Although it rose from 90,000 tons in 1939 to 154,000 tons in 1944, it constituted in the latter year only 15 per cent of all grades except newsprint, or 3 per cent if newsprint output

-

31

amounting to 4 million tons in 1944 is included. In Canada newsprint accounts for 80 per cent of the paper industry's total capacity, in the United States €or only 5 per cent.

TABLE I1

(Thousand metric tons) PAPER PRODUCTION IN CANADA - ALL ORADES EXCEPT NEWSPRINT

Grade of Paper 1920 1930 1939 1944

Book, writing ................... 66 63 82 139 Wrapping ........................ 70 71 too 142 Tissue ........................... 3 11 27 42 Paper board ..................... 143 212 375 534 Other ............................ 25 33 28 54 - - - - Total ........................... 307 390 61 1 911

On the whole, world production of printing paper has well recovered from the war and has now regained pre-war level. In Australia, Latin America and Eastern Europe pre-war rates .of output have already been exceeded. There is not much unused capacity in printing paper. Even in Britain, where much newsprint producing plant stands idle, production of printing paper is at a fairly high level. Belgium, a hard currency country, is one of the few exceptions. There the paper mills are working below capacity because of lack of markets. The principal dimculties encountered are trade barriers arising from quotas, other import restrictions and exchange controls, by which many European countries limit their purchases from hard currency sources, such as Belgium. One reason for this good showing of printing paper, as

against newsprint, is the wider choice of raw materials available to the makers. Several printing grades are traditionally produced from linen rags and other materials which are not 'derived from wood. Supplies of these materials are more plenti- ful, or less affected by currency restrictions, than supplies of wood pulp, a relatively new raw material, on which newsprint is wholly dependent. Shortage of wood pulp, for example, has forced the Italian paper industry to switch newsprint capacity to other grades. Another reason is the greater profltability of printing paper, compared with newsprint, in certain markets. Benefiting from being more lucrative, printing grades are at present produced in several countries on machines formerly used for newsprint. For example plant in Argentina converted during the war to newsprint has recently been reconverted. Mexico is also converting newsprint capacity to other grades. But too much should not be made of the more rapid recovery

in printing paper. World demands and requirements for this product have greatly increased since 1939 and are certainly far in excess of production in that year. Here, as for newsprint, pre-war figures have little relevance for post-war needs and only a limited value €or comparison. Printing paper remains in short supply, although it is less scarce than newsprint.

32

Consumption

GROWTH Tables 111 and IV give an indication of the growth in consumption since 1927 for certain countries, in so far as figures are obtainable. Consumption of printing paper of all descrip- tions has followed the trends of wood pulp, newsprint and other grades of paper, and has expanded appreciably over a period. But the pace of expansion has been slower as well as more steady. Printing paper is not as dependent on economic conditions as is newsprint, the demand for which is strongly influenced by the volume of advertising. Consumption of printing paper, therefore, fluctuates less sharply. In fact the demand for printing paper other than newsprint is normally stable, showing a steady increase. In the Netherlands, a country suf- ficiently representative of Western Europe to be quoted, consumption of printing paper increased in nine of the thirteen years before the war and contracted only in 1938. In 1939, Netherlands consumption had almost doubled compared with 1927. In Latin America and Asia the growth in demand w a s sharply accelerated in the second half of the .nineteen-thirties. Costa Rica’s consumption expanded more than twofold between 1935 and 1939. Between 1927 and 1948 consumption had doubled in N e w

Zealand and Colombia, and was more than twice as large for the same years in the United States, Switzerland and Norway. The amount of printing paper used in India has risen by 150 per cent since 1925. Two new states, Pakistan and Israel estimate that printing paper consumption, exclusive of newsprint, will quadruple within the next five years.

It is only in the United States, whose flexible economy is prone to abrupt alternations of boom and slump, that printing paper has reproduced the fluctuations which mark the consumption of newsprint. In that country per capita consumption of printing paper fell off heavily in each depression period between the wars, and during the Great Depression from 1930 to 1932 it w a s halved (Table IV). Recovery was slow, with the result that per capita consumption w a s no higher in 1939 than in 1927 and not significantly above 1920. But from 1945 onwards United States consumption of printing paper went up by leaps and bounds, and to-day it is 50 per cent above pre-war level. As will be seen later the trend in newsprint, during the past twenty-five years, is almost in exact replica of the trend in printing paper.

INEQUALITY Although the selection of countries for which per capita consumption figures are shown in Table V is by no means complete,

33

a 0 a 0

4 E E a a E

C

c

E F. m b

......................

......................

......................

......................

......................

...................... ~

~~

m~

w0

mm

0~

00

~l

-0

a0

rm

m~

---cc

-- damm

nmmm

.....mmwwdmmmw0t-wm00. t-

.....

.....

......

m-mm w.3wr*r*v~.~mrn0

......

......

-mi r- oz. w m U-. m

- w G w m 0) m U-. a

CD w r-

N N w N m 01 N

N m m .3 m

m D U .3 w

01 w m m

............

............

............

............

............

............

............

............

............

....

....

..I.

....

....

....

....

....

.... ..

..

..

-.

..

..

..

..

TABLE IV PER CAPITA CONSUMPTION OF BOOK PAPER IN THE U.S.A. * (kg. per head)

1900 ........................ 4 .................... 9 1910 ........................ 6 1936 ................... 10

........................ 8

............. ...... 10

........................ 10

........................ 11

........................ 10

........................ 6

................

....... 1934 .......

1920 1927 1928 1029 1930 1931 1932 1933

1937 ........................ 1938 ........................ 1939 ........................ 1940 ........................ I945 ........................ 1446 ........................ 1047 ........................ 1948 .......................

It 9

IO I1 10 12 14 14

* Excluding certain prlnting grades.

it is evident that the distribution of supplies is very unequal. Heading the group of countries covered, the United States annually consumes at present 26.4 kg. of both printing and writing paper per head. Scandinavian countries, the Nether- lands, France and New Zealand average each 7 to 10 kgs. Austria has a consumption of 7.3 kgs per head of printing paper. But per capita consumption in Italy is only 1.2 kg. and outside Europe, North America and Australia it rarely exceeds 1 kg. Thus Peruvians consume only 0.4 kg. a year, in spite of domestic production of printing paper, and per capita consumption in Ecuador, Turkey and the Philippines is as low as 0.2 kg. The figures for Burma, China and Pakistan are even lower. Immense as such inequalities are, they are greater still for newsprint, per capita consumption of this commodity in the United States being five hundredfold above that in India, China, Indonesia and most of Africa. The disparities in consumption have widened since 1945.

The few countries which have emerged from the war with strengthened economies, e.g. the United States and Switzerland, have enlarged their share of an unchanged volume of world supplies, while many other countries, especially those directly affected by military operations, have not yet fully retrieved the war-time decline in consumption. In consequence, consumption in regions other than North America and Australia is now somewhat lower than it was in 1939. But the 1939 level is an inadequate criticism to apply to consumption needs in 1949. The world's demand for book paper has materially expanded with the post-war drive for education throughout vast and largely illiterate continents, and the current supply position in those regions must be seen in the light of their current needs. Judged by this criterion, requirements are far in excess of

consumption levels in many of the countries where modern educational methods are only now taking root. Indonesia today consumes about the same quantities of printing paper as in 1939. Yet the demand has since multiplied, and meanwhile Indonesia lacks the paper to print the school books upon which

35

TABLE V PRINTING A N D WRITING PAPER ESTIMATED PER CAPITA CONSUMPTION IN 1948 (EXCLUDES NEWSPRINT) (kg. per head)

kg. per head Country kE. per head country

0.6 0.9 1.1

........... 0.i Austria .............. 7.3 Honduras Bolivia .............. 0.4 India ................ 0.2 Brazil ................ 1 .o Ireland .............. 8: 3 Bulgaria . . 0.; Italy ................ 1 .2 Burma .... 0.1 Japan ............... 4.1 Colombia ............ Lebanon ............. 0.6 Costa Rlca .......... New Zealand ........ 8.0 Cuba ................ Norway .............. 10.4 Czechoslovakia ....... Pakistan 0.1 Denmark Peru ................ 0.4 Ecuador ............. Philippines .......... 0.2 Egypt ............... Switzerland 8.9 Federation 01 Malaya Turkey .............. 0.2 and Singapore .... Union of South Africa 3.8

Prance .............. United States ........ 26.4

............. ............

..........

5.8 8.i 0.2 0.3

0.4 7.5

Greece 0.7 ..............

its post-war programme of education depends. Even in France or Czechoslovakia and other countries with a relatively large per capita consumption there has been a considerable expansion in the demand for book paper in the past ten years. Paper supplies, however, have not matched the increase in demand, and the publication of books for educational and other purposes is accordingly hampered. Such deficiencies could, of course, be relieved if countries were free to compete for supplies in the world market. But those countries which are short of paper are usually also short of foreign currency and are forced to confine their purchases to soft currency sources, where supplies are limited.

It is pertinent to note that a mope equitable distribution of printing paper is, to some extent, hindered by high import tariffs. Newsprint and other grades of paper are also liable to customs duties, but the incidence of such restraints affects particularly the importation of printing paper. Many countries are importers as well as producers of printing paper and afford their paper industries enough protection to safeguard their domestic markets from foreign competition. But much of the newsprint consumed cannot be produced economically by domestic paper manufacturers and must be imported. The import duties on newsprint are thus lower than for printing paper, and many countries admit newsprint duty free.

3F

C H A P T E R I V

Newsprint

Characteristics of the newsprint industry For none of the diverse products of papermaking are the advantages of mass production as manifest as for newsprint. In volume, newsprint is far and away the most important single pulp product. In a normal year it constitutes approximately 45 per cent of total paper output and absorbs a very large quantity of the pulp consumed in papermaking. Then newsprint is destined for some specific use, which requires less variety of grade, quality and size than most other kinds of paper. Light weight newsprint for carriage by air is at present very expensive and is the exception rather than the rule. Newspapers, moreover, have a very short life, and to achieve a wide circulation they must be printed as economically as possible on cheap, mass produced material. Newsprint is therefore eminently suited for mass production by high-speed machinery. Such machinery is extremely costly, and it is only economic at a large and continuous throughput. To some extent, investment risks are reduced by the adaptability of certain types of newsprint machinery to the production of other grades of paper. Older machines can be readily converted, although most machines for newsprint manufacture constructed within the last twenty years are not capable of producing other grades. Grade-shifting tends to spread investment risks over a range of products, but it also tends to make production of particular products, especially newsprint, highly sensitive to profit yields. A further characteristic is the length of the business cycle.

Some forty years of planned forest growth are necessary before the trees are mature for cutting; yet mill stocks must be con- tinually replenished to keep the plant running at an economic level of capacity. Growth is not entirely a natural process. It has to be planned years in advance in areas suitable for cutting and transportation. Provision must be made for housing labour near the cutting areas, roads may have to be driven through miles of thick forest and the transportation of men and materials has to be organised. To sustain an efficient cycle of operations the mills have to ensure a smooth flow of raw materials all the year round. The problem of forest conserva- tion is indeed vital to the paper industry and consequently to readers everywhere. Forestry officials in many parts of the world have warned of the dangers of over-cutting, and only

37

recently a prominent Canadian forester predicted that “unless new growth was established, Canadian supplies of marketable timber will disappear in less than sixty years.” The structure and organization of the newsprint industry

have been vitally affected by the magnitude of the capital requirements and the need to programme production many years ahead of requirements. First, the rise of the large unit has been favoured. The smaller type of establishment is not lacking but it is gencrally tending to be eliminated or absorbed by the larger onc. The long-term trend is definitely towards greater concentration of newsprint production in a diminish- ing number of growing concerns. Secondly, the processes of production have become increasingly integrated. Newsprint mills have expanded in varying degrees towards the sources of their raw materials. Several British mills have a stake in pulp production in Scandinavia and North America, and some own or control pulp mills in these countries. Thirdly, an elaborate system of long-term contracts has

evolved as the form of marketing most appropriate to the needs of the newsprint industry. Having so much capital tied up in the manufacture of a product with a singularly long cycle of operations, newsprint manufacturers are naturally anxious to avoid the hazards of the open market, and to cater for a known demand. Thus, before the war, most British publishers of newspapers were under contract up to twenty-five years with the domestic producers, and up to twenty years with the Canadian suppliers. Control of the newsprint trade in the United Kingdom since 1939, however, has modified or suspended these arrangements. Canadian producers’ contracts with publishers in the United States and in other countries usually run for ten years. United States manufacturers normally enter into ten year contracts with their domestic customers, and in tacit co- operation with them, they fix newsprint prices for a period up to one year. Scandinavian manufacturers, like others, cn- deavouring to make the most of inflated newsprint prices at the height of the post-war sellers’ market, have in recent years transacted a larger volume of spot sales than is customary. But in Scandinavia too, spot sales are the exception and the long- term contract is the rule. It should be noted that while the long-term contract is the

normal method of business it has not wholly superseded the open market. In normal times contractual arrangements do not necessarily involve the pre-emption of all supplies, and before the war, when capacity was in excess of effective demand, newsprint was available to all comers. But publishers willing to commit themselves to a specified annual minimum offtake over a long period invariably obtain much more advantageous terms than do their financially weaker competitors who cannot take on such commitments, and the larger the tonnage guar- anteed the better the terms. Thus United States consumers of

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Canadian newsprint are not only obtaining and using a lavish supply, but were also paying the lowest prices in the world before the devaluation in September, 1949, established international prices on a new footing. Finally, as a corollary, the press has itself entered the news-

print industry to secure supplies of the most suitable grades and at the lowest possible prices. In the last twenty-five years there has ensued a good deal of financial interlocking between newspapers and papermaking interests. Even before the war important British newspapers publishers owned and operated their own newsprint mills in the United Kingdom, and a few United States publishers had spilled over into domestic and Canadian newsprint production. After 1945, a number of United States magazine publishers, faced with a rapidly growing demand for their products, purchased newsprint mills and adapted them to the manufacture of magazine grades. Such spreading of interests was, of course, stimulated by the acute newsprint shortage in the early post-war period. More recently, as the result of larger newsprint supplies together with lower newsprint prices, this movement has received a sharp check. Several United States publishers are now closing down or selling recently acquired newsprint mills, most of which were found to operate at high costs. But the long-term trend appears to favour closer co-operation between newspapers and newsprint interests, and recent developments have brought no conclusive evidence that it is going to be reversed.

Production

DISTRIBUTION OF CAPACITY

Production of newsprint is dominated by Canada, which produces much of the world's newsprint and some of its best grades. In the last twenty-five years the machine capacity of the Canadian industry has increased threefold to nearly 4.7 million tons, excluding Newfoundland, and it is still increasing at an annual rate of 100,000 tons. The Newsprint Association of Canada has attempted to calculate the capacities of individual newsprint industries. According to these estimates Canada accounts at present for 46 per cent, or 50 per cent if New- foundland is included, of world capacity which at 9 million tons is about 5 per cent smaller than in 1939. Next in size comes the United States industry with a current capacit) of 800,000 tons, compared with just under 1 million tons in 1939. The decline in United States capacity is a long-term trend making for the diversion of domestic papermaking plant to uses more profitable than newsprint. It has obviously strengthened the demand for newsprint imports from Canada and is largely responsible for the expansion of the Canadian industry.

'

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North American capacity is n o w not far short of 6 million tons and exceeds 60 per cent of world capacity, against just over 50 per cent in 1939. In sharp contrast, the machine capacity of Europe’s once

flourishing newsprint industry has declined in the last ten years by almost 1 million tons to less than 3 million tons, or from 40 per cent to 32 per cent of world capacity. The decrease reflects both direct wartime destruction and damage due to years of neglect and dilapidation of equipment. The countries most affected are the United Kingdom and Germany, with the largest and second largest European newsprint industries before the war. The British industry still ranks first, although its capacity has been reduced by one-fifth to about 800,000 tons, but the German industry, suffering a much larger contraction to about 300,000 tons, has been relegated to fourth place. The combined Scandinavian totals have declined by 10 per cent to roughly 1 million tons. A number of countries, including the Netherlands, Italy and Austria, have maintained their newsprint industries at around pre-war levels of capacity, and the French industry has n o w made good its war-time losses. Few have reported any increase, and some of those w h o did probably included in the totals some capacity temporarily converted to newsprint production. One of the few countries where expansion has occurred is Poland, not only as a result of territorial changes affecting newsprint mills, but also through an increased speed of operations. About 70 per cent of Europe’s existing machine capacity is located in Finland, Sweden, Norway, the United Kingdom and France. Newsprint production outside Europe and North America is

negligible except in the Soviet Union and Japan. Machine capacity in the Soviet Union is n o w reported as 300,000 tons, against less than 200,000 tons before the war, while the Japanese industry has contracted by about the same tonnage to 200,000 tons. These changes are partly explained by the cession to the Soviet Union of the Japanese half of Sakhalin where newsprint is manufactured. The Brazilian industry has considerably expanded from 9,000 tons in 1939 to 40,000 tons to-day. Never- theless, current newsprint output in the whole of Latin America is less than 70,000 tons. During the war, when supplies were difficult to obtain, some newsprint was produced in Argentina. At present, however, Argentina mills produce other grades only. Australia’s first newsprint mill was erected during the war, and its current capacity is 30,000 tons. There w a s no newsprint production in Turkey before 1944. In that year, pro-

’ duction was begun at one mill which is owned by the State, controlled by the leading bank and operated at a loss. Its capacity is 10,000 tons. Less fortunate than the subsidised Turkish mill, the small Egyptian paper mill which produced newsprint for the first time in 1948 suspended operations in 1949 as it could not compete with the imported product.

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MEANING OF CAPACITY

Capacity is an elusive concept which is not readily amenable to hard-and-fast rules of definition. The Newsprint Association: of Canada, from whose publication the pre-war figures com- piled in Table I are extracted, defines rated capacity of the

TABLE I WORLD NEWSPRINT PRODUCTION (in thousand metric tons)

Production Area Average

1935-39 1948

World totals ..................... Worth AmeTiCa. Total ............. Canada (including Newfoundland) . Vnited States ....................

United KinEdom ................. E uTope. Totel ....................

Germany ......................... Finland .......................... France ........................... Sweden .......................... Norway .......................... Netherlands ...................... rlustria ........................... Italy ............................. Belgium .......................... Czechoslovakia .................... Smitzerland ...................... Poland ........................... Olhers ........................... Sociiet llnion ..................... Latin AmeTiCa. Total ............. Hrazil ............................ Asia. Total ....................... .Tapan ............................ Korea ............................ China ............................ N c a ~ East. Total ................. 0cc:ania. Total ....................

7,41 i 7,482 3,849 5,265 3,026 4,515 823 750

2,960 1,809 872 299 464 I81 395 3001 327 203 271 280 109 140 90 85 75 44 67 65 47 50 39 48 32 40 31 44 61 30

i 88 225 7 35 3 25

407 i 13. 360 100 41 5 6 B - 5 - 30

Sources : Newsprint Association of Canada and UneSCO.

Canadian industry as “totals representing the result of combin- ing for each newsprint machine the best speed in any one of the previous ten years with the best trim attained in any one of the previous five years”. Consequently, the rated capacity in any particular year is based on machine performance up to the end of the previous year, and “any improvements in speed or trim introduced during the preceding year or subsequent to that date would not be fully reflected in rated capacity figures until a year later”. It follows that in a period- of great demand newsprint producers can expand output beyond, nominal capacity by increasing speeds, without adding to their plant. This explains w h y the Canadian industry has !leen reported since 1947 as operating in excess of 100 per cent of its rated capacity. The expansion in Canadian capacity and production in recent years was achieved partly by raising the

speed of operations in most mills to the top limit of 2,000 feet' of newsprint per minute, and is not in itself a measure of the expansion in physical resources. Elsewhere capacity figures have not been calculated on the

same basis. Moreover, several countries, Belgium and Czecho- slovakia are probably amongst them, have included in their capacity figures every ton of papermaking capacity which is being, or can be, switched to newsprint manufacture. In other countries some nersprint manufacturing capacity may have been diverted to the production of other paper. The decline in rated capacity shown for their industries, therefore, is not necessarily an indication of potential capacity. The most important member of this group is Britain, where several newsprint mills have been turned over to the production of paperboard and other paper products. Conversely, reconversion of plant to or from newsprint may entail adjustments of newsprint capacity figures unaccompanied by changes in the overall totals for papermaking capacity. However it should be noted that some newsprint capacity in Britain has simply remained idle. Again, outside Canada the speed of operations rarely exceeds

the average of 1,200 ft. of newsprint per minute, and only in Finland and Great Britain does it reach the top limit of 2,000 ft. per minute. Should it be possible to raise speeds, as in Poland, by increasing the mills' efficiency, capacity figures would have to be adjusted accordingly. Finally, rated machine capacity is not always synonomous

with producing ability. Machines can be put out of action by mechanical breakdowns and adverse weather condition imped- ing the transportation and processing of raw materials. Thus the great drought which occured in Scandinavia in 1947 slowed down the movement of logs on the rivers to the mills, and deprived most mills of much of the water power generated by their own turbines. More remunerative prices for other pulp and paper products may cause a corresponding redirection of the productive effort. Capacity and prices are indeed inter- dependent. The lower the price, the less is the capacity, and vice versa. Above all, full utilisation of machine capacity is not possible without an ample supply of raw materials.

