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much money in the first place or is making none now. It is out of the question to assume that the producer absorbed this increase. This means it was paid for by us and the steam user. The price of steam coal has gone down rather than up. Railroads which used to pay $1.12^ to $1.15 for their coal are, right now, getting it all the way from eighty to ninety-five cents a ton. The official figures for Illinois show a reduction in the average selling price of coal of fourteen cents a ton in eleven years.
This measures the decrease in the price of steam coal. That is, the reduced price on sixty per cent of the output— ithe steam coal—was enough to reduce the average price of the whole fourteen cents a ton. In a struggle to make up this loss and also pay the higher wages to the miner, coal prices to you and me have gone up swiftly. In 1910, by way of example, Springfield, Illinois, lump coal was selling for $1.25. Illinois operators gave the Illinois miners an increase of seven and one-half cents a ton. The price of domestic coal immediately thereafter went up to $1.40. That was an increase to you and me of fifteen cents or seven and one-half cents for the legitimate rise due to the concessions of the miners and seven and one-half cents to make up what the producers knew they could not collect from the steam users. If the miners are given any new concessions, you and I will pay in like proportion.
Here is another coming burden upon •our purses.
In almost every state the question of compensating the families of those who were killed in the mines is being agitated. At Cherry, Illinois, in 1909, a great mine fire caused the death of about 300 men. To the heirs of these men the St. Paul Coal Company paid $1,500 each. In Germany, systematic settlements of such claims costs two cents a ton on all coal produced. Illinois has passed a law providing for such systematic settlements
A Modern Storage Plant, Few single coal-producing companies could afford this expensive outfit. If two or more companies united to build it, they would violate the Sherman Act.
and this will mean an addition of two cents a ton to the cost of producing coal. The charge is justified and must be paid. But, who is going to pay it?
The steam user fixes his own price and will not pay an increase. Just now the Illinois operators are absorbing it but they can't absorb everything. It will, ultimately, be passed on to you and me. And, when it is passed on, it will not be merely two cents a ton, or our just share; it will be four cents a ton—unless something is done. It will be the two cents a ton which we naturally should pay as coal users plus two cents a ton which we pay to relieve the steam coal user from his obligation.
I will give you a third burden.
For the protection of miners, state legislatures are now demanding that fire fighting apparatus be installed in mines and that the producers shall maintain well drilled first aid corps. These things with other safety appliances and their maintenance will cost—I am following Germany's actual figures—at least a cent a ton. To you and me it means two cents a ton—our own one cent and the one cent which we pay to relieve the steam user.
Permit me to cite a fourth burden.
In the halls of Congress, men are talking about conservation of coal. Under present methods, producers recover only, on the average, sixty to sixty-five per cent of the coal in the ground; forty per to cite a fifth illustration, and I might add a sixth and a seventh.
We have about worked out the "surface" veins of coal in all of those producing centers which are near the market. Hereafter, we must go deeper for the coal; we are mining coal today at depths ranging from 500 to 1,500 feet. This costs more money, naturally. Who pays that increased cost? Not the steam user because his price is not an advanceable
RECOVERING COAL FROM STORAGE. Anthracite coal companies are able to make uniform prices because they have the capital with which to store the surplus until it is needed. Jn this device the coal is scraped down from the pile upon this conveyor which carries it to the reloading plant.
cent is left unrecovered and unrecoverable. Conservation demands the recovery of that undisturbed forty per cent, and soon we will have a law demanding it. That law, for the protection of this nation, should be passed tomorrow morning because our coal is all too rapidly disappearing. However, to get that extra forty per cent, will add ten cents a ton to the cost of producing all the coal. Being a just charge, it should be paid. But who is going to pay it? The steam user is so fortified in his position he does not have to pay. Therefore the burden, when it comes—unless something is done —will fall upon you and me as householders. And, we will have to pay our own ten cents and the ten cents by which we will graciously relieve the steam user of his burden. The total cost to us will be twenty cents a ton additional for our domestic coal.
Permit me, if you have the patience,
proposition. You and I pay it; it is a burden on the householder. I cannot measure it in cents for it is variable.
While dissecting this subject, I want to bring out one more point. Personally I have the very opposite of any quarrel with the miners' union or, for that matter, with any other union. I like them and I think—if my opinion amounts to a bean's weight—they are fine things for industry and for the nation. However, the miners are human; they prefer the road of least resistance. They find that powder will get down coal easier than they can pick it down by hand. Blasting powder is a brainless force and is no respecter of substances. By making the powder do the mining, the miners are shooting the coal to pieces ; they are making an increased quantity of fine coal to be sold at a loss and a decreasing quantity of lump coal to be sold to you and
me at a big profit. That increases your and my burden. It must increase our T>urden if we must use lump coal and if lump coal only bears the manifold burdens of mine expense.
