Business: Container Kraft

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(for toothpaste, shaving cream, etc.), and paperboard for "set-up" boxes (for candy, shoes, etc.). Container Corp. dates from 1926, when Philadelphia Paper Manufacturing Co. was merged with the paper board division of Chicago Mill & Lumber Co., a business founded in 1881 by Hermann Paepcke. Founder Paepcke stayed on as president until his young son Walter, four years out of Yale, stepped into his father's shoes in 1921. When Container Corp. was formed, Walter Paepcke became its president at 29. For his executive vice president he had an old-line boxmaker named John Paul Brunt, onetime head of Mid-West Box, which was acquired shortly after the merger.

After a fine first year Container's earnings started to fall. The paperboard industry was feeling the effects of tremendous overproduction from new mills. Container met price cut with price cut, depending on big sales volume to make money. President Paepcke thought that quantity would be his company's salvation. But to conservative Boxmaker Brunt, whose credo was quality, the Paepcke policy seemed all wrong. Stubborn, he started a proxy fight to oust his young boss, lost in 1931. Accepting a lump-sum settlement for his salary contract, Brunt got out.

Still concentrating on big volume and low price, Container lost money that year, even more in 1932. Next year, however, prices rose enough to provide a small profit. Last year's fat earnings were made with prices of its basic products at only 65% of the 1926 figure.

Of his business since the proxy fight with Boxmaker Brunt, President Paepcke says, "It's gone along nicely." Blond, athletic, Habsburg-handsome, he lives with his wife and three daughters on Chicago's Lake Shore Drive, weekends at his 600-acre farm on Somonauk Creek outside of Chicago. Mrs. Elizabeth Nitze Paepcke goes in for stage designing for Junior League plays.