BOSTON PUBLIC LIBRARY
3 9999 06317 501 0
A ^3
OFFICE OF NATIONAL RECOVERY ADMINISTRATION i-''\
DIVISION OF REVIEW
ECONOMIC SURVEY OF THE BITUMINOUS COAL INDUSTRY
UNDER FREE COMPETITION AND CODE REGULATION
By
F. E. Berquist
and
Associates
WORK MATERIALS NO. 69
VOLUME I
INDUSTRY STUDIES SECTION
March, 1936
OFFICE OF NATIONAL RECOVERY ADMINISTRATION
DIVISION OF REVIEW
ECONOMIC SURVEY OF TIIE BITUlvilNOUS COAL INDUSTRY
UNDER FREE COMPETITION AND CODE REGULATION
By
F. E. Berquist
and
Associates
INDUSTRY STUDIES SECTION
March, 1936
9837
U.S. /Oopf . ^ Gd--
5; I 7 ^^
FOREWORD
This stud^' of tlie oit-.ijainous coal industry v.ts prepared ■under the
supervision of ilr. 7. 2, Jerquist of the Ini.ustr- Studies Section,
Mr. I!. D. Vincent in c;:r-i\';e.
The report is j.-,red upon materials prepared Lp' the Bituminous Coal
Unit as a r/hole; the ceveral chapters vrere 'rritten "o^ the follc^ing
authors:
EJuir'-ry P. E. 3er^uist
Chrpter I E. "S. G-ordon £Uid E. E. Berquist
Ch.p^^tor II Charles ^. Persons
Cj.rp/oer III George .x. Lrr.p
Chapter I^' (a) (b) Louis Levine
Chrpter IV (c) Charles '2. Persons
Chrpter V E. 3. Gordon r,nd Tf. T. Crandell
Chrpter VI George A. La'io
^.p;:)cndi:: II Charlotte 3. '.Tamer
In addition to -.cnio-'ledgraent of the '7ori: of the several authors,
special recog-nition is :::,de of the assistpnce of Virpinip. E. KcArdle in
assembling and chechinp the materials ^vhich enter into the report.
Because of circru::strnces beyond control of tlie Coal Unit - princi-
pally curtailment of personnel and requests for rscist-nce arising in
connection uith ne-,; coal legislation - the report as originally planned
was rarterially nodified ruid reduced in scope. It covers the salient as-
pects of the principal phases of interest relative to the operations of
the industry under the oode with four major exceptions: (l) code author-
ity organization p.iiC. ad ^.inistr.'ition, (2) functioning of labor boards,
(3) transportation, and (U) co:apliance and enforce-^ent . The main atten-
tion has been given to Ir.bor, costs and price fi::in,;' p.spects. The effort
has been directed jc/ard eveloping these topics in such a 'lay as to
illustrate the proble::s encountered and methods adopted to solve them,
rather than to provide a comprehensive treatment of all the cases that
3S37
called for aioiinistr-^.Vlve or other action.
The report cotr: ;rortl\ the nature of the prohle ■. of 'biturainous coal
and trepts the tv.'o ::r-^or ierAies, st-oili'^r.tion : a. coordination of prices
and of wages. The e::tc:i': to rrhich these oojecti^-cs --ere achieved are
discussed in dete.il in the body of the report r.n'. are oriefly svunraarized
in the Sanmary.
Many of the c\evelo;o: lents under the Code aros_e in connection --ith
administrption by coJ.e ruthorities, in joint conferences hetiTeen reprc-
sent-^tives of the sevGral suocivisions, and in the v/a, /e conferences.
"Ihile the results of t'esc activities ultimately oecp:ie a part of the
records of the IL'IA, r /^re.:.t deal of the records of proceedings ('."/hen
formally kept) -■enained in the possession of code ruthorities and their
successors. It did not prove possible to conduct tj.e field ;Toi'k \7ith
innustrj' and lahor rcnresent' tives necessp.ry to develop such materials.
The report does not "n^rport to provide sol'-.tions to such serious
questions arisin; "CMc.ei' the Code ps ''aininum price fining p,nd correlation
of prices and rnye '.iff ercntials. Ho>7ever, the ;_:rterials contained in
the report tO;';ether "ltd cost and other dp.t.a developed in connection rith
the Code should oe ver;- d.elpful in the future handling of these problems
under any ;oro,i'raj: of control.
At the bacl: of this report will be found a brief statement of the
studies under trj:en "x' the 'revision of Review.
L. C. Harshall,
Director, "Ivision of Review.
March 19, 193b.
9837
Pap-es
foreword
Summary 1
Chapter I - The 3iti\ inov.E Coal Iniiiisti--, Its '.'isborical
3ac':groiuif. me. problems 13
1. 'The Iiv';:ic;try' s Background
2. Intensive Competition
3. i-cc' r.ninr.tion of ilines
h, l>ael l:co:io:.iy
5. Tr-nspoi't-tion, Freif^ht Hates rno. .?.evenue
fro:i Goal
b, S^les ; .eclization and Prices
7. The Proolea of the Bituminous CorJ. Industry
Chapter II - The Code of I'air Coirrpetition under the ITr.tional
Industrirl dccovery Act . of 1933 .....•• 7S
1. The ?or" '.Illation of the Code
a.. Various Drafts Suomitted
0, Tlie Geographical Division
c. ..d-'inistrative provisions
d. '.linimura TJages and Ha::i:"n:.;-"; Hours
e. Condition of Employment
f. price Standards and Re;;7Lilations
;V. Trr e Practices
h. :jiscussion in the Paolic clearing
i. Drafts by K.H.A. Officials and Criti-
cisLis by iliners .-^-.d Oper-tor Spolres-
::en
j. If forts to secure Agreej'.ent on a
Sing;le Code
]", Successive P.evision ".nd final Accep-
tance
2. .;^'.end'cnts to the Code: Their Pui-pose and History
a, ilos. 1, 2, and 3 - Hour and '.Tace Standards
h. :"o. k ~ Providing for Statistical Bureaus
c. I'o. 5 - Porhidding Contracting below Code
fiates
d. To. b - Iievision of Price Control
e. "do, 7 - Providing for a f.epresentrtive of
Organized La,bor on Code .utliorities
f. ;'o. 8 - r^xt ending 'Ta'^e, Hour and Price
l.:e;ulaticn until June lo, 153:>
Chapter III - production and Distribution 1^5
1. Production and Mining Capacity
2. Prodiiction by Areas
3. Distribi-.tion of Bituminous Coal
SS37 --iii-
Pages
Chapter IV - Labor 153
Section A - General and Pre-Code
1. Collective 3pru:pining - wage negoti-'^,tions and
indtistrial disputes
2. Conditions of Emoloyment
3. Seasonal and C7clical Aspects of Employment
4. Kovements for Shortening the T.'ork Tay and \/eek
Section B - "..?ge P.p.tes pnd Hours: Emnloyment rnd Earnings
Under the Code
1. Labor Costs: fajor Factor in Costs, Srles P.ealizrtion
and Value of Product
2. Pre-r.R.A. History of ^'ages, Emplo;<nnent and Earnings
3. Code history of l.'ages and Hours
4. Pre-Code and Code TIage Rates
5. Employment Under the Code
6. Earnings Under the Code
7. The T.'age Bill Under the Code
Section C - \fage Differentials: Their History: Their Influence
on Prices a-nd '/ages
1. The His-(;orica.l Development of this Problem
2. L'age Differentials at the Code Hearings
3. \Jage Different ia.ls in the Code as Approved
4. Modification by iViiendments I'os. 1, 2 and 3.
5. Unsettled Controversies over Mege Differentials
Chapter V - Cost of Production, Selling and Administration During the
Code Period 417
1. Effect of IT.E.A. Code on Costs
2. Cost Reporting Under the Code
3. Factors Affecting Production Cost
4. Average Costs, by r.P.A. Code Divisions
5. Average Costs by r.P.A. Code Subdivisions
6. Cost Increases recapitulated
Chapter VI - Prices Under the Code 500
1, Original Code Price Provisions
2, Administra.tion of Prices
3, Factors in Bituminous Coa.l Prices
4, Establishment of Prices
5, The Price Structures
6, Problems in Price Control
7, The national Coal Board of Arbitration
8, Eea.lization Under the Code
9 , Summary
9837
~iv-
Pages
Appendices
Appendix I - Statistical reporting tuider r.E.A 552
Appendix II 580
Appendix III - Costs, LeE.lization and I'argins 584
9837
SUMMARY
Employment; The code sought to increase emnloyment through limita-
tion of the working hours of employees, first to 8 and later to -7, and
the number of days to 5, or a 40-hour week from October, 1933 tc March,
1334, and a 35-hour week thereafter. Prior to the Code in 1933, apcrox-
iimately 7.4 per cent of the total employees were engaged in mines whose
established working day was Q or 10 hours. The change to the 8-hour day
for these mines would necessarily result in additional employees or days
worked if output were to be maintained. The change from 8 hours to 7
hours in April- 1934 affected all mines and necc-ssarily required either
more men, more days worked or both to maintain production except insofar
as mechanization or increases in strip mining operations (higher cutput
per man per day), or improvement in efficiency might tend tc Tffset the
reduced working time. According to the index of employment of the Bureau
of Labor Statistics, the average number employed in 1934 was 13.7 per cent
greater than in 1333, while the average number of working days increased
from 167 tj 178, an'increase of 6.6 per cent, according to the U. S. Bur-
eau of Mines. Th<-> combined increase of men- employed and days worked
w:5uld indicate an increase of 21,2 -oer cent in man-days of employment.
How much of this increase is attributable to tne Code provisions and how
much to increased production in 1934 or 1933 cannot be definitely ascer-
tained. Production was 7.7 per cent greater in 1934, and if the assump-
tion is made that only this increase would have occurred if 1933 employ-
ment conditions had prevailed, then the remaining increase may be attribu-
ted to the Code.
On the other hand, output per man per day declined only approxi-
mately 8 per cent in 1934 as compared with 1933, according to the Bureau
of Mines, If the change reflected in productivity is correct, then only
3 per cent of increased employment may be attributed to the Cede. While
the two statistical indications each reflect increases in the volume of
employment (number of men employed and days of work afforded) due to the
Code and independent of increased production, there is considerable vari-
ance in the extent of such improvement. Considering the nature of the
statistical bases, it is the considered opinion of the Coal Unit of the
Division of Review that the true increase falls between the limits of
8 and 13 per c^nt, probably nearer the lower than th" upt)er limit. Such
employment data as are available indicate that apiDroEimately 41,006 men
were added to bituminous coal mining payrolls in 1934 as against 1933.
The Bureau of Min^^s reported employment in 1933 as 418,703 and in 1934
as 458,011 - an increase of 39,208. It must be remembered tnat these
figures are annual' and therefore include in 1933 th-^ influence of the
N.I.R.A. and the Code during tne latt=r montns of th-:- year. The Bureau
of Labor' Statistics indi^x anlied to thp C'^nsus of Unemioloyment , April,
1930, indicate that employment increased from 310,738 in 1933 to 353,290
in 1934 or 42,452 men. IVhile these two estimates of thp number of men
employed diffpr, the calculated increases in employment are not far apart.
For a detailed discussion of employment under the Code, see Chapter IV,
Wages: Wage rates had fallen progressively after 1923 until the
advent of 'the Codp. In the area east of the Mississippi River (repre-
senting approximately 90 -oer cent of total production) average hourly
earnings for all classes of employees had fallen from 79.5 cents in 1924
(last quarter) to 41.2 cents in 1933 (February). This decline reflects
tu-= downwai'd tr^-nd in prices experienced during this TDeriod, which cur-
tail-id tiip incomf^ from coal sales and hence the ability to maintain wage
rates. Wage rates Just prior to tne Code were at tue lowest level since
191'6. ■ .
■Tne Code ■orovid'-d for a schedule of minimum rates of pay for inside
skilled day labor and outside common day labor (Schedule a) . Except for
a small portion of .the industry in which union agre.^m^nts- were in e.ff ect
and continued under th" Code, the incrr='ases.. provided in this scnedul.e
w«re very, substantial. The following, indicates tne p.^rc^nt.age.- incr.-^ase
resulting in ado-ot ion of Schedule "A"^. in October, 1933, and contracts
ex=^cuted th.^-reunder in ar°as east of 't^ie MississipiDi . • , .
P^r C-nt.
Central P-nnsylvania
Maryland & Upper Potomac
Western P'=nnsylvania
Northern Vu'est Virginia
Ohio
Soutij-'-rn Sub division
No. 2 (Hign Volatile)
Average above '50,4
Alabama ■ . ; ' 64.3 ,
Illinois & Indiana ' No change . - continued operating-
undf^r existing wag^^" contract.
Again, in Anril, 1934, hours were reduced from 8 'to 7, and wages
were increased, '..'hile no composite measurement of tne daily average
increases effected can be mad- , the following shows tne .increase in ttie
wage cost per ton for 'imiiortant ar^as: . ,
. Eastern Pennsylvania
Vifestern Pennsylvania
Ohio
Northern 'West Virginia
Southern No. 1
Southern No. ?.
Maryland & Upber Potomac
Tne wag-- cost ner ton for Division I (exclusive of Southern Sub-
division Nc . l)- ./'^stern K ntucky and Michigan, after th'^ two wage in-
creases previously indicat'^d. av-^raged vil,153 per ton as compared with
the estimated wage cost of 61.4 c -nts in May, 1933. Applying this in-
crease in Wage cost per ton to the total production in these area5 of
Division I /or tne coal year April 1, 1934 to March 31, 1935, which
amounted to' 206 ,000,000 tons, the ihc'reas-- in trie wag-=> bill because of
nours and wage-rate changes in the Code amounted' to the tremendous total
of $111,000,000. The estimated number of employees in th" subdivisions
embrac=>d in tne- above mentioned area is airnroximately 265,000. On the
basis of tne calculated gain in earnings for April, 1934 - March, 1935
coal year, the averagt^' increase per worker for tnat p-^riod was $419,
compar'-^d with wnat the earnings would nav-^ been if May 1935 wage rates
and hours had continued during this period. If the estimated output
per man per day be tak'^n as 4.2 tons, th^-n on this basis the daily wage
0837
Per Ton Wage
. Per Cent
Cost
Incr-as-
Increase,
22.9
C<-nts
21.5
20.0
20.2 .
19.9
20.9
22.1
28.5
20.3
■' 21.5
21.2-
24,2
20.0
n
17.8
increaGed $2.26 after April, 1934 as a^rainst tnat wLicr: mignt hav^ b'^en
secured by the May, 19o3 rat-s. Tne oroduccion for wnich tae foregoing
gains ariToly re-nr^-s -nted aoout 57 per c-nt of tne total production of the
industrj' during tne coal year.
Vfnile tnp experienc=^ in this ar^a was probably outstanding in the
industry, th'= oth^r areas also reflected substantial increases in tne
returns to labor under tn^ Code.
It is also significant to note that tn^ Cod=- structure of wages
continued beyond May 27, 1935, when tne N. I. R. A. was d'=clared un-
.constitutional by the Suprem-' Court. Altnougli operators and United
Mine Workers failed to arriv- at agr^em-nts before tn^ expiration of
tneir contracts on March 31, 1935, by a s^-ries of truce agreements tne
wag- schedules -ond'-^r tne Code were continued until October, wnen a new
series of conti'acts b-carn" eff ^ctiv- . Thus, tn- momentum gained under
th° Code as to w^g^ rat-s carri~d tnrough the intervening period oe-
tween the collaps- of the K.H. A. -ind the Passage of the Bituminous
Coal Conservat.ion Act of 1935 and laid tn'^ foundation for new contracts
at substantially incr-^as-d wage rates. Details of wage ciianges and
earnings are discussed in diapter IV.
Wage Differentials:' Vt'ithout -question the most difficult problem
met in the formulation of tne Coal Cod*- was the matter of minimum rates
cf pay to be prescribed. This revolved not so much on the absolute
level of wages but rather on the relative levels for thi^ different areas,
that is, as to the differences in the minimum rates among the various
areas. Since wages constitute fiO-65 per c-^nt of costs, the relative
lev>^ls of wages go to the very core of the question of survival in the
various competitive markets. The problem of relative levels of wages,
or differentials, is affected by and must take into account many ele-
ments, most important of v;nich are:
1. Productivity of labor (output per man per day). This
is affected by geological conditions, such as seam
thickness, pitch of seams, partings in coal, under-
ground water and drainage, character of roof, etc.
Mecnanization is also a very important factor.
2. Quality of coal. This involves ciiemical analysis,
pnysical structure, fusibility, etc., whicn bear
directly on th;- relativ-' values of coals in tne
marke t .
3. Freight-rate differentials or tne differences in cost
to place coals from diffr-r^nt producing a.reas into
common mark'=-ts.
4. Competing fu'^'ls, especially natural gas and fuel oil.
Tn-^ compptition of natural gas is particularly impor-
t-mt in Divisions III and IV and greatly limits the
ability to pay wages.
0837
Fast history of the industry reflects the influtnce of the,se
factors in the consider-^ble range of the wage rate levels which existed
amonf the various areas of the industry. 7rom the beginning of negotia-
tions looking to\7ard the formulation of a code, it '^as recognized by op-
erators and labor alike that some pattern oi vage differentials must be
developed, to give exr)ression to the purpose of MA to increase real
labor income as greatly as the ability of the industry permitted, and
at the same time to' avoid Durdening' any section of the industry to a
point of destruction, ^'actual bases for such a determination at that
time were scanty indeed. There existed practically no data on costs of
production for the different areas, and such as I'ere available were too
old or fragmentary to place reliance upon i or arriving at specific min-
inum ra.tes. Accordingly, the Question of difierentials was resolved
through prolonged negotiations a.nong, operators representing oiiferent
areas, labor representatives, and the NiiA. The end-product, "Schedule
A, ivlinimum Kates of -av", was a coTOOsite of compromises, in some in-
stances reluctantly made and agr^feed upon only as provisional settlements
until such time as the -oroblem could be worked out on a basis of facts.
That the schedule was considered tentative' was recognized in the Code
under Article V, Section (g) which provided that the KaA should undertake
an investigation and report on or before December 31, 1933 on the "advis-
ability of revising mege diff erentialu in the. various divisions and dis-
tricts of the industry and in the event of recommenced change, specifica-
tion of the amount thereof."
Because of the limited time afforded, data were not available
in time for the -oreparation of a report with recommendations covering dif-
ferentials that should be established. It should also be pointed out that
the provision in the original Code for a report by kr.A on differentials
was never carried out.
V'hile several subdivisions urged that tne matter of differentials
be taken up at a public hearing by VIA prior to the expiration of '"age
agreements on March 31, 1934, no ac^'ion in this direction was taken. After
a series of meetings late in llarch, which consisted mainly of convening
and adjourning until a later day or hour, the Ohio, 'ivestern Pennsylvania
and Eastern Subdivisions, on l.Iarch 30, submitted to a conference of the
whole industry a pro-^osed revisior of minimum rates of pay and differen-
tials for the entire industry. This proposal narrowed differentials gen-
erally, though in differing amounts for the affected areas. Immediate
and vehement protest was made by a number of areas, particularly Divi-
sions III and IV, ■'/estern Kentucky and Northern ..est 'Virginia. On iviarch
31, the Administrator of WrA declared that an emergency was threatened
in the industry because the wage negotiations had not been concluded
.and no agreement had been reached as to wages beyond larch 31, ^nd
thereupon proioul -ated Amendment 1 to tne Code, setting forth the schedule
of rates recommenced by the three Subdivisions referred to.
This action on the part oi ■ the Administrator was widely considered
among industry members as arbitrary and precipitate. The outcome
deiaonstrated that a solution ol the ciif erentials question niast be
founded upon adequate facts and after deliberate consideration among the
affected parties. jrour major alterations of the Amerdi.ient 1 were made:
9837
1. The increase set forth in the basic inside skilled
rate for Alab-'^ma --ps reciiced fron $1.?0 per dpy to
40 cents per day.
