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the conditions of our social system, as a guarantee against combinations to monopolize the necessaries of life.
For the question is getting itself asked in rather imperative tones: How much better is it to tamper in this way with the fuel of the people, than with their food?
Substitute anthracite coal for wheat and flour in the above imaginary case, and it is a mild summary of the combination to which Governor Pattison of Pennsylvania, and his Attorney-General, recently directed their attention. This alliance of railway interests was described by Mr. Lloyd in a former number of the NORTH AMERICAN REVIEW. It has been told that five railroad companies, engaged in transporting this fuel from the mining regions of Pennsylvania, consolidated their control by first gaining the ownership of seven-tenths of the anthracite coal lands, and finally uniting their action to restrict the total output of coal, allotting to each company a stated percentage of the arbitrary total. Mr. George's recent articles also included a graphic picture of the condition of labor in the anthracite regions under the rule of this combination.
The latest manifestations of this railway alliance induced the Governor of Pennsylvania to invoke the action of his AttorneyGeneral, holding that such combinations are opposed to the general welfare, and violations of the Constitution of Pennsylvania, which declares that "all railroads and canals shall be public highways, and all railroad and canal companies common carriers;" that every one shall have full right to the transportation of property over them, without discriminations; and that no common carrier shall be interested "in mining or manufacturing articles for transportation over its works." This official assertion that the combination of railroads is ille oppressive to the individual and subversive of public policy elicited some not very consistent rejoinders from the gen managing these corporations, some of them declaring th is no combination but only a tacit understanding, w acknowledge its existence but justify it as a devic wages by keeping up the price of coal.
That the denial of the combination is only in the court of public opinion, is shown by the these gentlemen among themselves in adm The Secretary of the combined companies
the Pennsylvania Railroad expressing the wish that the latter corporation "should unite in the policy of restricting the output of anthracite coal." Meetings of the managers of these companies have been held at stated periods for years, with the result of limiting the production for one month to 2,500,000 tons, for another to 2,750,000 tons, and another to 3,250,000, at the same time advancing prices in one case 35c. per ton, in another 15c., and in another, "after considering the question of advancing prices," concluding not to do so until November 1. The effect of these frequent consultations was to maintain an arbitrary restriction of production several hundred thousand tons less than was actually sold in the same months of the previous year, for the undisguised purpose, by means of that artificial scarcity, of establishing an advance of 50c. per ton, with the hope of even higher prices.
The claim that this advance in price brings an advance to the wages of the miner, is best answered by the facts. No increase has been given to the miners on account of the late advance in prices, and Mr. Lloyd's article two years ago told how the early form of this combination vetoed an advance in wages by the device of prohibitory freight rates on the shipments of the private mine owners who had granted it. The dry statistics of census and labor reports also tell a startling story of the effect of this corporate union on the labor under its control. The United States census report on "Wages and the Necessaries of Life" shows that in the fre decade of the combination, the average weekly wages of the writers were reduced 361⁄2 per cent., while the retail price of coal in P delphia only declined 163 per cent. The Pennsylvania Bureau of Labor Statistics reports, in the early years of the present decade, that the average co
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ing, hoisting, preparation, and loading of coal be entirely discontinued." This method of protecting the companies from the calamity of having too much coal sent to market, has been continued for years, with the result shown in the report of one corporation, of allowing the miners to work 167.7 days in 1878; 2271⁄2 days in 1883; and, between those two extremes, a total of 1,628 days work in the past eight years. The unembellished story of these statistics beggars criticism. What more is necessary to be said regarding this device as a friend of the miners, than the cold statement of the figures that its peculiar policy has forced them to stand idle more than one-third of the time, or an average of 110 working days each year? Taking the actual average wages reported by the State Bureau of Statistics up to 1885, as affected by the enforced idleness, it shows a reduction of nearly 60 per cent. from the ante-combination period, while the fall in the price of coal was less than 20 per cent., wages having reached that level of modified starvation indicated by a weekly average of $6.67.
