Apart from a small amount outstanding (less than $1,300,000) of an original bond mortgage of the Riordon Pulp & Paper Company and purchase money obligations of about $450,000, the Kipawa and Hawkesbury mills and the Rouge and O'Brien limits contiguous thereto, are unencumbered; so with the thousands of square miles of Gatineau pulpwood, and even the Gatineau newsprint mill itself. There is not one cent of mortgage on the Three Rivers mill, valued at tens of millions of dollars, the largest single unit in the world. These great properties stand free, as additional equities behind the capital stock or available for future financing where further developments with adequate earning power are considered advisable in Canada.

The timber limit holdings of the organization, chiefly in Canada, are among the most extensive of any pulp and paper company. Timber land freeholds and Canadian Crown timber leases cover over 13,587,000 acres, and it is estimated, contain over 51,700,000 cords of pulpwood. Yet so conservatively are these assets,-of inestimable value looking to the future-treated, that they appear on the Balance Sheet of the consolidated statement at an average valuation of only $1.78 an acre.

There were offered to shareholders this spring at a price of $30 a share-and readily subscribed—an additional amount of common stock of International of 500,000 shares, doubling the total then outstanding. After giving effect to this issue the capitalization of the parent company, including funded debt obligations, as of April 30, 1927, was as follows:

Consolidated Funded Debt..

7% Cumulative Preferred Stock.

6% Cumulative

Common Stock, no par value.

1,000,000 shares.

$122,154,247

47,640,300 2,652,000

Some conception of the tremendous developments that have been undertaken by the company during the past two years—as well as of its high credit standing in financial circles may be gathered from the fact that since October 1925, a total of $110,000,000 in new capital has been brought into the Company, and its wholly owned subsidiaries. Within the past three years a total of $27,500,000 has been paid into the Company's treasury in cash for new issues of common stock alone. At least an equal sum, realized from earnings, depreciation and depletion and other reserves, and from the proceeds of sales of capital assets no longer required by the Company, has been re-invested in the properties,making a grand total of $55,000,000, or equal to $55 a share of the amount now outstanding.

The Balance Sheet under date of April 30, 1927, shows a strong working capital position, with current assets of $42,948,936, having an offset in current liabilities of only $6,464,950, leaving a balance of almost $36,500,000 of net working capital. The valuation of 'power properties and utilities" is set down on Dec. 31, 1926, as $35,377,745, but this figure, large as it is, does not include a number not yet comprised in the inventory. The "woodlands" item of $24,185,637 is recognized as being a remarkably modest valuation

of this all-important asset. During the ten years ended December 31, 1926, charges to depreciation amounted to $26,805,216, and repairs were allowed $31,388,006, a total of $58,193,222,-against a total valuation for all plants, except the new Gatineau Power properties, of $104,675,261 on April 30th.

Steady Growth in Earnings

The earnings of the Company show a steady increase, and the impression grows stronger, with every additional study of the Company's position and the actual records, that definite estimates have been worked out for each year or smaller period in advance of operations, and that these estimates are proving quite conservative. In other words, it is becoming more and more evident, that large as have been the increases in capitalization in the past three years or so, and heavy as have been the liabilities assumed, the earning power of the new operations will prove more than equal to the increasing obligations that have been assumed. In other words, that the great plans for expansion that have been conceived. and carried into effect, have been sound industrially and financially, and that an adequate earning power has been developed hand in hand; that expenditures have more than justified themselves.

For instance, the overall net earnings of "International" and its wholly owned subsidiaries for the ten years ending December 31, 1926, available for dividends, have been $3,250,000 or over twice the dividends accrued on the average amount of preferred stock outstanding during that period. Such earnings for 1926 were $3,275,000, and these had increased for the twelve-month period ended April 30, 1927, to $4,094,000. It is anticipated that earnings for the twelve months ending April 30, 1927, will be double requirements on the present preferred, and more than equal to the increased dividend of $2.40 a share (raised from $2.00 in 1927) on the one million shares of common stock. It is expected that for the current year of 1927 earnings on the present common stock will run about $2.50 per share; increasing to $4.00 a share in 1928 and to $5.00 a share in 1929.

Board of Canadian International Paper Company

Early in the present year announcement was made of the election of the following Board of Directors of Canadian International Paper Company :-Hon. R. B. Bennett, K.C., Calgary; Hon. Raoul Dandurand, K.C., P.C., LL.D., Montreal; V. M. Drury, Montreal; Gordon C. Edwards, M.P., Ottawa; J. H. Fortier, Quebec; Hon. Sir Lomer Gouin, K.C.M.G., LL.D., Montreal; A. R. Graustein, New York; Neil C. Head, New York; John R. Macomber, Boston; George H. Montgomery, K.C., Montreal; J. M. McCarthy, Quebec; J. W. McConnell, Montreal; J. S. Phipps, New York; Hon. Donat Raymond, Montreal; T. A. Russell, Toronto; F. N. Southam, Montreal; Hon. Smeaton White, Montreal; Brig.-General J. B. White, D.S.O., Montreal; A. H. Wiggin, New York, and E. R. Wood, Toronto.