2. The increase ol' &b cents per day in J^iVi.sion IV vtrs
reduced to '-5 cents for deep mines and 60 'cents for
strix) mines, thus recognizing the relative ability
to ppy as a factor in setting rptes i or deep as op-
posed to sti'iD mines.
3. The increase oi 50 cents per dry for . estern Kentucky
vas not recof:ni2ed by that arer, which -as successful
in the j^eder^l District Court in having' pn injunction
granted agpinst tiie '"'ag" rruvisions of the Code.
4. .A deterMination oi increases for ton'^'age men in Northern
West Virginia in excess oi that nDroviced in other areas
in Division I.
That these adjustments in difi erentirls ^ifered no final solu-
tion for difierentipls ^pb reco.e:nized in Amenciaeht 2 -hich provided that
p special unit be set utd in tht l-,.eseprch rnc plan'ning Division of NRA.
to study vrpge rates and report to the Adunisti ptor its lindings and recom-
mendations. Also, the ATDoalacnian '-'^age Agreement provided for the estao-
lishment of the Fortn-South Differentials C-.miission, com-osed of o-Dera-
tors from Northern and Southern Subdivisions oi Division I and reriresen-
tatives of ^'nited dne '".orkers.
The investigation to be made by I'xJi under Amend lent 2 was unable
to get under vay becfuse the Subdivisions oi Division I could not agree
on the cortent of forms to be used in collecting necessary data.
The Oiiio and Fennsylvrnia Subdivisions "ould agree to the collection of
only limited data vhich "'ere considered by the l.esearch and Planning Di-
vision to be cuite ina.deo/aate to suncly the basis for a factual study.
The Southern Subdivisions were vrilling to accent tue proo:,sals of t'HA.
The efforts oi TTi-.A to settle the controvtrsey '"ert wcrk, vacillating
and futile,
Tne fate of the ^ortii-South Differentials oranis-:ion activities
'"as similar to that oi hPA. Ivo a-^reeiatnt coulc be mace as to the basis
upon which their vork 'vas to procetd 'fith.the result that nothing was ac-
complished.
Thus, the Code -passed into history '-ithout carrying out any of
the TDrovisions in the original Code or its araencments resriecting the study
of differentials or adjudicating tht many claims and counter-claims as to
the economic validity of the rateF- as esta-jlished during the Code. In the
Ap-oalacnian ' pf.e Agreement oi Setitember, 1-/35, as i^as true in the April,
1934 agreement, provision vrss made for the study of differentials, thus
picking up "^here the NrlA left off in the matter of ultimate solution of
the -Droblem,
9637
Ho'i'ever, the unsettled stptus ox ciii erentipls coes not '-arrant the
conclusion that the schedule oi' .ainiinuLi rates established vas ^I'ithoat merit.
On the contrary the wage pattern '-'as one of the outstanding achitveraents of
the Code in that it substituted a deiinite, solid foundation for costs in-
stead of the shifting, unstsblt, uncoordinated and unpredictable basis that
had existed previously. It set de.initt, standards as among the various areas,
vrhich, when tested by the experience of tiiae, '.-'ould re-aal any ineaaities
of the rates. Claims of injustice coulc then be scrutinized in terms of
comparative costs and the relative abilities of the various areas to main-
tain their Dositions in the industry. Such data as were collected on
costs and realization under the Code die suggest tne necessity for modifi-
cation. If an adequate fact-finding program under the WixA had been
accepted by the industry (or othen-^ise made a pre-requisite by KEA to
the continued privilege of -Drice-i ixing by the industry), the basis for
an equitable and economic vfage structure '■idtii sound differentials '"ould
have been laid. Until an adeouate basis in lact is estaDlished, the wage
pattern for the industrv rests uT:on the bargaining strength oi the oper-
ators of the various areas and the representatives of the emiDloyees, '^dth
probable repercussions as developed under the Coce. Jor detailed dis-
cussion of differentials, see Charter IV.
Collective Bargaining: iollo'fing the ex-oiration oi the Jacksonville
'B.ge Agreement in April 19?7, tne extent of collective bargaining in
tne bitu;iiinous coal industry fell to the lo'i^est level since the estab-
lishment of the joint conference for the Central Competitive JTield in 169b,
Prior to the Code in 1933, the -orincipal area having ^^age agreements com-
prised the States of Illinois, Inc iana and lovrr. Some contracts were also
in eftect in the Soath--'est Interstate fields (Arkansas, Oklahoma and
Kansas) and in the Rock^'- .lOuntain pnp. The total tonnage rjroduced under
union contracts T'as prooaoly no ^lore than 15 percent oi the total for the
United States. Previous to approval oi the code, even anticipating the
adoption of the NIEA, a wavt ol union organization s^ept over the industry,
i:;ventu8llv close to 95 percent oi tne" labor emploved ^as T'orking under
coll'ective bargaining agreeiiients entered into beti"een the representatives
of organized labor and operators. This represented tne all-time peak of
collective bargaining in the incustry and large portions of the incustry
■:'ere thus served which had hitherto never engaged in tnis type of operator-
labor relationship.
Another important feature of collective bargainins:^ i-as the change
irom the Central Coapttitive area basis to the Appalacx.ian area oasis.
Hitherto, the principal collective bargaining agree:.ient applied to the
Central Competitive lield - Illinois, Indiana, Ohio and '.estern Fennsyl-
vanip. ', ith the advent of the Code, the principal agreement became the
Appalachian Agreement, "hich recognized the gro'-ing conviction that
stabilization "'ithin the industrv intolar as labor aspects were con-
cerned required the joint solution oi Hortn-South competitive relations
of the industry.
Industrial Peace: One of the outstanding aciiievements of operation
under the Code was the high degree of industrial peace v-nicn prevailed.
Laoor relations entered a new phase in the history oi the industry.
9b37
-7-
Sectiuns of the industry in i^uich collective bprgainin^ had never existed,
entered into w^ge net;otiations or e sincere and cooperptive basis. It is
trij.e that a number of serious situations developed at different times and
pl.-'cer, but these veru usurlly of short exudation and extended over relativelv
li:.iited territory. In ter'as of the industry as a "'nole and compared with
previous labor disputes, the Code period compares tavorablv with anv in
the history of the industry. Wage contrrcte entered into vere reiuarkaoly
v"ell observed throughout tneir life„
It is significant to note that t'-o contrr ct periods exrired without
the completion of contract arrangements for the industry as a vhole.
Yet- neither in the spring of 1934 or 19b£ did this situation result in
a -orolonr-ed susrension in o-neratiors as hrd occurred on so many similar
occasions in tne iiast. Thir was TDarticularly true ^^t the end of narch,
lyot. Tnrough the good on ices of the TaA, extension of e.visting agree-
ments until June 16, -,/as agreed to, obviating the necessity oi suspension
because oi inability to agret on the ter.is of r new contiact."
The Code served ^s a vcidcle i'or brir.^ing together the various
sections of the irdustr-'- anr la^or, "-hicn had never occrarred before for
the industry as a vrhole. It served to break dorn the comrartraentalized
barriers '"nich existed rirev.i-Ously and cevelo-ped a considerable STjirit of
"give and t^ke", to arcreciate th._ r.roblems of other sections and of labor,
and. a desire to -cromote the ^--eneral vjeliare of the industry in which all
segments 'ould necessarily ben^lit. It develoi^ed a recognition that ar-
rangements as to wpg-es or 'orices which tended to crinply unduly any sec-
tion '-'Ould operate as a booiaerang to otAer sections. T-^tter enemies of
the TDPst vrere ooligated to rather around the conference taole, and altnough
a grer't manv of these meetings broke ur- without accomrlishment, others
were orodiictive of the solution of -Derrilcxing nroolems. One of these de-
velorments '"as the Apnalpchian conference which brought together the
northern and southern sections of the Appalachian regi-jn. For the first
tii^e in history, Ohio and Pennsylvania joined with V,est Virginia and
Eastern Kentucky in the working out oi a joint ^-age agreement, this con-
ference .-u-oerseding tne old Central Comet titive Conference vaiich no
longL-r served the economic dtveloiriient ox the industry.
Prices: The concurrent "-age and price deflation, beginning in
1924 nnd continuing until the suianer of 193o, cemonstiated the utter
inability oi the industry to achieve a staoilized basis short of complete
bankruptcy ol operators and pau:-;erization of employees. In recognition
of the interdependence of '-'age costs and prices, the Code granted the
privilege of minimum price-fixing to efiectuate the minimum rates of
-agts established, and other provisions of the NIxiA and the Code. It
'7as argued by the industry, ano. accepted by the iMational Recovery Ad-
mmisti'ation, that any regalrlion of the industry affecting wage and other
costs, or otherwise restraining freedo).j oi "ction through trade practice
provisions, mast necessarily be accompanied by the 'uar-ntee of adequate
income to support such additional burdens. Fo spe«ific standards for
prices were estaolished, except for tne general terms "faiC market price"
as determined and approved under the Code.
9837
The Code "as successful in materially increasing; the level of
prices in the industry. In 19o?, recording to tne U.S. Burepu of i.-ines,
the average realization for ell corl, f.o.j. mines (captive plus commercial)
vas $1.31 as compared with $1.7o for iy3'±. Hovever, the increase for com-
mercial production alo^e (with r.'hich the Code and rrice-fixing were
primarily concerned) '-as much grefiter, as shown for Divisions I, II and
III, which represent about 90 percent of the total production of the
United States:
Aveiage liealization Average Kealization
Comraerci-'l Hines Coiamercial ivlines
1932 AT^r. 1934 - Jan. 1935
Division I $1.10 ^ $1.90
(Fenna. , Ohio, .vlich.,
Ky., -.Va. , Va., Kid.,
and Northern Tenn.)
Division II 1.53 1.69
(III '■, Ind. only.)
Division III 1.57 2.25
(Ala. , So. Tenn. .?- Op. )
\teighted Averpge 1.87
The increase in realization biou^lht about by the Code was even
greater than indicated in the preceding figures for tr-o reasons: (l)
During the first half of 1933 prices fell to greater reoths tnan 1932.
It has been estimated by the Coal Unit of the Division of xieview that
the Average realization for commercial mines of Division I during the
9-month period prior to the Code (January - Septemoer ly33) was only
$1.03 per ton as coaipai'ed with l^I.10 lor 1932. (1) The average
realization under the Code was diminished soiiie\"hat because of deliveries
made on contracts entered into -prior to tne Code at less than Code
prices. The reductions; per ton in averrge realization resulting from
these belov-Code-price contracts cannot be ascertained, but the indica-
tions are that these ranged iron practically no diminuti-n lor some
areas to rios.sibly as mucn as 20 cents per ton for other areas in
certain months.
Anotner adverse eiiect on realization was the failure oi operators
to observe at all times the Code prices m effect'. Tnis non-compliance
became a 'natter of grave concern early i'n 1935. The extent to i"hich
Code prices vrere not observec is not kno'-n, but common gossip among
operators was that prices were breaking:, that is, the "other fellow's
prices". The cc^mplaint was made repeatedly that the machinery for
compliance enforcement was lacking or failed to function. It became
evident that reliance on price-fixing depended almost entirely upon the
voluntary observance of prices by producers rather than upon the sanctions
of law or the Code. This uncertainty in the ability to maintain what
in effect was a voluntary price structure raised fears in the minds of
9837
Iffbor that the wage structilre vould be jeoDP.rdized if the situation
continued. Accordinjgly, the United i.iine workers prepared and s-Donsored
& bill for regulation with "teeth" in it to brin^ about compliance
to estpolished prices. This later became, in modiiied form, the so-
called fraffey Act, or the' Bituminous Coal Conservation Act of 1S35.
Because of the weaknesses in tjrice-f ixing under the VIA Code, a majority
of the operators eventually joined with the United Mine ■■ orkers in
support of new legislation. For details of price-fixing, See Chapter VI.
Costs: Although specific standards for price-fixing v.rere not set
forth in the Code, the test of costs may well be used to show the
reasonableness or unreasonableness of the level of prices established.
As indicated in the resume of lorices, Code -prices were somewhat higher
thrm would otherwise have been necessarv had not part of the coal been
sold on contracts entered into prior to the Code at less than Code
prices. However, granting at this point some degree of inecuity as
between pre-Code contract -orices and Code prices, the sliowing of
average realization for all sales i"ith the average cost of production
indic-tes on the "hole ouite reasonable results. There appears no abuse
of the privilege of price-fixing in the sense that excessive price
levels were established as compared witn cost of production, administra-
tion, and selling. For the lO-month period, April 1934 through January
1935, the following '-'eight ed average costs and realizations resulted
in the areas representing approximately 90 percent of the nation's
production:
Total Costs (*) Average Realization
Average _ Commercial Tonnage
Division I ' $1,692 t.1.897
(70-72-;a of total production
of U.S.)
Division II (III. c. Ind. only) 1.54-5 1.629
(15-17;. of total)
Division III 2.296 2.254
(Ala. , Southern Tenn. and Georgia)
(2-370 of total)
(*) Costs exclude' capital charges ( interest or bones, etc.)
jhile the average r'alization increased mrterially under the Code
as compared vith pre-Codc, it is evident that this increase was necessary
to carry the costs of production incurred under Code provisions.
Financial Improvements in the Industry; The financial record of
the bituminous coal industrv, as sho^n oy Internal Revenue Reports,
reflects the ecoromic decline of the industry after 1923. In the gen-
erally prosperous years of 1928 and 1929, the industry reported deficits
9837
•IG-
of $24, 50b, 000 and $11, 62?, 000 resptctively. In the succeeding four
years the deficits ranged fro.n $42,071,000 to $51,167,000. This
experience 'rp_s in marked contrast to that under the Code; fhile
"Statistics of Incone" are not available for 1934, the statistics
of cost and realization collected oy the FRA. , indicate a greatlv
improved financial condition, as sho'-^n in the Dteceding comparison
of costs and realization.
It is anticipated thpt vhen Internal Revenue figures for 1934
are available, the deficits reported vdll be greatly reduced as compared
with the preceding four years. It is doubtful, ho^^-ever, whether a net
income for the industry as a whole will be sho^nn. The conclusion of im-
proved financial status is amply fortified by many statements of oper-
ators to that effect given at -oublic herrings. In the trade -oreF-s and
otherwise. The improved status is also reflected in the resolution
adopted by the National Coal Association at a meeting of its directors
in October, 1934, v-hich out tne Association on record as favoring the
continuation of the Bitu^aincxis Coal Code.
Another evidence ras the maintenance of wage rates under the Code.
Vihereas prior to the Code the Trescure to reduce vages ";as experienced
'•■enerally throughout the industrv, the record under the Code was most
im-oressive in terms of compliance vdth minimum rates of pay and wage
agreements made thereunder. If the financial status of the industry had
not improved materially after adoption of the Code, the likel.ihood of
increased vages in April 1934 and rgain m September la35, ipould have
been remote. However, the substpntial increfvsas at the times indicated
have not resulted in any concerted violations in any arep, - in ot?ier
Fords, the industry has brien financially pble to carry th= increased
costs by virtue of en improved econo.aic status.
Allocation of Tcnr,af.:&: During the decrde precedinf; the K-J, the
flovf of coal from the various producing aroas vas tremendously affected,
some areas gaining enormously '-hile coi'resooiidin^'; losses occurred in
others. (See Chapter I, pa^je .) hiio the Code did not provide for
the allocation of tonnage among producerr,, it did'declaTe that in -deter-
mining the fair market price conrideration ?hould be taken of competition
with other doals, etc. One ot th(. first proble is aj:ter the Code was
adopted was -the correlation of nrices among tht various Subdivisions,
for the -purpose of estaulishmg a fair ::Tarket opportunity for the dif-
ferent producing ^ reas. Essentiallv, this resulted ir a freezing of the
flow of coal as it existed prior to the Code. Areas which had lost
heavily in their share of total production after 1923 (Illinois, Indiana,
Otiio, and Fennsvlvania) felt that they were entitled to a greater share
to restore the earlier relationship, while est Virginia and Kentucky
argued they ^^ere not responsible for the industrial and labor policy of
t; e north which resulted in shifts in tonnpge. The problem of so adjust-
ing prices that, the- relative market opportunities for different groups
would not be undulv disturbed become very difiicult and at times acute.
Finally in the summer of 1934, a scheme kno^n as the "adaras =lan" was
a/'Tf-ed to h' the sixbdivisions of Division I, in which the percentages of
tonnage that each area should enjoy out of the total for the Division
9837
Fere fixed. As each Month's production becrnie known, the results were
to be compared with the percentages fixed. If an srea fell below its
share, it should then be privile£:ed to reduce its prices to such extent
that would allo'- it to recapture the deficiency in its- share. In other
words, the -olan was essentially an effort toward rhysicrl allocation
through the indirect method of adjusting prices. The plan continued for
six months beyond which .".'astern Pennsylvania Subdivision rt fused to agree.
Any plan of ;niniraum price fixing in the bitu'.ainous. coal industry
must recognize established movements of coa!]- if certrin sections are
not to be destroyed or greatly reduced in their positions in the indus-
try. Therefore, rrice-f ixing becomes a roand-about method of production
control or allocation, and tends to preserve the wealrer econcdc sections
of the industr^^ and retards tno adjustment of excessive capacity to the
level of consumptive demands. ' hether in the long run allocation of
tonnage through the, indirect method of :r ice-fixing could be maintained
is highly probleinatical. The difficulties under the Code appear to sup-
port the proponents of direct allocation oi production.
jactual Basis for Promoting Incustry aefc:ulation: One of the
greatest handicaps in tne for;Talation ana administration of the Code was
the lack of certain types of factual information upon which to predicate
minimum '■■^'pge and price determinations, at ivhat relative price levels
could the various areas compete in the Different markets with the maximum
of equality of opportunity? V.hat relative wage rate levels could the
various .areas support without excessive penalty here or undue advantage
there? These two questions — probable income per ton under a system of
correlated price fixing on the one hand, the costs of production reEU.lt-
ing from minimum y"Pf;e rates and raaxi/rum hours provisions on the other —
required precise and comprehensive data vhich 'lere not available. The
deteriaination of tnese questions when first presented had to be accom-
plished through a process of negotiation - of .^Ive and take. The Code as
adopted in September 1'j33, recognized the need for the collection of data
on costs, realization rnd wages in order to establish bench marks for
future action and a review of the ceter^iinations made in establishing
the Code.
Accordingl-.', an elaborate program of statistical reporting was
established soon after the adoption of the Code, e-ibracing costs, income
from coal sales and employment and earnings data. Considering earlier ex-
cursions in the field of costs and labor earnings statistics by the Gov-
ernment, the response in the early months to the program was quite re-
markable, v.'hen the results became available, however, the attitude
towFrd fact finding lani^uisiied some^'hat, pai ticalarly with reference to
labor statistics. Here, as might be expected, the results did not
justify the determinations made with reference to minimum rates of pay,
or so at least it was argued by those are-s that felt thty had been
discriminated against. The difficulties tnat arose from the showing for
different areas of the earnings of piece-workers led to interminable
wrangling as to revision of methods used in the original reporting, with
the final result that reporting on emplovm>int and earnings data was
completely discontinued.
9637
On the other hand, since the results were not as contentious in
their nature, the reporting of costs covered a rerioa ox" 15 iiontns - from
Eovemher 1933 throup-h Jf^nuary 1935. Trds ppraliec to divisions I, II and
III, '7ith exceptions iox " esterr Iventuclo,'- and lea, vhich failed to
continue after the first 3 or 4 months. Like^"ise, cost reporting failed
to carry on heyond 'arch 1934 in Tivisions IV and V. Hie results of the
statistical reporting have been published by the ¥BA in four volumes.
Vmatever may oe said of the inadequacy of the fact finding program,
the statistics on cost fill a significant gap in the records of the
industry. On the basis of the cost and realization information .made
available, it is possible to discover fundamental relations in the
economic status among the various si^ctions of the industrv, and to
arrive at reasonable limits i^ithin vhich the decisions of regulation
must be made.