THE PRODUCTION PROBLEM

It is mainly the lack of raw materials, or rather the financial obstacles to their procurement, to which must be attributed the co-existence of unused newsprint capacity and an unsatisfied demand. In 1948 production was 7.5 million tons, while capacity w a s just under 9 million tons. The gap has narrowed in 1949 but it still measures more than a million tons. The existence of idle plant is, of course, nothing new. Newsprint production is highly sensitive to profits, and considerations of price and

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profit have often dictated restriction of output. In the five years before the war capacity amounting to about 7.5 million tons out of a total of 9 to 9.5 million tons was actually in production. Idle capacity was thus in the neighbourhood of 2 million tons, and only in periods of exceptional prosperity was it materially less than this. But before the war the demand for newsprint was not, as it is now, liable to official restraints. It could exercise its pull in any country of supply and stimulate a greater volume of production. To that extent output each year was a true measure of the demand from literate countries equipped with printing presses and thus able to utilise newsprint. There was then nothing paradoxical about surplus capacity. Even now physical shortages are only secondary reasons

for the gap between capacity and production. The main physical obstacle to newsprint production today, is the shortage of pnlp- wood.‘ Serious though this shortage is, it does not fully explain why one-seventh of the world’s newsprint industry is at present idle. At the root of the present production problem are external payments difficulties mirroring maladjustments of world trade in general and of the pulp and paper trade in particular. In 1948 the world produced rather morc pulp than it could consume and a quantity of 500,000 tons was in surplus for want of currency to buy it. This unexpected improvement of supply led to a substantial weakening of the pulp market and a fall in pulp prices everywhere. The pulp market remained weakish until the devaluation of soft currencies came to its rescue. But for currency shortages, the relatively small additional quantities of pulp needed for capacity opcrations in Europe’s and Japan’s newsprint industries would most probably be produced. There can be little doubt that pulp producers would, and could, respond to the stimulus of an unfilled, unfettered market. News- print mills in many pulp importing countries, however, are not permitted to buy as much pulp as they can use; and in certain pulp and newsprint exporting countries the mills are compelled to find wider outlets in markets where hard currency is earned, but, by the same token, only limited quantities can be sold.

OUTPUT

According to the Newsprint Association of Canada the distribution of the world’s unused capacity is as follows: United Kingdom 500,000 tons, Finland 190,000 tons, Japan 100,000 tons ana Ciermany 100,000 tons. Besides, there is some unused capacity in France, Belgium and Brazil. Idle capacity, therefore, is largely a British problem, and in two ways, both reflecting the United Kingdom’s acute balance of payments difficulties. First, the United Kingdom’s imports of woodpulp 1; Until quite recently shortages of chemicals, lack of man power and the general disruption of industrial capacities were also major factors.

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for consumption in papermaking have had to be cut back to about two-thirds of the pre-war level, and its newsprint production has declined accordingly. The current rate of output is only 450,000 tons a year, compared with over 800,000 tons 1

pre-war (Table I). With the exception of Germany and Japan, where output dropped from 464,000 tons before the war to 181,000 tons in 1948, and from 369,000 tons to 100,000 tons respectively, no other newsprint producing country has experienced anything like this drastic decline. Secondly, the United Kingdom’s demand for newsprint imports has fallen by flllly two-thirds, and the partial loss of the large British market has inevitably reacted on the production of its traditional suppliers, notably Finland. Nevertheless, output in Scandinavia has well recovered in

the last two years. It amounted to 720,006 tons in 1948, against 860,000 tons before the war, and has further expanded since. Sweden uses the whole of its reduced newsprint capacity, but produces less newsprint and more of other and more profitable paper grades than before the war. Both Norway and Finland suffered from drought and power shortages in 1948, and neither has yet succeeded in overcoming its numerous reconstruction problems. In the first three years after the war production in Scandinavia was severely hindered by the substitution of scarce pulpwood for fuel and timber, which were still more scarce. To-day the main problem is one of currency restrictions inter- fering with production and trade, rather than of physical shortages. Notable for their good showing among European countries

are Poland, Czechoslovakia and Switzerland. These countries have exceeded pre-war rates of production. Italy and the Netherlands have maintained their output at pre-war level. The Canadian industry is operating at 102 per cent of rated

capacity, and its output (including Newfoundland‘s) has risen from a pre-war average of 3 million tons to 4.7 million tons in 1949. The United States industry uses 90 per cent of its capacity, and its current output of 780,000 tons a year is 5 per cent below the pre-war average. The decline is in keeping with the long-term flight from newsprint to more profitable grades, and it is noteworthy that soaring post-war prices have hitherto done little to revcrse it. The provision of Marshall Aid has done a good deal to

revitalise the pulp and paper industries in war-damaged countries. With the assistance of dollars provided through the Economic Co-operation Administration several European countries have been able to import substantial additional quantities of raw materials and machinery. In the first year of the European Recovery Programme, E.C.A. financed the purchase by European countries of pulpwood, pulp and paper valued ai 53 million dollars and machinery valued at 3 million dollars. Britain received the lion’s share with about 31 million dollars

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worth of r a w materials and some Canadian newsprint covered by contract, followed by Bizone Germany with 10 million dollars worth of pulp, France with 3 million dollars worth, and something less than 2 million dollars each for Italy, the Netherlands, Belgium and Ireland. Italy was one of the principal recipients of funds for the purchase of machinery. In Eastern Europe plans for increased industrial production

have begun to take shape, and newsprint is among the products concerned. The output trend in Poland and Czechoslovakia continues to be sharply upwards. As a result, production in 1949 recovered well in a number

of European countries, and in some considerable progress was achieved. According to preliminary estimates for 1949 European output increased by about 20 per cent, and world output by 10 per cent to 8.2 million tons.

International trade

Newsprint is' a major commodity and occupies a prominent place in world trade. Only a few countries, all in the Northern Hemisphere, produce this essential of .modern life in sufficient quantities to export it while its use is world-tvide. International commerce absorbed already one-half of world production before the war, and at present it absorbs two-thirds. World exports in 1948 were valued at 800 million dollars. Newsprint is all- important to the economy of the principal exporters. In the largest exporting country, Canada, newsprint is Arst in value of output among manufactured products, and in Finland, the second largest, the export of newsprint is the chief source of foreign exchange.

DISTRIBUTION OF EX P O R T S A N D IMPORTS

Exports reached their pre-war peak in 1937 at 4.5 million tons, contracted sharply during the war and thereafter re-expanded rapidly (Table 11). In 1948 exports totalled 5 million tons and attained in 1949 an all-time record, provisionally estimated at 5.3 million tons. The rise in world newsprint exports since the w a r has been

made possible by the striking expansion in Canadian production. The Canadian newsprint industry, which exports 90 per cent of its output, increased its exports from 3.1 million tons in 1937 to 3.9 million tons in 1948, or from 70 per cent to 78 per cent of the world total. Its exports in 1949 showed a further slight increase. Newfoundland, which exports virtually the whole of its newsprint, raised its exports from 320,000 tons to 360,000 tons in the same period. Most of the remainder of world exports is provided by Scandinavia. Exports from this source fell from over 750,000 tons pre-war to 570,000 tons in

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1948 but expanded in 1949 to 650,000 tons. Exports from Ger- many fell from 100,000 tons in 1937 to 13,000 tons in 1948, and from Austria by 36,000 tons to 20,000 tons, but Austria’s exporting capacity is expected to be fully restored by 1950.

TABLE I1 EXPORTS OF NEWSPRIKT (Thousand metric tons)

Country 1937 1948

Estimated World Totals .......... 4,500 5.000

Canada ........................... 3,135 3,887 of which :

Newfoundland .................... 320 360 Finland .......................... 382 289 Sweden .......................... 198 155 Norway .......................... 177 Germany 98 United Kingdom ........... -. .... 57 Austria ........................... 56 Czechoslovakia ................... 10

10 10 5

.........................

Netherlands ...................... Italy ............................. Poland ...........................

i16 13 15 20 2 25 7 10

Sources : United Nations Economic and Social Council and I’nesco.

The other pre-war net exporters are Poland, Italy and Czecho- slovakia. Their exports have sharply risen since the war, and the combined total for 1949 is put at 40,000 tons. Exports from Czechoslovakia to Balkan countries are expected to increase appreciably from 1950 onwards. Meanwhile the Netherlands has also become a net exporter. Restrictions on Dutch newsprint consumption have released newsprint for exports which amount currently to 25,000 tons a year. The benefits of higher world exports have been reaped mainly

by the United States. That country absorbs a larger proportion of increased Canadian exports, while it takes about the same proportion of smaller European newsprint exports. Thus the United States share of Canada’s exports rose from 2.6 million tons in 1937 to 3.5 million tons in 1948, or from 83 per cent to 90 per cent, but the amount of Canadian newsprint available for other countries fell from 500,000 tons to 368,000 tons (Table 111). This contrast sharpened further in 1949, partly owing to the devaluation of currencies. Import figures reveal the same paramountcy of the United States. In 1937 imports from all sources into the United States amounted to 3 million tons out of a world total of 4.4 million tons, in 1948 to 4 million tons out of a total of 4.9 million tons (Table IV). Imports by the rest of the world have thus fallen sharply, according to figures for 1948 by 500,000 tons, or a drop of 35 per cent on the pre- war total. World imports in 1949 increased by 300,000 tons, but the net effects of this improvement on the distribution of imports was slight, for the United States took two-thirds of the increase.

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TABLE 111 EXPORTS OF NEWSPRINT BY COUNTRY OF DESTINATION (Thousand metric tons)

Exporting Country Country of Destination 1937 1948

Canada ......

Finland .....

Sweden .....

Sorway .....

Austria ......

Sources : United

All Countries .............. 3,135 3,887 United States .............. 2,630 3,519 United Kingdom ........... 134 5 9, Australia ................... 107 35 Union of South Africa ...... 25 33 New Zealand .............. 24 za Argentina .... 69 35 Mexico ....... 18 20 Brazil ...................... 7 25 Cuba . , .. 16 16' Japan _ . _ 30 China ...................... 10 25 All Countries .............. 382 289

143 i 20 L'nited Kingdom 94 11

36 1 58 Argentina Brazil ...................... 18 Denmark ................... 23 24 Belgium-Luxembourg 20 8-

39 Soviet Union ............... - All Countries .............. 198 177 United States .............. 80 United Kingdom . 19 Denmark ................... 14 France ......... 7 Argentina, . , . , . . 24 Brazil .......... 5 China ...................... 9 .411 Countries

United Kingdom ........... 17 Denmark ................... 14 Belgium-Luxembourg ....... 1 1 India ...................... io China ...................... 9 All Countries .............. 56 20 Yugoslavia ................. 15 Hungary ................... 1 1 India ...................... 1 1 China ...................... 7

-

..................

.............. 122' United States .............. I 2 _ _ 33

Nations Economic and Social Council and Unesco.

The regional distribution of the decline in imports has been uneven. On figures for 1948 some 80 per cent of it took place in Europe, the second biggest producing region, Britain alone accounting for 60 per cent. Of the remainder 12 per cent was borne by Australia, and the balance by Japan. Latin America and India have obtained slightly larger imports than before the war. But emphasis should be on current deficiencies in these regions, bearing in mind their dependence on imports, rather than the restoration of totally inadequate pre-war levels. Even now, India, with its 340,000,000 inhabitants-15 per cent of world population, takes just 1 per cent of world exports, and it has no domestic production from which to supplement imports. Moreover, it is far from certain whether these regions will be able to hold on to their recent gains, meagre as they are. Ever since 1947 Argentina has been short of dollars, and

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TABLE 1%‘ IMPORTS OF NEWSPRINT (Thousand metric tons)

Country 1937 1948

Estimated World TOlalS .......... 4,400 4.900 of which :

‘United States .................... 2,993 3,990 united Kingdom ................. 478 125 France ........................... 53 20 Denmark ......................... 51 38 Belgium - Luxembourg ......... 36 20 Iceland .......................... 26 i8 Hungary ......................... 19 13 Netherlands ...................... 15 Portugal ......................... 10 8 Argentine ........................ 120 146 Brazil ............................ 60 56 Mexico ........................... 30 54 Chile ............................. 15 14 Uruguay ......................... 11 19 Peru ............................. 7 4

......................... 7 13 Colombia Japan ............................ 37 China ............................ 60 ? India ............................ 40 45 AliStralia ......................... 212 82 New Zealand .................... 29 21 Egypt 13 9

-

-

............................ Sources : United Nations Economic and Social Council

and Unesco.

its press has experienced a succession of newsprint crises. The latest descended early in 1949 when the Government limited newsprint imports for the year to a total of 80,000 tons as compared with 146,000 tons imported in 1948. Like most of its predecessors, the crisis may again be staved off, but it is always looming on the horizon. The Union of South Africa is faced with a similar problem, and its newsprint imports, which at 41,000 tons in 1948 were 10 per cent above pre-war level, were expected in May 1949, to be cut by 40 per cent.

DISTRIBUTION ARRANGEMENTS

Trade in newsprint forms no exception to the normal method sf marketing the product, Most of the international commerce in newsprint is conducted on the basis of long-term contracts. Before the war the contracting parties to commercial agreements were the newsprint producers in exporting countries and the publishers or newsprint dealers in importing countries. The most usual forms of private contract are fixed tonnage contracts, maximum and minimum obligations, and the so-called “requirements” contracts. The last of these provides that the buyer’s requirements in whole or in part are to be purchased from the seller, and it has often been criticised on the ground of inequitable distribution. its adverse effects on distribution have probably been exaggerated, and its advantages to sellers in a buyers’ market or to buyers in a sellers’ market are slender.

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Contracts of this type coming up for renewal are frequently replaced by other types of long-term contract. On the whole the pre-war contracts are still in force. But

in several countries they have been modified in various ways, or even rendered inoperative, by Government control of the newsprint trade. Newsprint being a scarce commodity, its distribution is becoming to an increasing extent subject to trade agreements concluded by Governments, and it is accordingly liable to hard bargaining. Frequently licenses must be obtained even when no currency considerations are involved, because trade agreements must be kept. Nevertheless, since the bulk of the principal producers’ exports is still distributed in accordance with pre-war commercial commitments, little account is being taken of the new needs arising from the tremendous political and social upheavals in the world during the last ten years. Even in 1939 the flow of trade was mainly to industrialised countries, and today it follows much the same course. Post-war inequalities in the purchasing power of currencies have seen to that. The distribution of North American newsprint is largely

unaffected by control. Some 90 per cent of Canadian newsprint is taken by United States consumers who are in no wise hampered by rationing or import restrictions. Canadian shipments to the rest of the world, however, are encountering numerous import barriers erected wherever a dollar shortage exists. So long as United States consumers were clamouring for more and more Canadian newsprint such obstructions to trade did not matter a great deal to the Canadian industry. But in recent months Ganadian exporters have evinced greater desire to expand their trade in other countries, no doubt with an apprehensive eye on the economic barometer across the border. Canadian deliveries are usually on contract, and spot sales are substantial only in slack periods. Whether the reappearance of spot sales in 1949 has much significance remains to be seen. Finnish newsprint goes traditionally to long-term contract

customers, many of whom are still under pre-war contracts, and little reaches the spot market. An improved supply of electric power should solve the Finnish production problem by 1950. In that year importers of Finnish newsprint committed to long-term contracts, or by trade agreements concluded by their Governments after the war, are expected to be substantially better off for supplies. Much of the spot business in recent years has been transacted by Swedish and Norwegian producers. But the spot price is now half the post-war inflation peak of 300 dollars a ton, and it has not risen since the devaluation in September, 1949. This narrowing of the premium on the contract price has induced exporters in both countries to re- establish their trade on a more secure foundation by reviving pre-war contracts hitherto in abeyance, or by finding other permanent outlets. The Swedish Government has signed trade

49

agreements providing for newsprint exports with Britain, Argentina and other countries, and the Norwegian Government has adopted a similar trading practice. The bulk of exports from minor exporting countries-czecho-

Slovakia, Poland and Italy-is also tied to trade agreements, with Eastern European countries in the case of the former two, with Latin American countries in the case of the last. For the rest, a small volume of spot sales is transacted by countries normally without a surplus. Holland and France, for example, are exporting a proportion of their output to countries with a harder currency than their own, although their domestic markets are inadequately provided for. A full account of the types of commercial arrangements made

-or unmade-by the Governments of importing countries would be tedious and beyond the scope of this study. With the exception of the United States nearly all importing countries operate some sort of import control. Where Governments take no direct part in the import trade, or refrain from restricting it by physical controls, as in the case of Brazil, Bolivia, Cuba, Turkey, Egypt, they control its volume indirectly by means of permits issued for payments in foreign currency. Brazilian newsprint imports, for example, do not fall under trade agreements and are contracted for directly by the newspapers or by three main importing Arms. These two types of buyers have an agreement with the Exchange Office as regards foreign currency, but actual quantities procured depend on the purchasing power of the importing concern. For this reason, only the large dailies import their own newsprint, and all the others buy mainly from the three import firms. The Brazilian Press Association may be called upon to arbitrate if the foreign exchange department and the importers are not in agreement as to the quantity required. In Mexico the Government has instituted a semi-official

organisation, designed to co-ordinate and facilitate the import of newsprint.1 This body is endowed with considerable powers. It has a monopoly for the import and allocation of all newsprint, and resells to the Mexican press on a non-profit basis. Its purchases, however, are limited by the currency regulations which govern Mexico’s trade with dollar countries, and the war has increased the dependence on Canada for newsprint. Before the war Germany was one of Mexico’s principal suppliers of the commodity. Mexico and Brazil are fairly mild cases of Government inter-

ference with newsprint imports. There are other countries whose Governments have resorted to every device of human contriving to ensure that the newsprint trade flows through the proper currency channels. A typical example is the deal

1. Productoras y Importadoras de Papel S. A. ~,

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made in 1948 by the United Kingdom, whose Government has assumed complete control of the newsprint trade, with Australia and Newfoundland. By the terms of this deal, dollars earmarked by Australia for newsprint imports on contract from New- foundland were to be diverted to the purchase of additional dollar raw materials which were to be converted by a British mill into newsprint for shipment to Australia. Newsprint imports into Argentina are also Government con-

trolled. Owing to Argentina’s dollar difficulties the Government has sought to dispense with shipments from Canada, which in 1947 provided one-half of Argentina’s imports, and it is always on the look-out for alternative sources of supply. Newsprint figures prominently in trade agreements recently concluded with Scandinavia. The negotiation of a barter deal with Russia was repeatedly rumoured in 1949. Australia is another example of control. Rationing of news-

print imported from non-dollar sources was suspended at the beginning of 1949, but the Australian Gavernment has not yet waived the need for import permits as trade agreement with Scandinavian countries must be kept in mind. The second round of the dollar crisis of the sterling area, in the summer of 1949, threatened the fulfilment of Australia’s contracts with Canada for 40,000 tons in the twelve months ended June, 1950, and Australia was then reported as attempting to obtain newsprint from Russia on barter. Another illustration of the way in which trade agreements

acts as levers of trade has recently been provided by the trade pacts concluded between Russia and other members of the Eastern Block on the one hand, and Finland on the other. Until the middle of 1949 Finland made reparation deliveries of newsprint to Russia which in turn supplied Bulgaria and Rumania. Thereafter reparation deliveries ceased, but Finland had to sign a trade treaty with Russia providing for direct sales of Finnish newsprint to Bulgaria and Rumania, in return for coal and capital equipment from Poland and Czechoslovakia.