This announcement of the addition of a long list of Canadians to the Board of Canadian International Paper Company, making a total of 20 directors with five direct representatives of the parent organization, the International Paper Company, was received with a good deal of interest in industrial and financial circles in Canada. The men chosen hold outstanding positions and the majority are already closely associated with the pulp and paper industry in this country through holding positions on the directorates of other corporations, particularly those engaged in the production of newsprint. The bringing together of these varied interests on the Board of the Canadian International Paper Company should serve still further to strengthen the spirit of co-operation in the Canadian industry that is manifested so admirably in the activities of the Canadian Pulp & Paper Association.

A study of the personnel of the new Board suggests the E. B. Eddy Company interests in the choice of Hon. R. B. Bennett, K.C., and Victor M. Drury; Laurentide, in Sir Lomer Gouin, George H. Montgomery, K.C., and J. W. McConnell; Price Bros. & Company, in one of its vice-presidents, J. M. McCarthy; the Quebec Pulp & Paper Company, in a director, Senator Donat Raymond; Brompton Pulp & Paper Company, through E. R. Wood, of Dominion Securities Corporation, the company's fiscal agents; and the Canadian Pulp & Paper Association, through their counsel, Mr. Montgomery, referred to above.

Publishing interests are prominently represented in J. H. Fortier, of Quebec, who is closely connected with La Patrie, Montreal; F. N. Southam, of Montreal, associated with the Southam Press and what is known as the chain of Southam newspapers in Hamilton, Ottawa, Winnipeg, Vancouver and other centres; and in Senator Smeaton White, of the Gazette, Montreal. Brig.-General J. B. White was long connected with the Riordon interests, while Gordon C. Edwards, M.P., of Ottawa, bears a name that is synonymous with the lumbering industry of Canada. Senator Dandurand, of Montreal, and T. A. Russell, of Toronto, are well-known names in financial and industrial circles.

The new Board has as its remaining members five direct representatives of the International Paper Company. These consist of A. R. Graustein, President and Chairman of the Executive Committee of the International Paper Company; John R. Macomber, of Boston, and Albert H. Wiggin, of New York, members of the Finance Committee of the International; J. S. Phipps, of New York, representing important interests in the International, and Neil C. Head, of New York, who is Assistant to the President, Mr. Graustein, and who has taken a large part in the huge developments of the organization in Canada.

Canadian International Paper Company and the Gatineau Power Company promise to play a growingly important part in two of Canada's most outstanding basic industries, pulp and paper and hydro-electric power.

SHAWINIGAN WATER AND POWER COMPANY

Fourth Largest Distributor of Electrical
Energy in the World

Most Influential Factor in Development of Industry in the Province of Quebec-Its Relation to Carillon

During the period of 25 years since the Shawinigan Water and Power Company first generated hydro-electric energy at Shawinigan Falls, it has proved itself the most influential individual factor in the development of industry in the Province of Quebec. It has been responsible for the establishment at Shawinigan Falls of extensive aluminum, pulp and paper, calcium carbide, and electro-chemical plants; the abundance of hydro-electric power at economic prices it has rendered available, has made of the city of Three Rivers the largest pulp and paper centre in the world, as well as an important producer of textile goods; it has been the chief support, from the standpoint of power, of the great asbestos industry at Thetford Mines and adjoining districts; it has provided power for the busy industries of Quebec City, and has proved a magnet for the establishment of new pulp and paper plants in the vicinity of that city. It has provided close to 100,000 horse power to the industrial life of the city of Montreal. It numbers among its customers the Donnacona Paper Co., at Donnacona; the Canada Paper Co., at Windsor Mills; the Brompton Pulp and Paper Co., at East Angus; the Ste. Anne Paper Co., and the new "Anglo-Canadian" newsprint mill nearing completion, close to the city of Quebec.

The Shawinigan Company, either directly or through its subsidiaries, is providing electrical service to 224 towns and municipalities, an increase of 44 during the past year.

The power owned, controlled or purchased by the Company exceeds 600,000 H.P. per annum. Shawinigan is the fourth largest distributor of hydro-electric energy in the world to-day, and a new transmission line from Ile Maligne to Quebec City is nearing completion, to convey 100,000 additional horse power for industrial purposes from the Duke-Price Power Company, in which great development it holds a substantial interest.

During the past year, through itself and its subsidiaries, an income of $16,700,000 was received; some 3,510 men were employed, and wages and salaries exceeded $3,000,000.

The diversity of the industries and municipalities it serves in a distance east and west of 250 miles, and an area of over 15,000 square miles, may be conceived by a recent statement issued by the Company, showing sources of power earnings as follows: