EVOLUTION OF A PAPER CO~WANY: THE CARLISLE-FERGUSON YEARS AT ST. REGIS Interviews with 'c, "• Homer A. Vilas and James E. Kussman;' conducted by " , /' ,., Elwood R. Maunder and John R. Ross and"appen~ded -inte-rview with '.~ ,Carl B. ,Martin James E. Kussmann and Samuel Shane Forest History Society - Santa Cruz, California 1977 -, ,'. - .. ·.--.P '. .... ~ This volume is second in a series of or~l histor£~s on St. Reg4s Paper Company. The·~irit volu,me,. THREE MEMOIRS ON ST. REGIS PAPER COMPANY RI~.T6RY (Eunice Remington 'Nardwell, Louise E .. ·. Richter, and' Harold S. Sutton), was published i.n 1976. '-. ,. "," Forest History Society, Inc. P. O. Box 1581 Santa Cruz, California 95061 Copyright ©1977 by Forest History Society, Inc. All rights reserved. TABLE OF CONTENTS INTRODUCTION . vii INTERVIEW I: H01ffiR A. VILAS, DECEMBER 8, 1975 NEW YORK, NEW YORK . 1 First encounter with Roy K. Ferguson in 1921;. F. L. Carlisle and Company; Ferguson, Carlisle, and the pre-Depression business world; St. Regis during the Depression; Sandy Calder and Union Bag and Paper Company; Remarks on the brokerage business; Charles E. Norris, H. Edmund Machold, and Al Smith; Ferguson's relationship with Carlisle; contemplated merger of St. Regis with Union Bag and Paper Company; F_e]guson' s leader-' ,.--'--~ --"-~ .:::~. ----.~-_.- -,,- - - ',- ,.. _,,- ',- . .-'/ - ';,- .. ,,-"'--- - .. - .. sh-ip a'tSt.· Regis';-· tile pe;rsonal)Vorld of, Roy K. Ferguson'---religioiis-'faith, familY-; -and p-astimes; reflections on Ferguson as a friend. INTERVIEW II: JAMES E. KUSSMANN, OCTOBER 17, 1975 ,fJEWYOBK; NEW YORK . 31 Session 1: Roy K. Ferguson takes charge of St. Regis in 1934; separation of papermaking and public utilities interests; the company during the wartime period--1939~1945; postwar expansion in printing papers and the move to the South; impacts of World War II; St. Regis growth through acquisition; unconsummated mergers--Gaylord and RCA; Bates Valve Bag and the price of goodwill; Folke Becker and Rhinelander; Panelyte and the postwar switch to molded plastics; J. Neils Lumber Company, St. Paul and Tacoma Lumber Company, and West Fork Timber Company--leadership and personalities; consolidation of St. Regis research at West Nyack; forest research and reforestation; evolution of management structure in the fifties; beating the boom-and-bust problem in the late sixties and early seventies; the picture for paper industry growth in the future; funding pollution-control measures. --', - ".- -'--- in ,I _..,---- ----_...- -- --,,---.. _' iv Session 2: OCTOBER 18, 1975. 61 'Growth through merger ; orientation program in the fifties; the leadership of Ted Gay; miadle-level management group; financing and raising capital; stock ownership and Eastern States Corporation; Ferguson, Reuben, and the Hinton mill; ironing out problems at Hinton; public relations and public affairs--past and present; changes in communications to fit changing times and conditions; initiating feature articles in the trade and financial press; "swinging" or stodgy--the question of ' image in the paper industry; publicity and advertising; conflict and cooperation between papermakers and paper consumers in the past; the abrogated merger with RCA: background and resolution; a glance back in time--the Godbout tract--and a look forward--timber inventories, raw materials, new merchantable tree species. APPENDIX, INTERVIEW WITH CARL B. MARTIN Introduction. i A Brief Chronology. ii Factual Clarification. xi Interview, April 4, 1966, Sarasota, Florida. 87 George Sherman, David Anderson, and the Taggarts; Taggart Paper Company; bag manu- facturing at Taggart Brothers Company; pur- chase of water power from Frank Reynolds at Deferiet mill site; construction of mill canal at Deferiet; Remington mills acquired by Hanna interests; pulpwood controversy with G. E. Dodge and the Meigses in early years of St. Regis; early St. Regis directors; G. H. P. Gould and the labor strike of 1915; purchase of St. Regis by the Carlisle syndicate; :.St. Regis directory and catalog production in the twenties; various pulpwood sources in the twenties; formation of Taggart Corporation; important figures in early years of St. Regis; David M. Anderson; Herring family and Byron B. Taggart, Jr.; pulpwood controversy; electric power at Deferiet mill; competition for v Western Electric directory paper contract; paper machine builders in Watertown area; involvement of .H.E. Machold in St. Regis and Carlisle and Company; Carlisle and the northeastern power empire; St. Regis during the Depression; St. Regis stock­ holders' meetings in northern New York; prosperous years for the Deferiet mill. INDEX. 