Consumption

GROWTH

Few commodities can boast an equally dramatic rise to world prominence in so short a period as newsprint. World consumption of newsprint rose from less than 3 million tons at the outbreak of the first World W a r to 5 million tons in the mid-’twenties, averaged 7 million tons in the ’thirties and reached a peak of 8 million tons in 1937. It slackened off in the depression years after 1929 and again in 1938, and in the latter war years restricted supplies turned consumption sharply

51

downwards. The secular uptrend, however, was not checked for long. It was resumed after 1945, and in 1949 consumption topped the 1937 peak. In no country was this expansion more sweeping than in the United States. There consumption was already 2.5 million tons twenty-five years ago and reached the formidable peak of 5 million tons in 1949. Elsewhere expansion was less rapid, but in some countries it attained a remarkable pace in the decade before the war. Thus, between 1928 and 1937, consumption in the Netherlands increased from 78,000 tons to 102,000 tons, in Sweden from 52,000 tons to 85,000 tons, in Belgium from 54,000 tons to 85,000 tons, and in Europe as a whole by about 50 per cent to 2.6 million tons. The growth in newsprint consumption and world population

cannot be associated as cause and effect. Growth in world population, though enormous when expressed in millions, is not significant when expressed as a percentage. It has rarely amounted to more than 1 per cent in any one year and in many years to appreciably less. The astonishing advance in newsprint consumption this century has far out-distanced population growth. In fact it cannot be attributed to any speciflc causes universally applicable and everywhere equally potent. Circumstances vary widely, and with them the number of causes and the degree of their effectiveness. In industrialised regions--North America and Europe, the rise in living standards, a growing desire for a wider coverage of world events and improved information services of the news agencies have been among the principal causes; in regions gaining in importance in world commodity trade and as industrial producers-Latin America and Oceania, a greater interest in world affairs and technological progress; in backward regions-Africa and Asia, the quest for knowledge prompted by the spread of literacy. Whatever the causes, their effects are plainly visible. They

include an enhanced status of the press as a major industrial -and political-enterprise ; the emergence of dailies with circulations running into millions; the multiplication of the number of their pages and the appearance of Sunday papers weighing as much as a kilogram a copy; and, last but not least, a phenomenal expansion in newspaper advertising, especially in the United States. To-day the newspaper is an essential of life, essential alike to democracies in being and in the making. In a modern community knowledge and ideas reach the mind through the medium of the newspaper. Without an adequate supply of newspapers there can be no freedom of expression. Without an adequate supply of newsprint the press cannot fulfil its chief function of providing information to the peoples of the world. In the words of Lord Layton: “You cannot build the permanent structure of a peaceful world on ignorance, or breed world citizens if they have no access to knowledge.”

52

INEQUALITY

All the more striking are the extreme disparities which mark the consumption of newsprint in different regions. “Fair shares” has never been the principle governing the distribution of the world’s riches, but the inequalities in newsprint consumption are greater than for any other commodity of like importance. Indeed the growth of such inequalities is even more remarkable than the rapid growth in newsprint consumption itself. It is no exaggeration to suggest that the tardy progress in conquering ignorance and illiteracy is not wholly unconnected with the unequal distribution of newsprint supplies. The enormous extent of such disparities is illustrated by the

tables below.

PERCENTAGE DISTRIBUTION OF W O R L D NEWSPRINT CONSUMPTION AND W O R L D POPULATION IN 1948

Area

United States .................... 63 % 6 % Continent of Europe ............ 15 yo 15 % United Kingdom .................. 5 % 2 % Canada, Australia and New Zealand. 6 % 1 % Soviet Union ..................... 3 % 9 %

................ 8 % 6 7 % Rest or the world Total 100 % 100 %

~ _ _ ........................

EEWSPRINT CONSUMPTION BY REGIONS IN 1937 AND 1848

Region

North America ................... 4,077 50.5 5,023 66.4 Europe ........................... 2,656 33.0 1,450 19.2 Soviet Union .................... 200 2.5 200 2.6 Latin America .................... 2R7 3.5 400 5.2 Near East ........................ 24 0.3 29 0.4 Arrica ............................ 17 0.6 48 0.7 Asia .............................. 577 7.2 247 3.2

.......................... 2.3 I72 Oceania 192 2.4 Total ........................ 8,060 100.0 7,569 100.0

~ __ - -

While the United States with 6 per cent of the world‘s population consumes nearly two-thirds of the world’s newsprint, the vast continents of Asia, Africa and Latin America,

53

TABLE V PER CAPITA NEWSPRINT CONSUMPTION (kilogrammes per capita)

Pre-War Average 1945 1935-1939 Country

Austria .............. Belgium .............. Aulmria .............. CzeEhoslovakia ....... Denmark ............. Finland .............. France ............... Germany ............. Greece ............... Hungary .............. Ireland ............... Italy .................. Luxembourg ......... Netherlands .......... Norway .............. Poland ............... Portugal ............. Rumania ............. Spain ................ Sweden .............. Switzerland .......... United Kingdom ..... Yugoslavia ........... U . S . S . R . .......... Egypt ... Lebanon Palestine Turkey . Syria ... Canada . .

.............

.............

.............

.............

.............

............. U . S . A .............. Costa Aica ...........

............

............

............

............

............

............

............

............

............

............

............

............

............

............

............

............

............

............

............

............

............

............

............

............

............

............

............

............

............

............

............

El Savaldor ...................... Guatemala ........................ Honduras ........................ Mexico ............. ...... Nicaragua .......... ...... Panama ............ ...... Puerto Rico ........ ...... Argentina .......... ......

Chile ............... ...... Colombia ........... ...... Ecuador ......................... Peru ............................. Uruguay ......................... Venezuela ........................ Southern Rhodesia ............... Union of South Africa .......... Burma ........................... Ceylon ........................... China ............................ India and Pakistan .............. Japan ............................ Federation of Malaya and Singapore Philippines ....................... Australia ......................... Hawaii ........................... New Zealand .....................

* Less than 0.1 kgm . per capita

......

........

........

........

........

........

........

........

3.9 9.9 0.8 2.5 14.1 6.5 8.8 6.0 1 . 7 2.5 8.0 1.7 5.8 12.2 8.3 I . 0 1.1 0.3 1.4

12.8 7.5 26.2 0.8 1.1 0.7 0.2 1.4 0.5 0.1 17.5 24.6 1.7 3.3 0.1' 0.9 0.4 0.2 1.2 0.5 1.5 1.2 9.4 I . 6 3.7 0.7 0.7 1.1 6.3 0.7 0.8 3.8 0.1 0.6 0.1 0.1 5.7 0.9 0.7 23.1 5.8

20.2

3.4 7.5 1.9 3.7 9.0 7.2 6.4 2.5 1.7 1.8 4.7 1.3 5.5 6.3 7.6 1.6 1.3 0.6 0.8 18.2 9.2 8.0 0.8 1.3 0.5 0.3 2.5 0.4 0.1 21.3 32.4 1.7 5.0 0.3 0.9 0.2 0.4 2.3 0.7 5.2 3.8 9.7 1.6 2.8 1.0 1.1 1. 0 8.0 1.7 0.6 3.6 0.1 0.4 O.?

1 . 0 0.7 0.9

t 8.2 11.9 12.0

54

containing 67 per cent of the world's population, must at present be content with barely 10 per cent of the world's newsprint. Population in these continents is increasing rapidly, in India

TABLE VI NEWSPRINT BALANCE BY REGIONS AND COUNTRIES IN 1948

Production Consumption Surplus + Deficit -

T\-orld Totals .................... E iirope .......................... Finland .......................... Sweden .......................... Norway .......................... Netherlands ...................... Austria .......................... Germany ......................... Poland ........................... Italy ............................. Czerhoslovakia .................... United Kingdom ................. France ........................... Belgium-Luxembourg ............. Denmark ......................... Ireland .......................... Spain ............................ HiinBary ......................... GreGe - , .......................... Bulgaria ......................... Rumania ......................... Portugal ......................... Yu Koslavia ....................... Switzerland ...................... 0t.hers ............... Soviet Union ..................... North America .................... Canada .......................... Newfoundland ................... United States .................... Latin America ................... Argentina .... Brazil ............................

Uruguay ......................... Chile ............................ Colombia .............. Others ................ h'ear East ........................ Egypt ............................ Palestine ......................... Turkey .......................... Others ........................... Africa ................ Union OP South Africa Others ...........................

..................

.................. India ............................

7,532 7,569 650 * 1,809 1.450 + 359 : E

$ - ; - + io;

300 29 280 125 140 24 + 116

60 + 25 + 20 + 13

17 15 38 19 1 13 13 1 1 6 8 5 2 4

-c 7-9

- - - - - - - - - - - - -

Pakistan ......................... Philippines ...................... Korea ............................ Others ........................... Oceania .......................... Australia ........................ New Zealand .................... Others ...........................

+ Approximate inter-regional trade.

2 4 3

40

275 5,265 4.172 343 750 35 4 25 1

- -

- - 5 - - 5 - - 5 - - - -

113 100 5 - - - 8

30 30

-

- -

13 10 I1 5 42 4 zoo

5,023 275

1 4.745 400 150 77 55 26 18

* 15 1 1 48 29 9 5 8 7 48 4; 247 88 60 45 18 10 8 18

172 139 21 12

+ 042 + 3.897 + 342 - 3,993 - 365 - 146 - 52

54 26 18 - 10 - 1 1 - 48 - 24

- 9 5

- 3 - 7 - 48 - 41 - 7 - 134 + 12 - 55

45 18 - 10 - 18 - 149 - 109 21 io

- - -

-

- - -

- -

55

alone by 4,600,000 every year, or at an annual rate of 1.4 per cent. Upheavals engendered during and after the war by a political, economic, technical and educational revolution of unparelleled dimensions have shaken the foundation of their societies. Ambitious programmes for education have been launched in rkcent years to overcome the illiteracy of their peoples. Yet India’s, Pakistan’s and China’s poplation of 800 million consumes just 120,000 tons of newsprint (Table VI), no more than ten years ago; per capita consumption is a mere 0.1 kilogram (Table V), and for every 250 inhabitants only one daily newspaper is sold. In Colombia, Ecuador and Venezuela newsprint consumption has increased substantially in the last fifteen years. Even so, in the former two countries it is still no more than 1 kilogram per head, and in the third it is well below 2 kilograms. In the same period per capita consumption in Peru has actually declined by 10 per cent to 1 kilogram, in Chile by 20 per cent to 2.8 kilograms and in Egypt by 25 per cent to 0.5 kilogram, while in Brazil and Turkey it has remained unchanged at the extremely low levels of 1.6 kilograms and 0,5 kilogram respectively. Deficiencies in consumption are not confined to these regions.

In six European countries, Bulgaria, Greece, Portugal, Rumania, Spain and Yugoslavia, per capita consumption is also below 2 kilograms. In Spain it has fallen from 1.4 kilograms to 0.8 kilogram since 1935. In contrast, the United Kingdom is selling each day one

newspaper to every two of its 50 million population, and the United States, with much larger sized newspapers, sells one copy to every three of its 150 million population. Current per capita consumption is 36 kilograms in the United States, 22 kilograms in Canada, 19 kilograms in Sweden, 18 kilograms in Australia and 12 kilograms each in the United Kingdom, New Zealand and Hawaii. Before the war the United Kingdom ranked first with a consumption of 26 kilograms per head, followed by the United States with 25 kilograms, Australia 23 kilograms, New Zealand 20 kilograms and Canada 17 kilograms. It has sometimes been argued that the prevalence of gross

regional disparities must be blamed on the war with its holocaust of destruction and its aftermath of impoverishment, as well as on the appetite of the United States which has increased its share of world consumption from 46 per cent in 1937 to 63 per cent to-day. Both notions must be dismissed as fallacious. The w a r has not appreciably worsened the position of the ill-provided regions, but it has accentuated deficiences which previously went unnoticed. True, the share of the world total derived by Latin America,

Asia and Africa together declined by 210,000 tons from the pre-war level and in 1948 stood at 725,000 tons. But in 1948 Japanese consumption alone had dropped by nearly 300,000

56

tons. Thus some individual countries elsewhere in deficiency regions, most of them in Latin America, are now slightly better off than before the war. The expansion in North American consumption from 4 million tons in 1937 to 5 million in 1948, or from 50 per cent to 66 per cent of the world total was entirely at the expense of Europe. There consumption was reduced in eleven years by over I million tons to 1.5 million tons in 1948, or from 33 per cent to 19 per cent of the world total. Whether official curtailment of United States demands, assum-

ing that such restraints were constitutionally possible in peace- time, could do much to lessen existing disparities of consumption, must be doubted. Goods and services are produced and distributed in accordance with the pull and push of the market, and the artificial suppression of demand in one country does not necessarily raise effective demand elsewhere. The increase in Canadian production since 1948 has already outpaced the increase in United States consumption. In 1949, for the first time since the war, the North American newsprint balance showed a small surplus of production over total shipments. Moreover stocks in North America underwent a marked expansion, totalling about 900,000 tons at the end of the year, against 670,000 tons at the end of 1948. But much of the newsprint which Canadian mills can spare-and are only too willing to spare-the rest of the world cannot pay for. The newsprint market is no exception from other commodity markets and reproduces the split of the world into two trading areas, caused by external payment deficits. Its unification depends upon the success of devaluation in eliminating such deficits. Again, currency is the crux of the short-term problem.

RESTRICTIONS ON CONSUMPTION

In many countries outside North America the press is crying out for more newsprint and is languishing for lack of its raw material. Shortages are not amenable to precise calculations, and the experts are by no means at one as to the extent of the newsprint shortage. The existence of the newsprint shortage, however, is undisputed. An attempt to measure it has been made by the authors of Newsprint Data, published by the News- print Association of Canada. According to the 1949 issue of this publication, the world newsprint shortage is estimated at 925,000 tons for 1949 and at 1,085,000 tons for 1950. These figures represent the difference between unrestricted and restricted world demand, and the latter is roughly equal to actual consumption. The difference is defined as arising from various governmental regulations beyond control of individual consumers. Most of these regulations impose restrictions on purchases requiring foreign exchange, some of them limit the size and circulations of newspapers, and some combine both

57

methods of controlling consumption. Most signiflcantly, the world shortage is shown as increasing by 160,000 tons, or 17 per cent, between 1949 and 1950, and it is almost exactly equal to the world tonnage of idle newsprint capacity. If the estimates of unrestricted demand listed in Newsprinf Data, 1949 for individual countries are accepted, then a newsprint shortage exists nearly everywhere, North America apart. A few examples can be quoted. In 1949 actual consumption in the United Kingdom fell short of requirements by 40 per cent, in India by 33 per cent, Greece 30 per cent, Argentina 49 per cent and in Australia by 21 per cent. Shortages of this magnitude have made inevitable the ration-

ing of newsprint to the press. This has meant, in practice, the rationing of information to the public. Small newspapers, limited circulations and uncertainties about newsprint supplies have, in turn, weakened the press as an efficient instrument of information. Wherever severe restrictions on size have become necessary, the quality of the newspapers has deteriorated, and in some cases seriously so. Experience shows that the press cannot provide for the needs of all claimants for space unless it is able to publish at least eight pages. But a census of thirty- eight countries in 1948 revealed that in thirteen of them this minimum requirement was not then met, amongst them such important newsprint consumers as the United Kingdom, France and the Netherlands; and there has been little improvement since. An indication is given below of the wide differences in size and format of representative press organs in selected countries.

Guardian ....... La Prensa ....... El Ahram ........ Haiti-Journal ..... Dagens Nyheter ..

Echo du Katanga . Times of India ... Le Figaro ....... Pravda ...........

L e U. S. ....... New York Times . Oct. 20 57 1/2x41 1/2 60 143.175 “U. K. ....... Manchester Argentina ... ‘Egypt ....... Haiti ........ Sweden ..... Belgian Congo .....

India ........ France ...... U. S. S. R. ..

Oct. 21 Sept. 14 Oct. 31

Oct. 26 64 Oct. 20 58

60 61 56

Oct. 13 Oct. 3 Nov. 4 Oct. 30

51 63 60 60

x 44 x43 1/2 x43 1/2 x45 1/2 x43

x 33 x 44 x43 X 42

8 12 10 4 32

4 12 8 4

32,528 30.276 26:lOO 11.102 ‘17,056

6,732 33,264 20.640 10.080

Where newspapers are severely limited in size, no newspaper editor, however versed in the art of compression of news, can .give a balanced coverage of home and world events, satisfy ,the readers’ cultural tastes, allow for their desire for lighter

matter, and afford enough space for advertising to pay his way. Nor can he give much variety of fare. When conflicting claims press too heavily upon a limited newspaper space something has to give way, and usually the overseas service is the first item to go by the board, with articles on art, literature and music following as a close second, while advertising invariably comes off lightly. Although the need for international co- operation is a constant theme of public discussion and the public’s interest in world affairs greater than ever, the peoples of the world probably know less of each other than they did before the war. No doubt, the shrinkage of newspapers due to the newsprint shortage is one cause of this ignorance. The high cost of newsprint has also played a part in deterring

the consumption of the commodity. This is especially true of countries whose consumption is too small to enable the press to take advantage of cheaper supplies on long-term contract from traditional sources. In such countries the press is compelled, therefore, to contract for spot sales, and in a seller’s market this may prove to be a costly handicap. Price disparities rose, in fact, to enormous proportions after 1945, reaching a peak in the summer of 1949, when the United States quotation of 80 dollars a ton for contract deliveries stood at one extreme, and something like 250 dollars to 300 dollars a ton in Paraguay and other small and remote consuming countries at the other. Even in large consuming countries the current high cost of newsprint depresses demand, France being a conspicuous example. And a large portion of the sixth page permitted in Britain since April 1, 1949, had to be devoted to advertising to spread the cost of newsprint, which then stood at E41 a ton. To cope with the newsprint shortage Governments have gone

to great lengths to control consumption. The British Government controls the supply and costs of all. the newsprint consumed by the British press. It buys pulp for the home mills and resells it to them at a profit fixed by itself. It determines not only the price they in turn shall charge to their customers, but also the level of their production-i.e. how much newsprint they shall make from month to month. Above all, it determines how many pages shall be published, although it has recently de- restricted circulation. Consumption and costs of newsprint in France are also fixed by the Government. In Italy and Holland irksome restrictions on consumption continue to be maintained to ensure that a part of the mills’ production is exported to countries with a harder currency, in spite of the fact that current consumption in Italy has regained only 80 per cent, and in the Netherlands no more than 65 per cent, of the pre- war level. Even in exporting countries newsprint is allocated to the press, for example in Sweden where rationing is administered by the Fuel Commission in conjunction with the publishers and the newsprint mills. The Argentine press is not only subject to unavoidable limitations on size and circulation,

59

it is also hampered by periodic intervention designed to facilitate the pooling of scarce supplies. A decree published in Argentina at the beginning of 1949 added newsprint to a list of scarce commodities liable to seizure against compensation, and action on these lines was duly taken. As a result, the Argentine press is forced to operate on a hand-to-mouth basis, unable to lay in adequate stocks and never sure of its supplies for more than a week or two ahead. The newsprint situation in Peru has been precarious for some years despite rationing, and some of the smaller newspapers have been forced to suspend publication owing to their inability to obtain supplies. But in a number of countries the outlook for newsprint

supplies has brightened, accompanied by a relaxation of restrictions. In Denmark newsprint rationing as such was abolished in 1948, although a liberalised allocation system has remained in force. The Swedish authoritites relaxed restrictions on consumption as from January, 1949, while Norway plans to relax controls in the near future. At the same time rationing in Australia was considerably eased in anticipation of a much increased inflow of newsprint imports from non-dollar sources, and the newsprint pool was abandoned. Indeed in the flrst half of 1949, before the facts of the dollar drain were brought home by the British Government, the Australian press enjoyed the unfamiliar luxury of semi-abundance in what at one time looked like the beginning of a competitive era. Australian buyers were then holding off the market, or deferring delivery until the end of the year, in the belief that prices would then be lower.

THE NEWSPRINT BALANCE

Table VI gives a round-up of the supply position in 1948 by regions and countries. The last column of the newsprint balance estimates the size of surpluses available for exports or deficits to be met by imports. Such net balances, it should be noted, are not identical with actual exports or imports in that year; they merely express potentialities. According to this column. the inter-regional trade in 1948 totalled 650,000 tons including a small quantity from Russia. Some 150,000 tons of this quantity represent the deficit in Oceania. The remaining 500,000 tons measure the deficits in Asia, Africa and Latin America-with 67 per cent of the world’s population. This small volume of external supplies made up about two-thirds of the total consumption in those regions, allowing for an average consumption of 0.5 kilograms per head. The chances of increasing shipments to Asia, Africa and

Latin America are slight. Even before the war, Europe’s exportable surplus was only about 450,000 tons, against 360,000 tons in 1948, and the capacity of Europe’s newsprint industry was then 800,000 tons larger. If Europe’s idle capacity of

60

1 million tons a year could be brought back into production, the main beneficiaries would be the European countries themselves, notably the United Kingdom, whose current consumption has not even recovered to one-half of the pre-war level of 1.1 million. An expansion in Europe’s exportable surplus appears to be contingent upon an expansion of its newsprint capacity, through reconversion of papermaking plant to newsprint, higher operating speeds, the replacement of worn equipment and building of new plant. Larger exports from Canada will only be possible if currency can be found to finance them. The table also illustrates the great importance of international

trade in newsprint. The principal exporters, Canada and Scan- dinavia, export 90 per cent of their output, the world‘s largest consumer, the United States, imports 85 per cent of its requirements. South America’s largest consumer, Argentina, imports at present all but 3 per cent of its requirements, the second largest, Brazil, more than 60 per cent. Among the more important European consumers, Denmark is without any newsprint production of its own, and only Switzerland has an equilibrium of supply and demand, dependent neither on import to satisfy the needs of its press, nor on exports to provide foreign exchange. Italy and the Netherlands have fostered newsprint exports at the expense of domestic consumption, and Poland and Czechoslovakia are producing for exports in fulfilment of trade agreements.

61

C H A P T E R V

Demand trends

The object of this chapter is to attempt to evaluate the trend of demand for paper for reading materials over the next five to ten years. As has been pointed out above, the criteria relevant to the demand for printing papers vary widely from one region to another. The two most powerful long-term influences on world consumption are, without doubt, the education and the political awakening of the illiterate masses. But these influences are of far greater importance in Asia, Africa and Latin America than in the other regions, where the demand is obviously dependent on quite different factors, notably the state of trade and the level of incomes. In Europe and North America literacy is not a factor of importance. For this reason, it has been found convenient to examine the various elements constituting the demand for printing paper in connection with the regions to which they apply most, and not under separate headings. Chapter V thus deals with its subject matter by regions. The chapter discusses first North America, then Europe and

finally the rest of the world. This sequence does not imply that precedence is due to North America. For the purposes of this brochure the supply-and-demand position in Asia, Africa and Latin America is, of course, of particular interest, and these regions are, in fact, given greater prominence in this chapter than the others. None the less, of all the factors determining the world’s demand for printing paper, none are of greater immediate consequence than those affecting the trend of North- American consumption. An analysis of this trend is vital, therefore, for any assessment of the world’s future requirements.

North America CONSUMPTION OF PRINTING PAPER .4ND INDUSTRIAL ACTIVITY

Table 1, which is appended to this chapter, relates the consumption of newsprint in the inter-war period to the physical volume of industrial production. This criterion has been selected for comparison as it has an obvious bearing upon the demand for newsprint, other printing grades-and, indeed, for goods and services in general. On the whole consumption before the war varied in close sympathy with industrial activity, though

63

'TABLE I NEWSPRINT CONSUMPTION AND INDUSTRIAL ACTIVITY IN THE U.S.A.

Per capita cons. Industrial of newsprint production

1919 1927 1928 1929 1930 '1931 1932 1933 1934 1935 1936

............... 1,700

............... 3,124

............... 3,188

............... 3,428

............... 3.231

............... 2,943

............... 2,575

............... 4,441

............... 2.818

............... 3,033

............... 3,348

1938 ............... 3.103 'I939 ............... 3,192 1940 ............... 3,384 i94l ............... 3,564 Average 1927-41 .... 3.123

1937 ............... 3,46!1

Not available.

- 16.3 26.2 26.5 28.2 26.3 23.7 20.6 19.4 22.4 23.9 26.1 26.9 23.9 21.4 25.6 26.7 24.6

+ 1.1 + 6.4 - 6.7 - 10.0 - 13.8 - 5.7 + 15.4 + 6.2 + 9.2 + 3.1 - 11.1 + 2.1 + 4.9 + 4.3

... 95 99 110 91 75 58 69 75 87 103 113 88 108 I25 162 92

+ + - - - + + + + + + + +

-

4.0 11.1 17.3 17.6 22.6 15.5 8.7 16.0 18.4 9.7 22.1 42.7 13.6 29.6

not in the same proportion, and with a time lag up to one year. Consumption slumped badly during the Great Depression from 1929 to 1932, recovered gradually with the subsequent revival of trade and sagged again during the much shorter depression in 1938. Most of the remarkable increase in United States consumption

of newsprint in the inter-war years occurred before 1927. That period was one of great industrial progress, and it coincided with a doubling in newsprint consumption. In the fifteen years before the United States entered the war the growth in the consumption of newsprint was incomparably slower. In 1941 consumption was only 4 per cent above the pre-depression peak of 3.4 million tons reached in 1929 and no more than 12 per cent above the fifteen years average which amounted to 3.1 million tons. Per capita consumption dropped from 26.3 kilograms in 1929 to a low of 19.4 kilograms in 1932, averaged 24.6 kilograms a year between 1927 and 1941 and did not surpass the 1929 peak until after 1945. The cyclical falls in the consumption of newsprint affected

the circulations of the newspapers much less than their size which was curtailed by smaller demands for advertising space. Newspaper circulations between 1930 and 1933 declined by only 12 per cent, from 40 million to 35 million copies a day. Even so recovery was not completed before 1941, having been sharply interrupted by the 1938-39 depression. On the other

64

hand newspaper advertising, according to a census for twenty- three leading cities, fell from a peak of 1,300 million lines in 1929 to 750 million lines in 1933. Only in two of the following twelve years did it exceed 900 millions lines and it was not before 1946 that it regained the 1929 peak. Pre-war Agures for Canada indicate smaller variations in

annual consumption and a faster rate of expansion in the nineteen-thirties. Canada consumed 150,000 tons of newsprint in 1930 and about 20 per cent more in 1939. After 1945 the consumption of newsprint rose still more rapidly and set up a record in 1949 at 300,000 tons.

POST-WAR BOOM

Future trends cannot be predicted from analogy with the past, but there is no reason to believe that the long-term relationship between the consumption of various printing papers and the state of trade has been impaired. It would be rash, of course, to base forward estimates of newsprint supplies available for the world on the assumption of a major United States slump. But it would be equally unwise to equate that country’s current consumption with its normal long-term demand. A press which runs 60-page newspapers at the height of a boom unparalleled in peace-time, allowing a per capita consumption of 36 kilograms, is peculiarly vulnerable even to mild changes in the economic climate. With business activity and incomes at record levels, it does not need a drastic recession in output to deflate consumers’ marginal purchasing power, and in the volume of retail sales to deflate department-store advertising which makes such heavy claims on newspaper space. A contraction in advertising revenue would immediately react on the size of newspapers, and eventually also on their circulations. Signiflcantly, purchases of newsprint, book paper, and in particular, magazine paper have already fallen away from the high level of 1948, while publishers’ stocks of raw materials have appreciably risen. The downtrend is not yet reflected in the consumption of newsprint, which continues to increase, though at a slackening pace, but it is plainly visible in the consumption of other printing paper. The modest recession in the flrst half of 1949 raises, of

course, no presumption about the ability of United States industry to maintain a high degree of national prosperity. The United States economy is renowned for its resilience, and notorious for its defiance of forecasts. Moreover, the all- important question of its course is admittedly controversial in the extreme. Nevertheless it does appear justifled to assume that the impetus which the war gave to industrial development in the United States has largely spent its force. An economy which, despite the recession in 1949, is still operating at 160 per cent of its pre-war volume of output and is even

65

now utilising more than 90 per cent of its productive resources, m a y not be easily capable of further rapid progress, unless its capital equipment can be augmented. Investment expenditure on capital goods, however, has fallen off quite sharply throughout 1949. This movement is partly attributable to inventory

. accumulations which businessmen, apprehensive of another slide in prices, are anvious to work off. Yet its large extent does suggest that the tide of genuine new investment has begun to recede. Whatever the merits of the case, the view that 1948 represented a peak, rather than a point in a rising curve, is hardly an unduly pessimistic one. At this stage, therefore, it is by no means certain that the

abrupt jump in United States post-war consumption of newsprint to 5 million tons a year is more than a temporary mani- festation of a boom which will in time produce its o w n correc- tives. Estimates made in certain quarters that consumption in the early nineteen-fifties will reach 6 million tons are not altogether convincing. Indeed, some doubt may be felt whether recent gains in consumption will be consolidated.

SATURATION

A good deal will depend on the trend of advertising in newspapers, periodicals and magazines, which has made sensational progress in the United States since 1946. A recent analysis has disclosed that in 1948 advertising took up 60 per cent of newspaper space and news items 40 per cent, the 1941 pattern being exactly the reverse. In 1947 newspapers accounted for 1.475 millions dollars, or 34.6 per cent, .out of a total advertising expenditure (including radio and film) of 4,300 million dollars; in 1948 for 1,750 million dollars, or 36.2 per cent, out of a total close to 5,000 million dollars. Expenditure on advertising in business publications has also increased, amounting to 230 millions dollars in 1948. Much of the current high demand of United States publishers for newsprint and paper for periodicals and magazines derives from gains in advertising rather than circulations. In fact, the growth in circulation has been much less spectacular than the increase in the number of pages.

There are indications, however, that the boom in United States advertising is approaching its peak. Proposals to levy a tax on newspaper advertising have been repeatedly considered -and dropped-by the Federal Government, but may be resuscitated at any time. More important, numbers of department stores and manufacturers are reported to be hard pressed to sustain the financial strain which competitive advertising has involved, although United States business has so far been spared the calamity of a proper recession. Newspaper and magazine advertising may well be entering an era of dimi- nishing returns. If so, consumption of the printing grades

66

concerned could suffer some setback even if trade is stabilised around 1949 levels. In any event, the opinion m a y gain ground that the mammoth

editions of the United States press defeat their own-and, in particular, the advertiser’s-object. The public to-day is becoming surfeited with uniedly 60-page newspapers, and overwhelrn- ed by the weight of the product, if not its content, it is turning for sheer relief and economy of time and effort to radio and television. No doubt the press has overreached itself and the craze for bigness m a y be expected to subside in time. The increase in costs will itself make retrenchment imperative. Publishing costs have risen steeply since 1945, and over the past two years they have outpaced revenue gains. Retrench- ment will mean greater concentration of space and smaller- sized editions, that is less paper consumed per copy. And indeed, United States publishers may discover that circulations can be maintained on less lavish editions, at any rate in those states where saturation is yet distant. Whether or not saturation is near, is a moot point. The

saturation limit to newspaper circulations is neither absolute nor easily ascertained, but it is noteworthy that in a number of states with a large readership it was reached as early as 1920. In California, for example, the number of inhabitants per daily newspaper sold in that year was 2.4. The expansion in California’s newsprint consumption since then has been considerable, but it has been smaller than the growth in population, and by 1947 the ratio between the number of inhabitants and the number of daily newspapers sold in California had risen to 2.6. In Oregon, similarly, the ratio has increased slightly since 1920, and in several other states, including Ohio, Massachussetts and densely populated N e w York, it has not fallen appreciably. O n the basis of these trends it can be surmised that in states where the circulation ratio for newspapers is around 2.5 saturation m a y be in sight, and the ratio for the United States as a whole is already as low as 2.8. The balance of these considerations suggests that, for the

present and perhaps some years to come, the capacity of the United States newsprint market is likely to be near the point of exhaustion. Possibly the point has already been reached. Meanwhile some allowance m a y reasonably be made for the possibility that consumption of newsprint may settle down at a level somewhat below the post-war high of 1949. Similar considerations m a y apply to paper for magazines and periodicals. In contrast, the market for book paper is not unlikely to widen. The war has stimulated interest in literature and appears to have had a lasting effect on the demand for books. Publication of books has risen from year to year since 1945, and the long-term trend for book paper should be upwards.

67

UNITED STATES DEMAND AND CANADIAN PRODUCTION

Table I1 illustrates the effects of United States demand on the Canadian newsprint industry, which sells 90 per cent of its total output in the United States. In 1932, the worst depression year, idle capacity in Canada amounted to 1.7 million tons, just over one-half of the industry’s resources. Throughout the nineteen-thirties, except in 1936 and 1937, idle capacity was always around or in excess of 1 million tons, never less than

TABLE I1 CANADIAN CAPACITY AND PRODUCTION OF NEWSPRINT

Year

1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941

...............

...............

...............

...............

...............

...............

...............

...............

...............

...............

...............

...............

...............

...............

...............

2,243 2.714 2,294 3,265 3.469 3,482 3.489 3;501 3,549 3,509 3,521 3,813 3.893 3;661 3,937

1.892 2,159 2,475 2,271 2,015 1,736 1,825 2,355 2,495 2.911 3,308 2,381 2,602 3,101 3,108

35 1 555 449 994

1,454 1,746 1,664 1,146 i,054 598 213

1.432 1.291 860 809

84.3 79.6 84.6 69.6 58.1 49.9 52.3 67.3 70.3 82.9 93.9

68.8 78.3 78.Q

62.4

15.7 20.4 15.4 30.4 41.9 50.1 47.7 32.7 29.7 17.7 6.1 37.6 33.2 21.7 21.1

Sourre : Newsprint Data 1048.

17 per cent of rated capacity and averaged 32.6 per cent for the decade. The sharp increase in rated capacity between 1929 and 1939, from 2.3 million tons to 3.9 millions tons, was not matched by a corresponding increase in production. In 1929 output reached a peak of 2.5 million tons. The next peak was in 1937 at 3.3 million tons, and the production average for the decade was only 2.4 million tons. Meanwhile, rated capacity has risen above 4.2 million tons,

and since 1946 the industry has operated at full capacity. As new mills are still being put up it is certain that the expansion will continue, according to estimates at an annual rate of 80,000 tons to 100,000 tons. The United States press consumes currently 5 million tons

of newsprint. Any slight falling away from this large volume of consumpion, following in the wake of a business recession, and concurrently with the expansion in Canadian capacity, would certainly go a long way towards relieving newsprint shortages in other regions, provided that the currency shortage eases. If United States consumption were to decline by, say,

68

20 per cent, Canadian capacity of about 1 million tons might be put out of operation, or released to supply other markets, assuming that ways and means could be found to finance larger exports to other destinations. The newsprint market might then conceivably experience a development not unfamiliar to other commodities since the end of 1948. An apparent world scarcity as indicated by the excess of effective demand over supply might quite suddenly turn into a surfeit. The conclusion arrived at here is not that the short-term

problem is less serious than appears, or that no long-term problem exists. A prospcctive abundance of newsprint in the short-term would be quite compatible with an acute shortage in the long-term. In any case, the division of the world into two currency areas, a hard and a soft area, means that surpluses arising in the former are not readily available to meet the deficits of the latter. As for book paper, changes in United States demand should

not materially affect Canadian supplies. The United States manufactures enough book paper for its own use, with a margin to spare for exports, and imports little from Canada. Canadian output of book paper, moreover, is comparatively small.

Europe

A RISING PRE-WAR TREND

The decade before the war was for the Consumption of paper in Europe, unlike the United States, a period of steady and fairly continuous growth. Thus between 1927 and 1937 the consumption of newsprint and certain printing grades rose by 70 per cent from 2.1 million tons to 3.6 million tons (Table 111). Moreover, European demand did not fall off drastically in the depression years and recovered rapidly thereafter. The decline from the pre-depression high of 1929 to the depression low of 1932 was only 16 per cent, and as early as 1934 the 1929 level was far exceeded. Certainly, the consumption trend showed no tendency towards saturation. Per capita consumption of newsprint for Europe as a whole was only 8 kilograms even in 1937, and that year was a peak both for newsprint consumption and industrial activity. This overall figure concealed, of course, wide individual

differences. At one end of the scale was the United Kingdom with 26 kilograms per head and at the other were Rumania, Yugoslavia and Spain with less than 1 kilogram per head. But even in countries with a high per capita consumption and a large readership there was no sign of slackening demand. Dutch newsprint consumption remained unaffected by the depression and doubled between 1927 and 1937 (Table IV). In Belgium the setback was slight and easily retrieved; by 1937 the Belgian

69

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70

press consumed 70 per cent more newsprint than a decade earlier. In Britain the rising trend was no more than slowed down between 1930 and 1932. The subsequent upsurge was very rapid indeed, consumption expanding in flve years by 400,000 tons, or 42 per cent. Germany experienced a much sharper decline of roughly 20 per cent from 1928 to 1932, but in 1933 newsprint consumption began to revive and a n e w peak was hit in 1934. Consumption figures are given below for representative

European countries for three key years: 1927, 1928 and 1948. The decline in Dutch consumption after 1938 was brought about by cuts necessitated by shortages of materials and currencies and should not be taken as signifying a recession in demand.

CONSUMPTION OF ALL PAPER FOR READING AND WRITING PURPOSES (Thousand metric tons)

~~ ~ ~~

Country 1927 1938 1948

Ireland ........................... 17 32 24 Bulgaria ......................... 8 9 18 Finland .......................... 36 53 78 Netherlands ...................... 99 152 i zn Norway .......................... 23 41 57 Switzerland ...................... 45 50 91 Greece ........................... 12 16 19

POST+WAR ECONOMIC REVIVAL

Consumption of paper for reading materials, especially for newspapers, in regions economically advanced and without illiteracy is normally the function of industrial activity. The war, however, has temporarily severed this link. It has not tor long held up Europe’s economic recovery, but the disequilibrium of world trade which it has caused has dealt a severe blow to European production and consumption of pulp and paper. Europe’s industrial revival after 1945 was unexpectedly speedy. With the exception of Germany, virtually every country has n o w regained or exceeded the pre-war level of output, and even Germany is fast approaching it. Yet Euro- pean newsprint consumption in 1949 w a s only 60 per cent of the 1937 peak, or less than 2 million tons. Other printing grades have fared better, but their consumption is just back to pre-war level and is certainly surpassed by the demand. All available exidence points to continued economic pro-

gress. The Marshall Plan, whose objective is the viability of European economy by 1953, that is an approximate balance in the overall external payments accounts with the Western Hemisphere, implies a substantial expansion in output. Accord- ing to the programme submitted by the eighteen European participants at the end of 1948, the combined gross national product of the countries concerned in four years’ time is

71

expected to be 20 per cent larger compared with 1938, and 25 per cent compared with 1948. The programmes for both industry and agriculture are ambitious. They postulate an annual increase in output of 7 per cent, a rate not without precedent but more than double the average increase in normal times, and they assume a 15 per cent rise in output per man hour spead over four years. Industrial output is estimated to rise in that period by more than 20 per cent over 1948- 25 per cent for fuel and power, 30 per cent for steel, 27 per cent for machinery and by an even higher percentage for metals. The anticipated rate of expansion for agriculture is larger still. Compared with 1948, itself a year of good harvests, it is expected to be anything between 25 per cent and 40 per cent, and if this estimate is fulfilled, European farm production in 1952 should exceed the 1938 level by 15 per cent. The separate national plans of the participants, furthermore, assume that a large proportion of the national income will be devoted to investment in 1952, ranging from 12 per cent for Italy to 26 per cent for Norway. Concurrently, consumption levels, which in 1948 were on an average 15 per cent to 20 per cent lower than in 1938, are expected to be raised by the end of the period to pre-war standards. Planning for progress is no monopoly of Western Europe.

Economic programmes laid down for Eastern Europe, which has not joined the European Recovery Programme, are possibly even larger in scope, and certainly more significant in their long-term effects on printing paper consumption than those adopted by the West. Until recently there was little industrial production in Eastern Europe, excepting Czechoslovakia, and equally little consumption of printing paper per head. Yet Eastern Europe’s scarcely utilised industrial potential is great. Having completed the immediate post-war tasks of repairing war damage and restoring the low levels of output prevailing before the war, Eastern Europe has now begun to tackle the basic weaknesses of its economy: lack of domestic capital and skilled labour in industry, excessive population on the land and primitive methods of agriculture. Most Eastern European countries, accordingly, have launched ambitious schemes of industrial development, along with plans for the modernisation and collectivisation of farming. Yugoslavia, a country richly endowed with high grade iron and mineral deposits, has drawn up the most grandiose plan of all. The Yugoslav plan stipulates an increase in industrial production of no less than 23 per cent over the 1939 level to be achieved by 1952. It assumes a yearly investment equal to more than 1,000 million dollars, and it provides for extensive development of the country’s nature1 resources, as yet largely untapped. Bulgaria’s programme, launched in 1949 in succession to the previous Reconstruction Plan, aims a: nothing less than far-reaching industrialisation in five years. Industry’s share of total national output is expected to rise

72

from 30 per cent in 1948 to 45 per cent in 1953, and the contribution of heavy industry to industrial output from 20 per cent to 55 per cent. Poland intends to become a major producer- of capital goods and an important exporter of consumer goods. N o w ranking third among European producers of coal, Poland is doubtless well fitted to realise this double objective. It remains to be seen whether the planners’ blue-prints will

stand up to the hard tests of realities. Economic change has a way of eluding human foresight, and endeavours designed to guide it along pre-ordained channels are noted for the wide gap between promise and performance. Many observers, indeed, are critical of the exercise in long-term planning indulged in by the Marshall countries. Some of these countries, at any rate, are moving away from controls; and freer economies, giving the widest possible scope to multilateral trade, and rigid targets for production and consumption are incompatibles. Certainly the separate national plans worked out by the Marshall countries independently of each other are themselves not free from defects, and integrated into one programme they inevitably embody numerous inconsistencies. For example, the hope that these countries, unaided and without drawing on their gold and dollar reserves, will be able to finance their investment programmes by 1953 assumes monetary adjustments which are as unpalatable politically as they may be desirable economically. Then, even before the readjustment of exchange rates in Sep- tember, 1949, events had shown up as unrealistic a number of assumptions about prices, trade and output. Devaluation has since revealed several more, although it has in part redounded to the advantage of certain industries producing for export. Over-emphasis on the viability of individual participants, moreover, may well mean that one country’s gain in production is another one’s loss in exports. The prospects of achieving al€ the planned increases by 1953 are not propitious at the present moment. Attainment of the Eastern European objectives, likewise,

cannot be taken for granted. Governments may prove to have attempted too much in too short a time. Their production intentions may outrun available resources of capital and industrial technique. Imports of essentials may not be forthcoming on the anticipated scale. Politics may interfere and upset at one stroke the whole elaborate artifice of detailed targets set up for each sector and sub-sector of the national economy. Changing policies may have to be devised overnight to meet the needs of a changed political situation. Even on the most unfavourable assumptions, however,

Europe’s industrial expansion is unlikely to he halted for any long period or to any marked extent. What is in doubt is the degree of expansion. Always barring a prolonged and severe United States slump, which would be a calamity to all countries forced to augment their earnings from dollar exports to pay

for the irreducible minimum of dollar imports, Western Europe should at least maintain for a while the average increase of .3 per cent to 4 per cent a year in the volume of output in normal times. In Eastern Europe, which started from a much lower level of industrialisation, the annual rate of growth should be far higher. Judging by postiwar increases, it might be of the order of at least 10 per cent for the region as a whole.

.RISING DEMAND FOR PAPER RESUMED 7

What will Europe's economic revival mean in terms of printing material consumption? Current trends are obscured by various Government restrictions involving the rationing of the commodity, and by the inflationary rise in its price. They are no safe guide, therefore, to true demand. But where rationing is no serious obstacle to consumption and the price of reading material no obstacle to circulation, the demand for all kinds of printing grades can be shown to have expanded appreciably. This is true, in particular, of newsprint, the demand for which has risen with industrial activity and incomes. For example in Sweden the press enjoys generous newsprint allocations, and whereas the public pays about one-third more for its daily newspapers than it did in 1937, wages and industrial output have advanced in much greater proportion. No wonder there has been a definite and steady growth in the total Swedish circulation, both during and aher the Second World War. Swedish newsprint consumption on a per capita basis, already Europe's third highest before the war, has since expanded by over one-half. Undeveloped countries reveal an even closer relationship between the trends in manufacturing industry and newsprint consumption. Bulgaria with a per capita consumption .of 1.3 kilograms in 1937 has doubled the volume of its industrial production in twelve years and has increased its consumption

:INDUSTRIAL PRODUCTION, NEWSPRINT PRODUCTION AND NEWSPRINT CONSUMPTION

Belgium ......................... 93 100 76 Bulgaria ......................... 190 100 960 ,Czechoslovakia ................... 103 100 128

......................... 69 Denmark 129 - :Italy 98 108 80 Netherlands ...................... 114 a7 59 .Poland ........................... 153 iio 107 Rumania ......................... 60 100 200 .Sweden .......................... 144 99 156 .United Kingdom .................. io9 35 34

.............................

of paper for reading and writing purposes by 125 per cent. Rumania, where per capita consumption was lower still in 1937, shows increases of 60 per cent and 75 per cent respectively. Industrial activity is not the only cause of expanding

European demands for printing paper, although it is the decisive one for newsprint and periodical grades. The cost of raw materials to the press together with the price of reading materials to the public may be important factors in determining consumption levels (see section “Prices and Costs” below). Desire for information also plays a part. Rovted in human nature, it is, fortunately, not a function of incomes. Man does not live by bread alone. His urge for knowledge may be greater than his means, and he may willingly make sacrifices to gratify it. Further, political conditions may not be conductive to freedom of expression. Suppression of civic liberties may well deter the consumption of printing paper, but might also have the opposite effect. This is what happened in Nazi Germany where official propaganda was substituted for freedom of opinion, and subscription to Nazi Party organs made a test of loyalty to the State. As far as newspapers are concerned, a decade of small-sized editions may have changed the reading habits of the public and resulted in lasting economies in newsprint consumption. In Western Europe the 20-page newspaper may have outlived its usefulness. Readers’ preference may be for more concise presentation of news, fewer advertising columns and less bulky editions suited to the increased tempo of modern life. Illiteracy is another factor. Although it does not bulk as a large problem in Europe, it cannot be discounted altogether. The rate of illiteracy is still relatively high in Spain, Italy and parts of Eastern Europe, and efforts are being made to reduce it. Finally the development of political consciousness has received a strong stimulus in the last few years, and many nations are becoming more and more newspaper-minded. 1 It is impossible to gauge the effect of such influences on the

demand for newsprint. None of them is substantial in itself and together they may conceivably cancel each other out. The net effect should not be large either way. The only reasonably reliable pointer remains, for European demand, the rate of industrial development. On this basis, it may be conjectured, the demand for printing

paper in most Western European countries, when given a chance to assert itself freely, will at the very least revert to pre-war level, provided that the prices of paper, newspapers and periodicals are not out of step with other prices and wages in general. Room for newsprint expansion beyond this level mav

1. Circulation Rgures have doubled in Yugoslavia, Portugal and Poland during the lasi ten years.

75

ne limited in Britain, the Netherlands, Belgium, Denmark and other countries with a large per capita consumption, but it should be considerable in Italy, Ireland, Portugal, Spain and even in France. In 1937 Western Europe, including Spain and Portugal, consumed 2.5 million tons of newsprint; eleven years later the consumption amounted to half this figures. At a conservative estimate, the prospective increase in Western Europe's unrestricted demand by 1955 could be put at not less than 1.25 million tons. It might well be much greater. Other printing grades are already consumed in greater quantities than before the war, and the increase in the demand for them should therefore be slower, but it is sure to continue. The special factors in Eastern Europe are low levels of

current consumption-l50,000 tons of newsprint annually for a 100 million population, or 1.5 kilograms per head-and intensive industrialisation plans for large agricultural areas. Peasant populations emerging from illiteracy, and still without much technical skill today, are feeling the need for technical instruction as industrialisation progresses; technical education will reinforce the demand for reading materials. If it can be assumed that newsprint consumption will eventually be raised to the quite modest level in the most advanced Eastern European country, Czechoslovakia, with a per capita rate of 3.7 kilograms, there would bc an increase in demand of 250,000 tons to 400,000 tons. On these assumptions, European demand for newsprint in

1955 might reach a minimum of 3 million tons. The following table gives an indication of the expected growth

in the demand for paper for printing materials in certain countries. The tentative nature of these estimates should be borne in mind.

COXSUMPTION OF PAPER FOR HEADING PURPOSES (Thousand metric tons) Newsprint Other printing grades

Austria ................ 23 25 ... 52' 55' ... Denmark .............. 43 ... ... 37 50 60

Netherlands ............ 57 75 100 65 85 95 Swltzerland ............ 50 53 56 41 44 47 Greece ................ I 5 19 23 6 8 9

Italy .................. 68 1i7 137 55 125 1.55

Including paper for writing purposes. ... Not available.

76

Other regions In Asia and Latin America the consumption of printing paper

has also expanded fast.

CONSUMPTION ,OF PAPER FOR WRITING AND READING PURPOSES (Thousand metric tons)

Country 1927 1938 194s

Brazil 60 78 123 Cuba ............................. 17 19 31 Egypt 8 17 22 Philippines 15 2.5 Peru 8 9 15 N e w Zealand 30 43 37 India ............................ 50 81 129 Ernndor 1 2 5

... Noi available.

............................

............................ ....................... ...

............................. ....................

.........................

The stimulus to increased consumption outside Europe and North America derives from three principal sources : the growth of political consciousness, the spread of literacy, and industrialisation, the first two being closely correlated.

POLITICAL CONSCIOUSNESS

In the short period, the growth of political conciousness is probably the most powerful of these stimuli, but it is also the least tangible to assess, and, of course, its effectiveness depends on the degree of literacy. No study of newsprint, however, can fail to take cognisance of it. The world-shaking events of the last decade have everywhere released an irresistable pressure for political emancipation, with incalculable implications for the demand for newspapers, books, pamphlets and magazines. The First World W a r took the lid off nationalism in Europe. Its successor, giving a tremendous impulse to movements of resistance and liberation in all countries under foreign sway, saw a burst of national self-assertion in all Asia and much of Africa, unrivalled in its intensity, and more far-reaching in its effects than the wave of nationalism which swept Europe after 1918. The Second World War left behind a legacy of ferment whose consequences cannot yet be fully grasped. It led in India, within two years of its conclusion, to the complete transfer of power, wielded by Britain for more than a century and a half, to two mighty sovereign states. It saw the liberation of Japanese dominated China and Korea. Its aftermath included the birth of independent Burma, the Dominion of Ceylon, and the United States of Indonesia, the revival of Arab nationalism, and the creation of a Jewish State. One colonial territory after another is staking its claims to self-government. Malta has already had responsible government in internal affairs restored

to it. British colonies in West Africa have secured unofficial majorities in their legislative councils. O n the legislative councils of Kenya and Northern Rhodesia there is, for the first time, direct African representation. Participation in the war of liberation has brought to the

lives of hundreds of millions vast and permanent changes which have uprooted the foundations of societies and have thrown traditions and beliefs hallowed by antiquity into the melting pot. Fresh ideas have reached primitive man’s mind, and new ways of thinking about social and political relations have replaced the old docility. Above all the war has given rise to a growing clamour of the disfranchised, illiterate multi- tudes for a share in the management of their countries’ affairs.

There can be no uncertainty that the growth in political consciousness, coupled with the spread of literacy, will whet the thirst for news and knowledge. This, in turn, is bound to multiply readership. Again the crucial question is one of extent. No doubt, however, it will be very large.

LITERACY

As is well known, literacy is a vague concept and not readily measured. Each country has its o w n ideas about the degree of reading and writing ability which constitutes literacy. In certain countries, for example, literacy is taken to mean ability to read and write ten characters. Illiteracy figures for the same region from different sources are apt, therefore, to show considerable variations. For these and other reasons any analysis of the effects of prospective rises in literacy rates on the demand for printing paper is inevitably speculative. But, at least, there are some concrete data, and broadly the effects can be gauged. Moreover, past experience may be called in for guidance. T w o examples may be quoted. As Lord Layton has pointed out, “the large readership in the

United Kingdom dates from the end of the last century when tne generation trained under the Elementary Education Acts of the seventies was growing up. It was fostered by the political maturity of the British people, and if it was at times artificially stimulated by circulation boosting devices, it has continued to grow in the years since.” Data for the United States, assembled in Table V, demonstrate

that there is a direct relationship between literacy and newspaper circulations. The table shows the rate of illiteracy in 1920 and 1930 for states with a rate above the average, and compares it with the ratio of the number of inhabitants to the number of daily newspapers sold in the same years and in 1947. T w o facts are plain from the table. First, this ratio is highest in states having the greatest rate of illiteracy. Secondly, it is precisely in those states that it has contracted most, concurrently with the growth in literacy. For the whole of the

78

TABLE V ILLITERACY AND NEWSPRINT CONSUMP'rION IN THE UNITED STATES

Per cent Number or inhabitants per copy illiteracy of daily newspapers sold.

1920 1930 1920 1930 i 947

All U. S. A. ........ 6.0 4.3 3.8 3.2 2.8' Arizona ............ 15.3 10.1 5.2 4.7 3.5. Luisiana ............ 21.9 13.5 7.9 5.8 4.5 MiSSiSSippi ......... 17.2 13.0 34.4 18.6 10.6. South Carolina ..... 18.i 14.7 15.4 11.7 5.5 Tennessee .......... 10.3 7.2 6.6 4.1 3.5" Georgia ............ 15.3 9.4 9.6 6.8 4.3 Virginia ............ 11.2 8.7 8.6 6.1 4.5 Arkansas ........... 9.4 6.8 13.0 11.2 6.2 North Carolina ..... 13.1 10.0 14.1 9.0 4.6, Alabama ........... i6.1 12.6 11.2 7.6 5.1

United States the rate of illiteracy was reduced from 6 per cent in 1920 to 4.3 per cent in 1930, and the number of inhabitants per copy of daily newspaper sold from 3.8 to 3.2 in the same period and to 2.8 in 1947. But in Louisiana the rate of illiteracy fell from 21.9 per cent in 1920 to 13.5 per cent in 1930, while the number of inhabitants per copy of daily newspaper sold fell from 7.9 to 5.8 in the same period and to 4.5 in 1947. In Mississippi illiteracy declined from 17.2 per cent to 13.0 per cent, and in 1947 one daily was sold to- every 10.6 inhabitants as compared with 18.6 in 1930 and 34.4 in 1920. Similar results were obtained in eight other states.

Illiteracy among adults in North America a generation ago was a small residue confined in the main to the southern parts of the United States. In Northern and Central Europe illiteracy was negligible except for isolated pockets here and there, in Eastern and Southern Europe it had already been reduced to manageable proportions. Australia and N e w Zealand had virtually no illiterates. But outside these regions it was a truly formidable problem, and for the world as a whole it exceeded 70 per cent. Great progress has been achieved in the fleld of fundamental

education. Aided by the discovery of new techniques of teaching adults to read, voluntary movements for mass education have sprunt up in Asia, Africa and Latin America. Millions of adults have been taught to read and write during the last twenty to twenty-five years, and their numbers are daily increasing. New ground has been broken with the introduction of elementary education in backward countries. The Soviet Union is perhaps the most conspicuous example

of the struggle against illiteracy in the last generation. One of the first decrees of the Soviet Government laid down that illiteracy in the new Communist state was to be abolished. In little more than ten years, romanised phonetic alphabets were adopted to simplify the multiplicity of languages, and by 1932, one hundred and thirty-four out of one hundred and eighty-two.

7 9,

nationalities of the Soviet Union had their own written language. The Soviet Government claimed that by 1934 the literacy rate had been raised from 32 per cent to 90 per cent and that 100 million more people had become literate. A national literacy movement created in China in the nineteen-twenties had recruited 5 million members by 1931, and many millions more joined its mass education classes in the following years. Literacy among the adult population of China has been com- puted variously, but if the lowest estimates are accepted, the reading public in China to-day must be close on 150 million, equal to the total population of the United States. Progress in India up to the end of the Second World War was not so rapid. Even so, between 1931 and 1941 the rate of literacy for the total population rose from 9 per cent to 15 per cent, or by roughly 70 per cent. For the industrial provinces the rise was more than proportionate; in Bombay, for example, literacy doubled to 22 per cent. The reading public of the Indian Sub-Continent in 1941 was estimated at 50 million, compared with 30 million in 1931. In six years before the war €he number of pupils in primary schools increased from 950,000 to 1,400,000 in the Philippines. During the same period 600,000 more pupils attended primary schools in Indonesia, or an addition of 100,000 more potential readers every year. During ten years Turkey lowered her illiteracy rate by 15 per cent. The drive for literacy has thus been attended with consider-

able success. Yet even to-day more than one-half of the world‘s population cannot read and write. In Asia as a whole only 10 per cent to 20 per cent of the population can read and write, while in Africa the figure drops to from 2 per cent to 10 per cent. In Latin America barely one-fifth of the native Indians and no more than three-fifths of the Spanish-and Portuguese- speaking inhabitants are literate. To-day vast regions are opening up, amongst them those

with the world’s lowest standards of living and of printing paper consumption. India and China are at the threshold of an industrial and intellectual revolution. Africa is the scene of ambitious projects for agricultural expansion. New manufacturing industries are being established all over Latin America. Everywhere mechanised farming is replacing man’s unaided toil. Wherever primitive man is taught to handle tractors, .engines, machines, he must also be taught to read. Without the ability to absorb reading matter, he cannot acquire the technical “know-how”; without it he is poorly equipped for the calls of a technical age. Plans for economic development have brought to the fore

the need for technical instruction, which is one main element of the intensive literacy campaigns called into being after 1945. Present efforts to conquer ignorance and illiteracy in Asia and Africa have been fittingly described as the most significant movement of our generation. This movement is

80

gaining momentum, and, according io one authority, nothing can stop it now. Its full extent will not be revealed immediately as current plans for fundamental education and compulsory attendance at primary schools will take years to take shape. But it is certain that the renewed drive for education will in time reproduce, and on a vaster scale, the growth in the reading public which followed the introduction last century of general compulsory education in Europe. The broad lines of post-war plans are already emerging

from the blue-prints. British educational policy in the colonies, making a clean break with past practice, has laid the foundations of a comprehensive system of colonial education, Several Development and Welfare Acts have been enacted by the British Parliament for the purpose. Most colonial Govern- ments have now drawn up their long-term development plans, and all have given priority to education, including mass education. The ultimate aim is the provision of universal primary education for children, although the immediate one is the more limited objective of improving existing educational facilities. Nothing illustrates more vividly the magnitude of the tasks

ahead than the educational policies framed by the Indian authorities after the transfer of power in August, 1947. Free India’s Government, recognising that freedom means respons- ibility, has squarely faced the urgency of schooling. It has undertaken to eradicate, with the least possible delay, the enormous volume of ignorance and illiteracy that in the past has stifled India’s development. This ignorance, the Indian Government has avowed, must be wiped out as quickly as possible by education for effective citizenship. The Government has admitted that on its proper handling of education, above all, will depend the success of all other schemes designed to promote the nation’s progress. The problem confronting India is twofold: to provide education for children from six to four- teen years as well as for the millions of adults who cannot read and write, and the problem has been tackled at both ends. An Education Conference convened by the Central Govern- ment in January, 1948, took a number of important decisions with which the Government is in full agreement. Accordingly, a beginning is to be made at once with the introduction of universal, free and compulsory basic education, and covering, in principle, a period of eight years. To prevent the products of basic education from lapsing into illiteracy, a comprehensive scheme of continuation education will be launched in the immediate future. As an essential part of the campaign against illiteracy, adult education is to be provided forthwith for all people between the ages of twelve and forty-five, the aim being at least 50 per cent literacy in this age-group by 1952. Plans for technical, secondary and university education are being evolved, to be put into effect as soon as the country’s finances permit. Finally the period of forty years, at one time con-

81

aemplated for the completion of universal, compulsory, basic education, is to be curtailed substantially. If this hope is fulfilled the reading public in the Indian Union twenty to thirty years hence will amount to 250 million. Incalculable new demands for printing paper will stem from this expansion, demands to be reckoned in terms of hundreds of thousands, if not millions, of tons. By comparison, India’s current consumption of newsprint is just 45,000 tons.

