The Mead Corporation
List of Deals
- 1940 issue of $6,000,000 principal amount of fifteen-year 4 1/2% first mortgage bonds due March 1, 1955
- 1937 issue of 50,000 shares of $5.50 cumulative preferred stock, series B (without par value) (with warrants for the purchase of common stock, series of 1937, attached)
The Mead Corporation began as Ellis, Chafflin & Company, which was founded in 1846 by Colonel Daniel Mead and his partners. The company produced book and other printing papers at a mill in Dayton, Ohio. In 1856 Mead and a friend bought out his partners, forming Weston and Mead. This company became Mead and Weston in 1860, then Mead and Nixon in 1866. In 1873 Daniel Mead spearheaded a reorganization of the firm as the Mead & Nixon Paper Company, and in 1881 Mead bought out Nixon, establishing the Mead Paper Company in 1882. He upgraded the Dayton mill, and in 1890 he purchased a facility in Chillicothe, Ohio. During the first decade of its existence, Mead Paper Company averaged annual profits of $22,000, peaking at almost $50,000 in 1891.
The company soon fell on hard times after that peak; combined losses for 1901 and 1902 amounted to over $36,000, and banks began calling in the company's loans. By 1904 the Teutonia National Bank instituted a suit that resulted in trusteeship of the company by bankers in Dayton, Chillicothe, and Cincinnati, Ohio. By 1905 the company was on the verge of collapse; that year, the banker-trustees asked George Mead to take control of the company. George Mead accepted and reorganized the company as the Mead Pulp and Paper Company.
Mead Pulp and Paper made its first public stock offering in 1906. A year later operations were consolidated at the Chillicothe mill, costing the company over $32,000. The economic recession of 1907 and the tremendous cost of moving almost destroyed the company, but the sale of the Dayton property saved Mead. In 1908 the company finally turned a profit of nearly $25,000 and continued to operate in the black until the Depression. Mead expanded through acquisition during the 1910s and began to maximize machine output by restricting its product lines. In 1916 the company purchased a share in the Kingsport Pulp Corporation, and the next year it acquired full control of the Peerless Paper Company. Mead had been reducing the number of different types of paper it made during this time; George Mead believed that profits would be maximized if each machine could concentrate on producing one type of paper rather than continually changing production methods for different papers. As a means of reaching this goal, Mead secured a five-year contract to produce magazine paper for Crowell Publishing Company; this paper called for 75 percent of the Chillicothe mill's production.
In 1918 Mead established the Management Engineering and Development Company in Dayton as a separate firm to supervise engineering of new Mead plants and to market Mead's engineering services to other paper companies. Three years later the Mead Sales Company was established as a separate corporation to sell white paper produced by Mead mills and other U.S. and Canadian mills. In 1920 Mead bought out the other owners of Kingsport Pulp. The plant began white paper production in 1923 and became a central Mead factory. The company began to diversify its product lines in the 1920s as it started to manufacture paperboard. By 1925 Mead research led to the discovery of the semi-chemical pulping process by which wood chips from which tannin had been extracted could be converted into paperboard. Mead expanded the paperboard business in the late 1920s with the purchase of mills throughout Appalachia that produced corrugating medium from wood waste. In 1927 the Mead Paperboard Corporation was founded as a holding company for the paperboard operations, including the Sylvia Paperboard Company, the Harriman Company, the Southern Extract Company, and the Chillicothe Company.
The Mead Corporation was incorporated in 1930. The company subsumed the operations of the Mead Pulp and Paper Company, the Mead Paperboard Corporation, and the Management Engineering and Development Company. Five years later the company listed its stock on the New York Stock Exchange. Mead made substantial acquisitions that diversified its lines during this decade. Two major purchases were Dill & Collins in 1932 and Geo. W. Wheelwright Company in 1934. Each of these companies had established names and well-developed distribution systems, allowing Mead to market effectively large quantities of specialty papers produced at Chillicothe as well as smaller quantities produced in the acquired mills.
In 1938 Mead entered two joint ventures in an effort to reduce its dependence on imported pulp and to enter the kraft linerboard business. It formed the Brunswick Pulp & Paper Company with Scott Paper Company to supply both parent companies. In addition, with the holding company of the Alfred du Pont estate—Almours Security Company—it built a huge pulping plant in Port St. Joe, Florida. By 1937 the Brunswick mill was producing 150 tons of pulp per day. Soon the Port St. Joe facility was yielding 300 tons of pulp and 300 tons of linerboard daily. It was widely regarded as the leading linerboard mill in the country and by 1940 was grossing $1 million a year. Relations with the Almours Security Company deteriorated, however, and Mead sold its share of the operation.