The skeptic arises to scoff at my logic. He asks me what has become of the economy of production in mines arising from the introduction of labor-saving devices and arising from the increased size of the mines. I answer him by saying that the price of domestic coal has not risen enough to.account for all the increased expenses. I answer him by saying further that coal producers on the average are no longer making any profit. Thus the increased economy in coal production and the surrender of profits by the operators have merely gone to soften the blow upon your purse and mine.
However, the fact remains that you and I should have had smaller fuel bills as a result of this very economy of production. We did not get them but instead are paying and will continue to pay higher and even higher prices—unless something is done. As I showed, though, the steam user is getting lower prices. He profits by the economy and by the enforced competition; you and I and the operator of the mine stand the brunt.
Under the circumstances, the operator, who is a joint sufferer with you and me, is our partner in this affair. Anything which you and I may decide to do, he will go with us; he even wants to lead and will lead if we will but permit him. You ask why he has not done something long ago. He may be dull but having tried many things has found that the only efficacious way is some sort of an agreement as to output and relative prices—you and I are self-appointed policemen to see that he does not agree on either. The newspapers are our allies in this vigil; they would throw spasms of ink if any such thing were attempted.
Nevertheless, some efforts have been made along the line of equalizing prices and one after another they were killed by us police
men. About three years ago, I was in at the death of the McAlester Fuel Company of Oklahoma which was trying to equalize and standardize prices. The Interstate Commerce Commission got wind of it and advised that the arrangement be broken up. Then Governor Haskell of Oklahoma went out upon the trail of the operators and has been after them ever since; he is a very busy policeman who insists that the way to help the householder is to saddle this system upon him permanently. The prime movers in the McAlester Fuel Company were Carl Scholz and William Busby, Oklahoma operators, who yielded to the law's persuasions because they preferred business suits to stripes. I know both of them. I have spent literally days with Mr. Scholz trying to find some legitimate way of easing this burden on the householder's purse.
About that same time, in Chicago, I also attended the obsequies of the Sterling Coal Company. It was organized for the sole purpose of increasing the price on the steam coal produced in Illinois and Indiana, that the domestic coal price might be reasonable. The fathers of that movement were G. W. Traer, R. R. Hammond and J. K. Dering. Their hopeful project was killed not by the law —it never got that far—but by a league of the big steam users who knew what its success would mean to them. Their method was cunning. The Sterling Coal Company intended to "corner" steam coal and thus force up the price. The steam users, to crush the intended corner, bought lump and crushed it down to their size. One winter of this practice was enough; the Sterling Coal Company died of financial starvation. I know all of these men well. They are not criminally inclined; they want to do the square thing. But, they can't—and weren't permitted to do it.
Anthracite Coal In Storage. This is a sample of the Dodge System of coal storage. Such a plant will cost from a million dollars to ten million dollars. Few single companies could afford such a device. . A Kktailer's Delivery Outfit.
I have a recollection of a meeting of the Indiana and Illinois operators last spring to attempt to reach some understanding as to how prices might be equalized. I recall the virile and assertive stand taken by Walter S. Bogle. At one end of Mr. Bogle's fortyyear career stands a w heelbarrow; at the other end a position as the leading operator of Indiana and Illinois. He did not climb from the wheelbarrow to the role of
the manager without some fighting and all the fight in him rose to the surface when he talked of this subject. I remember his defiant declaration:
"We will agree legally if we can but we are going to agree."
There were men in that room who had been within the purview of the grand jury and they did not follow Mr. Bogle, so nothing was done. I have talked on this subject with Mr. Bogle. He wants what I have outlined here—to equalize prices.
Going further back and drawing an illustration from history: I remember when the Pittsburgh Coal Company was formed to do exactly that one thing—to equalize prices. Since the law would not permit any agreement, as to production, this company started out to buy all the producing mines in the Pittsburgh district. The leader of that movement was Francis L. Robbins, a genius of a kind, now dead. That company began to standardize prices and to make a little money. In two years, the competition upon which you and I insist had duplicated the output of the Pittsburgh Coal Company, by the opening of new mines. By that one
The owner of it lias no responsibility for existing conditions, yet this simple thing has become a veritable instrument of torture to many.
thing, the old system was fastened more tightly about our necks—yours and mine —and all efforts to solve the problem by amalgamation of existing companies was given up. We who know coal know that prices by amalgamation cannot be standardized without an outright monopoly of all available coal land. That, seeing the amount of available land, is impossible.
