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June 2, 1917 RECORD AND GUIDE 757 COAL PRICE INCREASE HITS PROPERTY OWNERS Probability that Advance Will Reach Fifty Per Cent. More Than Last Year—Corporations Do Not Fear Federal Investigation By J. D. EDDY EVERY building owner and manager in the United States is going to pay approximately fifty per cent, more for his coal supply this year. Why? Be¬ cause the mine owners and operators have so decreed. There is just one chance that the in¬ crease will not be so great as fifty per cent. That chance is that the threatened prosecution of the mine operators by the Federal Department of Justice will have the effect of stopping the raise in price which is now demanded. Already the Federal attorneys have taken action. The ITnited States Grand .Jury in New York, on March 6, indicted 109 coal companies and 65 individual dealers, charging a violation of the Sherman anti-trust law. Similar action was taken in Cleveland. It might also be added that this radi¬ cal and. so far as logic can determine, uncalled for increase in price may be revoked because of fear that the hard¬ ship it will work on the people of the country may bring about some effort toward .government ownership of coal properties. Such a revolutionary action, however, is so remote that it cannot be seriously considered. Attitude of Large Corporations. But evidently there is little belief among large corporations in the efficacy of Federal prosecution to bring about a change in the situation. Many of the big railroads, the largest consumers of coal, have not given this phase of the auestion serious consideration, because they are going right along making con¬ tracts for their coal supplies. And they are paying an increase of fifty per cent, and more over the 1916 contract price. _ If the railroads, considering their close relationship to the coal industry, believe it necessary to stand for the price increase, what chance has the owner or manager of a building, be it office or apartment, to do anything but likewise? Mine owners and managers in raising the price of the output of their mines have not the present-day excuses for their action. Labor costs them no more, because the miners are now working under a wa.ge agreement, which has an¬ other year to run. They cannot plead a shortage of croo. because the con¬ sumption is way below the possible pro¬ duction. Thus the increase is not to be excused by basin.g it on the law of sup¬ ply and demand. Bituminous Coal Capacity. The present capacity of the bituminous coal mines of the United States, the mines which supply steam, or power, producing coal, is 664,000,000 tons an- nttallv. Durincr 1916 the output was .509,000,000, or 155,000,000 tons less than can be produced should the mines be worked to capacity. There can be no fear of the immediate exhaustion of the supply, either, as exnerts estimate that there is enough coal under ground in the United States to supply the coun- trv's needs for hundreds of years. The price of coal is what is called a "place price." That is. the distance from the source of supply governs the price the consumer has to pay. On an aver¬ age, however, the cost of coal at the mine mouth is about half the cost de¬ livered to the consumer. Thus if coal costs J3 a ton delivered into the build- incr. the cost at the mine would be about Jl 50. The average increase in price the minf owners are demanding is from 50 to 100 per cent. In consequence, the price to the consumer or the building owner will be raised from 25 to 50 per cent. Fisurcs compiled on the cost of op- pfatinp' t>ui1ding.= show that the average cost of fuel is about 10 per cent, of the total operating expense. Using this per- "DECENT action of the coal mine ■*-^ owners and operators, who have radically raised the price of their output, means that the cost of operating office and apartment buildings will be materially in¬ creased during the coming year. The effects of the boost will be more far-reaching than merely in¬ creasing the price of the annual fuel supply in that the basts of nearly every industrial activity is coal. The raise is arbitrary, as no one seems to be able to find even a shred of an excuse for it, but, nevertheless, it has been done. This article discusses the action, its effects and tells something of what the Federal Govemment is doing to relieve the situation, which promises to work great hardship upon nearly every person in the country, the owner in particular. centage as a basis, the owner or mana¬ ger must expect to see his operating cost go up from 25^2 to 5 per cent. The increased price of coal, too, will have a more far-reaching effect than ap¬ pears on the surface. The companies which supply electric light, and power for the dynamos, have been hit by the rise in the price of fuel. It stands to reason that consumers of this power will be called upon to make up the additional cost. Railroads, also, now that they have been made to pay tribute to the coal mine owners, are clamorino: to the Inter¬ state Commerce Commission for per¬ mission to raise freight rates. It ap¬ pears to be an endless chain, this action of the coal men, and there is no telling where it will stop. The alleged facts produced by As¬ sistant Attorney-General