Add to these figures the fact gleaned from the railroad reports, that the rate of freight charged by the anthracite coal railroads has been sustained for the last sixteen years between 134 and 14 cents per ton-mile, while the fall of prices and economies of transportation have brought down the average rate on the high and low class freights carried by the trunk lines 50 per cent., to less than 34 cent per ton-mile. The fact that this policy has maintained charges on the inexpensive coal freights at twice the average rate, and three times that on the more expensive grain traffic of the trunk lines, makes it easy to estimate the character of this combination. The meetings of the corporation magnates, their orders to restrict the production of coal, to advance prices and to stop work in the mines, show us an alliance to maintain arbitary rates for the transportation and distribution of coal; to prevent competition among themselves; and the binding feature of their device is to restrict the supply so that the markets which in a given month of one year consumed 3,300,000 tons of coal, can now be forced to pay as much for the 2,750,000 tons to which they are limited. The barrier thus erected between the miner and the consumer is for the sole benefit of the corporations and dealers transporting and distributing the coal. Against a decline of one-half in the general rate of railroad carriage, the anthracite roads maintain their old charges. Wages decline 36 per cent. in ten years and the enforced
idleness for one-third the working time increases that reduction to an alarming proportion. Suppose the double rate of freight charges thus maintained to extend throughout the margins secured to subordinate corporations, agents and favored dealers, and it may explain the remarkable distribution of one-sixth the price of the product for the arduous and hazardous labor of mining and fivesixths for the capital and middlemen who haul and distribute the coal to markets one or two hundred miles away. Even the failures which have occurred in the maintenance of this compact reveal its arbitrary purpose of sustaining prices. One of the pleas of avoidance and confession by which the movement of Governor Pattison was met, was that "Coal has been selling this year at seventy cents a ton less than the prices of 1884." But what is the cause of this decline? Simply that the Pennsylvania Railroad, in revenge for the invasion of its own territory by one of the anthracite roads, entered into competition with the combination. The competition was not universal. Merely a province of the coal empire was invaded. Yet the slight approach to competition reduced prices in the eastern markets seventy cents per ton, and added thirty days to the working time of the miners. But the policy of these corporations is sufficiently illustrated by the fact that, as soon as the great corporate object of preventing competition on all sides was gained, the work of restricting production and putting up prices was resumed.
What is the moral and social aspect of such a combination? Lest the attempt to properly characterize it should betray me into the use of language that might seem extravagant, I will confine myself to quoting the expressions of some eminent judges with regard to similar, or even less threatening, combinations. The Governor's appeal to the Constitution of Pennsylvania is answered by the corporations with the claim that their charters ante-date the Constitution, and are, therefore, exempt from its restrictions. But there are principles of law which existed before either their charters or the Constitution. Some of the most cogent declarations of the bench on this subject have been uttered by the Supreme Court of Pennsylvania. Of a similar, though less stupendous, arrangement to combine five bituminous coal companies, that Court declared: "Such a combination is more than a contract; it is an offense. In all such combinations where the purpose is injurious or unlaw
ful, the gist of the offense is conspiracy." In the early part of the century, the eminent Judge Gibson, on the same bench, said: "I take it that a combination is criminal wherever the act has a tendency to prejudice the public or oppress individuals by subjecting them to the power of the confederates." Of a combination of salt manufacturing companies, the Supreme Court of Ohio declared its illegality when "the tendency of an agreement is to establish a monopoly and destroy competition." Long before railway combinations or anthracite coal pools were dreamed of, the Supreme Court of Massachusetts, speaking of agreements in restraint of competition, used these prophetic words: "They expose the public to all the evils of monopoly. This is especially applicable to large corporations who have the means, unless restrained by law, to exclude rivalry, monopolize business and engross the market." Not only does the common law prohibition of agreements to abolish competition apply in this case, but the very conditions on which railway charters are founded, as laid down by the Supreme Court of the United States in 1844, and repeated in every case where a railway has secured its right of way by legal proceedings, specify that if the effect of the charter would be to establish a monopoly, not even the Legislature could grant the powers of the State for such a purpose, "as it is opposed to every constitutional principle which protects the right of property."
"But," say the railway presidents, "This is an attack upon business prosperity ;" and one financial writer, in a sort of logical panic, terms it "an attack on $700,000,000 of capital." Here we reach the real foundation on which this extreme and yet typical example of the policy of combination between railways rests. "Capital must be protected against ruinous competition," is the gist of all the arguments in favor of that policy. It makes no difference to the advocates of this plea, that the capital to be protected in this case forms but a portion of the property interests of the country. Capital in general must compete for permanent investments until it reduces the current interest upon the best security to 3 per cent.; capital engaged in farming, in housebuilding, in merchandizing, and in manufacturing, all must accept the share of profits allotted them under the regulation of full and free competition. But the tithe of the capital of the country engaged in railway transportation claims exemption from this