The published reports have been eagerly sought by members of the
industry, trade fssociations oi operators, \7a::e conference members,
labor representatives, consumers, students of the econoaics of the industrv
and others. Undouotedly, one of the contrioutions oi Nx-lA wps an in-
crease in knowledge of basic facts of costs and realization of the
industry through whicn the solution of its problems might be achieved
i^-ith a maximum dc€:r ee of equity among the various contending interests.
9637
CKAPTSR I
(.)
THB SI2in/:iM0US COAL IirifuSTHY. ITS HISTORICAL
BACKi>H0Uin3 MB FR0EL:^L3
Intelligent i-eviev; and understanding of the bituminous coal
industry's experience under the KEA requires a consideration of its
prior history and problems.
THE IlIDUSTRY'S 3ACEG-H0U1\TS
The United States possesses withiu its borders approximately half
of the coal resources of the world. Except for relatively inaccessible
portions of the public co:iiain in the Rocky Mountains, practically all
of this vast storehouse is privately ovmed. ?^hile, measured in terms
of aiinual needs, these reserves represent a supply for hundreds of
years, the urr'^e of the present generation of owners has been to reduce
these resource assets to current income. In many cases, the burden of
coal-land taxes and of c,-?rrying char^^es on investments already incurred
compels owners to develop properties without jregard to the economic time-
liness of their exploitation. While not as desti^ictive economically as
the law of the capture applied to oil resources, nevertheless it has
fostered excess capacity, overproduction as compared with demand, low
prices for coal, and resulting starvrition wages for workers.
In order of rank, coals fall in the following categories:
Anthracite (hardest)
■ Semi-anthracite
Semi-bituminous (really super-bituminous)
Bitijininous
Sub-bitu'Aiuous
Lignite (softest)
(a separate group commonly known as
"cannel" coal) .
The bituminous eoal mining induotry, as contemplated in this study,
includes the recovery of all kinds of coal except anthracite, by either
underground or "stripping" operations.
This basic in'histry has occupied, and still occupies, a strategic
position in the economic life of the nation. The families of over half
a million workers represent probably well over two million people who
depend directly upon this industry for a livelihood; transportation and
distribution services raise this number very materially. Millions of
our population rely upon an unfailing supply for heat, both in homes and
in offices; railway's consu'ne upward of 20 per cent of the total; industry
operates very largely upon energy derived from coal.
(*) By F. E. Berquist and Ellery B. Gordon.
9837
-14-
Froduction. Bep'inniiv^ v/ith the eighties, production kept pace with
co-.siirnption, approxinatelr' douTjling in each decade dovm to the beginning
of the World War. Diiring this period of gradual industrial expansidnu,
the industry developed alonj- with the growth of all other industries and
was the chief soui'ce of en-rg:/ used in the production of light, heat and
power.
In the pre-war year of 1913, production reached the total of
478,435,000 tons. Beginning v/ith 1916, production was stepped up rapid-
ly, due to v.'ar activitv, and reached its all-time peak of 579,386,000
tons in 1918. The enormous development of ner mines during this period,
extension of railroads to serve them, and formation of companies to
operate them, presaged the ruinoiis deflation which he/jan in 1923 and
finally came into full effect in the depression years from 1930 to 1933,
In a futile effort to retain the markets whicii had beeii opened to them,
operators cut and r:cut their prices. Despite their "oest efforts pro-
duction declined until the low figure of 303,907,000 tons was reached in
1932, the lowest production in any year since 1904. (For annual pro-
duction see Chfpter III).
It must "be home in mind that proauction directly, it might be said
almost immedi£:.tely, reflects current market demand. Coal is mined and
shipped when and as needed. Storage at mines is practically nil; dock-
'^.torage is maintained on the Great Lakes and at some coast transshipping
points; public utilities and steel plants maintain storage piles; these
represent as a rule only 15 to 60 days' sup:nly. Hetailers possess faci-
lities for stocking, but seldom utili^ie them to capacity except in early
fall in anticipation of the first cold weather demand. In times of
shortage or threatened shortage from, whatever cause, stock piles have
bean built up far beyond normal practice. &enerally, however, dependence
is on uninterrupted mining and transportation. YiTiti the exception of
coal shipped to tidewater docks, aiid to lake docks duiiur, the open
shipping months, it may be state^~ that coal is largely purchased before
it is mined. At no time has capacity to produce been fully taxed.
Excess Cap^cit:: for Production. Kine capacity increased with the
growing development of the industry, was stimulated during the war
period, and continued unabated until 1923. Attractive high prices for
coal furnished the incentive. In that year capacity reached its peak,
and thereafter receded rapidly ui~ til 193-''-, due to closing of mines by
3837
companies unp.tle longer to compete in tlie mnrket at the j\;oing prices. (*)
The bittiminous coal code becan-.e effective in October 1933. Prices
were fixed at levels relater'. to a g,T.^atly increased wa-fce-bill and intended,
approximate at least, to avera.je the production cost. After years of
losses, the industry entered upon a code period of substantially higher
prices. Yfhile 5,427 operatin-;-; mines v/ere recorded in 1932, in the next
year 5,555 virere operating and in 1934 there were 6,258. (**) The in-
crease in num.ber of m.ines 'vsras due, in large part, to reopening- of mines
previously idle, though some of the increas ■ may hfve been new mines.
The U. S. "ureau of Mines has this to say in 3U.:i~!m-izing the pre-code
decade as a "period of liquid atibn:"
"So ..rrsat an excess above the needs of the raarket made
liquidation Ihovitable and since 1923 the industry has
been involved in a cntinuous process of deflation,
forcin- heavy financial loss and sharp reduction in
wages. 3etv/een 1923 and 1932 *** the net reduction in
the number of operatinj^ mines - commercial mines, not
wacon mines - Y/as 3,904 and the net reduction of oper-
ating capacity, 317,000,000 tons. In 1932 alone,' 215
mines with :xn /-mnual capricity of 83,000,000 tons shut
do\m.***'^ (**+)
This liquidation continued through the early months of 1933, but v;ith
the coming of the IJ.R.A. Coal Code, and much i.nproved prices fixed
thereunder, many marginal mines, previously closed, reopened.
(*) In the'U. S. Bureau of Lanes "Liinarals Year Book" for 1932,
;:ppears on page 393, an analysis of idle mine capacity in the
country and its availability for use in a period when higher
prices may bo in effect. This analysis includes the following
tabulation of mines which have been annually reported to that
Bureau as "idle" rather than abanloiied as worked out:
Capacity, tons
308 Days
219 had been idle since 1923 17,000,000
118 " " " " 1924 19 ,000 .000
83 " " " " 1925 13,000,000
151 " " " " 192r, 12,000,000
313 " " " " 1927 42,000,000
210 " " " " 1928 27,000,000
251 " " " " 1929 30.000.000
Total to the end of 1930 160,000,000
(***)
9837
These mines working 280 days would have had an annual capacity
of 145,450,000 tons. It is not possible to estimate dependably
hov; much of this idle mine capacity was really "suspended"
capacity rather than abandoned.
"Bituminous Coal Tables 1934," U. 3. Bureau of Mines, November
30, 1935, p. 1
Minerals Year Book 1934, p. 571, U. S. Bureau of Mines.
An ever-present capacity to produce tonnage far in excess of cur-
rent coiiFivinption, even of peal: deaands, has "been a potent influence in
the unrestrained conpetitive str-o^/jgle \7hiGh typified the industrj^ in the
pre-ilHA. decade.
The history of labor in bitunincus coal is inseparable fron the
industry's historj?-. It is narked b3'- hard-v."On recognition of collective
bargeaning, repeated periodic strikes, end. suspensions and lockouts
during the life or orgaiiized negotiation. Violence and bloodshed often
res'olted. Unionized areas expended their influence until the "central '
competitive field" (Illinois, Indiana, Ohio, TTestem Pennsylvania)
negotiated agreenents that formed the basis for all uage scales. After
1923, long continued liquidation of productive cai-jo.city, intense com-
petition on cut-price bases for a v.arket steadily trending dovmvrard in
volu'ie, has their effect on "ages; '-age contracts Mere revised, broken,
abandoned by oiiierators in one field after field until in early 1933,
Illinois a:id Indiana vrere the only important producing fields still
adliering to union contra.cts,
T'iis labor storj' is essential to a grasp of the industry's economic
life prior to KEA. The reader is referred to Chapter IV of this study
treating in detail the entire labor histoiy. Ho brief survey can
adeq-aately convey the dominating part played by labor relations in the
entire economic development of coal.
Intensive Competition; Consequent Pressure on
l.iethods and Costs of Production
Coal flors fron its many producing fields by a maze of hauls and
crosshauls to meet in competition for the iiarkets of the G0untr;% A
conception of the territorial extent and complexity of the distribution
pattern, as it has gro\7n, may be had from a charting of ijtie "Interstate
hovement of Coal in 1929," as shovTn in reiTOrts of the U, S. Bureau of
Liines,
lb v'ould seem unnecessar3r at this point to enter into detailed
statistical analysis of distribxxti-^n, since it will be exhaustively
treated in a later section of t'-ds study devoted to "production and
distribution," Tli^ following map , irip^-essively protra;^s a widespread
inter;;ingling in interstate com- lerce of coals shipped from all important
producing centers.
In 1529, the last .year for .which detailed distribution data are
available, about 74 percent of the total sales entered interstate commerce.
The other 25 percent w^re intrastate in character.
The straggle ar:iong producers and districts for narlcets and for
greater shares in the available tonnage in the consuming centers has been
a bitter one. The total business available did not increase in propor-
tion to the expansion of general industrial activity and prosperity be-
tween 1923 and 1S29. A glance at the yearly production record, shovm in
chapter III sufficiently discloses this fact: average production per
year in the 6 years 1924 through 1929 was 522 million tons, only a 7
percent increase over the average of 488 million for the 5 preceding
years. Many factors were responsible for this slow growth, among them
3837
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72
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-19-
steadily increasing use of competing fuels and notable strides in fuel
economy-o Th,e internecine comoetition, involving freight-rate structure
with its differential rates, frozen wag^-rate levels in unionized
territory in contrast to the freedom of non-union fields to maniiDulate
wages downward to conform to price reductions, and other considerations,
resulted in major, violent shifts in the relative share of 'narkpts among
the producing fields. This struggle took the form of price warfare;
production of sized coal to more intensively exploid the retailer as
an outlet for domestic sizes, chemical treatment and washing, with the
same objective — improved merchandi singe
This bit<-er- competition from both within and without the bituminous
coal industry, accompanied by orice warfare, pressed so heavily urion
costs that resort was had to every possible means to reduce cost of pro-
duction. Labor, as the major cost element, offered the greatest oppor-
tunity and consequently stood the brunt of the battle. (See Chapter IV
for full analysis of labor's plight during the pre-NRA decade.)
Merchanization of I.:ines was rapidly develooed. In 1922, mechanically
mined tonnage, both underground and in stripping operations, represented
65.6 percent tf the totil output, or 277 million out of 422 million tons.
By 1929, it har" reached 79.2 percent, or 424 out of 535 million tons.
The reduction in the amount of mechanically produced coal in the next 4
years was attributable to depression. Nevertheless the production from
stripping mines fell off little below the 20 million of 1929 and thereby
showed a remarkable percentage gain from 3.8 in 1929 to 5.5 percent of
total output in 1933. Underground machine-cut production also showed
gains relative to the total, so that in 1933 the total mechanically mined
tonnage reached 85.5 percent. This represents a relative gain of 30
percent in 1933 over the 65. 6 percent of 1922,
Data bearing on savings in labor cost incident to mechanization,
are scanty. Stripping operations as such, show a striking increase in
output per man per day - from 5,1 tons in 1914 to 13 in 1928 and to
15,67 in 1932. In deep mining an increase in prodaction rate, not all
attributable to mechanization (some influence undoattedly was exerted by
changes in length of working days), was experienced - the average per
underground man per day was 4,98 tons in 1922 in contrast to 5,78 in
1932.
In a study by the U. S. Bureau of Labor Statistics (1933) an
attem.pt was made to measure the effect of mechanization on eraTDlojmient in
the bituminous coal industry. (*) Says that study:
"If strip mines and mechanized loading minps were re-
placed "by mines producing at the same rate per day of
labor as other mines in the United States, an average
of 525,240 persons would have been necessary in 1930
instead of 493,202 actually emoloyed. Thus the potential
loss in jobs due to the efficiency of these mines alone
amounts to about 32,000." ***
(*) Monthly Labor Review, Fpbruary 1933, pp, 256-278
9837
"Had the man-day oatput remained at the same level as
■■ ■ ■ in 1910, 722,584 persons instead of the 493,202 actually
employed would have been required to produce the 1930
tonnage in 187 days (the average number of days of opera-
tion in that year); while for the 1929 output 706,^32
instead of 502,993 persons would have been required."
The paper rightly concluded that "many of the improvements in methods
and mechanization cannot be measured statistically in their effect on
employment opportunities." •
In some states, stripping operations account for a major -oortion of
the coal -oroduced. This method of coal recovery is almost entirely
mechanical; mining is by steam shovel and loading is mainly by revolving
shovels. Daily output per man is high, and costs per ton are relatively
low in this type of operation. This low cost coal enters, into com-
petition with deep-mined coal loroduced at higher average cost, with a
rapidly narrowing margin of quality disadvantage, although qualities
vary widely among stripped coals, Strioping contributes its share of
downward pressure on prices under any scheme of free comnetition.
Although in 1933 only 5.5 percent of the United States total production
was. from stripping mines, these mines occupied commanding positions in
certain states, such as Kansas, Missouri and North Dakota, with over
.60 percent of the total coal output; over 35 percent of the total in
Indiana and Montana; over 15 percent in Illinois, and over 11 percent
in Ohio, With the possible exception of the coal deposits in Kansas, .
it is doubtful whether the, coal reserves of the United States that may
be orofita.bly mined by stripping are even near exhaustion; the possi-
bilities of expanding the annual output are considerable. (*) The nro-
gress of mechanical mining may be summed up in tabular form:
(*) See f/iinerals Yearbooks; also Economic Taper No. 11, "The Econom-
ics of Strip Coal Mining," p. 3; U. S. Bureau of Mines,
9837
-21-
1-^ CTvCVI CVJ O O
O^ Cr\ rH I—I rH r'-\.
CM to r- to rH
VX) LCn LO C\J CM
-pj- irNLTMrMX^LrMTMrMPvirMOi lc^ j-
r^ I — c^j CO CVI t^ J- O LO>^ ro LPi
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CM. o^so to CPiK^ 1^ CM to CTivo oj r-
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r^UJ rH ^-D CM rH t-- r— LPi r^ Lr^ D r- -
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§^
— Lr\ rH f-Mbo cr> CO o
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• CM O I-— Lr\^ l-O CM O CjO LC^ J- ,"4- j-
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9837
CM to -f ir^^X) r^ to cTi o r^ oj ■•' , -+
CM O] CM CM rvJ CM OJ CM i'-N t^> to ro KA
c-^ o-\ o-\ o 1 en 'TA c^^ o■^ T^ c^ t.n en en
Fuel economy is of first importance as a factor in reduced demand
for coal. Losses sustained ojl this, apcpunt. have not been as large as through
other causes, hut these losses are permanent.
"For a time the effects of the moveraont were ohscured by the
munitions prosoerity and .the .disturbed conditions of coal
supply from 1916 to 1920. Interest in preparation lagged
at a time when 'anything black' was saleable; thousands of
mushroomlike small mines diluted the supply with dirty
coal; and war-time .zoning regulatioAs, priority orders,
strikes, and car shortages often forced consumers to accept
coal ill-suited to their ne.-ds. Thus, it was not unti:.
after 1920 that the effects of fuel econora7 b' g^n to
register themselves in the national demand. Thereafter the
movement gathered momentum, and for 10 years it has remained
perhaps the most important single factor in the market,
its effect remaining long after the immediate stimulus of
high prices has disaopeared. The c-omulative result is
summarized in the following statement, which shows the
average percentage reduction in fuel consumed per unit of
product from the beginning of the fuel economy movement
in 1909 to the end of the 'oost-war boom inl929, (Tryon,
F.G-. , and Rogers, H. .0, , .Statistical .Studies of Progress
in Fuel Efficiency, Transactions: 2nd World Power Conf . ,
Vol. 6, sec. 12, 1930, pp. 343-365)
Percent
Reduction
Electric public utility power plants 66
Steam railroads 40
Petroleum refining 36
Iron furnaces, steel works, and' rolling
mills i 25
Cement mills 21
All other manufacturing, apbroxiraately 21
(All industries and railroads combined, apurox ....... 33
"The average reduction in all industrial and railroad uses
combined is 33 percent. Stated another way, had there been
no advance in thermal efficiency during the 20 years and had
the efficiencies of •1909- continued without change. Ajnerican
business would have consumed 210,000,000 tons more of bituminous
coal in 1929 than were in fact required,
"Savings during this oeriod were not. sc much due to the
appearance of epoch-making inventions like those of Watt
and Nielson as to the cumulative effect of many small
economies and to the general application of improvements
and practices which the best plants had alrea.dy shown to
9837
-23-
"be profitable. " (*)
linproveraent in fuel efficiency in the electric oublic utility power
ol.gnts of the Unitt-d States; the fuel efficeincy of locomotives in road
service on steam railroads; the striking economies in by-iDrodact coke
ovens and in pig iron manufacture - as shown in the following t^ble
from 'J, S, Bureau of Min-^s reports - are examples of savings that ad-
versely affect the tonnage demand.
(*) Minerals Yearbook 1932-33; U. S. Portaa of f-in-^s; id. 400
34-
EXAI..TLES OF FUEL EC0N0I-,1Y
Electric Ptitlic
Steam
?iailroad
By-Pro
duct
I
ron & Steel
Utility Pov/er
Locoraotives
Cooking-
Coal
Blast Furnaces
Plants-Pounds
Pounds of
coal
equi"va,lent of
Pounds of coal
of fuel cons-omed
i:er-—
the gas,
tar,
per gross ton
tj
^ fuel stations
^r kilowatt hour
and oil
ered
recov-
of
fe
pig iron and
•D«
1,000
Cr.
Pass,
rro alloys
Year
ton niles
train
ITo.of t
ons
Freigiit
serv
. car mi
Las (OOO)
ornitt
ed)
1913. .
2,600
3637.2
1914. .
2,461
3519.3
1915..
,
,....-■
3,280
3351.2
1916. .
17^.,..
18.5
4,375
3421.1
1917..
19.4
5,432
3523.6
1918..
174.
19.2
6,785
3577.1
1919..
3.2
164.
18.1
7,575
3427 . 6
1920..
3.0
174.
18.8
9,316
3420.8
1921..
2.7
162.
17.7
6,461
3236.2
1922..
2.5
163.
17.9
9,058
3186.4
1923..
2.4
161.
18.1
12,417
3323.4
1924..
2.2
149.
17.0
11 , 628
3248.2
1925..
2.1
140.
16.1
13,786
3125.6
1926..
1.95
137.
15.8
15,394
3048.4
1927..
1.84
131.
15.4
15,642
3093.7
1928..
1.76
127.
15.0
17,426
3053.4
1929..
1.68
125.
14.9
19,262
2983.5
1930..
1.62
121.
14.7
16,923
2978.5
1931..
1.55
119.
14.5
12,482
2923.0
1932..
1.50
123.
14.9
8,572
2910.8
1933..
1.50
121.
15.2
10,287
2875.7
1934..
1.45
122.
15.2
11,505
2926.7
Figures taken from United States Bureau of I.Iines reports.
9837
Similar economies in combustion of coal hr.ve also teen practiced
in all Drriiches of industry &.nd have even reached the sma.ll domestic
user in his home. Improvements in house insulation; in more efficient
radiation; in automatic heat controls.; in ^^'reatlv improved standards
of furnace construction, hs-ve in recent years sharply reduced the con-
sumption of domestic coal ner capita. Still further economies in this
direction may "be anticipated as econom;^'- device's are promoted "by far-
sighted coal men.
As a corollary to all of the factors of combustion, efficiency
and econongr, it must "be borne in laind tlift they lia.ve been forced on
the 'coa.l o-oerators by the active comvietition of other fuels and if they
had not been encouraged by him, losses to other fuels would hr.ve been
much greater.