INDUSTRIALISATION

To present the prospective demand for newsprint and other printing grades from impoverished Asia and Africa, under- developed Latin America, and prosperous Australasia, in its proper perspective, some idea must be given of the industrialisation projects launched or planned in the large and pre- dominantly agricultural regions. Industrialisation means urban- isation, and urban growth a growing interest in news, information, knowledge. Increased industrial production creates higher incomes, and a larger demand for consumer goods stimulates advertising and readership. Compared with North America, Europe and parts of the Soviet Union, the industrial ouput per head in the regions mentioned is still very small. Up to the present, their principal non-agricultural activity has been the mining of ores and metals, the bulk of which is destined for export. But all are rich in raw materials, metals as well as fibres, and three of them, Asia, Australia and Latin America, orer great possibilities for industrial production. Projects concerned with the industrial development of back-

ward areas are, of course, associated with considerable difficulties. In some of the new countries, there is a low standard of living, and the small volume of savings generated domestically is often hoarded rather than invested. The volume of investment required and contemplated is enormous, in relation to both the national income and the volume of savings, and must be drawn largely from abroad. Industrial and technical experience are usually inadequate and must be imported, along with vast quantities of equipment. External payments accounts, consequently, have a chronic position to disequilibrium. But provided that, in the years to come, the lack of locally produced capital goods can be alleviated by imports and the shortage of foreign exchange by foreign investments, and that technical co-operation can be secured, industrialisation in those regions is certain to be carried forward by the sheer force of its own momentum. In Asia it should at last begin to yield concrete results, in Latin America it should be much accelerated, and in both Latin America and Australia the long-term movement from primary to secondary production should receive a fresh impetus. Signs are not lacking that assistance from outside will be

82

forthcoming. United Nations and its agencies have devoted a great deal of attention to the problems connected with the tcunuraic development of backward areas, where half the world’s population is living in conditions approaching misery. The Organisation has initiated a series of studies of under- developed countries, designed to advise on the selection of . the industries to be established and on the most efficient means for raising output per head. More recently the under-priviledged half of the world has been in the headlines. A wider diffusion of wealth under the auspices of the United States and the United Nations is the essence of the famous “Fourth Point”, which pledges the extension of America’s technical and financial assistance to backward areas. The proposals emanating Prom the President’s initiative do not constitute a specific programme of Government assistance, least of all on the lines of Marshall Aid. They aim at opening the reservoir of American private capital to the rest of the world, at restoring the wealth-creating flow of capital for investment in under-developed regions. In APrica, the influx of American capital should contribute

a good deal to the success of existing agricultural projects, whose dual purpose is the production of foodstuffs in demand elscwhere for export and the provision of larger cash incomes for the native population. The prototype of such projects is the experiment in groundnuts started in British East Africa in 1947. This scheme envisaged, in its original version, the cultivation of no less than 1 million acres with a production target of 225,000 tons a year and involved a major operation of planning. Tractors were to be provided for clearing the bush, transport facilities for marketing the crop, and new settlements complete with welfare services for housing native labour. Although it is an open question whether the project should be judged by the grandiose intentions of its authors or the modest results it has so far produced, it does give an indication of the scale and type of development which is now going on in many parts of the African Continent. Such development will, in turn, react upon industrial pro-

gress, and already mining and manufacturing in Africa are advancing. New and expanding manufacturing industries have been set up in the Union of South Africa. In Southern Rhodesia iron and steel works are to be developed, with the participation of British Steel interests. The mining companies operating in the Rhodesian copper belt contemplate large extensions of mining facilities to satisfy the world’s demand for non-ferrous metals from non-dollar sources. The Belgian Congo is becoming increasingly important as a supplier of raw materials. India, distrustful of foreign capital, endeavours to finance

industrialisation largely by its own efforts, aided by native capitalist development in the older industries as well as state ownership of some of the newer ones. Its plans are nonetheless ambitious. The fundamental objective of India’s economic policy

83

is to raise the standard of living of the masses: the immediate need to produce more coal, install new power plant and enlarge steel capacity. Development of engineering and metal rnanu- facture is to follow in due course. Extensive expansion programmes have been laid down for its two largest industries. cotton and jute textiles, whose output has already far exceeded pre-war level. The range of consumer goods industries, including papermaking, is to be widened. There are plans for a wholly Indian mercantile marine, which, it is hoped will secure for itself the whole of the coastal trade, three-quarters of the trade with adjacent countries and half of the trade with more distant countries. Agricultural Pakistan has felt the first stirrings of industrial-

isation. Despite the lack of indigenous coal the Government is hopeful of the Dominion’s industrial future. The lack of coal is to be ovcrcome by harnessing Pakistan’s reserves of water power. Two large hydro-electric installations are already in operation and work on Feveral more has been started. Extraction of petroleum has expanded by 50 per cent in the Dominion’s first two years of life. Many new cotton mills and the first jute mills are being built, to be supplied from rich resources of domestic fibre. Government plans include the establishment of paper, leather, cement, and chemical industries, assembly of bicycles and motor cycles; and a network of light engineering factories. Argentina has emerged from the war greatly strengthened

as an economic power, and with far wider industrial ambitions. These have found expression in the Five Year Plan for economic development acclaimed by its authors, the Peron Govern- ment, as signifying the opening of Argentina’s industrial era. The plan contains a large hydro-electrification scheme and a nation-wide programme for roads, ports and canals. A characteristic feature of the plan is a series of production targets given to virtually every industry in the country. The target for paper making, for example, stipulates an increase of 90 per cent. If these targets are hit, industrial production in 1951 should be at least 30 per cent above the level of 1946. Argen- tina’s plan exhibits weaknesses common to similar industrialisation projects; it has attempted to do too many things at the same time. And like so many other countries, Argentina has been caught up in the toils of the dollar shortage. War-time exigencies provided a great stimulus to secondary

industry in Australia. For the duration of the war, Australia w a s cut off from many of its former suppliers, and imports from Great Britain were necessarily limited. This, together with the direct requirements of the war, appreciably widened the market for home produced goods. Industries built up or expanded during the war in response to this demand included aircraft, agricultural machinery, machine tools, vehicles, ship- building, chemicals, textiles and newsprint. In the post-war

84

period the pace of industrial progress, so far from slackening, has been actually accelerated. So great has been the expansion in industrial activity during the past ten years that the traditional idea of Australia as an agrarian country must n o w be modified. Australia is, in fact, destined to rank high among the world’s industrial producers.

EXPANDING DEMAND FOR P A P E R FOR READING MATERIALS

It is one thing to adumbrate the problem, to outline the factors likely to effect newsprint consumption. It is quite another to measure their combined quantative effects. Again conjecture has to take the place of firm estimates. This section attempts no more than a rough and ready assessment of what demand might be in the medium term, say, the middle of the flfties. A few countries have ventured to forecast the trend of

domestic consumption, and Chile is one of them. A recent calculation has estimated the demand for newsprint in that country as increasing by just over 3 per cent a year. This estimate applies to a country where per capita consumption of paper for reading purposes stands at 5 kilograms a year, is already well ahead of that of much of Latin America, all Asia, and all Africa except the Union of South Africa. If the estimate proves correct, it m a y reasonably be assumed that the prospective rate of expansion in countries with a lower per capita consumption, and a similar intellectual, social and economic environment will be greater. Latin America consumes, at present, slightly more than 2 kilograms of newsprint per head, and their consumption has risen by 65 per cent in the past twelve years, or at an annual rate of 4 1/2 per cent. If this rate of expansion is maintained, demand in Latin America should approximate 550,000 tons to 600,000 tons in 1955, compared with 400,000 tons consumed in 1948. It might easily rise beyond this figure, once industrialisation has begun to augment cash incomes and the demand for consumer goods. Japan it can be surmised, will endeavour to raise its annual

consumption of paper for reading purposes from the current abnormally low level of 220,000 tons a year to the pre-mar average of over 400,000 tons a year. United States policy in Japan is fostering the country’s economic rehabilitation with the greatest possible speed. If production and consumption of goods in general are restored to pre-war levels, it is improbable that newsprint alone will form an exception. Publishers in Korea, too, will not for ever be contented with a mere 10,000 tons of newsprint a year, against 40,000 tons annually produced and used before the war. Assuming that China, India, Pakistan and Burma, all in the 0.1 kilogram per capita group, were to double their newsprint consumption to 240,000 tons by 1955, and allowing for some increases for the rest of Asia, the total for the continent in the nineteen-fifties should be at least

750,000 tons a year. This compares with a consumption of 250,000 tons in 1948 and 420,000 ton in 1937. Newsprint consumption per head in Australia and New

Zealand is amongst the world's highest; but owing to cuts enforced by the currency shortage it is substantially lower than it was before the war. Potential demand is thus much in excess of actual consumption. Moreover, both countries are prosperous, and their economies are every year becoming more diversified and more productive, while immigration from newspaper- minded Great Britain and other advanced countries is daily adcling to their populations. A recent estimate has placed New Zealand demand for newsprint in 1955 at 40,000 tons, compared with a current consumption of 25,000 tons a year, and consumption in Australia, if unrestricted, might rise in the next five years by 60,000 tons to 200,000 tons a year. It is also fair to assume the expansion of demand in the

Soviet Union. If per capita consumption of newsprint were to be raised from its present annual level of 1.3 kilograms to 2 kilograms-surely no exaggerated assumption for a country claiming 90 per cent literacy-this would result in an increase of 100,000 tons to 300,000 tons a year. Finally, Africa and the Near East. These regions consume

at present about 80,000 tons of newsprint annually, of which the Union of South Africa accounts for 40,000 tons. Even South Africans, however, consume no more than 3.6 kilograms per head annually, and an increase of only 25 per cent, together with the effects of continued population growth, would add about 15,000 tons a year. In the rest of Africa, the scope and the facilities for publications are poor, and readership is limited to the few. On the other hand, Israel, with a prospective population of 2 to 3 million by 1955, and a current newsprint consumption of 3,000 tons a year, would increase its consumption threefold, if consumption per head were brought up to the level ruling in advanced communities. Turkey and Egypt are both expanding as agricultural and industrial producers, and both are potentially larger users of newsprint and other printing paper. Altogether, the demand for newsprint in the Near East and in Africa might increase to 150,000 tons by 1955. Newsprint consumption in the regions discussed in this

section amounted to 1.1 million tons in 1946. The estimates above suggest an increase to something like 2 miIlion tons in 1955. Examples of the estimated rise in the consumption of paper

for printing materials are given below.

86

CONSUMPTION OF PAPER FOR READING PURPOSES (Thousand metric tons)

Newsprint Printing paper

Burma ..... Costa Rica . ~ New Zealand India ....... Japan ....... Chile ....... Lebanon ....

..

..

..

.. .. ..

..

.........

.........

......... ......... ........ 4 .........

......... ... Not available.

3 I 23 50 120 22 1

5 2 40 80 181 27 1

5 3

... 130 170 32 2

1 5 5 I 2 2 10 14 14 65 120 910 100 120 130 7 9 10 1 i 2

Prices and costs The argument of the preceding sections has been that in most countries there is ample scope for an increase in the demand for newsprint and other printing paper over the next few years. This increase, it has been suggested, is likely to be the joint outcome of economic development, the conquest of illiteracy ana the growth of political consciousness. T w o qualifications have to be introduced here. The public’s demand for reading materials is not wholly unrelated to their prices, just a< ihr anility of publishers to meet it depends at least partly on the cost of the raw materials. This section deals, in the main, with newspapers and newsprint, but much the same considerations apply to other reading and printing materials. In fact, the demand for books is very sensitive to prices, as has been demonstrated by the great success of cheap and popular editions. A little while ago, Editor and Publisher undertook research

on newspaper costs in the United States. The study revealed three important facts. First, of all the items entering into the costs of newspaper publication newsprint was by far the largest, accounting for an average of 24 per cent of total costs for all circulation groups. Secondly, the proportion of total costs represented by newsprint was larger for higher than for lower circulation groups. For newspapers with a circulation of more than 100,000 copies a day newsprint was almost 75 per cent of total costs, whereas for those with a daily circulation of 10,000 to 25,000 copies it was only 14 per cent. Thirdly all newspaper expense had risen since 1939, but none as steeply as newsprint. Changes in newsprint costs are thus a major influence on the price or size of newspapers. The demand for newspapers is not normally subject to strong

competition from alternative outlets for consumer spending.

87

Yet an analysis of the relationship between the prices of and the demand for newspapers is beset with several difficulties. One of there arises from the need to isolate the effect of prices on demand from other, and perhaps more potent influences, such as the rate of literacy, the desire for information and the level of employment. Another difficulty lies in the fact that expenditure on newspapers is not a large item in anybody’s budget, and is, therefore, partly haphazard. The connection between prices and demand is therefore not easy to trace. Nevertheless, there is no reason to suppose that expenditure

on newspapers defies the ordinary rules of economic behaviour. Indeed, there is enough evidence to show that newspaper purchases depend a good deal on newspaper prices, more particularly on the ratio between living costs and incomes. Certainly the elasticity of demand for newspapers varies with their price. That is to say, if newspapers are cheap in relation to incomes, as they are in the United Kingdom and in Denmark, the demand for them is not very responsive to changes in their selling prices. But such changes can make all the difference if newspapers are dear. To that extent price governs the demand for newspapers, as for other goods. A few examples can be given to illustrate these points.

Paraguay, with a population estimated at 1.2 million, has three dailies with a combined average circulation of 17,000 copies per day for the entire country. There are thirteen newspapers for every 1,000 inhabitants, and, although newsprint consumption has risen by 50 per cent since the end of the war, per capita consumption amounts to only 0.4 kilogram. Government control over newsprint consumption is limited to the issue of import permits which are required for payment in foreign currency. These permits are usually granted, and each newspaper is free to make its own private contracts for supplies. Newsprint is not rationed or otherwise allocated. Yet a further expansion in newsprint consumption is frustated by the excessive cost of the commodity, which, with inflated charges for transportation and trans-shipment, was raised to the equivalent of 250 dollars a ton in the summer of 1949. High costs of distribution in remote areas inadequately provided with road and rail services have added to high costs of publication. As a result the price of dailies has risen to the equivalent of 5 1/2 cents per copy, a price beyond the reach of many readers, and circulation remains pegged to an extremely low level. The circulation of Algerian newspapers is similarly handi-

capped. Before the war the Algerian press ran 8-10 page newspapers. Meanwhile the number of pages has been reduced to 6, while the price per copy has gone up considerably. Wages have also risen considerably but have not kept pace with living costs. Newsprint consumption is restricted and has dropped to one-half from over 10,000 tons in 1938. Current per capita consumption is only 1.0 kilogram a year, and at present there

88

are only 44 papers for every 1,000 inhabitants. But the main1 problem confronting the press is one of selling, not of official restrictions on newsprint consumption. Newspapers are to@ expensive, and it is doubtful whether the press could utilise more newsprint if the commodity were freely available. Another country without a supply problem and with o

stationary consumption is Turkey. Now, as before the war,. Turkey uses 8,000 tons to 9,000 tons annually, and the envisaged increase for the next few years is only 1,000 tons a year. The local newsprint mill operates at one-half of its rated capacity of 10,000 tons a year, and imports, which are not seriously restricted, amount to only 3,000 tons a year. There are ncr shortages of newsprint capacity or printing equipment, and imported newsprint is not rationed to consumers. No doubt one reason for the tardy progress is the price of newsprint, which stood at the equivalent of $200 a ton in 1949. High prices have tended to curtail the demand for news-

papers even in certain major newsprint consuming countries with a relatively large national income, a highly developed press and a public with a long tradition in reading and buying newspapers. France is a case in point, where the current consumption of newsprint is no measure of unrestricted demand. Recent reports have suggested, however, that if all official restrictions were removed French demand for newspapers would not materially expand, and newsprint consumption would regain at best 90 per cent of the pre-war level. In February 1949, the president of the Paris Press Syndicate was quoted as saying that France had enough paper to enable the press to publish more pages provided that the price of newsprint could be reduced. Moreover, a comparison of net sales of Paris dailies in February 1949 with those a year earlier revealed a striking decline for all but three of them, and the increases reported for these were less than 5 per cent. At the same time as France began to show signs of economic recovery its press was being plunged into greater difficulties than ever. In Paris, twenty dailies and more than a hundred weeklies established after 1944 had disappeared by the beginning of 1949. Paris morning papers then numbered ten instead of twenty4lve as in 1944, and evening papers four instead of ten. No one, it was reported, was keen to invest money in printing plant. Evidently, the effective demand for newspapers is held in check by the sharp rise in the selling price, and the high costs of newsprint has. played havoc with the French press. At the other end of the scale is the United Kingdom, where

newspapers still sell at a penny, the same price as before the war. With incomes and employment at very high levels, and with everything much dearer, it is natural that there should be a boom in circulation. Sales of dailies rose from 19 million copies a day in 1939 to 30 million copies in 1949, or from 400 to 580 copies for every 1,000 inhabitants, and a

89

further increase was achieved in 1949 after the removal of restrictions on circulation. But per capita consumption of newsprint fell from 26 kilograms in 1939 to 12 kilograms in 1949, and total consumption from 1.2 million tons to 560,000 tons. It is largely due to enforced economies in space that the Gritish press is still able to operate at a profit. Even after successive reductions in 1949, the British price of newsprint is still somewhat above the world price and far above pre-war level. In view of the high costs of newsprint, the withdrawal of restrictions limiting the size of most dailies to six pages would not be an unqualified boon, and would certainly not be followed by the restoration of the pre-war standard of twenty pages. Given the costs structure of to-day, the British press could. afford extra pages only insofar as extra advertising revenue could be raised to offset a large part of the additional cost. No doubt a colossal increase in advertising revenue would be necessary to finance an increase in the number of pages to twelve, to say nothing of twenty. Thus even the British press might not reverts to its pre-war rate of newsprint consumption unless the cost of the commodity could be brought down into a more realistic relationship mith the current selling price of ncwspapers.

C H A P T E R V I

Basic factors affecting the supply in the future

Raw materials SOFTWOOD ORIGIN

This section examines the availabilities of both woodpulp and pulpwood derived in the main from softwoods, to meet the expected increase in the world's demand for paper.

\VQQD PULP

The Preparatory Conference on World Pulp Problems held in 1949 estimated that maximum world pulp requirements excluding the Soviet Union, would increase in 1950 by more than 2 million tons to 31.3 million tons and thereafter at an annual rate of 1.3 million tons, equal to 4 per cent, to 37.6 million tons in 1955. The Conference emphasised that, in the absence of reliable data, it was unable to assess future requirements from kown or verifiable factors governing the demand for newsprint and other paper prdducts, although it evidently anticipated a substantial rise in the demand for all grades of paper. Hence its estimates should be interpreted as indicators of a trend rather than forecasts. Requirements were calculated on the assumption of full employment and continued economic expansion. Stress w a s also laid on the possibility that the tentative estimates of consumption might well be qualified by subsequent developments, such as the trend of the external payments position of the various consuming countries, and the unknown effects upon the demand for wood pulp of the use of alternative raw materials for papermaking. One further reservation was made. For many years past pulp producers have sought to integrate the manufacture of pulp with the manufacture of newsprint, paperboard and other mass produced articles. Progressive local integration is not only in keeping with national economic policies, but also an important aid

91

towards greater productive efficiency and lower shipping costs. In pursuance of this policy, some countries might have inflated the forward estimates of their pulp requirements to allow for additional exports of finished paper, while at the same time understating the pulp balances available for export. But the margin of error is small and should not alter the overall picture to any extent. With due allowance for such reservations and any other modifications which may prove to be necessary, the forward estimates of wood pulp requirements reproduced in the table below from the Report issued by the Conference constitute the closest approximations which exist. The forward estimates of requirements should be compared

with those for production. Although the Conference envisaged a large increase in output during the next five years it did not expect that the present equilibrium between world requirements and world production would last long. World production, excluding the Soviet Union, was estimated at just over 31 million tons for 1950, against 29 million tons in 1949, and at 37 million tons for 1955.

1 9 5 0 1 9 5 5 - Region

Thousand metrir tons Ellrope .......................... Soviet Union (exports) ........... Near East and North Africa ...... North America ................... Latin America ................... Africa ........................... Asia ............................. Oceania .......................... World ...........................

9,400 ... 20

10,290 580 15 71 5 245

31,265

9,600 75 15

'20.310 31 5 15 665 175

31.170

1 i ,800

30 -03,705

685 40

925 37,635

450

... i1,lOO

200 30

'93.915 440 30 880

76,940 345

* Maximum. ... Not available. Source : Report of the Preparatory Conference on World Pulp Problems, 1949.

