PROFITEERING BY THE COAL BARONS
Calder, Williams M.
Profiteering by the Coal Barons Situation So Critical, Government Must Take Steps to Remedy the Evil; Continuation of Present Condition is Predicted By WILLIAM M. CALDER (United States Senator...
...The evidence before the committee indicated that he has already procured for the Government while acting as its agent 150,000 tons of coal, involving a commission or agency fee to him of $75,000...
...The average price to the War Department of this coal at the mine was about $7 a ton, so that the department paid about $8,000,000 over the cost of producing the coal...
...So I think it is hardly fair to say that the Federal Trade Commission has not made some effort to get information which, if obtained and published to the whole country, would, I am sure, be very helpful...
...Heat is as necessary for production, in fact, for human existence as is air or water...
...The causa of this is plain...
...I know some suits have been begun, but I know of none that have terminated successfully...
...I was quite shocked at the disclosure, and stated at the hearing that the American people never would agree that a transaction was perfectly legitimate whereby a coal operator who sold coal for $3.50 a ton to his private customers should, while representing the Government, obtain coal for it at $11 a ton...
...Men have contended that this business, too, will take care of itself, and considerable reference has been made to the operation of the railroads under Government control...
...I know also, that the Federal Trade Commission has attempted to obtain from the coal operators of the country detailed information...
...The remedy is first of all to force the monopolists to let go who are holding valuable farm lands unused...
...More Activity Needed IKNOW there has been some activity on the part of the Department of Justice, but not in my judgment as great as could easily have been...
...Its officers have held forth to this committee promising assurances of reductions in prices of bituminous coal since last July...
...He said he did not, but that he sold other people's coal to the Government at $11 per ton out of which he made a commission or an agency fee of 50 cents...
...Coal has been so difficult to obtain that the Government itself has been obliged to pay commissions ranging as high as 50 cents per ton, one gentleman alone receiving $75,000 simply for acting as an agent for the War Department in connection with such purchases...
...During the period from July to November the War Department purchased some 2,000,000 tons at figures as high as $13 at the mine...
...Its use must be continued from day to day and cannot be deferred or interrupted...
...In spite of the decline in agricultural population, rural land values are increasing...
...It has been moved and delivered in such quantities that there ought not to be any occasion for panic...
...What the Census Shows By SAMUEL DANZIGER THE census shows that a majority of this country's people live in cities of over 2,500 inhabitants...
...Evidence is Offered THE evidence before the committee indicated that Col...
...The average cost of mining this coal was probably about $3...
...Many of the bituminous coal operators have set a most unfortunate moral example to the industry of the country during a period in which there should have been moral reconstruction as well as physical reconstruction...
...This association during the past summer has been trying to ally itself with wholesalers and retailers and anthracite producers, in order to present a united front to influence the making and administration of Federal laws...
...He was Col...
...Passing the Buck THIS is one of the most important things I ever tackled...
...I believe that there is plenty of evidence obtainable that would have warranted the Department of Justice in prosecuting under the Lever Act some of the men interested in the coal business in the country...
...The farmer cannot pay the exorbitant prices demanded for farm land and make enough to make a decent living for himself after paying interest on the investment, taxes on all he produces and consumes, and extortionate prices to transportation and other monopolies...
...Its membership have dictated to the United States Geological Survey as to the form in which the basic figures should be compiled...
...The result has been that certain unscrupulous mine owners, I have no doubt, and perhaps certain brokers who have contracts with the railroads, with construction companies of one kind and another, with industries, with wholesalers and with retailers of coal that have deliberately withheld the fulfilling of their contracts in order that they might have coal for the market...
...It is ever ready to supply voluminous information upon the questions which are to the inter-est of its membership, but seems reluctant to supply simple and essential information which may be to their disadvantage...
...that is, complete information as to costs, selling prices, production, and all similar matters...
...The total tonnage purchased by the War Department (luring this period is according to figures furnished the committee...
...Cost of Production DURING the past few days revelations have been made as to the actual cost of the production of bituminous coal—we have that information in our possession, obtained from some of the operators—as to the great production this year, and as to the fact that the railroads have carried more tonnage during the months of July, August, September, and October than ever before in their history...
...and yet Interstate Commerce Commissioner Aitchison, when asked by me in his appearance before our committee, "Has it ever been suggested that coal was being held for higher prices or speculation...
...President, we are not sure that the remedy proposed will be adequate, but believe it should be tried before the Government goes into business itself...
...Wentz if he sold any of his $3.50 coal to the Government...
...answered: "I have not any doubt of it...
...The committee makes this recommendation now and is to inquire further into the situation...