Com-^eting Fuels. It is obvious tha.t the level of prices wMch will
move coal -co market, is not determined by the industry; largely but by
the ability or agility of consumers in satisfying their requirements
from among all the fuels ordered. The truth of this is written in the
records of the industry during the past E5 years. As shown in the
following table, bituminous coal, at the opening of the century and
until the close of the war in 191G, was the so-orce of about 70 per cent
of the total energy-supply of the country. Emanding industry, car
shortages, va.T causes and other factors increased the delivered price
of coal to several times its former value from 1917 through 1923. This
led to the use of substitutes — other sources of enerQr.
Afforded every incentive for ej-^anding, the comncting fuels
promptly increased their output and agg;ressively entered the market in
competition with coal.
Althout^h bituminous coal is still the principal source of energy,
its shru-c of all ener^^ has stca.dily receded to the comnaratively low
point in 1954 of 46 per cent of total energy. This does not mean that
coal v;as actually replaced in every instajice by the total production of
the other .sources. Of the total quantity of petroleum produced in 1929
(1,007 million barrels) only S72 million barrels of fuel oil, or 36.9
per cent, were consumed. Of these 372 million barrels, 56 nullion
barrels were used as fuel by oil comorjiies, 93 million barrels were
used by steamships and tarJcers. Eliminating these tv.'o items as apart
from the domestic competitive picture, leaves 323 million barrels or
the equivalent of 51.86 million tons of coal which may more properly
be considered as in coimietition with coal. The apparent, magnitude of
the displacement of coal must be carefully examined in terms of the
nature of its use as well as the geography of its consumption. Of this
residual ?23 million barrels, California alone consumed, for all
pur-ioses, SO million and Texas 52 million barrels. While it is
difficult to measure the prq-jortion of coal displacement in the 1929
consunroticn of oil (314 million barrels excluding tha,t used by oil
companies), it is proba,bly less than one fciurth, or the equivalent of
about 30 million tons, accordin;; to the I's-tional Industrial Conference
Board.
9C37
The same careful examination must be made of natural gas. Elimina-
tin;^: t:ie ^as used in cai-bon-tlack rmnufacturc (261,107 million cubic
foot) ar.d field and refinery use (C08,812 million cubic feet), 848,000
million cubic feet remain, which the national Industrial Recovery Board
classifies as "conrpetitive '.Tith coal." That portion v.-hich is consumed
in Texas, California, Oklahoma, 335 million feet, if combined with the
gas consuiiiption of Kansas, Arkansas and Louisiana, leaves onlj/- about
Imlf the total entering, directly into comx)etition with coal.
notwithstanding the severe depression years of 1929-33, the
natural j,as industry expanded. Since 1929 the competition of natural
gas lia.s been extremely acute in certain markets. Instances have been
alleged of natural gas offered to consuraers at rates which meant that
coal, to compete, would find it necessary to sell at approximately the
cost of transportation alone, in some instances at best, a few nickels
or diaes per ton at the nine for the producer. The offer of natural
gas, as well as oil, in some of the: coal markets at practically
"dnj-nping" prices, liad disproportionately depressed coal prices before
the- institution of IIEIA. codes and price-fixing in bituminous coal.
This inter-fuel corrnctition. calls not for imposition of sup-
pressing methods so much ^s for coordinated planning and the develop-
ment of a program to deal constructively with the problems of these
natural resources.
number of I.Ijhes and Relative Production by Size Groups. During
the post-v/ar years, a large but diminishing number of mines remained
in operation. The accompanj'-ing table shows the number of mines whose
production in selected years placed them in one of 6 size groups. The
figures after 1923 a.re not strictly coranoarable with those for 1922 and
1923 because after those years the annual survey took no count of wagon
mines producing less than 1,000 tons a yea-T. Uhile the total volume of
such mines v.'as almost negligible (between 1 and 2 million tons), the
number of mines was considerable. This is the kinc. of mine that, in
periods of tem.porarily high prices, operates as long as the market
holds, then disappears until o-T^ortunity again appears.
It is interesting to note the shift in percentage of total number
of mines thpt occurred during' the years 1926 feo"1933, when liquidation
in bituminous coel was continuous. Mines" of larger tonnage output,
v/orking on reduced schedule, fell into a size group v/ith lower pro-
duction, Betv/een 1929 and 1932, for instance, the number and per-
centage of total mines in the largest output group fell from 209 to
82, from 3,4 per cent to 1.5 per cent of the total number of mines, and
from 29,6 per cent to 17,9 per cent of total production. At the same
time, although the number of mines in the second largest output group
also fell from 618 to 383, their share of total production increased
from 35,6 per cent to 37,8 per centj and in turn the number of mines
in the 100,000 - 200,000 ton grou;n dropped from 845 in 1929 to 660
in 1932, but the latter group's sli£'.rc of total production increased from
17.9 per cent to 21.8 per cent. This sMfting undoubtedly explains in
part the failure of the "less than 10,000 tons" group to shrinli pro-
portionately in numbers, many of those v/hich dropped out of the
operating statistics being offset by mines whose annual output under
9837
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9837
depression conditions had fallen fro'i over 10,000 tons to less thp^n
""that lij.urc.
The openin^i of mines formerly closed and their return to opera-
tion under the recovery influence or 1934 is clearly shov/n, par-
ti cula.rly in the small-mine group.
Consmnerr-ovmed. or. "Ca:otive" ■ Mines . .The principal industries that
operate captive mines are the railroads, puhlic utilities, 'by-product
coke plants, and steel plants. In ^'eneral it may he said that captive
mines are operated hy industries in which fuel is a major item of cost
or \7hich require an unfailing supply of special quality coal. Ko
published statistics v/ere- available for -these mines until a detailed
study (*) a,nd report uas made by two members of the U.. S. Bvireau of
Mines, covering in detail the operations of 19.?,4 and, in general, the
years 1915-1926. Since 1929 statistics of the U. S. Bureau of Mines
are partially segregated betv/een captive and commercial mines. The
follov/ing table summarized the available 6_ata \7ith respect to ca.ptive
and commercial mine operations for selected years.
From these da.tao it is apparent tha.t a-oproximately 20 per cent of
the bituminous coal mined in the United States is talcen from mines
that are operated by industries whose principal business is other than
coal mining. Most of this fuel , (87 .per . cent in 1924) is used by the
consumer-owner, and does not enter directly into 'the competitive market
with operator-owned coal. Indeed, most of the coal rained by consumer-
owners in 1924 came from mines that offered none of their output in the
commercial markets. The ca.ptive mines east of the Mississippi are
concentrated principally around the large steel producing and other
industrial center^.
The principal consumer-owners in 1924 were steel plants with 232
mines which produced 11.9 per cent of all bitiminous coal in tha,t year;
railroads v/ith 135 mines and 5.6 per cent of the total production;
other public utilities with 53 mines and 1.9 per cent; by-product coke
plants with 3§' mines and 1.6 per cent; all others owning 191 mines and
2 per cent; total captive production representing 23.1 per cent of all
coal in tha.t year.
(*) Mineral Resources' 1926, Part II, p. 465
98S7
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PRODUCTIOr OF GAPTIVS BITUl.'IilOUS COAL IH
UITITBD STaT-:]S 3Y TSrZ 0? Q::13R. 1924
Pioduction
:To. of ."lines
Amount (OOO)
1> of Ca-otive
\ of Total
Railroads
135
25,965
24.15
5.58
Public Utilities
53
9,039
8.10
1.87
Sy-Product Coke
Plant s
38
7,902
7.08
1.63
Steel Plants
232
57,593
51.58
11.91
All Other
191
10,154
9.09
2.10
111,554
100.00
23.09
9837
-32- -;. ■
The great decrease in steel production, reaching a depression low
of about 26 per cent of capacity, undouttedly contributed a heavy share
of the decline in captive coal production in 1931 and 1932. It also
materially affected the output of many commercial mines whose coking
coal, particularly in the Pittsburgh and nearby fields, goes to the
minor steel operations and to supplement the captive tonnage used by the
larger steel plants.
The average value per ton f.o.b. mines is reported at a higher
level than that of strictly commercial coal. Op>tive mines also normally
enjoy a more dependable outlet for their production and show a larger
number of days operated annually than do commercial mines. In 1934,
captive mines worked an average of 194 days, while commercial mines
averaged only 165 days. In Alabama, in 1924, 37 captive mines averaged
250 days, although commercial mines averaged only 200 days.
Transportation, Freight Hates. Hevenue from Coal-(*)
Labor, the largest item, constitutes nearly tv/o-thirds of the
cost of production at the mines. The transportation cost, or freight
rate, is the largest item, on the average, in delivered cost. It is
surprising to note, from studies by the Interstate Commerce Department
in 1930, that the transportation charges on bituminous coal equalled
approximately 56 per cent of the delivered value thereof, which com-
pared with 5 per cent on all other similar commodities, except like
mine products. By 1932 this percentage had increased to 64 per cent by
reason of the steadily dropping coal prices.
The following table compares average value of coal f.o.b. mine
with freight revenue per net ton received from bituminous coal by rail-
roads of the United States:
Year
Avera^Tie Value Freight Revenue
per Het Ton per Net Ton from
Bituminous Coal Bituminous Coal
f.o.b. Mines
1923
1927
1929
1930
1931
1932
Decrease 1923 to 1932
Decrease in percentage
$2.68
$2.30
1.99
2.30
1.78
2.25
1.70
2.23
1.54
2.22
1.27
2.26
$1.41
$0.04
52.6fo
\.l1o
T7hile during the decade 1923-1932, the average f.o.b. mine value
of bituminous coal declined 52.6 per cent, average railroad freight
revenue from coal remained practically the same.
(*) Report of Research and Plaiining Division on the Bit\aminous Coal
Industry, September 1933; pages 27-30; files of N.R.A. Bituminous Coal
Unit.
9837
Prior to 1923, d-uring the 1917-1920 period, railroad freights on
coal almost doutled, lagging behind coal price increases diiring that
period. After 1920, however, coal i^rices steadily trended dovmward until
the coming of the K.E.A. code prices. By 1932 they virere far "below the
1917 level of $2.26, to say nothing of the 1920 average of $3.75; hut the
high freight rates still remained in effect, the only general reduction
being one of 10 per cent in 1922.
This situation clearly pu.t upon bituninous coal the burden of
meeting competitive fuel prices at destination points, although such
fuels contributed little revenue to the railroads. In the case of gas
and hydro-electric power, in fact, they use their own pipe lines and
wires.
The decline in average market value of coal, from which the operator
must subtract the freight rate, had by 1932 produced an almost unbelievable
distortion in the relative percentage of transportation charge to the
delivered value of the coal. For a striking example: in 1914 Poca-
hontas Riui-of-Mine (from smokeless field of West Virginia) showed an
average mine value of $1.09 per ton; freight rate to Hampton Roads,
Virginia, tidewater, was $1.25; the skilled wage rate was 25 cents per
hour. A comparison of these figures with those for 1932 shows the
following:
1914 1932 Per Cent 1932
_1 is of 1914
Average mine value of
W. Va. Low Volatile
Freight Hate to tidewater
Skilled Wage Hate per hour
Similar comparisons for some of the northern coal fields would be
even more startling in the relation of wage rates because a large sus-
tained advance took place from 1914 on. It was stated that these figares
do not mean that the coal business was profitable in 1914, but do mean
that all the progress in the v/ay of efficiency and economies at coal
mines have been paid out largely to labor and for supplies. The facts
certainly pointed to the necessity for raising coal prices, if the op-
erators then in business were to continue.
An idea of the effect of the recovery program for bitiominous coal
under K.R.A. code may be had for this same Pocahontas field:
Per Cent Increase
over 1914
1.09
1.13
104
1.25
2.25
180
.25
.35
140
1914 1932 1934(*) 1932 1934
Average mine value
per net ton, W.Va. $1.09 $1.13 $1.87 4. 72
Freight Rate to tide-
water, per net ton 1.25 2.25 2.25 80. 80.
Skilled Wage Rate per Ist^ .525 110.
ton .25 .35 Last|:,657 40. 113.
(*) Source of this coluim: value, U.S. Bureau of Mines, unpublished;
Wage Rates: Schedule A of N.R.A. Code for Bitiominous Coal Intustry
and Schedule A of Amendment 1 thereto.
9837
Were the figures for 1935 available, it is probable that the
average mine value y/ould arppear somewhat less than the $1.87 realized
in 1934, since it is common knowledge that coal prices, after, the code
expired, went greatly below the code prices in eff&ct, at that time.
May 27, 1935. The freight rate to tidewater, on the other hand, was in-
creased by a 15-cents per ton surcharge allowed about May 1935, so that
the 1935 freight to tidewater from Pocahontas field w,^s 192 per cent of
the 1914 rate.
Unquestionably freight still represents, at this writing (early in
1936) more than half the destination value of coal. Although the 1935
average freight revenue figure is not yet available, it must be rem.embered
that a surcharge of from 3 to 15 cents per ton on bituminous coal was
effective in May 1935, thus raising freight rates in a year featured by
a collapse of mine prices.
Consumption: Prior to the world war consumption of bituminous
cOal followed very closely the curve of production. There vras compara-
tively little storage of coal -ontil prices began to rise in 1917.
If the pre-war rate of growth in annual production had continued
uninterrupted, the annual requirements would have reached 760 million
tons by 1932, or about 2-^ times the tonnage absorbed by the market in
that year. The following table shows the production, changes in stocks,
and consumption of bituminous coal in the United States from 1917 to
1934, inclusive.
9837
■^
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ri g o
-36-
7Tcm 1929 all "branches of conGumption felt the effect g of depression
until cue recovery program in 1933, vmen the tide v;as stemmed and the curve
again started upv/ards. The decline was least in heating of huildings, in
domestic tonna^^^-e and in the generation of central-stntion power. It v;as
greatest in the metallurgical industries and the maniifact-ure of furncae
coke .
An exrmple of the effects of the depression on changes in -practice
in some industries and consequent radical reduction in the consumption of
coal may he found in the use of scrap iron a.nd steel instead of pig-iron.
The U. S, Bureau of Mines report for 1?32 says:
"Among the causes of the flattening of coal demand after
the v;ar is the increasing use of scrap-iron and steel,
v/hich was acted to slow down the former grov/th of pig-
iron ipanufacture and therefore the consumption of "blast-
furnace Golce, *** while the output of steel increased
■ 30 13 r cent from the :oeriod 1916-20 to the j^jriod 1926-30,
. the output of pig-iron increased only 8 per cent. This
did not meaij that the .,Amei;iQan> p,eopl.e .we.rq, using less
ir^n tut rather tliat an increasing proportibn of each
year's requirement' was'' being met ■ froA scrap. Since' iron-
"blast furnaces are ravenous consimiers of fuel, the clia.ngc
,had a powerful influence An tiie demand for coal^ Couples
T/ith advances in efficiency of furnace operation and coke
■*manufact:-ar..e , ,it meant that, in spite of a large 'increase
in the- constmiption of .steel, the country actually needed
less coking stee"! "td. smelt: j^ig-i'rph in 192'9 "thiit it did
•in 1316, In 1916 the "blast furnaces required 56,500,000
tons of coking coal to make 59,435,000 tons of iron. In
, 1929 they got along with 63,200,000 tons of coking coal
to_ make -42,614,000 tons of iron, yet the production of
steel ;t/as 32 per cent greater in 1929 than it v/as in 1916,
"Fortunately for the producers of coking, co.al, tlicr6-ihas
"been a lirge .increase In the CQna.uii¥'"fciO'n .of. coke for do- •
mestic and miscellaneous industrial uses, vfaich has helped
to offset the stationery or declining demand for metallur-
gical coke,"
Consumption "by classes of consumers, in so far as data a.re avail-
a'ble is shov;n in the follov;ing tahle:
9837
iiiii!-:
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SSS5
m
8
S«2,3
^
lis'
llli
9
S
llh
1
s^si
43 q ►-• o » o
9 «: hH
ta
"» JB 2
" ^la^
9^i 1
855 g
A i-i ■>* ri •-'9
5^
si
u e a S -e fl 1^
<»»ft_ -•do ♦•Tl
5I« "
o ^ • _
• OpHca ri S M ^ f-* ^ -^
;)^;^ ^Tri :oi ;::i;iii
:i
The "all other" designation includes 'both industrial and household or
doiuestic coal, ITo definite data are c.vailahle upon which to make a
segregation of tne domestic tonnat~;e. It is variously estimated to run
heijween - 60 and 70 million tons, tne writer's oninioii being that the
figure of 70,000,000 tons is perhaps not unreasonahle for 1934, in view
of the fact that ahout S**, 000, 000 tons of antliracite were shipped in
tlTs.t year and the Retail Solid Fuel Code letter of transmittal carried
an estimate tf the total of retail tonnati.e as 125,000,000 tons. (*)
Stoolrs. As has heen previously stated, the practice of mine
storage is not generally followed. Although there have frequently "been
heavy a,ccu-nulations of unbilled car loads on the tracks, this practice
has proDahly hecn somev/nat reduced -onder the provision of the II. H. A.
Code's trade practice rules, forhidding shipments on consignment , (**)
By far the largest element in current "bituminous coal stocks is
the tonnage in the hands of cor/imercial consimiers and retail coal dealer:
During the years since October 1, 1916, covered by statistical records,
the commercial reserves have ranged from 20,000,J00 to 75,000,000 tons.
Since 1928 they have fluctuated within rather narrow limits, ranging
from a net shrinkage of 1,500,000 tons in 1929 to a nat gain of
3,174,000 tons in 1933 and another gain of 1,636,000 tons in 1934. (See
table of Consumption and Stocks, under discussion of Cons-amption,ante) .
A comprehensive sta.tistical summary by significant dates from
Octo"t'er 1, 1916 through 1934 is shown in the following ta'ble:
(*) Code of Fair Competition for the Retail Solid Fuel Industry;
letter of transmittal; Oodc Record files of li.E.A.
(**) IT.R.A. Code of Fair Competition for tiie Bituminous Goal Industry,
Article VI, S ection 6
9837
STOCKS OF Biroumons coal is hasps ot comherciji.
S^snuEEs ABS IB BmiL iuLsas'
lAEDS. i,;^l,^ (.
0
tota stock, BBtlmatad,
(thonaanda of tons) i/
Days' SodtdIt at Currnnt lUte of Commnrotlon on Datn of Stnry TnMii»
By-Product
Stael
other In-
Coal Cas
nectrlc
Batsll
Sail-
Total
Dat.
Coke Plants
Plant
6 dustrles
riants
Utilities
Dealers
roads
BltimlnouB
1916 - Oct.
27.000
Ho data
25
Bo data
Ho data
Ho data
20
(a)
1917 - Oct.
15
28.100
39.700
Be data
28
27
Bo data
72
Ho data
39
Ho data
15
IB
(b)
I9I8 - Jnl?
27
1*8
31
- Oct.
59.000
32
'^5
71
84
'^7
28
29
13
- Hov.
11
63.000
35
"^S
71
85
49
37
31
'•5
1919 - Jan.
57,900
32
42
65
81
49
39
32
42
-i*r.
uo.Uoo
23
35
47
58
48
25
Ho data
31
1920 - Bar.
2U.000
15
9
27
31
a
13
11
18
- l-m» 1
20.000
8
11
24
22
10
10
15
1921 - Jan.
U5.8OO
29
42
64
55
44
30
11
-^r.
39.500
28
51
'♦7
66
48
26
36
-Hov.
48,500
^
67
87
5^
46
31
•♦3
1922 - Jan.
w.ooo
48
51
89
51
3i
^
41
-liar.
52.500
11
43
56
82
5>»
23
'*3
- Oct.
26,000
17
^
38
30
18
15
21
192} - Jan.
l^Z
19
27
60
g
18
16
26
- JT1I7I
26
35
46
89
39
28
^
- Oct.
1
60,000
33
11
56
91
49
36
41
192U - Jan.
1
62.000
35
11
91
51
11
44
46
- Sapt
. 1
47.000
30
42
90
58
42
1*5
1925 - Itor.
1
44,000
25
30
40
78
51
33
35
37
-Hoy.
