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COAL PROBLEMS AND PRICES

BY FLOYD W. PARSONS

Mr. Parsons, the author of this article, was the founder and for many years editor of Coal Age. After his graduation from college as an engineer, he learned the fuel business from the bottom up, beginning with two years work in the coal-mines, and later serving as chief engineer for important operations. He thus knows the subject on its practical side and its theoretical side.-THE EDITORS.

C

OAL is not only the foundation of America's industrial life, it is also the base on which civilization is built. No nation can hope to be supreme among the countries of the world, in war or peace, if it lacks a bountiful supply of coal. We often read, or hear it said, that this or that business is the "key" industry of a nation, but the truth remains that there is only one "key" industry-coal-mining.

Coal is the ancestor of more useful products than any other element of nature available to man. From the time we rise until the day is done, we maintain an intimate association, either with coal itself or one of its by-products. The leavening agent in our bread and the gas we bake it with are from coal; so are the agents that tan our shoes, and that vulcanize the rubber in our automobile tires. We are indebted to coal for the various forms of ammonia that go into fertilizing, refrigerating, electric batteries, and household uses; for aspirin, salicylic acid, and many other cures for common colds; for elements used in manufacturing insulating coatings, phonograph records, and pipestems; for benzol, one of the best available fuels for automobiles and internalcombustion engines; for food preservatives, moth balls, and disinfectants. While coal furnishes us picric acid and trinitrotoluol, it carries locked in itself synthetic oil of wintergreen and the delicate flavoring extracts and perfumes. When the World War was being planned, German statesmen devoted their time largely to studying the coal map of Europe. When hostilities commenced, the strategy of the Teuton generals centred about possession of the coal-fields of France and Belgium. Great Britain's preeminence in world affairs was built on her surplus production of coal. The biggest problem in Great Britain to-day is how to meet American competition in the export of coal. England's coal has given power to her

ships and economic balance to her trade. The future of the British coal problem is closely linked with the futures of the British food and manufacturing problems. For example, in past years Great Britain supplied herself with cheap beef by exporting coal to Argentina and bringing back the carcasses of cattle.

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History shows that for several centuriesin fact, since the beginning of a coal industrythe consumers of coal have condemned the practices of the so-called "coal barons,' producers of this essential product. nationalize the coal-mines," has been heard in English politics for more than a generation. The fight to accomplish this aim in England has reached the point where it threatens to become a national disaster. Even though the latest strike be ended on terms fairly satisfactory to all sides of the controversy, it is à fair presumption that the settlement will be only a temporary one, provided the American coal industry is permitted to go forward without undue restrictions being placed on it by the Government or by labor. Even though coalminers in the United States receive double the wages of British miners, American coal is produced at about one half the cost of English coal. American miners using machines produce from two to three times as much coal each year as do an equal number of British miners using mostly hand methods. While this condition prevailed prior to the war, British exports of coal were not seriously affected, because America lacked ships as well as an export policy.

Just as the coal problem in Great Britain has become the most acute and difficult question confronting that Government, so the coal problem in the United States is tending to become our most important political and industrial issue. Before getting directly to the point of the discussion, let me clear the way by laying down a few fundamental facts. Four

sevenths of all the probable coal in the world lies in the United States. Canada has one seventh, China nearly one seventh, Germany one seventeenth, and Great Britain one fortieth of the total. We have in the United States upward of fourteen hundred billion tons of the various grades of so-called "soft" coals. This supply of bituminous coal should last us for several centuries. In addition, we have enough anthracite coal (practically all in the state of Pennsylvania) to last from fifty to seventy-five years, on a declining production.