In my time among coal men I have heard Tom L. Lewis, then president of the Miners' Union, try to shame the operators into some kind of action for their own protection—and for yours and mine.
I have heard him say:
"You men are cheap, cheap, cheap. You let the steam users of coal take away your capital and your b i rthright without raising a hand to protest. Why way we miners
don't you organize are organized?"
That taunt of Mr. Lewis that hot summer day at St. Louis never caused a ripple. The operators saw the need for organization but between them and the goal they saw the Sherman law and—you and me as policemen.
Again at Cincinnati, in 1910, I heard Mr. Lewis thus tantalize the operators:
"You men stand together about as firmly as a rope of sand. You talk boldly in meeting and then the traitor in your ranks comes to my hotel at midnight and offers to sell out the whole of you. You have no organization with which to punish that fellow as we miners would do."
And again the specter of the law and the policemen; the operators sat still and bolted that truth. They could do nothing.
If the operators were given the right to agree—under proper supervision? G. W. Traer said to me not long ago:
"If the steam coal price were marked up, the domestic price could be marked down, now; the householder would get the benefit, in future, of mine economy."
Dr. Joseph A. Holmes, director of the Bureau of Mines, agreed with him.
Harry N. Taylor, president of the Monon Coal Company, president of the Illinois Coal Operators' Association and president of the American Federation of Coal Operators, before the meeting of the American Mining Congress said:
"The householder pays too much for his coal because the steam user pays too little. Equalize these prices and we can reduce the householder's price and still make all the improvements in mining conditions the public demands."
I have, in the hearing of men who know the coal business from the bottom of the shaft to the ash pit, made this statement without being contradicted:
"If coal prices could be equalized, it would be possible, at once, to take fifty cents a ton off the price of the domestic coal at the mine mouth; grant workmen's compensation and old age pensions; put safety appliances in mines; recover all the coal left in the ground; and still leave the coal as rich as the oil business."
In drawing this down to a practical suggestion, I want to show how easily the whole situation could be turned end to end. To make my point clear, I will ask the uninitiated to dismiss from their minds, once and for all, the notion that steam coal and domestic coal are different products; they are one and the same thing in all save the size of the pieces. Coal in the ground is a solid black rock. It is shot down with blasting powder. The large lumps and the fine lumps are carried to the surface in the same mining car and go together upon a chute which leads to a screen. The fine particles which fall first through the screens constitute the steam coal; the large lumps which pass over the screens constitute domestic lump.
However, you and I do not burn coal in summer; the steam user takes his coal the year around. When, however, the coal producer is mining the requisite amount of steam coal in summer, he also mines perforce a proportionate amount of domestic lump. The question is: What to do with that lump coal until we are ready to take it? Also, in winter when he is getting out all the domestic coal we want, he is making too much steam coal or more than the steam user wants—just at that minute. What is he to do with that surplus?
You say, naturally and truly: Store the surplus until it is needed, as any business man would do. But—one dock to store coal will cost a million dollars; some storage plants in the anthracite field cost as much as $10,000,000 to $15,000,000 or even more. It would seem easy for the coal producers of a given field to build these docks and store our domestic coal until we. wanted it and then use the same space upon which to store the surplus steam coal until it was needed, thus enabling them to equalize the price. *It seems strange they have not done it long ago. You forget, however, that this would regulate the price and that an agreement to regulate the price contravenes the Sherman act.
But suppose we gave the coal men the right to agree? What would happen? The coal men, instantly, would build those storage piles and then forget about the seasons and the influence of cold weather. Domestic prices would not go up every time the thermometer went down.
The biggest change would come in this: Mr. Lind said that the big steam coal users would never pay the coal man a profit, and I believe him. The Commonwealth Edison Company has enough coal land in Illinois to last it for the next 100 years. The International Harvester Company has 14,000 acres of land in Kentucky and 20,000 acres in West Virginia. The United States Steel Corporation owns about all of the Connellsville field of Pennsylvania and has something like 200,000 acres of coal land in southern Illinois. Every coal carrying railroad has control either of virgin coal land or of coal-producing companies. One and all, these big buyers of steam coal would desert the commercial coal companies which they now patronize and would start to develop their own property. There would be a rapid and radical readjustment of coal sales by which the steam coal price would be freed from the downward pressure of these powerful buyers. We would have a realization that it is as much against the common good for a coal producer to sell one man his coal at a lower price than is charged another as it is now against public policy for a railroad to give one man a preferential freight rate.