1
48,000
26
32
44
78
46
30
30
35
1926 - Jan.
1
49,000
26
28
39
72
48
20
27
30
- if Til 1
40.000
a
24
32
60
46
14
23
26
- Oct.
43.000
26
37
11
70
1*5
33
35
1927 - Jan.
55.000
3>»
50
69
'»7
i
37
-ipr.
75.000
38
73
62
77
70
59
53
- Oct.
61,900
40
^
62
93
69
»*3
48
S
192s - Jan.
^^
3«
44
!2
58
27
41
-Apr.
25
35
39
60
40
3H
-Oct.
41,100
27
31
37
72
56
33
35
1929 - Jan.
41,800
27
3i»
33
72
53
26
26
31
- Apr.
36.000
19
25
26
57
^
17
23
25
- Oct.
^.•3^
26
27
32
64
35
20
30
1930 - Jan.
30
31
32
67
i2
23
a
28
-^p.
33.100
22
25
26
58
16
19
23
- Oct.
35.900
32
32
36
68
^
44
22
35
1931 - Jan.
37.200
38
37
31
65
27
24
31
- Apr.
29.500
26
29
27
59
1*7
15
20
24
- Oct.
3^.500
49
^
^
65
52
^
23
39
1932 - Jan.
35,500
51
62
53
31
28
37
-Apr.
30,050
39
H5
35
57
60
22
30
33
— Oct.
27,500
29.666
55
50
38
61
52
40
23
38
1933 - Jan.
53
38
30
68
56
18
23
27
- Apr.
23,608
34.137
40
37
25
63
65
21
a
27
- Oct.
44
41
40
70
58
43
30
40
193^ - Jan.
32.71U
53
33
J2
71
57
23
24
32
from "Coal tn 1930", Ulneral BasoxLTces, I93O Fart II, p. 682; and snoceedlcg annoals, U. S. Boreau of H
B.B.A. Bituminous Coal Unit.
Tlgnres for 1918 are based on actual connt. Beginning with April 1, 1919, figures are tiased on reports
list of 5,000 oonsmoers Aose stodcs In I9I8 bore a known relation to the knoim total stocks.
Data Incomplete. Istlisatsd as 22 da^s.
Data Inconplete. Istlmated as 21 da^s.
fron a selected
-40-
Sales Realization and Prices. When the den and for coc.l, stiinulated
diaring the war rnd post-war period, slowed dovm to " peace-time rate of
activity, tne industry was left with the greatly espanded productive
ca,pa-city previously described. At the same time, the market v/as "being
seriously cuj:-ts.iled hy increasing sxihstitution of other fuels and rapid-
ly improving methods of coal conhustion, both encouraged by the high
coal prices.
From 1913 to 1916 the average value of bituminous coal in the
United States varied from $1.13 to $1,32 "but. in 1917 jumped to $2.26,
just doubling the 1913 average. Prices continued to increase until
1920 when the average value reached $3,75.
These averages do not disclose the movements of Gpot-m.a,rket prices.
The average spot-market climbed from $1.25 for 1913 to $3.25 for 1917,
when Fuel Adininictration price control took nold and held it on an even
keel. In the later months of 1916 and earlier months of 1917, in fact,
the spot-price averages iia.d run v:p rapidly from $2.26 to over $4.u0
per ton, but v/ere set back to $2.02 in October of 1917. The averages
for 1918 a,nd 1919, control iuwing been removed and la,ter reinstated,
the average ran $2.58 and $2.59. The runaway market of 1920, due to
a switchmen's strike and car shortage, boosted prices beginning in April,
to $3,85, then to $7,18 for June, $9,51 for August, $8,52 for September,
and by December had settled bac]c to $4,38, for a year's average of $5,64,
After that, except for a simila,r flurry the last lialf of 1922 and ex-
tending over the first quarter of 1923, during v/hich the peak was $6,13
for August 1922, the trend of spot-prices li3.s been generally downward,
A brief flurry of export demis/nd, due to a British coal strike in 1926,
strengthened spot-prices temporarily, after whcih the sectional price-
war described in the second part of this chapter, gradually drove both
the spot-and contract-market dovni to the rxilmsias depths of early 1933,
Beginning in 1923, total average value, or re.alization, of bitujiiin-
ous coal continuously moved covrnv'rard under the combined pressure of
competition from other f.uels and gre3.t strides in fuel economy, ably
aided and abetted by the price and wage-sca.le battle between the north-
ern cju. southern coal operators. At the same time, operators expended
large sums of modern plants to increase the fuel value of coal by better
preparation; a part of their despera.te stru^jgle against loss of market,
(Detailed price and realization treatment will be found in the second
part of this chapter discussing the problems of the industry; also in
the chapter of Realization from Sa.lcs Under the Code.)
Belovj is presented a tabular presentation of the average value
(realization or price), and, for comparison, the average spot-prices,
by years beginning v^ith 1913,
f5837
Averaf;e Spot Prices and Avera,?:e Value, at Mines ,
for Bi tuiTiinous Coal, 1915 to 1935. (*)
Average
$ 1.18
1.17
1.15
l.S
2.26
2.58
2.49
3.75
2.89
3.02
2.68
2.20
2.04
2.06
1.99
1.86
1.78
1.70
1.54
1.31
1.34
After 10 years of rvinous decline, the average value per ton for
the United States as a vrtiole turned upward in 1933 \mder the influence
of prices fixed in accordance with the N.H.A. code for "bituminous coal.
For purposes of comparison, the average value per ton at mines is shown
ty I\f,E.A. suhdivisional ares.s in the following tahley covering the pre-
cede decade and ca.rrying thro-ugh 1934,
Average
Year
Spot
Prices
1913
Prc-War
$
1.23
1914
II
1.14
1915
11
1.12
1916
II
1.85
1917
War
3.25
1918
n
2.58
1919
Post-War
2.59
1920
II
5.64
1921
II
2.55
1922
II
3.64
1923
II
2.77
1924
II
2.08
1925
II
2.06
1926
II
2.21
1927
II
1.99
1928
II
1.80
1929
II
1.79
1930
II
1.75
1931
1932
1933
(*) From Mineral Resources; 1913-1922 U. S. Geological Survey; 1924-31
U.S. Biu-eau of Mines; 1932-53 Minerals Yearbook, U. S. Bureau of
Mines; Depa/rtment of Commerce Lihrary
9857
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-43-
THE PIlOBLEM of THE BITUMIMOUS COAL ITOUSTRY
The Bituminous Coal Code effec6--d tr-raendous changes in the
economic status of zh^ coal industry. Free competitive -oractices in
the marketing of coal, as well as labor relations in the industry, were
suT^erseded by entirely new arrangements. In place of fierce competition
for markets among producers, resulting in prices almost witnout any lower
limit, price-fixing at materially higher levels was established . In
place of an uncoordinated, chaotic wage structure, with its many attendant
evils in th^ conditions and terms of employment, an overall patern of
wage rates was developed. It is doubtful if any industry operating under
under an N.E.A. code experienced greater change in the transition from
pre-God^" to code operation.
In order properly to appraise the effects of the cral cede, it
is highly desirable to describe and analyze the general status of the in-
dustry prior to the code; and to se^k out and present the economic forces
which were responsible for conditions as they prevailed. Even prior to
the depression coal was termed a "sick" industry. V/hile most industries
enjoyed expansion and prosperity diiring the decade ending in 1929, the
coal industry, after 1923, experienced an ever-increasing deflation and
liquidation. The urge for regulation and governmental assistance in most
industries was a direct product of the depression; on the other hand, the
depression merely accentuated the problems of the coal industry which were
already producing distress tc operators and employees alike. The roots
of instability in coal are co be found primarily in the nature of industrial
organization for the exploitation of this resource, the effects produced
by the World War, and th^ development along geograpnical lines of uncor-
related wag-^ and labor-relations policies.
The analysis of the problem of bit\iminous coal as it existed
prior to the Code will b^'- divided for purposes of this presentation into
thr-^-e parts or periods:
a. Economic Developments prior to 1916.
b. Economic Developments from 1915 through 1923.
c. Economic De elopments after 1923.
Economic Developments prior _to_ 191_6
The bituminous coal industry experienced a remark-
ably steady growth up to 1916. In only two years since 189b did there
occur any marked r^cesr.ion from th? upward tPtend - in 1908 and 1915.
Also characteristic of th^ industry as far back as th<= statistical record
goes (1880), was th^ condition. of over-capacity - the ability to produce
from existing mines in excess of market demands. As production (demand)
increased, new capacity came into being, with the result that average
•perating time (d'>ys worked) of mines remained relatively constant. This
relationship is shown statistically in the following table which gives
the average annual production, average capacity,' and average number of
days worked for 5-year periods beginning with -1890. (*) -
(*) See also Cnarts and accompanying tables, which follcw.
9837
production
(Millions of
--^Ie.t.-T.Q;isl_
1390 - 94
121
1895 - 99
155
1900 - 04
252
1905 - 09
353
1910 - 14
435
44 -
C?lcu.lated Cai:^'^cit7 AverR,-;e 7o. of
(■.:il lions of tons Days V.'orl:ed oy
a.t _308„Dciz?l-.- -_:.^ - Jiine s.
ISl 208
233 205
350 221
513 212
622 215
The average annual increment in -oroduction during this period
v^as over 15 million tons, while that for capac.ity grew at an average rate
of 22 million tons. The change in relationship of capacity to ^:>roduction
is expressed in the average vrorking ti.ae afforded the mines. This con-
tinued at a-:)proXliaately 70 loer cent of theoretical maximum of 308 days.
If allowances he made for seasonal demand and hreaicdowis in mine operation,
265 days may oe considered as the maximum "ootential operating time for
the industry. (*) On this corrected h^sis of available operating time,
the mines in the -n-e-war -leriod '.;ere utilized at a'^nro::imaxely 80 ner
cent of their coacity.
This characteristic relationship of production ca.-oacity to mar-
ket requirements reflects the desire on the ^lart of owners of coal lands
to convert their fixed resources into current income. The national re-
serves of coal are very great and Toractically all of those east of the
Rocl^y liountains are privately ovmed. Even nt a modest estimate of two
or three centuries of economically availa'cle rev,erves (or if it were
only 100 years), and 'vith ovrnershi-o vested in thousands of different en-
tities (coal companies, land holders, and farmers) the ur e to develop
holdings in coal lands has been very great. Individual operators and
o\7ners have often found the burden of carrying charges and taxes very
onerous and sought to mal:e their -properties carry themselves by -put ting
them in -oroduction. Purthei-more, owners do not find it attractive to
hold property indefinitely to satisfy demands of a remote fu.ture. If
f-unds could be raised through bonds or stocks to finance nev; enterprise,
there v.'as alv/ays t"ne o^:!-oortunity for promoters' ' prof its, to say nothing
of iDOSsible profits from operation. Thus, as the demand forged ahead,
capacity maintained roughly its "oroportion in advance of it. The allevi-
ating element under these circmistances- \.'as that -oroduction did trend uo-
v/ard.. As long, as production increased year by year and the ratio of
capacity to production did not materially change, the burden of over-
capacity could not be considered as becoming more onero\is or difficult.
Tlie continued expansion of ca-;:iacity cannot be attributed to in-
creased lorosperity in the industry, as these may be reflected in average
realization for coal af the mines and the trend of wage costs uid to 1916.
Average realization remained relatively constpjit for the 15-year period,
1900 - 14, as follows:
(*)- F. Or. Tryon, Anerica's Caiiacity to Produce, BrooJring'o Institution,
9837
BITUMINOUS COAL PRODUCTION, REALIZATION ^
MINE CAPACITY .n the UNITED STATES 1899-193^.
1,000
2.00
K
Net income J^
¥- -
B
CT..«^-.., 1
J
o '••
qt.
Tr
, .r.^r.n
""^"uoiyyulu
Defied
SOURCE: U.S.GEOLOGICAi- S(J13VEY<ANO U.S. BUREAU Or MINES.
paCtVkRCD BY BITUMINOUS COAL UNIT
DIVWCW or MVIEW.NR.A. UNOEB DI8ECT10N OF F.E.BEWJUIST.
■CAR4CITY UNDER N.R.A. CONDITIONS AND
WORKING TIME NOT AVAILABi.E . DEFICIT
EiTirvlATEO
9837
r
^46-
BITUMINOUS C0,4L PEODUCTIOW, REALIZATION Affl) MINE CA^^ACITY
IN THE UITIT^,D STATES. 1899-1934
(C
)iled from thp annual coal r^
Production
(Milliono of
net tons)
Calculating
(Millions •f
ca-pacity
net tons)
Value
per ton
At 308 days
At 280 days
1899
193
212
225
260
283
279
315
543
395
333
380
417
406
450
478
^.23
« 443
• 503
552
579
466
569
416
422
565
^84
520
573
518
501
535
468
382
310,,
334
1/ 3L.8
254
279
309
348
387
425
460
496
520
' -. 531
560
592
593
622
635
668
672
673
699
719
736
796
860
916
970
871
822
821
835
760
752
770
736
653
515
2/
23d
255
281
316
350
386
417
451
473
482
510
538
538
566
577
608
610
613
636
650
669
725
781
832
885
792
748
747
759
691
679
700
669
5C4
559
2/
$0.87
1900
1981
1.04
1.05
1902
1903
1.12
1.24
1904
1?05
1^06
1907
190P
1.10
1.06
1.11
1.14
1.12
1909
1910
1.07
1.12
1911
1.11
1912
1.15
1913
1.18
1914
1915
1916
1.17
1.13
1.32
1917....
1918 .
2.26
■2.58
1919
1920
2.49
■ 5.75
1921
2.89
1922
1923
3.02
2.58
1924
2.20
1925.
2.04
1926
2.06
1927
1.99
1928
1929
1930
1.86
1.78
i.ro
1931
1.54
1932
1.31
1933
1934
1.54
1/ 1.82
1^; Preliminary
2 ' No data
By F. G. Tyron a£Z. V».
Coal Economics Divlt:
L*n^
U.S. Bureau of Mi nee
October 28, 1935.
9R37
MEN
(000)
'9.000 900
TRENDS OF EMPLOYMENT. WORKING TIME, WAGE
RATES AND LABOR PRODUQTIVITY. 1899-1934
900
,.
800
/
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1
1
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S
3E
W<
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1
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1 1 1
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ion
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IN
01
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S
1 — 1
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~
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hj
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200
7
;
AY
E
ME
WEST VIRGIN
DAYMEN'S EAR
A
Mir
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S
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100
0
...
-
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:a
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R
DA
Y
S S S o o o
DAILY
WAGE
TONS
PER
MAN
.50 4.0
(MOJNN(VfMW(^ rtPiS^
fl ^--D^^S
IDLE .IN LABOR DISPUTES-^
0 D
■ nnii niiiiii ■
AYS IDLE - OTHER BCAUSES"
J^^^^ ^^1
^^^^1 ill ^T . ^
0 ^ _ ^ „ ^v'^
1 — , ~ '""
1 •"" T
DAYS MINES WORKED
Mil \
nSi^iiiilii
iiiiiiliiiiiiiiiily^^i^^l
8 ~siS!SKs;;i;ssSmP{;?
mziiss 01 BiFLOTuziiT, fOBKuo foa, uai siTB Aim Luoa FBomciiTin ki :
_ _ MWUIWHra OttlL WSB IH THJ DSITE) SliTB, 1899-193U
(Col»a. (1) to (6) from axmi^'r.poru'of ib. B. 8. »ir«a of Uln..; Colmn. (7) and (g) coopafd from rq»rt. of th. U. S. »«•«« of L
Stallitlci; Ooluim (9) froo Report of th» U. 3. Coal CobhImIod end Eli Cod«)
(3) ^!U) (5) (6) _ _JJL '*' ^'^
(1)
(2)
Average number of dn/il
I Idle
Lipatet»
Average dally eamln««
all daymen covered by
Baroau of Leiior Statll-
tlot. eanple eurveyi
Illlnoli ecale
Inside daymen
(tmcbaan}
1905 .
1906 ,
1907
19O8
1909
1910
1911
1912
1913
IJIU
1915
1916
1917
1915
1919
1930
1931
1932
1933
\93U
301.
231.
5
3W
lit
225
3
1(38
202
8
¥il
211
2
1*78
213
SI 3
231*
1
«ilfa
193
51*3
209
1
-,^(,
217
35
'i'^0
211
SU9
223
10
572
232
5
58U
195
19
557
■iSl
203
It
230
601
2^3
M^
21*9
1
622
195
25
6140
220
6
bbU
11*9
3
bsa
1U2
73
70-^
179
2
620
171
7
^s
195
2
■i44
21'^
1
'191*
191
1*5
',22
203
503
219
(d)
k^^
187
2
kV
160
3
Mt
11*6
19
1*19
167
9
1.50
5,813
5.887
5.71*7
5.776
5.592
5.902
5.726
6,939
3.319
6.921
8.033
9.299
9.331
7.586
5.891
5.61*2
5.1*27
5.555
(c)
(c)
(c)
$i*.09
(c)
$5.37
(c)
$U.91
(c)
$l*.57
(c)
$3-25
$3-55
(c)
$3.35
(0)
$3-19
(c)
$2.66
2.28
2.28
2.28
2.56
2.1*2
2.1)2
2.56
2.56
2.56
2.56
2.70
2.70
2.85
2.35
2.85
5.70 Nov.
6.00 Apr.. 7.50 Aii^.
7.50
7.50
7-50
7-50
7.50
7.50
7.50
6.10 I
6.10
6.10
5.00 Aug.
5.00
5.00
£ Includes strikes, suspensions, and lockouts.
b Includes no market car shortage, mine Irenlo-doimB . and all -
i »o dntr.
d Less than J day.
± Surveys made between Jpniurj- and liy.
X Surreys made between October 1. I921 anil February 15. 1922.
£ Barveys made between October and December.
h Surveys made between November 26. I926 and March 22. 1927.
^ Survoyw made In first q-iarter.
J, Surveys made In first quarter.
k Surveys made In February
1 Utlmated.
9337
time except labor die
Prepared byi J. d. Tryon and W. H. Young,
Coal Iconomlce Plvlilon,
U. S. Bureau of Uinei.
October 27,* 1935.
19CC -
. O-l-
1.11
1905 -
- ''>9
i. Iv.'
1910 -
- 14 —
1.1-
Resiats for incavidur.l years dep-.rted somewhat froni these averages,
the mr:xii.-va.i in 1903 at vl.24 per ton pnO. the minim-ojB in 1900 rt
Hil.04, The rbsence of rny rppreciaole upwrxd trend vould appear
to favor a conclusion that the extent to which new capacity crjne
into hein-'j r;as hardly justified. Such a conclusion cannot bo made
without evidence of the profits in the industry daring this period
pnd. the trend of costs. In this connection the only available lines
of evidence r.rc: (a) the trend of wages in unionized areas (wages
representin.'_; roughly two-thirds of cosy) and, (h) costs as reported
in the Cenna-.scs of Mines and Quarries for 1902 ,^jid 1909.
During the period \3nder review, the great hulk of tonnage
under union contract T;as in the Central Competitive Field (com-
prising Illinois, Indiana, Ohio and Western Poi-m?ylvania) and rep-
resented for this period over a third of the national output.
Therefore, tne clmnges in v/agc rates for this area are signifi-
cant as indicating the trend in vagc costs, and hence total costs.
The following shows the union scale (haxic rate) in Illinois for
inside day men (traclonon):
)er day
1900 - 02
':'2.28
1903
2.56
1904 - 05
2.42
1906 - 09
2.56
1910 - 11
2.70
1912 - 15
2.85
This schedule of rates for Illinois was also adopted, with minor
variations, in tne other States of the Central Cem;octitive Field
and represents, in a general way, the increases in wage rates that
took place during this "cried. These increases are reflected in
the laoor cost per ton for the industry as a whole as hotv^een the
years of 1902 and 1909. For those years the labor cost per ton
for all production was 70 cents and 78 cents, respectively, ac-
cording to the results of the Ctmsus of Mines and Quarries. The
increased cost due to labor alone v/as therefore greater than the
corresponding incrca-se in the realization per ton over this period.
