Story last updated at 6/6/2012 - 2:11 pm
Editor's note: Second in a series of stories on Alaska's first pulp mill.
With a 30-year timber contract and an assured source of water for operation and manufacture of power, Alaska's first pulp mill was ready to start construction.
Alaska Pulp and Paper, incorporated in 1920, began building a pulp mill in Port Snettisham on the southern bank of the Speel River falls where it comes into tide water. Loggers fell sufficient timber, and by August 1, 1920, crews had assembled a sawmill and began to operate it to provide lumber for buildings. Within four months the mill building and a power plant were close to completion.
The mill began operations almost immediately after the first of January 1921. Everything was operated by electricity. A dam at Tease Lake ran water through Pelton wheels to the hydro-electric. The first sample shipment of 100 tons boarded a ship in Juneau on January 24 or 25 bound for San Francisco, Calif.
A news release at the time announced: "Alaskans believe this shipment makes the beginnings of an industry that will bring millions of dollars to the Territory." A prophesy that became true, but not for Alaska Pulp and Paper Company.
The company swung into full production. Two shifts produced 2.5 tons per shift in February. McKay & Johnson and a number of independent Hoonah Natives ran two outfits in the woods cutting and rafting logs.
It became apparent the company could not be profitable with current shipping rates of $12.40 per dry ton landed at Seattle. Because this was the first shipment of pulp from Alaska, there were no federally established rates.
In desperation the company attempted to lease the barge M/V Libby Maine, owned Libby, McNeill and Libby, the salmon company. The insurance underwriters refused permission. Rumors abounded that Pacific Coast Steamship had influenced the underwriters.
The company applied to the U.S. Shipping Board to establish a fair rate. By July, public hearings before the Board began. Its members felt that a good price to try was $5 for 26 cubic feet per 2,000 dry-weight tons. This amounted to a $10 per ton rate, not a big decrease especially since the Snettisham pulp was 50 percent water.
As the company fought for cheaper rates, 300 tons of pulp sat on the mill dock. The mill was temporarily closed because there was no longer space to store pulp. Soon, another trial shipment of around 100 tons was made on Alaska Steamship's M/V City of Seattle to paper mills that wanted to try Alaska pulp.
On May 2 the mill started again with one shift, but pulp prices continued at a low. I haven't found references the mill operated the rest of the year.
Things looked up in 1922 with pulp priced at $70 per ton. By June the mill operated again with a daily output of 10 tons. Another 100 tons waited shipment. In early September the company was then able to adjust shipping rates, this time for $3 per ton to Puget Sound. As a result, three shifts were started. The company had orders for its entire output of 20 tons. The mill ran most of the year and produced $15,480 worth of wood pulp.
Optimism continued, and an average of 15-16 tons per day rolled out of the mill. Frank Roppel, who was in the timber industry from 1956 to 2002, said that at Sitka's Alaska Pulp Co. the average output per day was around 500 tons per day.
The air-dried pulp was shipped to San Francisco and other markets including the Port Angeles paper mill. In August, the M/V Admiral Sebree took on 400 tons of pulp. Unfortunately the company could not dispose of some of the pulp at the market quotations.
By 1924, it was obvious the pulp mill could not compete in the market. About this time Eastern paper mills had increased capacity. Pacific Northwest mills had been built. In 1923 there was a new record of nationwide paper pulp production - 9 percent over 1922.
The unsatisfactory pulp market prompted the owners to think about further processing the ground wood pulp into low-grade paper. Improvements to do so were estimated to cost $100,000. All stockholders were offered an opportunity to participate, assured by officers that there would be a wider market.
Nothing came of this planned expansion, and the mill stood idle in 1924 and never operated again. In October 1925, a press release announced by W. P. Lass, the manager, stated the largest stockholders personally developed a market and advanced funds for investigations to construct a machine that would manufacture cardboard containers. This machine was still in San Francisco. If a trial run took place, it must not have been successful.
All attempts to keep the mill in operations ended fruitlessly. The newspapers do not mention anything further. The Tease lake hydro-project did not operate after the end of 1923.
Although there were U.S. Forest Service timber sales and applications for hydro projects, no other pulp mill was constructed until the mid-1950s. Ketchikan Pulp Company and Alaska Lumber and Pulp Company in Sitka did not make pulp for paper. They produced high purity cellulose pulp for such things as rayon, diapers, photographic film and cellophane.