117 Photographs: Exce pt where noted, all illustrations are courtesy of St. Regis /Ra,p.er Company. vi J]jTRODUCTJOlf Those who we;reacquainted with,thelateRo¥, K., Ferguson remember him as a reserved and quiet individual who never courted public attention', In contrast to the flamboyant Floyd Leslie Carlisle',' his predecessor in the St. I Regis presidency, Ferguson addr~ssed audiences on a formal basis with relative infrequency, When he did choose tal, share his thoughts with a gathering of others, this intense~y private man seemed to enjoy describing the history of thei company whose progress he guided for nearly four decades.: I St. Regis history, as presented in Ferguson's articles and speeches, was divided into three segments! th~ newsprint era" a later period in which public utility holdings were of great significance to the company; and finally, art era extending to the present during which St. Regis abandoned its involvement in utilities and focused exclusiv~ly on pulp and paper production, ' The major emphasis in the first volunle of pral history interviews on the heritage of St, Regis, is upon tpese first two epochs in the company I s development, The lea,d-off inter­ view in that volume, conducted by John R, Ross, i;s with Eunice R, Wardwell. Mrs. Wardwell, a member of tpe famous Remington papermaking family, recalls the industry and its leaders in lfew York's lforth Country in the early years of this century, The second session in the volume, :conducted jointly by Elwood R,Maunder and John R, Ross, isl with Harold S, Sutton, who worked closely with both Carlisle ,and Ferguson. Mr. sutton helps trace Carlisle I s exploitation ofl the tre­ mendous water power resources of lfew York State t:o generate electric energy as well as to manufacture paper. ' The final interview of the first volume, conducted by Maunder and Ross, offers a sketch of Ferguson by Louise E. Richter ,I who worked as his executive secretary for many years. Ferguson is presented both as a young man working for Carlislle and also as the mature leader who reestablished the manuf~cture of paper as the top priority business of St. Regis. I ! I Ferguson took the reins of power at St. R~gis during the grimmest period in American economic history:! I Those were not happy days. We really had iproblems over which we used to huddle. However, one basic I decision came out of these huddles, namel~ that we would rebuild St\ Regis purely on pulp land paper, We would continue to- hold what was left- .-, of ,ourI public utility investments but they would 'be vii viii liquidated when opportunity arose and our J. future expansion would be in pulp and paper, I , This second volume of oral history intervi~ws focuses . , upon St, Regis's third historical perlod and uponithe man , who was its principal architect. I I Mr, Homer A. Vilas, former honorary chairmin of the board of the New York City investment firm Cyrus J. Lawrence, Incorporated, wap intimately acquainted!with Roy K. Ferguson for many ye~rs, An encounter in 1921 l between Vilas and Ferguson at F, L. Carlisle and Company in New York City generated an enduring relationship betw~en the two men. Mr. Vilas contributes substantial depth!to our understanding of the complex individual who led St. Regis to international prominence. He candidly and incisively recounts what he saw as Ferguson's business abilities and suggests that Ferguson, not Carlisle, developed Carlisle and Company into the successful contender it quickly became in the business arena of the twenties. Mr. Vilas!also elaborates upon certain facets of Ferguson's private life which have received less attention -- particularly his adoption of the Christian Scientist faith and an accompany- ing change in life style. ' The Vilas interview is the personal recordiof a de~ voted friend and it prepares the way for the follbwing two­ session interview with James E. Kussmann. Mr. KU$smann's recollections detail the activities of Ferguson and his dedicated business associates in rebuilding and expanding St. Regis during the Great Depression, World War ~I, and the postwar era. ! , ! Mr. Kussmann, at this writing vice-preside~t of public affairs for St. Regis, has held managementi positions at St. Regis operations located in Trenton, New J~rsey; Kalamazoo, Michigan ;: Tacoma, Washington; and Deferiet, New York,prior to moving to New York City in 19631 to manage the newly created public affairs office. Mr. Kus~mann's background in plastic, kraft, and printing paper operations allows him to discuss in considerable detail th~ postwar strategy by which St. Regis was built into one ofl the largest paper companies in the Dnited States. In! this period a program of extensive growth through both! acquisi­ tionand construction was pursued,. and. the product line.. was diversified j:)roadly; c' St. Regis ~:overcame: its ~rior: c' . dependence upon imported pulp and was integrated !from pulpwood to converted products. I ! J. Roy K. Ferguson, Address at St, Regis Baper Company Orientation Meeting, 4 April 1955, p.11, 1 I ix I Not only does Mr. Kussmann describe Fergusln's plans and policies in growth, diversification, and integration but he also depicts important personalities in the St. Regis story such as C. B, Martin, E. R, Gay, and George:, J, Kneeland, The interview, in addition, offers glimpses of men like Folke Becker, Hilding Lindberg, Everett G.