The Census reports also shov; certain other costs besides labor costs,
inclttdin^ salaries, sup23lies and materials, miscellaneous expenses
and contract work, but exclude other items such as selling e::ponscs,
insurance, taxes, interest, depreciation and depletion charges. The
total of costs covex"ed, increased from 92 cents per ton in 1903 to
$1.00 per ton in 1009. As between those two years, then, the
reported costs increased 8 cents per ton while realization remained
at practically the came levels.
It is evident, then, that while tne opportunity for, and
range of, profits were apparently aiminishing during the pre-war
9837
-50-
period, capacity v/as nevertheless 2ro^7ing apace v.'ith prodv.ction.
This condition of chronic ovorcapacity has come to he accepted
as a natrual, if not necessary resultant, -uiider laissez-faire eco-
nomic policy for this industry-. The significant point to be de-
rived from the foregoing discussion is tiiat under a condition of
expanding markets for coal, as existed prior to the war, and the
free play of individual enterprise and competitive forces, the
■oossihility of an eccnomic "balance "between capacity and consixmp-
tive demand appears remote of accomplishment.
Econom.ic Developments from 1916 to 1925
Contrasted with the preceding historj" of the coal
industry, the pei-iod from 1916 to 1923 stands out as one crowded
with unusual developm.ents with tremendous repercusoiona through-
out the industry, as the events transpired. For a detailed des-
cription of these years, reference is made to the annua.l coal
cliapters in "Mineral Hosourcos of the United States", published
by the U. S. Geological Survey. Among the important features
in chronoligical sequence were:
1916 - Car shortage developed in October.
Demands of cons\jmers could not be
fully met.
1917 - Production jumped to 552,000 tons.
Acute car shortage and coal short-
ago. 3stablishmont of Committee
on Coal Prodiiction of the Counsel
of National Defense to regulate
prices.
I'Xiol Administrator appointed to
regulate prices, production and
distribution.
. Miners granted increased wages to
cover increased living costs.
Average realization for 1917 was
$2.26 per ton as coi".pared with
$1.S2 in 1916 and $1.14 for
6--;rear average from 1910 - 15.
,1918 - Car shortage conti-.:ued through
early months.
1919 - Strike of miners, ITcvembcr 1, to
December 12, tying up operations
employing 415,000 men in 22
States, shortage of coal result-
ing.
Ro-cstablishment of powers of Fuel
Adi^inist.-ation to cope with prices
9837
-51-
ancl distribution.
1930 - Switclmien's stril:o ■beginning
April 1, resultin,, in acute car
shortage.
3uiiav7ay prices in spot rnarltet.
Wage increase granted "by U. S.
BitiMninous Coal Commission, aver-
aging 27 per cent.
Average realization for the year
was $3.75 per ton, the highest for
any year in history.
1921 - Acute post-war depression
1922 - General strike affecting 460,000
miners and 73 per cent of produc-
tive capacity, lasting almost five
months.
Strike of railway shopmen beginning
July 1, resulting in acute car short-
age.
Average sales realization was ;^3.02
per ton, second only to that for
1920.
In terms of the problem which later encompassed the in-
dustry, the most important developments during the 1916 - 23
period relate to prices, profits, capacity and wage rates.
Prices; Althou^^h demand leaped forward in 1916, 1917 and
1918, the effect on prices was accentuated "by factors other than the
physical capacity of the mines. Difficulties in rail transportation
and the supply of cars to the mines made for actual shortage of coal
to consumers as well as developing fears of inade'q\3ate supplies in
the future. The inadequacy of transportation facilities plus the
miners' strikes of 1919 and 1922 resulted in a material diminution
of the supply of coal tliat otherwise might liave been available for
consumption and the maintenance of adequate stocks by consumers.
With the uncertainties of coal supply brought about by the events
previously listed, prices took a very irregular course. This lack
of stability in prices is shown in the following Chart and Table,
which give the average monthly spot-prices (sales on the open mar-
ket). It will be noted that from the middle of 1S16 through 1923
the course of spot-prices was very irregular s.nd reached, at differ-
ent periods, fantastic levels. The important causes of sharp changes
are shov.Ti on the cliart.
9837
• s as follows:
01.15
per ton
1.32
It 11
2.26
II II
2.58
M II
2.4S
11 II
3.75
II II
2.89
n II
3.02
n 11
2.68
II II
-52-
The tonnage represented "bv spot sales ordinarily averages about
25 per cent of the total tonnage, the remaining 73 per cent "be-
ing sold on contracts and not sutject to vide fluct-uations in
prices. The average realization for all sales (spot plus con-
tract) during this period was
1910 - 15
1916
1917
1918 ■ ■
1919
1920
1921
1922
1S23
VJhile prices from 1917 to 1S23 average well over double
those of the pre-',7ar y.cars, labor and supply costs also were advan-
cing. The only evidence of the rolatiwo prosperity of the indtistry
is to be fo-ond in the reports of the Internal Hgvcnuc Bureau of the
U. S. Treasury Department.
Profits; The first shoring of income data for the indus-
try is for the year 1917, In that and the four succeeding years,
the industry reported enonnous not profits, aggregating $29,000,000
over deficits even in the depression year 1921, and a quarter of a
billion dollars in 1920. Although data are not available for 1922
and 1923, these years were undoubtedly more profitable than 1921,
judging from the comparative production and price levels. These
huge profits served as inducement to increased investment in the
industry. liany operators extended their holdings to the limit of
their resources, and the alluring prospects drevj in many i.'ho previous-
ly had ha,d no connection with the industrj^.
Increase in ITimber of Minos and Capacity; Although the all-
time peak in production was reached in 1918, the continued high
prices and liberal profits brought in new increments of capacity
until 1923, The following sliows the growth in the number of mines,
annual capacity, vrith annua.l "oroduction, days operated and number of
men cnrploycd from 1315 to 1923: (*)
V.
(*) rroi.-. annur>.l reports "Mineral Resources of United States", U. S.
Geological Survey
9837
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Average Spot Prices * Bituminous Coal |
1913 - 1931. by Months. |
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CU rH r-l f«N «0
CVI CM CVi
ir\ ir> w) r--
ir> vo h- 10 o o >-•
o>rKr«>rK^>^~^Vri?i""'"JfMCMCMCMr'NK\
-55--
Production
(Millions llo. of at 308 days
of ijet Tons) Minos (Million Tons)
Ann-ua.l Capacity Avg. IIo. Av;i;. llo. Men
Days Employed
Operated (Thousands)
1915
443
5,502
672
1916
503
5,726
673
1917
552
6,939
699
1918
579
8,319
717
1919
466
8,994
736
1920
569
8,921
796
1921
416
8,038
860
1922
422
9,299
916
1923
565
9,331
970
20S
557
230
561
243
603
. 249
615
195
622
.220
640
149
664
142
688
179
705
Between 1915 and 1923 the number of mines increased "by
4829 and capacity increased by almost 300 million tons. In 1918,
the year of peak production, the average operating, time Y7as 249
daysi the highest for any year of record. Had new developments
been halted at that time, the industry would have achieved a great-
ly improved economic porforms.nce, Hcvevor, during the succeeding
5 years ending vdth 1923, .the number of mines increased by 1,029,
and capacity increased by 253 million tons, to the all-time peak
of 970 million tons on a 308-day basis. Although 1923 production
was only 14 million tons less than tliat for 1918, the working
time averaged only 179 days. Conversly, , as the working time dimin-
ished additional men were being -'.dded to the rolls of the industry,
with the result that 90,000 more were employed in 1923 than 1918.
Wage Iteitcs; Wage rates were advanced rapidly during the
1916 - 23 period. It lias been pointed out earlier in this discus-
sion that wage rates were moving up gradually during the pre-war
years, the rates for skilled inside men in the Central Competitive
Field increasing from $2.28 to $2.85 per day, or 25 per cent, be-
tween 1900 and 1915. During the ensuing years, the increases were
much sharper. Cornparison of rates for inside skilled labor (track-
men) for Illinois (unionized) and for Logan and Pocahontas fields
in West Virginia (non-uiiion) give the general trend in the Appalachian
and Central regions, which embrace over 35 per cent of the nation's
total nroduction.
9837
Illinois pj
1915
$2.85
1916
3.00
1917
-..60 Apr,
5.00 Oct,
1918
5.00
1919
5.70 ITov,
1920
6.00 Apr.
7.50 A-ug.
-56-
Logan Field t/
3.20 J-une
4.00 Dec.
4.00
4.00 J-ojie
5.44 Dec.
5.00 JiJiiie
7.04 Dec.
Pocahontas Field \l
$1.80
1.96
2.40 J-une
3.73 Doc.
3.78
3.73 J-unc
4.80 Dec.
5.60 June
7.12 Doc.
1921
7.50
7.04 J-ono
J. 12 Dec.
7.12 June
5.35 Doc.
1922
1923
7.50
7.50
5.13 JiJJie
7.04 Doc.
4.00 J-une
6.60 Dec.
a/ From U. M. W. oi A. contracts
t/ From U. S. Coal Commission reports. For dotailed v/agc data, sec
Cha-Dtcr IV ■
S tat-as of the Industry in 1935
The year 1923 stands as a lino of demarcation "b e two on two
periods of contrasting tendencies in the coal industry. During 1916
to 1922 the industry v/as "besot v/ith events which greatly modified
the earlier trends. The characteristic growth in pte-war produc-
tion ceased after the forward surge of 1916, 1917 and 1918. Car
shortages and far-reaching strikes hold in check the normal produc-
tive activities of the minrjs, which in turn made 1915 to 1923 a'
period - characterized hy actual or threatened scarcity in the
nation's' coal supplies. Prices and profits reached levels never
remotely approached in pre-war days. As a consequence, hew invest-
ment in the industry expanded mine capacity tremendously, so tliat in
1923, in which production was only i;lightly under the 1918 peak,
the excess of capacity was greater than for any ye&.r in the history
of the industry. The n-uraher of men employed also at'taincd an all-
time peak.
This condition of great capacity was further acccnt-uated by the
9837
freedom from shortages of transportation facilities. Thro-ughout
raacli of' the 1916 - 22 period, the limiting factor in production
was the ahility to' get empty cars at the mines. By the second
q-uarter of 1923, this Gittiation disappeared as a check on mining
activities. From that time on the transportation facilities h^ave
"been adequate to handle any demand on the part of the coal indus-
try. Competitive activity in the coal markets were thus freed
from a most important restriction of the preceding years, a re-
striction wMch had operated to materially increase and sustain
prices of the preceding seven years. . /•■.■,
Significant also in terms of developments in succeeding
years, was the level of wages in the industry. Generally speak-
ing, the peak of wage rates for the industry as a whole was attain-
ed in 1920. In the union areas these continued in force. in 1923.
In the non-union areas, the rates had dropped materially in 1921
but were restored in 1922, cither in their entirety or very suhstan-
tially, so that these rates were, on the average, not materially
below the 1920 levels. As compared with 1915 and 1916, the evi-
dence would seem to support the conclusion that the general wage
levels in 1923 were double or more, those of the earlier years.
The exact increase is not important --the fact that large increases
had occurcd made possible considerable cuts in the rates in the
competitive straggle that developed in succeeding years.
S-urrmarzing the general situation in 1923 we find:
1. The number of mines, n-umbor of errroloyecs and productive
capacity at their all-time peaks,
2. Prices at high levels,
3. Wages at high levels, and
4. Car shortages and other impediments of the preceding years
removed.
Hindsight clearly indicates tlmt the developments of succeeding
years were incvita,ble.
Economic Developments from 1924 to 1933
Trend of Production; The peak of production in the industry
was reached in 1918 after which the production curve flattened out,
with the trend from 1S18 to 1929 slightly downward. While details
of production and other data for the industry a.rc covered in other
chapters, attention is here called to broad clianges. The average
annual output for 5-year periods beginning with 1911 is as follows:
1911 - 15 ~ 440,000,000 tons ■
1916 - 20 ~ 534,000,000 tons
1921 - 25 ~ 483,000,000 tons
1926 - 30 — 519,000,000 tons
9837
Only rne.year, 1926, during the iDeriod of deflation, achieved production
in excess of 550, 000, 000- tons, while this achievement ^■7as reached in
four years of the preceding period, 1917, 1918, 1920 and 1923. This
levelling off in production is in mprked contrast to the relatively
steady growth up to the nar. The pverage annual increase from 1900
through 191S was ap-oroximately 20 million tons per year. It is signi-
ficant to note that had this annual increment continued until 1929, the
production for that year would have "been in the aporoximate magnitude
of 800,000,000 tons. The actual production for 1929, a year of excep-
tionally high industrial activity, was only 555,000,000 tons. Thus,
it is seen that during the period under review, the industry did not
"benefit from the increments of demand so characteristic in the rre-war
years.
Tnere is no doubt that many operators and students of the indus-
try expected that the growth of the pre-vrar days would assert itself
again after the post-war readjustments were complete. The failure of tnis
expectation or hope is of fundamental significance in the evaluation of
the factors which loroduced the problem of bituminous coal.
Although the total fuel and energy requirements of the country did
increase until 1929, the proportion supplied bv bituminous coal de-
creased. The trends of production and consumption are treated in detail
elsewhere in this report. Suifice at this point to mention the major
factors which operated to cheek the growth of coal consumiTtion. Most
important has been increased efficiency in the utilization, particularly
by large industrial plants, electric public utilities, and railroads.
As the result of improvements in fuel burning equipment by steam rail-
roads, the average requirements per 1000 gross tontrmiles of freight
were reduced bv 28.8 per cent bet'-een 1919 and 1933; in electric power
plants the coal used to generate one kilo'-'att hour of power was reduced
53 per cent. Changes in the fuel-using industries, such as the substitu-
tion of scrap-iron for virgin pig-iron, has reduced ttie use of coke;
the amount of cokin.-: coal to smelt one ton of pig iron was reduced 19.6 per
cent "between 1919 and 1933. The use of b^-product ovens in place of the
bee-hive coke ovens account for a saving of 19 per cent in that fuel use.
Another factor has been the substitution of cetroleum products and natural
gas, and the rapid development of hydro-electric power, all of which has
resulted in considerable displacement in the utilization of coal. The
exact measure of the influence of all these factors on the trend of coal
consumption is not ascertainable, but the evidence is clear thut the
aggregate effect has been to appreciablv reduce what otherwise "'ould have
been tne demand for coal.
Mine Realization (Value of Coal, feO.b. Mines)! The prices of
bituminous coal went to unprecedented levels during the wpr and post-
war years, and beginning with 1924 and thereafter, until the Summer of
1933, went through a continuous do-'-n^'ard spiral of deilation. The fol-
lowing table shows tne trend of averr::;e mine realization for th(? indus-
try as a whole:
9837
Per Ton
1900 -
04
^-
$.1.11
1905 -
09
—
1.10
1910 -
14
-1.14
1915
.1.13
1916
1.32
1917
2.25
1918
—
2.58
1919
—
2.49
1920
3.75
1921
—
2.89
1922
—
3.02
Fer Ton
1923 —
$ 2.66
1924 —
2*20
1925 —
2.04
1925 —
2.06
1927 —
1.99
1926 ~
1.86
1929 —
1.76
1930 —
1.70
1931 ~
1.54
1932 —
1.31
1933 —
1.34 (*)
1934 —
1.75 (**
Prices from 1917 reflect the unusual conditions in the iniastry
until 1923. Car shortpges, strikes of miners and of rpilway switchmen
pnd shopmen, zoning and budgeting of the industry under the J?uel Ad-
ministration, anthracite strike, British coal miners' strike and other
factors, along rith unprecedented war demands, kept lorices at unusual le-
vels. Normal competitive pressure of available capacity agr-inst the
market demands of this period failed because unusual circumstances
thwarted their expression. By the latter half of 1923, we find the be-
ginnings of readjustments from the abnormal developments of the pre-
ceding seven years. The enormously built-UD capacity for production
was then freed to exert its pressure uron a more or less stabilized demand.
The result i^-as a continuous deflation from 1924 to the Su iraer of 1933
(except for the year 1926~). From 1923 to 1929 realization decreased one-
third, and for 1932 it "ras less than one-half oi 1923. The decline from
1923 to 1929 took -place in a period of general business prosperity when th^
average of commodity prices '='ps relatively stable. Co:nDarison of the
index of wholesale prices for all commodities (Bureau of Labor Statis-
tics) with that of avera :e realization for bituminous coal folloi"s:
(Index Number 1923 = lO'j)
All Commodities
Wholesale
Price
Index
Bituminous
Coal, f.o.b.
Mines, Avg.
Sales Realiza-
tion
Bituminous
Coal under
All-Commodity
Index
1923
1924
1925
1926
1927
1928
1929
100
97.4
132.9
99.4
94.8
95.1
94.7
100
82
1
76.1
76.9
74.3
59.4
56.4
0
-15.3
-25.6
^22.5
-20.5
-25.7
-28.3
Financial Losses in the Industry; As a consequence of intense
competition and the fall in prices indicated in the preceding paragraphs,
(*) Code adopted Octoc r 2, 1933, — fixed prices thereafter until
(**) May 27, 1935
9837
-60-
the 'biturainous coal industry as a whole slio'Ted deficits during the
prosperous years for industry generally, which carried through 1S29.
For three years (1925-28-29), concerning which Bureau of Internal Re-
venue figures are availahle for "bituminous coal, the 'industry showed net
deficits, that is, deficits of deficit-reporting corporations exceeded
the net income of income-reporting corporations. Only 4 other industries
in 1928, as classified oy the Bureau of Internal Revenue (out of 91 in-
dustry groups), namely, woolen and worsted goods, shipbuilding ,and re-
pairing, aerial transportation and joint stock lend hajihs, showed net
deficits during the period 1925 to 1929. This e:cperience of the coal
industry is in marked contrast to the five year record of 1917 to 1921,
when profits of the industry were enormous. (See following Chart cjid
Table.)
9837
Decreane^ in Number of Ivanes.jyL.d CgjgaXiiJXi The high prices and
enormous orofits in the industry served as ajrole inducement for nev; en-
terprises to enter uoon coal jaining .-uid for those already established to
increase their -oroductive capacity either by opening ne\i mines or en-
larging the rate of outnut of those already in existence. As a result,
the number of mines grer? from 5,502 in 1915 to 9,331 in 1923, exclusive
of those mines (country banks) whose out-out i.7as less than 1000 tons per
yeai-. After 1923 the nunber of mines decrear,ed year by year, numbering
6,057 in 1929 and 5,427 in 1933. Productive capacity also folloTred the
same trend, increasing from 672 million tons on a 308-d8y basis in 1915
to 970 million tons in 1923. It is significant that capacity continued
to increase for five years after the pealc demand year of 1918, not in
terms of increasing demand for coal but in response to the continued
high level of prices. Ctipacity declined to 752 million tons in 1929 and
615 million tons in 1933.
Tilth ca-Dacity sjid demand so far out of balance in 1923 and with the
checks of previous years removed, it i.7as but natijj"al that prices should
fall. And as orices fell, operating mines found it necessary to curtail
costs, go into bankru-otcy, or voltintarily retire from o-oeration. The
principal item of cost is labor, v/hich is also the one most easily adjust-
ed. In spite of the .great dor/n'7ai-d revisions of T7ages which took place
after 1923, many mines could not survive the continued deflation in pri-
ces. The problem of bituminous coal after the inflated war and post-wax
periods may be considered as focusing on three factors: (l) excess capa-
city against a limited market, resulting in (2) intense price competition
to hold a share in the market, resulting in (3) the brealiing down in the
wage structure in order to obtain lo'-'er costs and preserve existence.
The situation thus naturally developed into a vicious spiral. Continued
operation was dependent on reducing prices low enough to retain markets;
reduction of prices was dependent upon ability to keep costs at a level
no higher than prices, in order to remain solvent. Thus developed the
situation sjnong producers in which survival raepjit ability to cut costs
and as labor constitutes 60 - 65 per cent of total costs, this item con-
sequently bore the brunt of attack, iioreover, many of the other items
of cost such as ta^-es, s-apolies, pov.'er, insiira^ice and other items, are
fixed and outside the power of the operator to cut.