The estimates were based on varying hypothetical assumptions as to the prevailing conditions in the various countries. Thus a deficit of 100,000 tons would emerge in 1950 and

rise to 700,000 tons by 1955. Transoceanic shipments would continue, though on a reduced scale. These prospective trends appear to foreshadow a movement towards greater regional self-sufficiency. A shortfall of production would be common to all major

regions except the Soviet Union and North America. The Soviet Union was expected to have a small exportable surplus, but the

92

Conference pointed out that the calculation of a North American surplus w a s based on the assumption of maximum production. As North America was generally expected to produce pulp at a somewhat lower rate, it was thought probable that it would continue to show a net import balance. Productive capacity in Latin America, Asia and Oceania was expected to expand, but the requirements of these regions were believed to grow apace, and their deficits would therefore undergo little net change in the Ave year period. The regional redistribution of production and consumption

in favour of North America, noted in Chapter 11, was not expected to be reversed to any marked extent. Europe’s share of the respective world totals would improve; it would rcmain, however, far below the pre-war proportion. As production in Europe was thought to expand at a smaller rate than requirements, the net exportable surplus would shrink rapidly and disappear after 1950. If the estimates were fulfilled Europe’s requirements in 1955 would exceed its production by 700,000 tons. The cessation of wood pulp exports might come into conflict

with Europe’s overriding need to earn more dollars and other scarce currencies. In consequence European Governments may be compelled to give priority over domestic consumption to whatever products can be sold in desirable currency markets. The probable persistence of wood pulp deficiencies in Latin America and the United States suggests that wood pulp will be one of these products. Furthermore, in various parts of the world, notably in Latin America, India and Pakistan, there are newly established paper industries catering for an augmenting domestic demand from a growing population and dependent for a proportion of their pulp requirements on imports from Europe. For this reason, if for no other, it would be highly desirable to maintain European pulp exports. In this event then, a European net deficit may not actually materialise.

PULPWOOD RESOURCES

The projected expansion of pulp production to 36 million tons in 1955 would place a severe strain upon the world‘s resources of softwood. To achieve the pulp objective pulpwood production will have to be expanded appreciably. The Preparatory Confer- ence on World Pulp Problems estimated minimum requirements in 1955 at 146 million cubic metres. This compares with 120 million cubic metres produced and consumed in 1949 and an output of 139 million cubic metres envisaged for 1955. More than three-quarters of the deficit of 7 million cubic metres which thus appears in prospect would arise in Europe and Japan. North America would also show a deficit, but, to quote the

Report issued by the Conference “it is believed that forest

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resources now accessible are capable of maintaining supplies of wood adequate for current production levels. From the medium and long-term points of view, great opportunities exist for still further expansion as more and more of the forest area is subjected to improved forest management and to more adequate protection against fire, insects and diseases, and the industry makes greater use of hardwoods and wood now wasted and introduces high yield pulping methods. In addition, there remain large forest areas not yet fully utilized, notably in the northern parts of Canada, Alaska, and portions of the Rocky Mountain Area.” A European woodpulp output of nearly 11 million tons in

1955 will require 48 million cubic metres of pulpwood. But, according to the Conference, Europe’s forests would furnish only 44 million cubic metres in 1955, leaving a large deficit to be met by imports. It is possible to foresee considerable difficulties in obtaining the required volume of supplies. Although Europe’s current pulpwood cut of 42 million cubic metres a year is still 12 per cent below the 1937 rate, it already exceeds by 20 per cent the maximum which the regrowth of pulpwood permits. The drain in Scandinavia is not so much out of line with new growth, albeit at a lower level of output than before the war. Reduced industrial wood consumption during the war gave the forests of Sweden, Europe’s largest producer of pulpwood, a much needed period of rest. Even so lumbering in Sweden might have to be curtailed for several years if the forests are to be maintained on a sustained- yield basis. The important point about pulpwood growth is the ratio of the age groups. The trees must be allowed to grow and mature in an agc group ratio which will make it possible to obtain and maintain maximum volume of output per acre. Excessive cutting has upset this ratio in Europe, and it will take years to restore a balance. A further increase in Europe’s pulpwood output may be physically possible. Pulp- wood comprises only one-eighth of Europe’s total fellings, and a small diversion of wood from other uses would make a big difference to pulpwood supplies. Pet the claims of other users are also expanding, and there is no immediate scope for such diversions. Larger pulpwood production would thus be at the expense of new growth, but it would surely be desirable at long last to arrest a drain which threatens the forests with a scrious decline in productivity. The Conference expressed the view that an increase in the

effective size of “raw materials supplies for European mills could be achieved to some extent by closer utilisation of sawmill waste, greater use of hardwood and alternative raw materials, the introduction of high yield pulping methods, and, possibly, the diversion of some fuelwood or timber to the pulp mills.” It was also thought that certain central or Eastern European countries with wood pulp capacity newly built or

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transferred from other areas could probably make better use of smaller wood from local forests. But no indication can be given of the degree by which the raw material shortage may be eased by such means. Whether Europe’s pulpwood deficit can be met by imports

is equally uncertain. The only possible sources of imports are the Soviet Union and Canada. Imports from the Soviet Union are negligible at present, and there is no sign that they will be resumed soon and in sufficient volume. With Russian shipments in abeyance, and a European pulpwood cut far below the level commensurate with the wood pulp objective for 1955, Europe will be faced with the choice of slowing down the envisaged expansion of pulp production, relieving shortfalls by additional pulp and paper imports from the Western Hemisphere, or of purchasing pulpwood from Canada. Of the two choices the second is much the more preferable, although transoceanic shipments of so bulky a commodity are extremely expensive. The Conference estimated that additional imports of pulp and paper from the Western Hemisphere to offset a reduction in European pulp output below the estimates would involve a dollar expenditure at least three times as large as would be needed to import the necessary pulpwood from North America. The outlook for pulpwood supplies in Japan is even less

promising. In recent years, Japanese forests have been overcut twice their annual growth, and woodpulp output has fallen to half a million tons, or about one-third of the pre-war level. Despite the depletion of forests Japan desires to augment wood pulp production substantially, according to estimates to 880,000 tons by 1955. But until the benefits of reforestation have been realised, not much more domestic pulpwood can be produced than at present. The Conference estimated the increase in domestically produced supplies at only 150,000 cubic metres, from 1.65 million cubic metres in 1949 to 1.8 million cubic metres in 1955, compared with double the output before the war. Plans to expand Japanese pulp output by about 80 per cent in Avc years therefore depend on importing something like 1 million cubic metres of pulpwood.l There is no indication that imported supplies of this magnitude will be available, and unless alternative raw materials can be economically developed on a scale never before attempted the pulp 0bpectiX.e for 1955 must be deemed unrealistic. The Conference noted that the undeveloped forests of the

Soviet Union were of enormous extent, and that the long-range prospects for Russian pulpwood production were good. O n the other hand, it was known that the developed forests of Western Russia were heavily overcut, and war-time destruction in the

II_-

I. Japan has recently imported 500,000 dollars worth of woodpulps from Ihe U.R.S.S.

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region added to the damage. As it was also understood that great efforts were being made to expand the domestic pulp and paper industries as rapidly as possible, “it was not impossible that all the pulpwood that could be produced west of the Urals would be needed for domestic pulp production”. New pulp mills are being established in India and Pakistan,

with the assistance of Canadian technical experts. But the Conference observed that local forest resources were too small to support large native wood pulp industries, particularly as competing demands for other wood products were likely to result from the planned industrialisation of these countries as well as from the continued growth of their populations. In other parts of Asia, including Burma, China, Indo-China, Malaya, the Philippines and Siam, there are extensive forests, most of which arc not readily accessible or are broadleaved types. Indonesia has a considerable area of pine, and the Conference was advised that plans for the erection of a sulphate mill were now studied. A part of the hardwood resources of Oceania is already

utilised as pulpwood, and it was thought that Australia would furnish all the pulpwood required for an expanding domestic pulp industry. The Conference also referred to the possibilities of producing

pulpwood in Latin America and Africa, where vast forests of productive quality exist. In Latin America 4 per cent of the productive forest land is coniferous, but virtually the whole forest area in Africa is covered by broadleaved species, and much of it by tropical rain forests. The Conference stated that “the problems of adapting such species to the commercial production of pulp have not yet been fully solved, nor had a systematic programme of research been undertaken until recently”. In Latin America, as in Africa, the conversion of dormant forest wealth into active resources would depend on the success in tackling the “social, technical and economic problems connected with the utilisation of tropical forests”. If these problems could be solved the pulpwood potential in both -regions would be enormous.

NEWLY DEVELOPED RAW MATERIALS

Shortages of pulp made from softwood have naturally directed attention to the possibility of meeting the demand for cheap paper from sources other than the softwoods of the Northern Hemisphere. In the past few years there has been a good deal of research into the use of straw, bagasse (the waste of sugar cane), hardwood and other fibrous materials which were not previously favoured as a source of pulp. Experimentation has been undertaken in many countries, and not only in those with insufficient supplies of woodpulp, although only a few +countries have developed commercial production on any scale.

STRAW AND BAGASSE

Among the alternative fibrous materials straw has always been regarded as the most obvious choice. It is a by-product, seemingly abundant, normally inexpensive, and the possibility of using it has been periodically investigated. Indeed straw antedates the use of wood in papermaking by many decades. But, in a way, straw has also proved to be the least satisfactory of the alternative materials; at any rate, its utilisation encoun- ters greater difficulty than is commonly thought. First the abundance of straw is more apparent than real, for straw is by no means a mere waste product. A large proportion of it is used on the farms, and in countries with a relatively small cereal crop and an expanding livestock production straw may actually be in short supply. Even in so important a cereal producing country as France, the residual straw it will ever be possible to divert from agricultural to industrial use is estimated at no more than 10 per cent of the total annual crop, and current consumption by industry is only 3 per cent because of competition from other users. Secondly, not all types of straw are usable in pulp manufacture. The best yields are obtained from rice and wheat straw, somewhat lower yields from oat straw, while barley straw is of little use. Even for the most suitable straws, yields barely exceed 35 per cent, whereas the yield of wood is almost 100 per cent. High wastage materially adds to the cost of the pulp. Thirdly, straw is expensive to process. Straw pulp for paper making must be prepared chemically and takes more coal and chemicals per ton than wood pulp does. Fourthly, the straw fibre is short and weak, and the pulp made from it lacks the resistence required for conversion into paper on fast running, modern papermaking machines. Straw pulp, therefore, has a limited range of applications. It can be used for printing paper, but in newsprint production its usefulness is confined to countries equipped with older types of papermaking machines which do not operate at high speeds or need not be run at top speeds to be economic. It is significant that only Italy and a few of the smaller paper producing countries manufacture newsprint from straw in quantity. In contrast, British newsprint producers, despite great efforts during and after the war, have been unable to solve the technical and economic problems involved in using straw pulp on their up-to-date machines. Italy is now leading the world in the manufacture of all grades of paper, including newsprint, from straw, whereas output of straw pulp in the United Kingdom has declined from the war-time peak of 300,000 tons a year to less than one third. Then, straw makes bulky shipments and the costs of collecting and transporting it are very heavy. Finally, straw deteriorates quickly under exposure to moisture and nowhere are storage facilities suffi-

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cient for the huge quantities which would be needed for large- scale operations. Against these demerits must be set two important merits.

Straw is a home-grown material and its consumtion requires no outlay of foreign exchange. Also the use of straw helps to spread scarce supplies of wood pulp by releasing some wood pulp for the manufacture of newsprint and other grades which are not satisfactorily made from straw pulp. Straw pulp is thus essential to the paper industries of all countries unable to manufacture or import the whole of their wood pulp supplies. Bagasse and rice straw share with other cereal straw most

of the disadvantages and advantages. Both materials yield short fibres, are costly to process, collect and transport, and the pulps made from them are not suitable for every paper grade. But neither has as many alternative uses as straw has in the industrialised regions of Europe and North America. Moreover, the bulk of the world's rice and sugar cane is grown in uhder- developed countries, and many of these have great plans for paper manufacture, although they have neither the pulpwood nor the foreign currency to import pulp. Rice straw and bagasse, then, are evidently of growing importance as papermaking materials. 1 Technical difficulties apart, the chief obstacIe to more

intensive utilisation of bagasse and staw pulps is the high cost of producing them. At present pulp derived from ordinary cereal straw, rice straw and bagasse costs more than wood pulp, and its production pays only when wood pulp is dear and scarce. Opinion on the future of straw and bagasse pulp is therefore divided. Although the world has long searched for new paper-making materials the paper trade itself is known to view with some scepticism the long-term prospects of straw and bagasse as major sources of supplies. But the outlook is not really without hope. Some of the

present difficulties are likely to diminish in time. Costs might be brought down by larger-scale methods of production and by siting straw pulp mills in areas where a regular supply of suitable straw is assured. Technical improvements should alleviate deficiencies in fibre length. Recent research has already shown the Possibility of increasing the strength of bagasse pulp by adding to it an admixture of bamboo which has long fibres. Thus the chances are that the use of straw and bagasse has

come to stay. The example of Italy has already been mentioned. Germany is another important producer of straw paper. Before the war Eastern Germany had a large output of straw pulp, and at present Western Germany produces annually about 25,000 tons of bleached straw pulp. The Netherlands and other

1 Esparto grass which is grown in large quantities in North Africa is not a recent raw material for paper It is almost all exported since paper manuracture cannot be carried out locally ouing to water shortages

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European countries are preparing plans for the extensive utilisation of straw in pulp manufacture. Papermaking in India and Pakistan is to be expanded on the basis of native supplies of rice straw and bagasse. Mexico is a possible producer of pulp from bagasse.

The fact remains, however, that the limitations of straw and bagasse are considerable. The volume of pulp made from these materials is very small in relation to total pulp consumption, and there is no evidence that a marked expansion is imminent. Meanwhile the use of straw and bagasse cannot materially lessen shortages of wood pulp.

HARDWOOD

Thefe is more hardwood in the world than softwood, yet not so very long ago the use of hardwood in papermaking per- plexed scientists and industrialists alike, and it still offers a number of unsolved problems. Hardwood, as the name implies, is harder than softwood and is harder to treat. Most species are too tough for grinding, and many contain a relatively large proportion of resin which must be extracted. The preparation of hardwood for pulping requires cooking, and chemical treatment is more expensive than mechanical. Tropical woods are rarely of homogeneous character, and it used to be accepted opinion among paper producers that a variety of divergent species cannot be cooked in one process. Separate cookings yield higher grade pulp, but increase the cost of producing it. If hardwood is coloured, as many species are, the pulp must be bleached if it is to be used in the manufacture of paper for printing. In contrast, softwood pulps used for newsprint are unbleached and consist up to 85 per cent of the cheaper mechanical grades. Hardwood pulps, in short, are more difficult as well as more expensive to treat in papermaking than are softwood pulps. Transportation is another difficulty. There are not so many

rivers and streams in the regions where hardwood is grown, and, as has been mentioned above, pulp producers rely for pulpwood shipments on water transport which is both cheap and convenient. As hardwood is heavier than softwood, it does not easily float, and in certain regions it must be transported overland. Finally, because of the great demands in Europe for timber from local forests, hardood is hardly less scarce than softwood in North America. Even in normal times many hardwoods, especially tropical species, fetch higher prices than softwood.

The manufacture of paper from hardwood, therefore, is neither simple nor cheap. Nevertheless production has undeni- ably progressed in recent years. Hardwoods are used in Italy for the production of mechanical pulp for use in newsprint and other printing grades. In fact, a very large percentage of

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the mechanical pulp made in Italy is produced from poplar, which has long been grown as a crop. The great advantage of poplar over many other trees in Europe is its rapid rate of growth. Poplar reaches pulpwood size in ten to twelve years as contrasted with forty to sixty years for spruce and up to a hundred years for beech. Italy is one of the few European countries where mechanical pulp for use in newsprint is made from hardwood, but other countries also utilise hardwood as pulpwood. German mills have long produced pulp from beech, although the only grade hitherto manufactured in quantity has been dissolving pulp, principally for the rayon industry. After the war German scientists undertook research into the cultivation of poplar for use as pulpwood. The results obtained indicate that pulp from poplar pulpwood could be substituted for all the pulp which is now produced from beech, as well as for a large proportion of the pulp which is now produced from spruce. If large-scale cultivation of poplar in Germany is successful, the growing cycle for pulpwood could be enormously reduced and large-scale pulp production from poplar might possibly begin in fifteen years. The pioneer of hardwood processing in papermaking is,

probably, Australia. That country is almost without softwoods and only a few years ago it was wholly dependent on imports for its large consumption of newsprint. Yet to-day Australia is turning out annually more than 30,000 tons of newsprint from hardwood and it aims at a threefold increase in output by 1953. Australia has immense resources of eucalyptus trees of which there are five hundred different kinds, but tests conducted over thirty years have shown that very few are suitable as pulpwood. The difficulty about eucalyptus’ is twofold: the Abres are very short; and worse, the resin bond between them is as strong as the Abres themselves. Resin treatment, which is a tricky business, is believed to be very near to Anal solution, and the planned expansion of the Australian pulp industry is based entirely on native pulpwood from eucalyptus. More recently, the use of tropical woods for pulp and paper

was investigated in French colonies in West Africa. The inves- tigation was so encouraging that it was decided to erect a pilot mill on the Ivory Coast, where operations are expected to start in 1950. The Preparatory Conference on World Pulp Problems reported that “if these semi-industrial experiments prove successful, it is the intention that this pilot plant will be followed by several standard commercial mills in other French tropical regions”. It is safe to assume that the methods of processing hard-

woods for pulp will be much improved in the future. Doubtless the advent of the new papermaking material is a development of great significance to papermakers all over the world. Greater utilisation of hardwoods will ease the pressure on world

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resources of developed softwood in two ways. It will augment the supply of materials available for the manufacture of newsprint and other printing paper, and it will help to meet an expanding demand for dissolving pulp and other chemical grades used in the production of rayon, synthetic textile Ahres and plastics. New pulp and paper industries in Latin America and Asiatic countries short of dollars and unable to import the necessary pulp should benefit from gaining access to non-dollar soiirces of raw materials.

Capital and equipment

The Preparatory Conference on World Pulp Problems “was in uiiaminous agreement that no pulp factory should be built without being assured of a continuous supply of raw materials based on sustained forest yields.” It considered that “in general, pulp should be produced where mills can be supplied with pulpwood in an economical way”, although it allowed for certain exceptions to this rule. Given the supply of raw materials, do the nations of the

world possess the other ingredients for expanding their paper industries? Will the large volume of new investment in expensive papermaking plant he forthcoming, either from private or from public sources: will the equipment be available; will the current expansion programmes suffice to satisfy the prospective rise in the world’s demand for printing paper and newsprint? All too often, in pre-war years, papermakers and, particularly,

newsprint manufactures languished not for lack of capacity, capital or raw materials, but for lack of markets. Throughout the inter-war period the world‘s newsprint industries suffered from a chronic surplus of capacity which always was a potential threat to their prosperity. At times the producers’ profits fell to vanishing point. During the economic depression in the early nineteen-thirties, when United States newsprint consumption contracted by one-third, nearly all of the United States foreign suppliers were severely hit, and many Canadian newsprint companies went into receivership. Manufacturers of paper used for periodicals, magazines and books were not to the same extent exposed to fluctuations of purchasing power, but they too were far from enjoying an unbroken run of prosperous years. At present there is a shortage of all grades of printing paper and the problem of excess papermaking capacity looks as if it belonged to a distant part. To provide for the unsatisfied demands for printing paper from all parts of the globe outside North America much thought has been given to projects designed to enlarge existing industries and to cstahlish new ones in rcgions where the demand is likely to grow most. Yet even to-day newsprint producers are worried about the permanence

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of the post-war rise in demand. Already there is talk that the entire newsprint industry of Canada may go on short time in the second half of 1950. No wonder established newsprint producers, with memories of pre-war gluts, are wary of competition from newly established industries in their export markets and chary to install new plant. Since newsprint capacity amounting to more than 1 million tons is still unused, it is widely held, and not unreasonably, that reactivating idle capacity is of greater urgency than building new mills to supply unknown future demands. In fact, some of the newsprint mills forced during the war

to close down or to switch to the production of other paper grades are reported to be back in production shortly. One of the largest British mills is planning to resume the production of newsprint in 1950. Other British mills now idle or diverted to other uses may follow later provided that enough wood pulp and labour can be obtained. Rehabilitation in Norway and Finland has lately shown good progress, and by 1951 the newsprint industries of these countries should no longer be physically incapacitated from working to capacity. But the German and Japanese newsprint industries are bound to recover slowly, and much of their plant may continue to stand idle for a considerable period. All in all, the tonnage of idle plant may be halved within the next three to five years; there is no sign that it will be eliminated in the foreseeable future. Additions to papermaking equipment are being planned in

many parts of the world. But in so far as newsprint capacity is concerned the envisaged rate of expansion outside North America and Australia is not impressive. Large projects now under way in the United States are probably the deferred results of years of scarcity and profitable prices. One mill, which is to be opened in 1950, will add 50,000 tons a year to that country’s newsprint productive capacity. Another pulp and paper mill costing 22 million dollars and with an annual capacity of 70,000 tons is to be built in Western Colorado. Alaska’s forest wealth is certain to be harnessed, and plans for bringing it into production of pulp and paper are already far advanced. The capacity of the Canadian newsprint industry was at one time reported as expanding at an annual rate of 100,000 tons. Whether this expansion will actually materialise, in view of the weakening of the newsprint market in 1949, is another matter. Rated machine capacity in Canada may possibly increase further, as it has done for some time past, through improvements in efficiency and higher operating speeds, even if no new newsprint mills are put up. The capacity of Australia’s newsprint industry is to be raised from a current level of 30,000 tons a year to 80,000 tons a year. New Zealand’s Govern- ments intends to set up a state owned pulp and paper plant at a cost of 14 million pounds to lessen the country’s dependence upon Canadian newsprint.

