Editor's note: This is part one of a series of stories on pulp mills in Alaska.
Southeast History: Alaska's first wood pulp mill 053012 OUTDOORS 2 Capital City Weekly Editor's note: This is part one of a series of stories on pulp mills in Alaska.
Wednesday, May 30, 2012

Story last updated at 5/30/2012 - 12:59 pm

Southeast History: Alaska's first wood pulp mill

Editor's note: This is part one of a series of stories on pulp mills in Alaska.

Wood pulp mills no longer exist in Alaska after the closures of the Alaska Pulp Company in Sitka and Ketchikan Pulp Company, both in the 1990s. However, before these mills were built, a short-lived pulp mill operated in Snettisham Bay south of Juneau.

This mill, to make pulp for newsprint, operated for only a few years in the early 1920s. What prompted men to start a company to make paper? During and after World War I, a paper shortage, mostly news print, took place in the United States. Much of the news print in 1920 was imported from Sweden. That year, a tariff was suggested by Congress that caused newspaper owners to fear prices would continue upward.

Manufacturers of pulp for news print had not come to Alaska. This was because there were no definite terms to provide sustainable timber over several years, and water power leases were subject to revocation at any time.

Through politics early in 1920, the USFS finally began offering 30-year contracts, with two additional years offered for construction. A timber sale was laid out within Port Snettisham and on Glass Peninsula, and advertised in April. A lot of queries were made, 150, but only Alaska Pulp and Paper Co. showed a real interest.

In anticipation of the sale, on February 26, 1920 Alaska Pulp and Paper Co. was organized in San Francisco, Calif. It was a stock company with a half-million dollars capitalization. Stock available for purchase included 2,500 preferred and 2,500 common shares.

C. W. Callaghan was listed as president when the company registered to do business within the Alaska Territory. The other organizers were William H. Gorrill, Erwin E. Richter, Delger Trowbridge, and Walter Slack.

As for President Callaghan, he had been in the pulp and paper business for years. His initiation into the industry occurred when he became president of California's Union Pulp Company in 1899. Over the years, he was with several other mills including South Coast Paper Mill, where he was one of the owners during World War I. (It is interesting that I have never seen his name in any of the Alaska Paper and Pulp news releases. If his name wasn't in the Alaska Archives' Territorial records, I would never have heard of him. I haven't found how long he stayed as president of Alaska Pulp and Paper, but soon E. P. Kennedy was listed as president.)

How did San Francisco men hear about Alaska's opportunities? This came about in a round-about fashion. Two men associated with the Alaska Treadwell mill became interested in hydro-electric power sometime before 1913. Eugene P. Kennedy by 1911 was assistant superintendent and knew how important water power could be to the mining industry. Until 1912, the Treadwell mines used mostly coal and some oil to generate electricity. That year hydro-power came on line from a Sheep Creek plant on the Juneau side of the channel.

Kennedy teamed up with W. P. Lass, who worked in some capacity at Treadwell, and they began to explore for rivers with waterfalls. Port Snettisham offered many opportunities with the run-out from at least four large lakes. A Federal Power Commission report tells us that E. P. Kennedy applied on April 11, 1913 for a power permit on a number of the lakes in Port Snettisham, including Tease Lake. It is located inland from Speel Point and River. By 1915, the permit was in the name of Speel River Project, Inc. This company undoubtedly encouraged the formation of Alaska Pulp and Paper to utilize power from its planned development at Tease Lake.

In June 1920, C. H. Flory, Tongass forest superintendent, awarded a contract to San Francisco-based Alaska Pulp and Paper for a hundred- million board feet of timber. The stumpage, or amount paid to the government, was $1 per thousand board feet for Sitka spruce and red cedar and 50 cents per thousand for hemlock. The timber was located on 10,000 acres most of it in Port Snettisham. The federal government contract required the company to build and operate a pulp mill, Alaska's first. The company immediately placed an order in the East where pulp mill equipment manufacturers and most pulp mills were located.