9837
Net Income °^ Deficit °^^^^ Bituminous Coal industry.
Prior to Deductions ^^^ Tax, ^^^ Specif ied Years
4 1917 - 1934^ 1
Millions «"•'<>«
240
220
—
r ' 1
j mm
■ L_____
!
I
M 1
220
200
180
1AP
- ■
1
i
180 H ~H
160^B ^1
140 ^^H| ^M
120 ^^H H
looj^^H H
80^ ^1
aeo^^^L^H
1
1
i
1
i :
1
t
1
140
120
100
80
60
40
20
0
-20
-40
-60
-80
-100
-120
■
1 1 !
i
1
! 1
\
I 1
—
1
i
^
' 1
S 0
i-20
-40
-60
-80
-100
1 _ .. ,
,-- -I m.
QATA NOT
AVAILABLE
m
vm
m,
1
1
-i
lZ. " 1%^
!
iua
'%
m,
yy^i
Wa
,
1 1
1
i
1
-120
-140
\
i
!
1917 1918 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929
1930 1931 1932 1933 1934
-140
J/ Bi/^,3^i u 5 CM, commission Report from Treasury Depdrtmcnt
7B mi ^**'5""'^, secrewry •' Treasury
of Ocv«« N RA ynoc' the Oi-ecCO" •< FI »«•<»,.«
1^
33
Comn
ision
Br -fin
tcrnal
Reven
jc-Prel
iminar
y Not
YetPul
jiisnect
SiSl:
B 9. ;
u a
rH^ ir\<D CO
K^cy o o
c\j H irM>«-(r>
jy -^^^.
japlvStJ^S'
[^
of^-^8 8o
ys> cr>c\j iH CTs
J-^
J- 60 ca o o o
ir>f^K>BO^
VD
WMi
3w 0>VD W
8!
^•o^^-^
^
trlinvo in !?!'?«
dCo O"iip>o o^
O OJ O rH J-
mo oj
OM w 8
r- 60 t^ i^uj tn
f-vo r^ifMTi^
J- o o crxTvw
O iH ino VX) VD rSw to 00 (T\
iH to »H 1?\ O CO <TM~~ir>C\J r<>
CO fU r^ CO K^ 00 ^r^ir>rHh-m
i-i J- r— i?S M in^ mm^
o cyvDvoi — r~->>D
ir> eo^ mo <T*m
v£) onCS ^f^c^J 60 <r>
CU (M OJ Oi CM
f^ OJ CVJ OJ C\J «-« r-l
\jr\
r~-6a cTio r-i
rH f-l f-l CU OJ
0> CT\ CT^a^ (Tn
CO (T\ O <-! OJ ^^
c\i OJ t<^f^iJSt<~>
cfS CT\ CTN Oa 0> 0^
<M O -H o o
<H »^ CD »4 o
I <d ti tiO '^
e O r^ ^^ O
O -H U O -ts
a fn p< at
<M (0 U O rH
o TO a o -H
a U 4> Hi ^
•H 01 .HO
^ mH .rl c„ h
to ^ «M aJ
■S S ^ "^ :d
d a o N-i
c o -H +> m
o o 1-t to
£ fj is ^ ^
^^ g »**
^ O fl 0) o
a o (D <cj d
O rH fl S O
o rs
as
.H <w iH O O
OS U) o
o a «) >» o
-IS"
^ o Ti o d
q (d 0] 4^
(d u «i
9 Si
4» so
^2§
* (0
^ O <H
^ d OS
O U (j
o o »
it
01 c3 ^
? ? 5 "
t< C) (D Vi
•P M O
(u ro (u ••-«
ti O H -P
1151
(0 o a
t? Pk-3
«<( <o <-i ^
« g a
<H <M tJ
•P +> ro O
O R r4 »-l
9837
The Center of the Coal problem; Althoiigh other sections of
industry passed through similar experience, the main prohlem in coal
has "been concentrated on the great Appalachian Region and Central Re-
gion, comprising the States of Pennsylvania, Ohio, Indiana, Illinois,
Kentuc!-^, West Virginia and Virginia. This area has represented since
the var period "between 85 and 90 per cent of the total production in
the industry. It constitutes the great economic unit or entity of the
industry, and the various sections thereof are affected directly or in-
directly by the competition of every other section. A drastic wage or
price cut in one area eventually, often immediately, makes itself felt
in the other arer.s, through loss of tonnage, price and wage cuts, and
an effect on the established flow of coal to markets. Therefore, an
analysis of the trends of production, capacity, employment, prices ?.nd
Traces for this area will serve to picture the problem and analyze the
nature of the conflicting forces within the industry, with their in-
evitable consequences.
Shifts in production from Area to Area; Both a cause and effect
of insta.bility in the bituminous coal industry, has been the shifting
of production from one ares to ajiother, changes in the natxire of con-
sumer demand, to strikes, suspensions and lockouts, changes in freight-
rate structure, and chpnges in the competitive relationship in prices.
Of these, the most imoortant in cumulative effect has been that result-
ing from changes in price rela.tionships, T'hich in turn were made possi-
ble through disparities developed in the wage structure.
The outstanding example of shifts in production is that which
occ'.'xred among the seven sta.tes under discussion, and took place duiring
the period of the Jacksonville Wage Agreement (1924-27). The explana-
tion of this convulsion within this area, resulting as it did from price
and wage instability, goes to the very core of the bituminous coal prob-
lem.
The statistical record of shifts in production are given in the
following tables and ch?rt. For convenience in these and later tables
and charts, the four states north of the Ohio River are labelled Group
"A" States, vihile Kentucky, Yvest Virginia and Virginia comprise Group
"B" States. First, attention is called to the record of production
from 1898 to 1916. It will be seen that production in Group "A" States
increased 188,000,000 tons between the two years, and 119,000,000 tons
in Group "B" States. Though in absolute magnitude Group "A" States
forged ahead more rapidly, the ra.te of increase was much greater in
Group "B" States. The greater rate of increase is accounted for mainly
by the fact that several of the important producing areas in the south
were first tapped during this period. Much of the railroad development
occurred during this time in the Group "E" States, whereas in the Group
"A" Ste.tes the railroad network was already relatively complete. It is
significant to note that production gained simultaneously in both groups
during this entire period. In contrast, the increase in Grouo I'A" States
ceased with the peak production reached in 1918, while the trend con-
tinu.ed uTD^ard in the Group "E" States through 1927.
9837
I
¥
i
1^1
Hi
§§§§§§§§§§§ §§§§§§§§§§i§§§§8§ii§§ii§
§§§§§§§§§§§ §§§§§§§§§§§§§§§§§§§§§§§§
^ie&^^§SSI9>S&l^SlS2>«&§£3S$§8i«SI^SS3l
re&8H£?a&S'^?is§i?^eiE^5i§SH&gsss&
M
iiitmmiiniiimiimisiiimm
iiim^mUtimiiiiimimmiii
iiUiiMmtiiimimimmui^in
i !mi^i^lill^ii§i§S§m§^ISEI§§§
s
li
SI
11
11
8 o3 u^vij'vo ^-l^» r^<n\£ cno o^w r^oj r^ N o o>r-.i-^ON 'H
I - ^. „.,„
i i 111
8
I
O OMTV O Jt eO to CM ^ r-t r- rH r4 tTLtf KMn<\j <rv W M ON .5 $m
tin vS«^ r^r- r- to r- 60 vD f*o <T\»H K\5 cvj To f* o^ to ON oi &"£ 5
8 '&° . ^.'^^.'
9 3 l3 ?• S5"#,C\J Slfi?,Q''?^'#>'S 5* M^W S^S!■?^ Winnie's 1?
H q nS o » w ja-^ l*^^^K^o o ovi) r-cu ifN^ fM o M oj fH fvj
So g. £ Si
S3SS^q^^^iCqf5S^.5^K'!^£(|f8 ; 'S
t J* ^^rAo^^'■-^ ^^r^'^*Q q'so P^O-* to ^-^^r^l^^^^ r^ eo' *# d
O-^ O 60 ON <ri J- r*^ rH 0^» K^rj O t- J "^ CM rH r-* J- K\ a) o
VI jf K\r-» mcujt o o o oj rt * fvf <no o o i~o rt o
I'll H ..... . r-^- «r-^ ^^ -. ^ g
o 5 1
«4 trvVO iTlftl W^ M M K^r*.r*^ r-( UNPJ fU ON-* O (T-UN-* d
<r>. uvo i~;» r-vo •» i-cmvo w rNa-vo » k>cvi r~r-o
9837
-67-
*■> J.
<o e
■DO
^^
%i
il
r;
1
5
HI
^0)5)
■8
C J- "0
o^2(?)
m
z&
xi
•63-
Omitting from consideration the trends during- the war end.
su.cceeding years through 1922, daring vhich unusual circ\i!nstances
already referred to held ST7ay, the course of production after 1923
deserves special attention. For Group "E" States, production in-
creased from 164 milliou in 1923 to 221 million tons in 1926, an in-
crease of 57 million tons, while during the same period production
dripped 44 million tons in Group "A" States. The pre-war cha,racter-
istic of simultaneous growth in the tv/o areas was replaced, after 1923,
ty the most rapid incree^se ever achieved by the Group "B" States, end
large absolute losses in Group "A". Exsraination of price levels for
the t\70 areas sheds significant light on the new trends,
delation of Price and Shipment Changes; During the pre-war
period, the differentials in prices (mine realization) "between the tY/o
areas remained relatively stable and narrow. For the entire period,
the average of annual realizations for Group "B" mines was only 10
cents a ton below tha^t of Group "A" mines, with a maximum of 15 cents
in 13S9 and 1900. During the 1917 - 1923 years, the average of annual
ree.lization v;as greater for the southern mines than the northern. In
the su.cceeding yee.rs the differential in realization favoring the Groxip
I'B" States v/as as follovrs;
1924
1925
1926
1927
1928
1Q29
1930
1931
1932
1933
These spread.s are in marked contrc.st to those of earlier years
?:ad are of sucn magnitude a- to .aodify tlie currents of flow in coal in
the highly competitive markets. The relationships of prices and the
chr^nges in production between the t\70 areas during the 1923 - 1953
period, o.re shown in the follov-ing table and charts.
In these the da.ta for realization and production are converted
into indexes, with 1923 as base for each series. For 1924 and 1925
the divergence in price levels between the two areas in greatest a.nd
reflects the greater ability to reduce pr:».ces in Group "B" axea. The
narrowing of the differential in 1926 reflects the active demand of
th:,t year, production being only second to that in 1913. At the sane
tiine the relation of the production curves vra,s reversed, the index num-
ber for Group "L" rising to 134 and that for Group "A" falling to 85,
THiile the price relationship in 1927 rema^ined practically the same, the
proc.uction curves grew wider apart, due mainly to the prolonged strike
- follovring the erpiration of the Jacksonville Wage Agreement in Group
"A" States. In 1928 Pennsylvania ojid Ohio were non-\mion, therefore
38
Gents
38
28
33
31
23
18
26
31
32
9837
ation
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9837
-70-
T
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Comparison "'^ Production -~' Realization. P. O.B. Mines,
between Two Groups '^ States East «**»» Mississippi
River 7^ 1923 - 1933. 1923 = 100'/^
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9837
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9837
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alDle to reduce woge costs and prices. The drop in the level in that
year for Group "A" is largely determined by the reductions in those
tno St tes. Ho'^ever, this drop vas met "by Group "B" States, so the
relationship of prices remained practically the same. The production
cu-rves rrere also affected in 1928 due to strikes in Illinois, Indiana
and Ohio adversely affecting the year's shoeing in Group "A" and favor-
ing Group "E" . After 1928, the differential in realiza,tion reduced con-
siders.bly. Wliile prices in general if/ere falling, those in Group "A"
dropped more rapidly. As a conseauence, the production in these Sta.tes
did not decline r,s rapidly as that in the southern states. In other
uords, the trends of 1924-26 v;ere then reversed, both as to realization
s.nd production. In the keen competition for markets after 1923, it is
apparent that the Group "B" States had a distinct advantage in prices
a,nd gained a larger share of the market. The question na,turally arises,
~hy 1,761-6 not the Group "A" States able to meet the level of realization
of the Groiip "B" States a,nd thus retain their proportionate share? The
principal reason appears to lie in the relative ability to reduce costs
of production, thereby creating opportunities for reduction in prices.
Trend of Vfege Rates and Labor Costs; Since labor costs consti-
tute 60 to 65 per cent of total costs of production, the relation of
wage rentes to prices cpn be readily appreciated. Moreover, much of the
remainder of costs is made up of fixed elements, such as royalties,
taxes, power, insurance and worlvtien's compensation payments, etc. It
was natural, therefore, that the efforts of operators to meet the price
competition should be accompanied by pressure on the most vulnerable
part of their costs and the one \¥hich offered the possibilities of sig-
nificant reduction. In the deflation of prices resulting from intense
competition after 1923, '7age rates ?rere progressively reduced to the
low levels of the first half of 1933.
Beginning in 1920, the Central Competitive Field was under con-
tract at the highest level of wages ever achieved. These rates were
continued until April 1, 1924, at T.'hich time they were extended under
the Jacksonville Agreement until April 1, 1927. On tlie other hand, onlj
four districts ha.d wage contracts in 1920 - Ksn-'wha, JMew Pdver and Fair-
mont in Uest Virginia, and Western Kentuclcy - and these were only par-
tially under agreements. Contractual relations continued until 1921
in the Hew Hiver Field; April, 1924 in Kanawha Field; April, 1325 in
TTestern Kentack^r. The wage scale in northern West Virginia was extended
by the Baltimore Agreement from April 1,1924, until April 1, 1927. All
other areas in Grcap "B" States, comprising the bulk of production in
this area, were without -anion v/age agreements throughout this entire
period. Therefore, as far as the influence of wage contracts on the
xie^e scales in concerned. Group "B" States may be considered as prac-
tically freed from the restrictions of wage agreements while Grovip "A"
Sta.tes were tied to contracts.
9837
After the signing of the Jacksonville Agreement in 1924, the
Sou-thern States vrere in a preferred position in cutting prices "by re-
ducing 'vages. In the keen competition resulting from the great excess
of mine capacity, the Group I'B" States i--ere atle to cut further than
the Group "A" States, as already described. T/ithin a year f)i"ter the
signing of the Jacksonville Agreement, V,estern Pennsylvania operators
deuanded a revision of the contract heca.use of loss of "business to
southern rivals. Failing this, many of the mines ^ere closed in April,
reopening in August on a non-union "basis with reduced wage scale. There
\7as also some "brerl:dov/n in Ohio, and in the Fairmont district of northern
■Jest Virginia.. 3y the end of the contract, all those operators thF.t
carried through the Agreement refused to continue and a large strike
ensued. As a conseqaence , all of Ohio and Pennsylvania (with minor ex-
ceptions) "became non-union and Illinois and Indiana continued their con-
tracts to the end of the coal year, flarch 31, 1928. After another strike,
Illinois and Indiaxia renewed contracts on a reduced "basis of $6.10 ysr
day for the "basic inside skilled (tracl-onen) classification, as compared
\7ith the $7.30 ra.te "onder the old agreement.
In the meantime, wage rates in the non-ujiion areas of Group "3"
ha/, little of permanence or stability in them. As it "becajne necessta-'y
to cut costs to keep or gaan mr,r':ets, wage ra,tes "became subject to at-
tack.
The best indication of the trend of wage rates is to be found
in the series of reports published by the IT. S. Burea.u of Labor Statis-
tics, entitled "Hours and Earnings in Eitiominous Coal kining", beginning
with 1919. In order to simplify the presentation of these data a, cha.rt
.,nd tahle have been prepared combining the results for Group "A" oiul
Gro'LTo "li" States.
98o7
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9S37
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Unfortunately the data on ho-urly es.rning-s are not available
for each year, and represent only the earnings at the period in 'hich
talren, therefore failing to note variations within the year. Consider-
ing first the earnings for all men in Group "A", it will be seen on the
chart that hourly earnings continued' fairly constant from the 1921~22
observation until the 1926-27 observation. The straight drop reflects
the brealcing away by some producers in Group "A", notably in the Pitts-
burgh district, beginning in 1925. The observation in 1S29 shows a
marked decline from 1936-27, showing the break which took place after
the expiration of the Jacksonville Agreement in 1927. Contrasted with
the trend in Group I'A" States) we find a sharp break after 1921-22 in
the Group "B" States, which reflects the exercise of freedom to modify
wa/:'e scr.les in the latter area. The disparity in the hourly earnings
attained in 1924 continued with slight change, until the 1926-27 observa-
tion. Thereafter the spread in hourly earnings materially lessens as
shown in the observation for 1929*. " Thereafter, the disparity remains
relatively constant, the cutting in wages in one area being offset by
decreases in the other. After 1927, the two curves fairly nose-dive,
so that by 1933 hourly earnings in Group "A" States were 49 per cent
less then in 1921-22 and 54,3 per cent less for Group "B" States,
The ratios of hourly earnings in Group "B" States to those in
Group "A;" are sho^n also in the table and chart. Ftilling from 91.5
per cent in 1921-22 to 79 per cent in 1924, the level dropped slightly
in the 1925-27 observation and rose sharply in 1929, followed by further
decline,
Financial Status of Industry 1924 - 1953; In the process of
declining prices and liquidation of wages, what of the financial pin-
tu.re of the industry? Referring again to the Chart and Table following
page no,__^ the story of income as reported by the Bureau of Internal
Sevenue is shown. Unfortunately data are not available 'for -bituminous
coel alone for several of the years, but it should be noted that for
the generally prosperous years of 1928-29, the industry showed con-
siderable net deficits.
Summary of 1934 - .1933 Period; From the discussion of shifts
in production, prices, T/,?ges and financial status of the industry, it
is clecr that these elements are closely interwoven in the fabric of
the industry. The evidence indicates that the .iridu.stry is one of
chronic over capacity, which in tifrn results in intense competitive
pressure to gain a share of a limited market. In order to gain and
hold a share that will afford reasonable running time and costs, prices
8.re slashed to satisfy a bijyer's market, and vvith the lowering income
from coal sales the wages of miners must be slashed.
In a sitos.tion in which a p.-rrt of the industry is -under wage
a^gree.viont and another is not, the former is placed at the mercy of the
latter, TJ'ithout any stabilized v/age or price levels, the industry is
9837
doomed to endless confusion and despair, as vitness the developments
after 1927. It is often argued that the industry should he permitted
to carry out its competitive struggle to the hitter end, thus elimina-
ting the economically weak "ijnits. This process continued for ten years
after 1923 without any approach to a stahilized condition. In 1932^
the capacity of mines in operation was ahout douhle the requirements
of that year. With any improvement in demand and in prices, many idle
idle mines representing millions in capacity are ready to return to
active operation and continue the previous chaotic conditions. If
mines were automatically and permanently withdrawn from future activity
"by virtue of inability tc withstand financially the stress of declining
prices, the argument for liquidation might he acceptable. But inability
to meet fixed obligations often merely results in financial reorganiza- -
tion cud the wiping out of all or part of these obligations, and con-
tinx-'^.tion in operation. The inability to maintain wage levels offers
but the choice of reduction of wages or closing down. In most instances
miners as well as operators are willing to concede that a half loaf is
better than none, and so the wages are forced within the limits imposed
by en ever declining realization for coal.
S837
-78-
TEE FOHLULATION 0? THS CODE OF ?XI.R CO'TETITIOIT lugER TH5 NATIONAL
iMi)Us?::iAL TS:COY£:':: :M of i93g
Activities in the coal industry looking toward the formulation of a Code
of Fair C«mnetition were initiated at an early date, -ore ceding "by sorae two
weeks the Tjassage of the National Industrial Eecovery Act, On June 5, 1933
over a h-'ondred coal operators asserahled in Washington on the occasion of a
meeting of the National Association of Manufacturers. They were addressed hy
General Johnson, A Committee was named "to prepare the outline of a Code that
would serve as a guide to all -oroducing fields that decided to submit a code
to the Government" . This sugjested code was raaile'"'^ to the memhersnir) of the
National Coal Association that same week. On June 15 this Committee re-oorted
to the National Association meeting at Chicago. (*) 'This so called model code
was later descrioed as "a very general and much exnuri^'ated affair Tsractically
ignoring the controversial -ooints in connection with collective hergaining,
hours, wages and prices". (**)
By June 24 it was reported that code work was making substantial progress.