Gaging the industrial development of the different nations by the per-capita consumption by the people, it is interesting to note that here in the United States the consumption of coal per person is 6 tons annually; in the United Kingdom it is 4.9 tons per capita; in Germany, 3.4 tons; France, 1.4; Italy, 0.34, and Russia, 0.18. Previous to the war, Belgium consumed about 4 tons per capita, which fact indicates the intense development of that small nation's industrial life; indeed, the 8,000,000 people in Belgium use annually nearly as much coal as the 170,000,000 people in Russia, exclusive of Poland. While the miner in the United States produces better than 1,100 short tons of coal annually, and ranks first in the matter of individual output, the Japanese miner produces an average of only 155 tons each year, and ranks last. Here in America, coal is produced in twenty-eight states by approximately 6,000 mining companies employing about 750,000 men in and about the mines.

It is impossible to discuss coal-mining prices and problems without first pointing out the two besetting sins of the industry. The first, if not the more important, is the seasonal operation of the mines. The seasonal nature of coal-mining is more responsible for the industry's labor troubles, and for the dissatisfaction on the part of miners, than any other one thing. No class of workmen ever have been satisfied with seasonal employment. Not long ago American miners demanded a six-hour day; not because they were dissatisfied with the number of hours they had to work, but for the reason that they were determined to bring about an equalization of the work. If the men were given six days' employment at a fair rate of wages, there would be little discontent among the rank and file. Stabilization of the coal industry, particularly the bituminous industry, is no easy

problem. Lumber improves with storage; shoes and textiles can be easily warehoused; the production of iron and steel plants can be stored during a slack season. In practically all these cases, the matter of storage depends on the ability of the producing company to finance their operations until demand has caught up with production. The storage possibilities in coal are limited. Although many grades of coal will stand storage, none of them are improved by it, and quite a few kinds of coal deteriorate through storage. It would require sixteen times as much space to store the nation's yearly production of bituminous coal as would be needed to store the nation's supply of iron and steel products.

Since 1890, the bituminous coal-mines in the United States have worked only 83 per cent. of a normal 300 days each year. In 1914 the mines worked only 195 days. In 1919 the average days worked was about the same as in 1914. A careful investigation has shown that the cost of mining coal at one colliery will vary as much as 60 cents a ton from one month to another, depending on the number of hours the mine is idle. A manufacturing plant may be closed and only a watchman left to guard it, but in coal-mines, the forces of nature work unceasingly, and as a result the cost of upkeep continues at a high rate, even if coal is not produced. During the summer months, the production of bituminous coal in the United States often falls as low as 23,000,000 tons per month, while in the winter season the production of soft coal will average upward of 50,000,000 tons per month. It should be plain, therefore, that any industry having more than 100 idle days each year and a seasonal variation of 100 per cent. in output, cannot be operated on an economical basis.

This failure to equalize the load in coalmining has still other effects that are farreaching. The railroads of the country own approximately 1,000,000 coal-carrying cars. Coal furnishes about 34 per cent. of the nation's total railroad tonnage. On certain roads the transportation of fuel amounts to 60 per cent. of the total freight moved. As the business is now conducted, the so-called coal-carrying lines must store thousands of their coal cars during the summer months. This practice increases railroad expenses, for cars in storage not only afford no revenue, but they deteriorate rapidly during the period of disuse. In the fall months, when the coal rush commences, the

railroads must gather together a small army of workmen, which force is subjected to expensive training in order to fit it properly to repair and handle coal cars.

THE ANTHRACITE BOARD

HE history of anthracite mining should provide an interesting lesson for the bituminous coal industry. Prior to 1900 the hardcoal mines of Pennsylvania worked an average of only 170 days each year. During the decade which ended last year, the average working time of the anthracite mines was 255 days per year. This improved situation was a direct result of the Anthracite Board of Conciliation, a body composed of representatives of the operators and the miners, and created by President Roosevelt during the difficult days of the hard-coal strike in 1902. This conciliation board, while only a common-sense court, has settled approximately 650 disputed cases in eighteen years, and has established an enviable reputation as a just tribunal. The hearings before the Anthracite Board are informal in character and are marked by an absence of legal talent. A case is never brought to the Board until the employer and the local mine boss have found that it is quite impossible for them to adjust the matter in dispute. While there have been a number of purely local strikes in the anthracite field, there has been no general strike of hard-coal miners since the Board of Conciliation was first organized.