...It has assisted in drafting some of the priority car-service orders of the Interstate Commerce Commission which have relieved its members of contractual obligations...
...Until that situation will be remedied, until the cause of the trouble shall be removed, the tendency to go from farm to city will probably continue even though city workers have more than their share of hardship and trouble...
...It appears that he was invited by the War Department to purchase for them not exceeding 275,000 tons of coal, and merely for acting as the agent for the War Department he was to be paid $137,000...
...I inquired of Col...
...National development depends upon an ever-increasing supply of power...
...That is abundantly established...
...Nevertheless, profiteering has continued and propaganda has been issued shifting responsibility to others...
...Our investigation into the coal situation has convinced me that the private interests now in control of the production and distribution of coal, in spite of efforts by some, are actually unable to prevent a continuance or a repetition of the present deplorable situation, and that it is the duty of the Government to take such reasonable and practical steps as it may to remedy the evil...
...It is a recognized fact that the coal busi-ress, if properly conducted, could easily supply fuel to the people at a price they could afford to pay...
...and I want to say that the ramifications of this coal business, one "passing the buck" to the other, and, as Mr...
...They have reached and passed the point beyond which profitable production can be carried on...
...The outstanding fact of the committee's investigations seems to be that the coal interests themselves have taken the matters in hand during the past season, have influenced the issuance of priority car-service orders and other Federal action, and that the public has lost, while those engaged in the coal industry have made inordinate and extraordinary profits...
...When they see the mine operators charging $15 a ton for their product, it is natural that the miner should demand a part of the profits...
...His answer was that he had no coal to sell at that time, but that the Government had sent him out to buy coal in the market for it, and that he did buy some coal for the government at as high a price as $11 a ton...
...Fuel is a basic necessity...
...We have moved coal...
...There has been the greatest crossing of orders, double-crossing of orders, and double-crossing of consignee and those who have had contract for the last 90 days that I have ever known about in my business experience...
...but when the Federal Trade Commission sought to collect such information the coal operators of the country began suit against the commission, and have been able, so far, to restrain them by order of the court from gathering the information...
...President, the committee now knows the cost of bituminous coal at the mines of the respective producers...
...Continuation of Present Condition is Predicted By WILLIAM M. CALDER (United States Senator From New York) COAL PROFITEERING on the part of the mine operators has encouraged the miners to ask for more pay...
...It would afford opportunity for the public to know the exact cost of production, the price coal was sold for, and to whom...
...We must have fuel and shelter, and something must be done to supply the dire necessities to the people...
...Bituminous coal which before the war sold at the mine for $1.50, is now at $3.50 to $15.00, and anthracite which formerly sold at the mine for $3.50, has brought from $8 to $20...
...It would also afford opportunity for coal to be traced to its final destination and in all probability would bring the relief desired...
...But there has been the excuse of car shortage and the excuse of labor trouble...
...The committee has felt disposed, before it actually urges the establishment of complete Government control, or even the licensing system, to recommend that all coal operators, wholesalers, jobbers, and retailers be compelled by statute to file at regular and frequent periods with some Federal agency reports on the total tonnage produced or handled, the size and quality thereof, the amount of tonnage contracted for, the amount sold on contract at spot sale, to whom, together with the prices made or received under such contracts or sales...
...That was the statement of a member of the Interstate Commerce Commission appearing as a witness before our committee...
...Wentz, president of the National Coal Operators' Association...
...it knows something of the activities of one of the great coal associations which during the past three years has spent nearly a million dollars, has collected from its members nearly a million and a quarter, and is now collecting at the rate of nearly a half mil-ion dollars annually...
...Aitchison said before us the crossing and double-crossing of the coal industry during the past summer have been about the worst examples of defying the public and of giving improper information as to selling prices and as to purchasers, and with this definite information it is to be hoped that pressure may be brought to bring prices of coal to a reasonable level...
...It has spent in lawyers' fees during the past nine months over $100,000...
...This can be done by taxing land values enough to make holding without use unprofitable...
...Wentz's mine in West Virginia, the Stonega mine, was selling coal for $3.50 per ton or perhaps $3.75 a ton, and that, acting as the agent for the Government, he sold coal to the War Department at $11 a ton...
...indeed, this association is so powerful that its president has been sought by the War Department as a procurer of bituminous coal at a commission of 50 cents a ton...
...It is an unhealthy situation, and shows clearly enough that the high coat of living brings no advantage to the actual producer of food...
...Working farmers are going to the cities because it pays better to work in a factory than on the farm...
...it knows the names of the producers and the amounts at which they have sola their coal...
Vol. 13 • January 1921 • No. 1
