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MacMillan Bloedel Limited - Lehman Brothers Collection

MacMillan Bloedel Limited

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MacMillan Bloedel's roots lie in three companies: Powell River Paper Company Limited; Bloedel, Stewart & Welch; and the H.R. MacMillan Export Company.

Powell River Paper got its start in 1901, when Dwight Brooks and Michael J. Scanlon formed the Brooks-Scanlon Lumber Company in Minnesota. Brooks-Scanlon invested heavily in British Columbia, in Canada, buying tracts of forest. The company moved to British Columbia in the early 1900s, where logging had been under way for several decades. In 1908 Brooks-Scanlon abandoned plans to build two new sawmills and instead used the capital to merge John O'Brien's company, becoming Brooks, Scanlon & O'Brien. The company entered the newsprint business in 1909 after acquiring land and water rights on the Powell River. The mill was incorporated as the Powell River Paper Company Limited. Complications with mill construction led to the reorganization of the subsidiary in 1911 as the Powell River Company Ltd. Its first newsprint was produced the following year.

In 1911 Julius Harold Bloedel heard about an anticipated Canada-U.S. reciprocity treaty to lift tariffs on lumber and other products and decided to expand his logging operations into British Columbia. Bloedel united with railway contractors Patrick Welch and John W. Stewart that year. Bloedel, Stewart & Welch (B, S & W) was then incorporated in British Columbia. World War I hurt an already ailing lumber industry, and in 1914 exportation was nearly impossible because of a shortage of non-military shipping. B, S & W managed to keep open its logging camps at Myrtle Point during most of the war. When servicemen returned home in search of work, only two-thirds of the mills in the province were operating. At that time, Powell River Company enjoyed a boom market and rising prices.

During World War I, Harvey Reginald MacMillan was tapped by the Canadian government to find world markets for Canadian lumber. He found that nearly everywhere he traveled, lumber, including that from British Columbia, was sold through U.S. firms. In 1919 MacMillan shook hands with British lumber importer Montague Meyer on a deal that created the first privately owned lumber export brokerage in British Columbia. The H.R. MacMillan Export Company was incorporated in 1919.

B, S & W unintentionally became a manufacturer in 1924, following the failure of the Shull Lumber & Shingle Company, which owed B, S & W money. B, S & W, Shull's main creditor, bought the Shull mill. B, S & W, however, still focused on logging and buying timber. In 1930 B, S & W, like other firms, got caught in the Depression, experienced decline, and the following year lost money. Despite the Depression's effects upon the newsprint and pulp markets, Powell River maintained production, although to a reduced extent. In 1935 B, S & W joined Seaboard Lumber Sales, a subsidiary of the Associated Timber Exporters of British Columbia Limited (Astexo), a cooperative and the main competitor of the H.R. MacMillan Export Company. When Astexo, representing about thirty firms, formed Seaboard, it stopped allowing MacMillan to market its British Columbia lumber supplies, forcing MacMillan into a major mill operation and the purchase of timberland. The firm not only survived but expanded, handling logging, sawmilling, plywood and door manufacturing, railway-tie production, and shipping and sales. The H.R. MacMillan Export Company was a pioneer in vertical integration; it purchased firms involved in all parts of the lumber trade.

Powell River was one of a group of pulp and paper companies that, along with several of their company officers, were indicted in 1939 by a grand jury in San Francisco, alleging conspiracy to fix prices. World War II brought tight shipping and a shortage of labor, but also growth. British Columbia's forest industry was breaking production records by the end of 1940. Powell River expanded its sulfite pulp mill to produce market pulp for export. At the end of the war, when it became a public corporation, Powell River was in good financial shape.

B, S & W went public in 1948. Serious reforestation efforts began after World War II, with B, S & W in the forefront of that endeavor. By the late 1940s the company handled 70 percent of all reforestation in the province by private industry. During World War II the H.R. MacMillan Export Company's most important acquisitions were timberlands. That company went public in 1945. Convinced that smaller firms had no future, B, S & W approached MacMillan in 1950 about a merger. MacMillan had a larger marketing operation, and B, S & W had more timberland. The merger would result in British Columbia's largest lumber and pulp operation. MacMillan & Bloedel Limited was established in 1951.

Powell River's best year in production, sales, and earnings was 1950. During the early years of that decade, the company considered five mergers, all of which were rejected. In 1957 MacMillan & Bloedel's first newsprint machine made a better product than did Powell River, one of Canada's largest newsprint makers and owner of the world's largest newsprint mill. In 1957 Powell River decided against a merger with MacMillan & Bloedel, but the following year it sold the firm half interest in a paper-products company. Serious talks about a merger began in 1959, and in 1960 MacMillan, Bloedel and Powell River Limited, the largest forest products company in Canada, was established. With its emphasis on solid wood products, the firm experienced significant growth in pulp and paper manufacturing during the 1960s, becoming an international corporation with production in Europe, the United States, and Asia. In 1963 the company bought container plants in Great Britain. The next year it bought a minority interest in the Royal Dutch Paper Company. In 1966 the company was renamed MacMillan Bloedel Limited.

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