VALUES WHICH GO UP IN SMOKE

THE

HE second sin in the mining and consumption of coal is waste. While this may be said of practically all industries, it is particularly true in the handling of our fuel resources. Practically all of our anthracite production is consumed in our homes. Of our annual bituminous coal output, 40 per cent. is used for steam or industrial purposes, 27 per cent. is burned by the railroads, 15 per cent. is domestic coal, and the remaining 18 per cent. goes for coking, exports, smithing, gas-houses, and bunkering. Assuming that it is possible to obtain the by-products from only 25 per cent. of the industrial coal and 50 per cent. of the railroad fuel, through establishing central stations and electrifying; also that all the domestic coal can be coked firste find that 195,000,000 tons of bituminous hat is now burned raw should be coked. { but two thirds of this tonnage can be sub

jected successfully to by-product practice, the saving would amount to something like $200,000,000 annually. The values which go up in smoke in the United States each year are nothing short of appalling.

The losses to the nation through coking coal in beehive ovens continue at the rate of

pacity of our coke ovens is approximately 60,000,000 tons of coke annually, of which total nearly one half comes from by-product ovens. The manufacture of by-product coke in the United States is a comparatively new business, the first ovens of this kind having been installed only a little more than twenty years ago. Prior to the war the Germans were the leaders in the practice of extracting the by-products from coal through coking. When the World War commenced, Germany was coking 10,000,000 tons more coal in byproduct ovens than the rest of the world combined. This policy of the Teutons in extracting the highest possible value out of their coal supplies is largely responsible for Germany's supremacy in dyestuffs manufacture. One authority estimates our annual losses from coking coal in beehive ovens as follows: Tar 320,000,000 gallons; ammonium sulphate, 436,000 tons; surplus gas, 240,000,000,000 cubic feet; benzine, 65,000,000 gallons; and toluene, 16,000,000 gallons. The yearly waste of these same elements through firing raw bituminous coal in this country amounts to more than $400,000,000.

A four-foot seam of coal contains enough ammonium sulphate to fertilize the land above it for more than 500 years. Assuming that 100 pounds of ammonium sulphate are needed each year to fertilize one acre of cultivated land, it follows, therefore, that we are burning up each year in our beehive ovens enough nitrogen to fertilize 8,720,000 acres. An acre of wheat land treated with an application of 100 pounds of ammonium sulphate will show an increased yield of at least seven bushels of wheat per acre. Therefore, if we carry this thought a little further, we find that the country's production of wheat would be increased by more than 60,000,000 bushels a year if the ammonia that is now wasted in our beehive ovens were saved and effectively used.

The absolute power of oil and coal over humanity may eventually be broken by scientific discoveries and engineering skill, but right now all the nations of the world are

at the mercy of the present fuel industries. This being true, it follows that each and every citizen of the United States should take an active interest in the present practices of mining, handling, and burning coal. No matter where we live or what we do, the cost of coal is a heavy item in our budget of expenses. Whenever we can raise our voices to help do away with the seasonal operation of coal-mines, or lend aid to sensible suggestions for eliminating the waste of the valuable constituents of coal, we should do so without hesitation. However, we should all act with great discretion when it comes to considering the now common proposal that the coal industry be taken out of private hands and placed under government control. It is little wonder that the people of America have become disgusted with the handling of the coal problem and are willing to turn to almost any scheme that holds forth hope of relief from the high prices for fuel which have prevailed for several years. It has been my purpose in the foregoing to show how vital the coal industry of the United States is to the welfare of every other American industry and to every individual. For this very reason

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we must avoid all action except such as is based cleanliness, convenience, and efficiency as a fuel. on sound fact.