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Foremost among recent newsprint production plans are those of India, Argentina and the Philippines, with planned mechanical capacities of 50,000 tons, 30,000 tons and 18,000 tons respectively. Operations in India should begin soon and maximum levels of output could be reached by 1952. But in Argentina matters have not yet advanced beyond the placing

1 of orders for machinery. In Swaziland an extensive area of forest has been put under concession and plans are in progress to set up a mill which would go some way towards covering the pulp and paper requirements of the Union of South Africa. Mexico has plans, and Brazil proposes to increase newsprint production. The paper industries of Chile, and other Latin Amer- ican countries are also expanding, although newsprint will not be among the principal grades to benefit from the expansion. Development in Europe is reported mainly from Eastern countries and especially Czechoslovakia and Poland. Both countries are installing new papermaking plant and are, in addition, raising the efficiency of their newsprint industries. On the whole, it cannot be said that the growth of the

world’s newsprint industries is spectacular. Regions largely dependent on imports show, of course, a greater rate of development than the others, but compared with the expected rise in their requirements the volume of development looks modest. Certainly the expansion in papermaking capacity for use for other printing grades is more rapid. Nevertheless, it is doubtful whether it will keep pace with the demand for them. The reasons for the comparatively slow advance in news-

print are not far to seek. It takes up to five years to set up newsprint making plant and longer still for newly established producers to acquire the necessary industrial and technical experience required for successful operations. Equipment is not easy to come by. Very few countries manufacture newsprint making machinery and the leading producers and exporters are in the United States. Post-war demands for machinery have been heavy, and although supplies are increasing, the shortage is not yet over. Besides, purchases frequently necessitate dollar expenditure. Mexico, for example, is unable to expand its production of newsprint because of difficulties in obtaining machinery, and publishers are spending large sums on imported newsprint which could be locally produced. Another chief obstacle to new construction is the enormously increased post- war cost. Before the war a newsprint machine cost about 2 million dollars; meanwhile its price has risen above 5 million dollars. Other cost items, notably the cost of building mills and the price of power plant, have advanced in even greater proportion. Altogether, total costs are now three times the pre-war level. As the installation of newsprint plant is a long-term investment it inevitably involves investors in long-term risks. Fears that expansion schemes put in hand now may just come into production when the demand for newsprint is overtaken by supply

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may have little enough justification at present. But a certain reluctance of private investors to come forward does seem to indicate that a maintained level of profits commensurate with the capital outlay at the peak of cost inflation is not taken for granted. Current profits from newsprint are admittedly high; on the other hand pulp and paper producers claim that newsprint represents a minor part of their total earnings, whereas it accounts for the major part of the total volume of their output. Finally, in many of the smaller countries domestic manu-

facture is evidently not feasible. The modern newsprint machine has an annual capacity of at least 20,000 tons, and it is so costly that it is only economic at a very large throughput. Indeed the history of newsprint manufacturing on a purely national basis is a record of ventures that failed. The paper industry in Argentina has repeatedly endeavoured

ta switch plant to the manufacture of newsprint and has repeatedly givcn up the attempt. Danish papermakers abandoned newsprint production in the nineteen-thirties as the publishers could then obtain lower-priced newsprint from abroad. And both countries are among the larger consumers of the commodity. Papermakers in Chile, enjoying tariff protection for paper other than newsprint, have found the returns on newsprint too small, and are expanding their plant to supply the demand for more profitable grades. At the same time, the Chilean prcss continues to import a large proportion of its newsprint requirements. The experience of producers in any other countries, including Turkey and Egypt, could be quoted as further exidence that newsprint produced by small-scale local manufacturers cannot compete with the imported product.

If it is not practicable for every country to have its own newsprint mill, the establishment of new mills may have to be planned on the basis of regions large enough to make production remunerative. Regional organisation of newsprint production depends on a high degree of co-operation to overcome such difficulties as the choice of country to be provided with a mill and the apportionment of the capital to be raised jointly by the participants. But ultimately regional production may prove to hold out the best prospects for solving the supply problem of many of the minor newsprint consumers.

Currency

Stress has been laid throughout this brochure on the importance of foreign curency in determining the supply and the distribution of paper for printing purposes. No apraisal of supply prospects would be complete without due consideration of the currency problem. This section is intended to give a brief exposition of the problem with its principal ramifications

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summarising previous references and conclusions scattered in these pages. Newsprint ranks prominent among the world’s export com-

modities, and its distribution is evidently subject to the direct impact of the level of international trade in general and the balance of payments of importing countries in particular. Printing paper does not enter into exports in anything like the same quantities, and its distribution does not, at first sight, appear to be influenced in like degree by the availabilty of foreign currency. But as in many countries printing paper is made from imported raw materials, resources of foreign currency determine the distribution of the product indirectly by controlling the volume of raw materials which can be imported for its manufacture. Trade in pulp and paper thus depends for its normal functioning on a smooth flow and a high level of international commerce. It is obviously very sensitive to any interferences arising from currency shortages and import restrictions. The burden of the argument in previous chapters has been that much of the blame for current low levels of output as well as for the inequitable distribution of supplies must fall on the scarcity of currency to pay for imports. This scarcity has dislocated all sections of the pulp and paper trade at every stage of manufacture and exchange from the cutting of pulpwood to the marketing of finished paper.

physical limitations to higher production of pulp, newsprint and printing paper are few. At any rate they do not explain, in themselves, why one-tenth of world pulp capacity and one- seventh of world newsprint capacity are unused at a time when requirements, and from all accounts even demands, are still unsatisfied. Not so very long ago the most urgent need was the repair and replacement of worn equipment, but it was also the most temporary. Much progress has been made in the past two years in working off accumulated arrears of repairs and renewals, with the result that nominal mechanical capacity is now roughly in line with actual producing ability. One of the remaining physical obstacles is the shortage of pulpwood in Europe and Japan. In both regions forests have been heavily overcut for several years, and pulpwood output is below pre- war level with little hope of a speedy recovery. Europe, moreover, has lost the Russian supplies which represented a considerable proportion of its pulpwood consumption before the war. The reappearance of pulpwood from the Soviet Union would certainly ease conditions in Europe’s pulp and paper industries, but the resumption of shipments from this source probably depends on improved trading relations between East and West, involving freer trade and exports of capital goods to the Soviet Union in exchange for its pulpwood. As timber is indispensable for the rehabilitation of war-devastated terri- tories as well as for the realisation of post-war plans for

Elsewhere in this brochure it has been shown that the .

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industrial expansion, the Soviet Government may be unable to release this vital constructional material for export except in exchange for equally vital imports or against payment in hard currency with which to pay for such imports. Currency is thus among the factors frustrating the resumption

of Russian pulpwood exports to Europe and hampering the expansion of European wood pulp production. Current output .of wood pulp in Europe is not only below pre-war level, it also leaves a large tonnage of machine capacity unused. Further- more, currency considerations have influenced the direction of the pulp trade. European pulp exporting countries have long endeavoured to widen their market in the United States, or else to sell more pulp in return for goods which are either scarce or can only be bought with hard currency. Preference for hard currency business has tended to be at the expense of pulp importers in Latin America and Asia, who traditionally rely on imports from Europe to cover their pulp requirements. It has also reacted on the United Kingdom, the Netherlands and other important European consuming countries with small domestic pulp outputs. Imports from Canada, where pulp has lately become abundant, involve direct dollar expenditure, and few countries with balance of payments difficulties can afford the luxury of buying pulp from that source. The United King- dom has, in fact, expanded its pulp imports from Canada since 1939, although its imports from Scandinavia are only about one-half of the pre-war quantities. But the dollar crisis in 1949 has led to severe cuts in the purchases of the British Common- wealth from the dollar area, and pulp and newsprint are among the goods on which the axe has fallen. Deficiencies in pulp supplies due to currency shortages have

retarded the progress of newly established paper industries in Latin America, Asia and Australia, and have forced the newsprint industries in several European countries and in Japan to operate far below their capacity. While world demand for newsprint is much in excess of world supplies, world newsprint capacity to the extent of 1 million tons is at present idle. In Finland and Norway newsprint production is also below capacity, not only because neither country has yet completed its economic recovery, but also because their markets for newsprint have narrowed. The United Kingdom used to be Finland's second largest outlet for newsprint, absorbing before the war one-fourth of Finland's newsprint output. To-day its imports from that country are only one-third of the pre-war volume and its share of a reduced Finnish newsprint production has fallen to one-tenth. Finland has little use for inconvertible sterling or other inconvertible soft currencies, and like other Europe- an newsprint exporters it prefers to foster sales in markets where hard currency can be earned. Belgium, a hard currency country and an exporter of paper, is likewise handicapped by the mal- *distribution of currencies. Shortages of Belgian francs have

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caused most European countries to cut their imports from Belgium to the bone, and Belgian manufacturers of printing paper are starved for lack of export orders and therefore unable to use the whole of their productive capacity. On the other hand, the need to earn foreign exchange has prompted certain producing countries catering before the war mainly for the home market to enter the export trade. For example the Netherlands, which was at one time a net importer of newsprint, is diverting a part of domestic output of newsprint to countries with a harder currency than its own. Dutch consumption of newsprint is severely rationed and is only two- thirds of the pre-war level. Governments have sought to circumvent the worst effects of

currency shortages on the trade in newsprint by providing for its exchange through bilateral trade agreements. Such agreements specify the goods to be exchanged, determine their volume, and fix a ceiling to the total volume of trade which can be carried on between the contracting parties without direct payments in currency being made. Trade agreements arc being concluded in increasing numbers and are now important if not indispensable instruments of directing the flow of newsprint trade. Broadly, they have helped to restore a larger volume of trade, but in other respects their consequences are not altogether wholesome. Bilateral pacts make for inflexible commerce, and however useful they may be as temporary expedients, ultimately, by forcing trade upon a rigid pattern, they may be found to delay the return of multilateral trade on which an export commodity like newsprint is dependent. Lack of foreign exchange has in various ways interfered

with the consumption of newsprint and, to a lesser extent, of other printing paper. Outside North America, newsprint is one of the most rigidly controlled commodities, and current consumption is quite insufficient to satisfy demands. While newsprint requirements have risen enormously since the war, many countries consume less newsprint than before the war. The present newsprint shortage, in so far as it is due to restrictions on supplies arising from currency shortages, has been estimated at more than 1 million tons for the world as a whole, compared with a current world consumption of 8 million tons. But as there is no shortage of newsprint in North America, the shortfall in supplies is felt exclusively by the rest of the world. which consumes at present just under 3 million tons. Restric- tions on supplies dictated by the necessities of the financial situation obviously affect with special severity nations dependent on imports for the whole or the bulk of their consumption requirements. The countries concerned most are almost invariably those which need larger supplies most, not only because their per capita consumption is usually among the world's lowest, but also because of the fresh demands resulting from

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the expansion of their economies and the intellectual and political progress of their peoples. Yet currency shortages have deprived many countries of the benefits of recent improvemrnts In supplies. In India newsprint supplies remain limited to 50,000 tons a year, equal to a consumption of 0.1 kilogram per head. Other countries, including Argentina, Chile and the Union of South Africa, have even imposed drastic cuts on newsprint imports, in the past few months, to conserve scarce foreign exchange for the import of essentials. Financial difficulties thus tend to widen the extreme inequalities which have always been such an outstanding feature of the distribution of newsprint and other printing paper. Monetary strains have accentuated the maldistribution of

pulp and paper supplies but are themselves effects rather than causes of the disruption of world trade since the war. The war, with its tremendous claims on the resources of North America, has greatly strengthened the economy of that continent, and although it has not exactly impoverished the rest of the world it has certainly slowed down economic progress elsewhere. As a result the export potential of North America has risen quitc out of proportion to its import potential, whereas in most other regions import needs have far outpaced the ability to export. The purchasing power of the dollar has appreciated, therefore, in terms of most other currencies, and since the dollar is such a potent factor in world markets it usually commands a premium over weaker currencies and inevitably attracts away supplies from other countries. Currency shortages are really symptoms of the post-war shift in economic power towards North America, and as such they are not easily amenable to purely monetary cures, such as adjustments in exchange rates. Devaluation in 1949 has certainly helped to correct differ-

ences in the cost and price structure between hard and soft currencies. But the general effect of the currency operations, and indeed their fundamental objective, is bound to be the curtailment of demand from soft currency countries for direct dollar imports as well as for dollar earning exports. The long- term implications of devaluation for world supplies of pulp and paper cannot yet be assessed with precision, and only the briefest indication can be given here of the probable short- term effects. On the whole, devaluation should complete the unification of the North American market. Exports of newsprint and printing paper from that source are already at a low level and are likely to be reduced to a trickle. The British Govern- ment has already announced that all imports of Canadian newsprint into the United Kingdom will be suspended in 1950. It is not certain, however, whether North America will secure a large share of European exports of pulp and paper. There are signs that Scandinavian producers display a greater interest in the other markets than they have done for some time Dast

d 08

Conclusions

In the preceding chapters an attempt has been made to analyse the factors which influence the supply of paper for reading purposes. Paper is one principal medium by which ideas may be expressed. It is still the chief medium for both teaching and learning. In this chapter w e summarise what conclusions may be drawn from this study, and examine what are the outstanding problems. The Aeld of the principal raw materials for paper has already

been explored. Adequate pulpwood supplies for the future are dependent upon good forest management and the development of the vast wooded areas which at present are untouched. These two factors mainly determine what will be available for the reading public of future generations. In addition, science is playing an important rBle by making new raw materials available and providing methods for their utilisation. Grades of printing paper used for books, periodicals and, in

fact for all reading matter except newspapers, have felt the impact of war to a smaller extent than newsprint. Restrictions on these grades of paper have generally been easier and of shorter duration than for newsprint. No accurate estimate can be formed of the existing gap between supply and demand, although it is certain such a gap exists. Also, individual appetites of certain nations are tending to increase and the extent of these appetites is known. But the full implications of paper requirements and literacy campaigns launched in recent years in Africa, Asia and Latin America have yet to be revealed. As generations which are now for the Arst time learning to read and write grow up, they will make unpredictable new demands upon the world’s supply of printing paper. Mass information and education would undoubtedly make

swifter advances if more paper were available, but it is not possible to estimate exactly how much one would affect the other. Moreover, it has been argued that the reduction of illiteracy must precede a demand for printing paper. Thus the overwhelming amount consumed in North America is apt to overshadow the effects of expansion and development in backward countries. This is particularly so for those concerned with planning the expansion of paper facilities for the

109

immediate future. Fluctuations in the rhythm of business cycles in the United States and the standards of European recovery are greater influences than indefinite and remote requirements. Nevertheless, the future increase in the demand for printing paper, whether it is for books or periodicals lies outside Europe and North America. The long-term growth in the world demand for newsprint is

assured. N o one can foretell the rate of expansion or the demand levels likely to be established in ten or twenty years. If the estimates for newsprint consumption given in Chapter V for the medium term are accepted, world demand should at least be 10 million tons by 1955. According to these estimates the regional distribution would be as follows:- North America, 5 millions tons; Europe 3 million tons; Latin America 600,000 tons; Asia 750,000 tons; Russia 300,000 tons; Oceania 250,000 tons; Africa and Near East 150,000 tons. A large speculative element attaches to these estimates, but insofar as they err they are likely to do so on the low side. In particular the conservative assumption made for North America m a y have to be modified. The significant point is that, on virtually any showing, the

demand for newsprint in the medium term is certain to exceed both current world production at 8 million tons and existing world capacity estimated at 9 million tons a year. Full utilisation of idle newsprint capacity amounting to 1 million tons would probably end the present newsprint shortage. But it would be sanguine to expect that every ton of idle plant can, in fact, be used, or that 100 per cent capacity operations can be attained soon. The chances are that by the time production in the under-employed newsprint industries is raised to capacity, demand may also have risen. Although the world shortage of papermaking materials may be less serious than was at one time feared, local shortages are likely to persist, especially in regions where increasing demands for all classes of printing papers, generated by industrialisation, the spread of literacy and the growth in political consciousness, have stimulated the establishment of n e w pulp and paper industries. Such projects m a y not come into full production for several years, and they do not appear adequate to meet the envisaged rise in local demands. Elsewhere much of the expected increase in production is not unlikely to be absorbed locally. Altogether supply in the future may no more than catch up with demand in the past and thus continue to be outpaced by requirements.

Shortages brought about by war-time dislocations of production and reinforced by post-war increases in United States consumption are common to many commodities. But newsprint differs in several respects. The long-term trend of consumption is decidedly upwards and even without the intervention of war newsprint could conceivably have become a scarce commodity for a period. Productive resources are concentrated in a few

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countries, Canada alone accounting for over 60 per cent, and their expansion requires long-term planning and a large volume of capital investment. Both production and distribution depends on the free flow of international trade which is at present impeded by hard currency shortages. For this reason a decline in United States consumption would not automatically release supplies for soft currency countries. If such a decline were associated with a major United States business slump the already intractable problem of currency might well become insoluble and the newsprint shortage would then be further aggravated. In the short term, the removal of the newsprint shortage is

inseparable from the solution of the currency problem of which it is a part. The shortage could be materially eased if newsprint industries outside North America were operating at capacity. But to cater for the new demands for newsprint from continents no awakening, as well as from many developed countries with a low per capita consumption, an expansion in world newsprint capacity beyond the level indicated by present development plans appears to be inesca- pable. Books, magazines, newspapers and every category of printed

publication m a y well be called the chief food for the human mind. Just as m e n have for centuries taken an interest in their meals, so thay have discussed the quality of the food for their minds. But this is where the comparison ends. Food for the body can be scientifically analysed, and its mutritional value assessed. As a result of many studies, science n o w tells us h o w many calories are necessary for a minimum standard of life. No such standards exist for the food for the brain. Thus n o calory calculation may be advanced to show h o w much paper the readers of one area require as compared with others elsewhere. Is one kilogram per capita sufficient, or should it be more? Too many factors are involved even to hazard a guess. One thing alone is certain : while shortages and great inequality exist at present, a long-term growth in world demand must appear. During the course of this study the word "demand" has been

used exhaustively. Since economic factors must be taken into consideration, an interpretation of the word is necessary. The demand m a y mean the amount which a government, or individual publishers, consider should be acquired and used. It is often limited by a variety of restrictions, such as tariff barriers, exchange problems and even technical ignorance or prejudice. Yet the meaning in these final conclusions is far wider, including the full amount which should be available for education and information, representing the real desires of the Community. Such objective needs can play no direct part in an economic or statistical survey, but it is essential to insist on their existence, as the real requirements of social and international progress.

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Documents

THE PROBLEM OF NEWSPRINT - UNESCOunesdoc.unesco.org/images/0004/000439/043907eo.pdfCONTENTS ewe CHAPTER I PAPERMAKING 9 CHAPTER 11 PULPWOOD AND WOOD PULP. 17 . Pulpwood Wood pulp General