Frank M. .Swacker. before the Federal Grand Jury in New York City, had to do only with the owners and operators of those coal fields in West Virginia known as Pocahontas and North River. These fields produce what is called "smoke¬ less" coal. It is especially desirable in lara-e cities, because it is bituminous, and in consequence is a good steam coal, and at the same time does not produce (he smoke which is prohibited by many mtmicipal codes. Tt was claimed that before these West Virginia operators got together some time in Tanuarv this coal sold at the mine for about !M.25 a ton. The elimina¬ tion of comnetition. it is declared, made it possible for these operators to raise the price to around $3 a ton, or more than 100 ner cent. The men and com¬ panies indicted, it was allesred. control 22.000.00n tons of the 35,000,000 tons these fields oroduce annualy. The in¬ crease in price netted these operators $38,500,000 more than they received for (he same quantity of coal a year ago, a sum that seems to be worth a court battle. Private consumers, corporations, rail¬ roads and others have been deprived of the benefits of competition, the indict¬ ments states, and are now naving double the former price for coal at the mine mouth. Buyers of "spot coal," or coal for the open market, are paying a much greater price. A Chicaeo newspaper is authority for lhe followincr statements regarding con¬ tracts for coal for the year 1917 made by railroads durintr the first part of the ni'^ntb nf March: The New York Central Railroad bought 600,000 tons of Southern Illinois conl. pavinsj $2 'a ton at the mine for steam lump roal. Last year it paid for the same coal $1.35 a ton. The. Southern Railroad at about the same _ time purchased 900,000 tons of what is known as Big Seam coal, paying $1.65 a ton. The price asked a year ago was $1.12H. The mine operators stood out for $2 a ton for coal wanted by this company, but finally dropped the price to the contract figure when the railroad agreed to cancel its former contract, which had yet four months to run. The Louisville & Nashville Railroad bought 1,000,000 tons of Alabama coal at $2 a ton. It paid last year $1.23^ for the same kind of coal. The coal docks of the upper lakes bought 400,000 tons of Pocahontas coal, egg and lump, at $3.75 a ton. The price a year ago was $1.60 for the same grade. Six hundred thousand tons of mine run Pocahontas coal, purchased by the same interests, cost $3 a ton, as against $1.65 in 1916. These cases can be multiplied indefi¬ nitely, the same source declares, and asks the question "If corporations such as these, which buy millions of tons of coal at the mine mouth, are charged such prices, what is the prospect for the small consumer? What will be the ef¬ fect on the cost of living?" During the past winter some coal op¬ erators deliberately broke contracts on various pretexts. Now they are reluc¬ tant to make contracts, evidently believ- ingthat they can get better prices by selling in the open market next fall and winter. Elements Affecting Price. There is another element which will enter into the price of coal next winter. That is the cost of delivery from the cars or yards to the buildin.g. The in¬ creased cost of living is having an ef¬ fect upon the cost of all kinds of labor. It stands to reason that these increases will apply to the coal wagon drivers and cnal handlers. These men in Chicago have alreadv secured a raise of 15 cents a ton. which, of course, is added to the price of the coal. What constitutes the cost of cbal has been answered verv thoroughly by Gen. Otis Smith and C. E. fresher, of the United States Geological Survey, who recently prepared a paper on the sub¬ iect for a meeting of the American Min¬ ing Congress. Just who gets the money that is paid for a ton of coal and the proportions that go to the producer, the railroads and the men who handle the coal i.s shown. This paper, it should be kept in _ mind, was prepared before the recent increase in price made by the coal mine owners. The analysis of these two men follows: Cost of Production. The price of coal is a matter of vital concern to the average citizen. No less important, however, is the question what our coal actually costs to produce, and the interest in this subiect is typical of the popular interest in the large produc¬ tive enterprises of the country. As citi¬ zens we recognize the consumer's de¬ pendence upon the producer and are takin.ff advanced ground as to their rela¬ tive riehts. In few industries does this dependence seem more vital or the con¬ sumer's eqtiitv appear larger than in that of producing and selling coal. The per capita annual expenditure for the useful metals is roughly equivalent to that for coal, but few citizens purchase pig iron or bar copper, whereas of the urban population only the dwellers in apartments, boardine houses and hotels are spared the necessity of buying coal'. The consumption of coal in the United States for heating and cooking is be¬ tween 1 and Ij^ tons per capita. A careful estimate for 1915 is 1.1 tons, which happens to be identical with the figure determined for similar consump¬ tion in Great Britain in 1898. This, noti- industrial consumption is greatest in cities, and in Chicago in 1912 it was