Abstract: The Invisible Hand: International Paper's Conquest of Ontario, 1920-1930

Mark Kuhlberg

Abstract

Historians who have traced relations between "business and the state" in Canada's newsprint industry have drawn practically the same conclusions. The provincial governments that controlled access to the natural resources the pulp and paper makers sought linked arms with them in an effort to build up the strongest possible domestic industry. There are numerous reasons to challenge this interpretive framework, however, and the story of the Ontario government's treatment of the International Paper Company during the 1920s illustrates a few of them. During this period, the Canadian pulp and paper industry was not monolithic, and the various firms competed with each other for fiber and water power resources. In the case of IP in Ontario, the provincial politicians showered the company with largesse, awarding it a remarkably lucrative hydro-electric contract and a veritable treasure trove of pulpwood. This benevolence is noteworthy because Ontario's "domestic" newsprint producers urgently sought the timber that the government repeatedly gave IP. Moreover, IP had long been these producers' greatest competitor and represented the epitome of the "foreign" firm, as it did not—and would never—operate even one ton of newsprint capacity in the province. Recognizing the stealthy manner in which IP operated in Ontario explains why this story has gone unknown for so long.