In any discussion of coal mining, we must bear in mind first of all that hard-coal mining is a business apart from soft-coal mining; yet whenever legislation is proposed relating to coal, no distinction is made between anthracite and bituminous coal. The rates of mining wages in anthracite and bituminous mining are different, and the mining methods are unlike. The production of anthracite is more of a manufacturing business, due to the extensive preparation of the coal, while the product itself is a luxury rather than a necessity. In our every-day life, it is to bituminous coal what cake is to bread. Householders in a limited area of the United States insist on having anthracite simply because of its superior

So far as our industrial life is concerned, the production of anthracite could be discontinued at once without causing much of a flurry in the situation. The fuel bill of the American railroads last year totaled upward of $700,000,000 and practically no part of this enormous total was expended for anthracite. Several million people in that eastern section of the United States where anthracite is used almost exclusively as a household fuel, read in their daily papers about an impending coal famine and other items of startling interest, and immediately assume that the dire predictions refer to hard coal, whereas in nine cases out of ten, the featured coal news of the day covers only bituminous coal and is in no way related to the anthracite situation.

One investigator found that 85 per cent. of the soft coal produced in the United States is purchased by the agents of 55,000 corporations. This means that less than one tenth of the population of the United States buy more than four fifths of the nation's bituminous output. While the people eventually pay for this coal in the form of finished products,'its cost is not noticed so markedly as is the cost of the hard coal which the citizen must pay for in a lump sum out of his own pocket. Practically no anthracite coal is exported, and yet when the consumer reads in the paper that large shipments of coal have been sent overseas, he assumes that these shipments are reducing current stocks, and thereby making it more difficult for him to get his winter's supply. A week later he reads in his paper that the price of steam coal at the mines has slumped materially, and he can't understand why he must pay just as much as ever for the coal he puts in his cellar. The truth is that such a statement concerning steam coal refers only to bituminous, the price of which is subject to fairly wide fluctuations, while anthracite prices, due to more steady operation of the mines, are far more stable. Another thing that causes confusion is the practice of selling anthracite on the basis of the gross ton in certain markets and on the basis of the net ton in other localities. In Baltimore, Washington, Philadelphia, and Pittsburgh, anthracite is usually sold for so much per gross ton of 2,240 pounds. In New York and Boston the unit of measurement is the net ton of 2,000 pounds.

Anthracite is mined in practically one statePennsylvania-while bituminous coal is mined in nearly two thirds of our states. Bituminous coal is produced in more than forty separate and distinct fields, and each district competes with all adjacent ones. Competition in bituminous mining has always been keen and somewhat wasteful. The profits of soft-coal operators before the war were so small that members of the industry found it difficult, if not impossible, to interest capital in the business. Anthracite mining, on the other hand, is more closely organized, and the business is conducted with far less waste. About 74 per cent. of the output of hard coal is produced by a group of eight companies. Because of this limited circle of control of anthracite mining, the charge is often made that the industry has become a business monopoly. In answer to this charge, the anthracite interests point to the cost re

port of the Federal Trade Commission, which states: "The increases in the prices of anthracite coal since 1916 have on the whole been closely proportional to the increases in costs of production." George Otis Smith, director of the United States Geological Survey, in a recent letter to Senator Edge, said: "It is perhaps a question whether a jury of disinterested observers from another planet, neglecting the consideration of the internal management of the industry and thinking only of its service to the public, would not conclude that the American people had been better served by the closely organized anthracite industry than by the wasteful competition of the bituminous industry."

Director Smith is also authority for an interesting table (which appears on this page) that shows the separate items of cost of a ton of coal shipped by rail from a mine in Pennsylvania to a town in northern New England. The carload of coal was delivered in varying lots to several individual consumers. Since the coal was obtained direct by these purchasers, no wholesale or retail dealers' profits are included; only the local dealer's charges for services in handling the car on the siding, and weighing the coal:

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