Meetings were in progress or arranged for: at Denver for the Colorado - New
Mexico operators, for Uta.h and Southern Wyoming operators; at Fort Smith for
the Arkansas - Oklahoma Association; for Kansas-Missouri o-oerators who had
reached an agreement in wages and hoMrs with the United Mine 'Workers; at
Terre Haute for three Indiana operators' associations; at Pittsburgh, attended
by operators from Western Pennsylvania and Ohio; at Washington, D. C. of
Central Pennsylvania operators; at Comberland, Maryland for Georges Creek
and Upper Potomac operators; Smokeless operators met at Fnite Sulphur Springs
and arranged a conference with Appalachian operators; and Alabama coal mine
operators met a Birmingham. The National Coal Association forecast the sub-
mission of codes present^ d with substantial accuracy, predicting five major
districts:
Rocky Mountain District - Utah, Montana, Wyoming, Colo-
rado and New Mexico.
Southwest - Ar':ansas, Oklahoma, Kansas, and Missouri.
Central - Icwa, Illinois, Indiana.
Northern - Ohio, Pennsylvania, Maryland and Fairmont, W.Va.
Southern - Southern West Virginia, Virginia, Eastern Ken-
tucky and Tennessee.
The reporter pointed out that this left several states unprovided for:
Washington, North Dalcota, Texas, Alabama, Western Kentucky and Michigan. (***)
(*) Bulletin No. 1197, National Coal Convention, June 10, 1933,
(**) By Mr, George Harrington, Code Hearing Transcript, August 10, 1933,
Vol. II, p. 228.
(***) National Coal Association Bulletin No. 1199. June 24, 1935.
9837
In the outcome the National Recovery Administration received for con-
sideration only one code intended to "be of general a-oiDlication. This was
filed July 13th, was known as the "^eeneral code" and resulted from extended
deliberations Isy, a grout) of bituminous o-oerators and United Mine Worker
Union representatives. The- operators were active in the "States of Penn-
sylvania, West Virginia, Ohio, Indiana, Illinois, Michigan, Tennessee,
Kentucky, Arkansas, Oklahoma, Colorado, Montana, and Wyoming". They claimed
to riroduce "in the aggregate a substantial prot)ortion of the bituminous coal
tonnage of the United States." (*) The'other codes submitted were intended
•to be of regional' or local ap-nlication. Measured by tonnage represented,-
largest importance attaches to the code jointly presented by the Northern
Coal Control Association with membership in Pennsylvania, Ohio and Northern
West Virginia, producing srme 60 per cent of the total tonnage in that area
.in 1932, and the Smokeless and Appalachian Coal Association including
operators producing 70 to 75 per cent of the bituninous coal for those fields.
For convenience this will be referred to as the "Appalachian Code". Other
important districts filing codes were the Rocky Motmtain and Pacific fields,
which, with the exception of the State of Washington, had combined in a single
code except for difference en wage scales. These codes were submitted by the
following associations:
COLORADO AND NEW IvIEXICO COAL OPERATORS ASSOCIATION, voluntary association
of representative producers and wholesale distributors of Colorado and New
Mexico coal;
NORTHERN COLORADO COAL PRODUCERS ASSOCIATION, voluntary association of
representative producers and wholesale distributors of N.orthern Colorado
coal;
UTAH COAL PRODUCERS ASSOCIATION, a corporation organized and existing
under the laws of Utah, its. membership comprising a representative group of
producers 'and wholesale distributors of Utah coal;
S0UTI31RN WYOMINO COAL OPERATORS ASSOCIATION, a voluntary association of
representative producers and wholesale distributors of northern Wyoming coal;
MONTANA COAL OPERATORS ASSOCIATION, a voluntary association of rep-
resentative producers and wholesale distributors of Montana coal, and
WASHINGTON COAL OPERATORS ASSOCIATION, a voluntary association of rep-
resentative producers and wholesale distributors of Washington coal.
As noted, the Washington Coal Operators' Code was different in content
from the general model.
Southwestern Coals, a voluntary association of opei-ators claiming to
represent "over 75 per cent of the tonnage of bituminous coal in the States
of Missouri, Kansas and Oklahoma", presented- a code on July 27th. The
failure to secure the adherence of ArkansS.s and Texas will be noted. Operator"
in Alabama whose combined tonnage amo-onted to 75 per cent of the commercial
production cf the State, submftted a code which is best regarded as an ex-
pression of the views of operators in the Southern Field. The letter of
(*) Testimony of George 3. Hg-rrington at Coal Hearings, Transcript Vol. II,
p. 223.
9837
-80-
transraittal, dated July SSth, asserted "no general code hfis "been stiggested or
can be pror)Osed which would bear any reasonable relation to the existing or
■Drosnective conditions affecting the Alabama commercial coal industry or
ca-oable of effective enforcement with reference to tbnt coal field, either
as to the emergency or -oermancntly".
The exoected Central Code failed to materialize. For this result several
factors were resnonsible. Several of the most influential Illinois orjerators
had shared in the formulation of the general code. The ot)erators of both
Indiana and Iowa found their interests divergent from those of Illinois and
in each state there existed a triangular coraoetitive situation which extended
beyond the area com-orehended in the Central district. Iowa's severest cora-
TDetitors were Missouri and Illinois; Indiana's were Illinois and Western
Kentucky, (*) Cedes were sent in from both Iowa and Indiana. These, however,
were so largely auoted from the general code as to be in effect the same code.
The princiiDal point of difference, aside from the wage levels rtronosed, was
in the more advanced statement on the establishment of minimum -prices. Wage
proToosals are discussed in Chanter IV and will receive only incidental mention
here.
0-nerators in Illinois who had maee contracts with the Progressive Miners
Union, formed an organization loiown as the Coal Producers' Associaticn of
Illinois and submitted a code which followed exactly the nhraseology of the
general code excent for the substituting of the wages in their agreements
with the Progressive Miners Union for the minimum wage standards of the
original document.
Operators in the State of Korth Dakota through their Indet)endent Lignite
Operators' Association, worked out and submitted, AuTUst 30th, a code based
on the peculiar conditions and nrobleras encountered in that State, The letter
of transmittal contained the following anology:
"In submitting this Code, I shall be frank to admit
that in some details the Code will not measure up to
the reqiiirements and conditions of the National Recovery
Act. In that connection I wish to inform you that the
State of North Dakota ha^ suffered from drought and
adverse weather conditions for the last three years;
that our farmers, laboring-men and business-men are
all in equally depressed financial circajnstances.
Therefore, it wo\ild create a hardshiri on a large
part of the ppoulace of North Dakota to increase the
cost of coal and fuel sufficiently to make possible
any material advance in wages. However, the prices
embodied in the Code submitted are slightly in excess
rf what hi"is been paid in nearly every mining district.
Then, en the other hand, the o-oerators who are re-oresented,
and who are a party of this association, are. small mine
owners ... most of them serving a. local trade territory,
being termed 'wagon and truck mines', who are comnellcd
to sell their coal in competition with the large strip
mine operators whose labor cost ner ton is comparatively
(*) These triangular situations are discussetl more at length in Chanter VI
9837
-81-
srnall compared to the independent o-oerators . . . the latter
not being affected by an increased labor coet. In addi-
tion to the above handicaps, the large strit) mine o-oer-
ators,have been enjoying a free rein in their discrimina-
tory method of selling coal; they are selling coal within
hp.uling distance of the wagon and truck mines at a "orice
much lower than their general r)rice."
Various sub-marginal district, mainly P^oerated by hand methods, submitted
codes. . Their chief interest was in wage differentials and these documents
seldom' made significant contributions to the principles of code making. In
most Cases these codes can be dismissed with very brief discussion.
The Coal Control Association of Georges Creek and Up-oer Potomac subscribe
to the Ap-oalachian Code. Their sole reason for a, ser)arate presentation was
the matter of wage differentials.
The Preston County Coal Operators Association of West Virginia nresented
a fairly com-olete code, based on the model sent out by the National Coal As-
sociation. It inconoorated the current wage .standard" of the district.
Southern Ohio Coals, Inc., comprising a representative grout) of producers
and wholesale distributors of bituminous coal from Southern Ohio, submitted a
code closely similar, except for wage standards, to that from Preston County.
Choefators of coal mines in Hamilton-, Sequatchie, Bledsoe, and Rhea CountiGfe
in Tennessee, and Walker and Dade Counties in Georgia also followed this model.
Their code was signed by ten .operators and no formal organization seems to havt
been formed. With one exception, all these mines were hand o-oerated and
"practically none of the coal was shipped interstate". Although a different
code was -oresented, the subscribers professed their willingness to agree to all
provisions of the A-opalachian Code, except the wage clauses.
The West Kentucky Coal Association presented a Code of like c'ontent.
Their chief interests seem to be twc; the wage standards, and the matter of
administration, whi'ch they wished to be under the direction of the Board of
Directors of. the Wes-tern Kentucky Coal Associatiors.
The Off Railroad Coal Mine O-oerators of Saline, Jackson, Williamson and
Jackson Counties, Illinois, 117 in number, submitted a code with original pro-
visions. They felt that small mines such as they operated must have a wage
differential in order to compete with the large operators. Altho-ugh their
organization was loca.l they seemed to have hoped for a national administration
for "Off Railroad" mines. The Code provides for Divisions of the Off Rail-
read Coal Mining industry with separate administrative agencies. These were
to send representatives to an Emergency National Committee which was to be
the "general planning and coordinating agency for the industry".
The Verr.iilion County, Illinois, Small Coal O-oerat ors ' Association was a
similar group, They aspired to rexiresent 113 such mines in the county, em-
ploying 950 men and producing 250,000 tons of coal in 1932. They presented the
model code.
The Progressive Miners' Union submitted a document headed: "A Statement
9837
and Information Relative to the Activities of the Progressive Miners of
America, including a Code of Fair Comioetition" . Judged as a code, it was a
very fragmentary document having no r)ror)OPals on marketing or administration,
"but confined to Ifbor relations, to support of the Progressive organization,
and to suggestions that during the continiiance of the "-oresent national
emergency" em-nloyment should he increased "by the substitution of hand l?bor
for machinery whenever possible".-
The Coal Orjerators Association of An-nanoosc and lYayne Counties, Iowa,
indorsed the general code and asked for recognitiovi of their d istrict afe one
entitled to a differential below the base rate "due to mining conditions".
Three small coal com-oanies in Jefferson County, Colorado, each emnloying
at a maximum less than 35 men, had been advised by the Northern Colorado Coal
Producers Association that they were not acceptable as members of that or-
ganization "due to differences in situation, mining operations and coal veins".
Accordingly they formed the Littleton Colora^do Coal O-nerators Apsociation and
submitted a code. This code, ho-^ever, was the standard Rocky Moimtain Pacific
one without even such elementary modification as might have adapted it to this
situation of the small group. The only distinguisliing feature was In the wage
proposals.
The above summary statement will disclose that the multiplicity of codes,
sometimes stated as 23 in number, submitted for the BitnJminous Coal Industry,
is reduced to four essential forms: the fjeneral code with wJiich the Iowa Code,
that of the Coal Producers Associatioi of Illinois and of Wayne-Appanoose are
in agreement; the model code followed exactly or in large part by Southwestern
Coals, the Coal Trade Association of Indiana, the Western Kentucky Coal As-
sociation, Southern Ohio Coals, the small mine owners of Vermilion County,
Illinois, and the Preston County Coal Operators Association; the Appalachian
Code, subscribed to by the Coal Control Association of Georges Creek and Up-'-^er
Potomac and the Southern Tennessee and Georgia operators; and the T.ocky
Mountain Pacific Code, subscribed to by. the western states and which was ;
adopted by the three operators from Jefferson County, Colorado. The Code
presented by the Coal Producers Association of Washington calls for some cor-
relating comment. Those, for Alabama, the Illinois Off Railroad Coal Mine
Operators, and North Dakota are highly original in content, deeply stamped with
the convictions of their operator authors and an outgrowth of indigenous
conditions and problems.
For convenience, the follovring topical discussion of the contents of
proposed codes follo'-'s the outline furnished by the general code. North
Dakota's Code is sui generis and is reserved for discussion in a separate
paragraph. Wage matters are referred to the chapter dealing with wages.
Details of minor significance are, of necessity, omitted. After a general
declaration of intention to effectuate the nurp.ose of W. I. B. A. this general
code in section I declares its general purpose o f stabilizing the coal in-
dustry. A sentence- may be quoted:- "Fair and constructive competition is to
be encouraged, but unfair competition must be eliminated." There is a
cautionary paragraph as to the importance of labor, costs and the dangers aris-
ing from competitive fuels and other sources of energy.
9837
■The geographical hasis pro-nosed for administration .deserves full st-'te-
ment 'becaiise of its relation to that established in the approved Code:
Nor theastern Division
The New England States, the States of
Hew York, New Jersey, Delaware, Penn-
sylvania, Maryland, Ohio (exce-ot the
City of Cincinnati) , and Michigan, and
the coal fields of Northern West Virginia
lyine north of the Kanawha district.
Ap-oalachian Division
Virginia, the high volatile field of
Southern V'est Virginia, the Pocahontas,
Tug River, Winding Gulf and New River
low volatile fields of Souther-n West
Virginia; that portion of Kentucky lying
East of a North and South line drawn
along the West line of the City of Louis-
ville, and the States of Tennessee, Ala-
bama, North Carolina, South Carolina,
Georgia, Florida, Mississippi, the Dis-
trict of Columbia and the City of Cin-
cinnati, Ohio.
Central Division
Southwestern division
Indiana and Illinois, that portion of
Kentucky lying West of a North and South
line drawn along the West line of the City
of Louisville, and the States of Iowa,
Wisconsin, Minnesota, North Dakota, South
Dakota and Nebraska, and the City of St.
Louis, the County of St. Louis and the
City of St. Charles, Missouri.
Missouri (except the City of St. Louis,
the County of St. Louis and the City of
St. Charles), and Kansas, Arkansas,
Oklahoma, Texa,s and Louisiana.
Western Division
Montana, Wyoming, Colorado, New Mexico,
Arizona, Utah, Nevada, Idaho, Washington,
Oregon and California.
Machinery for administration was proposed; consisting of a central Bi-
tuminous Coal Industry Board of five; two operators designated by N.R.A. In-
dustrial Advisory Board; two representatives of labor named by the Labor Ad-
visory Board; and a fifth member named by the Administrator. All matters
affecting the administration of the Code were to be heard by the Board whose
rulings were to be "final and conclusive". Each of the five Divisions was
"to establisn its own administrative agency or agencies for the determination
of its own buriness affairs with appeals from this agency's rulings to the
Bituminous Coal Industry Board. Subdistricts might be established if deemed
advisable by the Divisions. Thoughtful critics will find these provisions
slight for the management of an industry as complex and far flung as the
Bituminous Coal Industry. Nevertheless they represent the high water mark for
administrative provisions in the codes submitted. The codes following the
model furnished by the Operators' Committee frequently omit any reference to
9837
administrative pro"blems. Yfhen mentioned, power is lodged in the operators*
association concerned, which "shall have all the po^vern necessary and ^Droper
to effectue.te its purposes". The Alabama Code lod^-^ed control in the Board
of G-overnors of the Alahama i'ining Institute. Tnere, as in the Appalachian
Code, some agency for joint control was ooviously necessary, a Central Code
Committee was proposed. But the o-oerators v.'ere chary of delegatin,.'; authority.
This Central Committee was limited to "the administration of such matters of
common interest to ooth territories as may "be s-'Decif icslly referred to it for
that purpose by the respective Code Administration Committees". The 'Roc^x^r-
■lountain-Pacif ic Code is especially interesting at this point. The various
districts "ere stated above. "^ach party to this Code", reads that -document,
"is pledged to the enforcement of its -orovisions". Each district, by its
own methods, was to select a District Control Committee to administer and
-oolice the provisions of the Code and "make such regjulation as may be neces-
sary to carry out the intentions of this Code". There was also provision
for a Central Advisory Committee consisting of two members from each district.
Consider the statement of its authority: "It su?ll be the duty of the
Central Advisory Committee to consider and attemiot to adjust and harmonize
all problems which may arise under the Code as between the several districts,"
The T/ashington Code omits even such saado^■^^ delegation of centralizing
authority. The Code is to be administered b;r the loard of Trustees of the
Coal Producers Association of Washington. There were, however, to be five
divisions in the State, each with a district committee whose acts were sub-
ject to revision by the Board of Trustees. Siich weakness of central adminis-
tration, joined to the numerous cases in which districts of minor importance
in coal production, jealously sought independence of control, are highly
significant in the light of the Drovision for administration later included
in the approved code and of the troubled and ineffective administrative
history of that code.
As a feature of administrative control, the provisions for the filing
of reports by operators may be mentioned here. This was a matter ^'enerally
touched uiDon. But the requirements varied from the general code which read:
"51ach employer shall furnish reports to the designated agency in such sub-
stance and form as may from time to time be required" to carefu!l.ly hedged
statements that the officials of the district coal association should be
the custodian of the reports and sho;ild determine their character and con-
tent. All the codes agree in nrovioing for secrec3'' for the individual
reports.
In the matter of hours the Codes were in substantial agreement on
dail-'- hours set at eight. Exceptions are found in the Progressive Miners
Code, the Off Pa,ilroad Operators of Illinois Code and in the presentation
of the case of the United Mine 7or!:ers. (*) It may be noted in rjassing
that the Progressive I'iners controlled the region from which tl^e 6-hour
day and 30-hour week proposal originated. Al"i the .groups not proposing
the S-hour day favored this schedule and this was the only exception stip-
ulated by the United iiine TJorlcers to the general code. (**) On weekly
hours wide divergence developed. Indiana operators stood alone with a
proposal for 32 hours per week. Since these maximum hoars were conditioned
upon the esta-blishraent of competitive hour and wage scales in Ohio, '"Jestern
Pennsylvania., West Virginia, Virginia, Tennessee and Kentuclqy, this was not
a firm commitment on the part of the Indiana r>roducers. The general code
and 7ayne arid Ap->-)anoose Counties, Iowa, suggested 6 months at 32 hours
per week and 6 at 40 hours. Proposals for 40 and 48 hours h<?,d the adher-
ents indico-ted below:
(*) Transcript of Code Hearing, Vol. II, pp» 346 et seq.
(**) See the letter of transmittal.
9837
40 Hours 48 TJpiirs
A-D-nalachian Code All Rocky Mountain-Pacific dis-
Soutb-restem Code tricts except Washington but in-
Alabama eluding Littleton.
Washing-ton ■ lo^ra
Western Kontiicky Southern-, Ohio •_
^ . „ . ■ Tennessee and Georgia
Preston County Illinois Coal Producers Association
Vermilion County, Illinois
North Dakota operators nominally ToroTOscd a 40-hour week hut there was a -oro-
vision that "any eimoloyee may from time to time work a 48-hour week so long
as ills a.vera-.e 40-hour week is not e^xeeded through any 16 weeks rieriod".
Familiarity with the peculiar conditions existing in North Dakota's lignite
industry will suggest that with this exception the 40-hour week would seldom
prove "burdensome to North Dakota o-oerators. As a samnle of numerous exception
to the 8-hour day, further reference may be made to this code. Supervisory
staff and monthly employees were to "work the number of hours reouired for the
proper completion of their work in accordance with' the customary practics";
employees transporting men and coal "the additional time necessary" to handle
the men and all coal mined in the 8 hours of actual work; outside employees we
to work the additional time necessary "to dump and i^repare the coal delivered
to the tipple each day". Besides all this, there \ms a clause to cover ac-
cidents or emergencies. (*) The Appalachian Code included these exemptions an
also carried a provision for working a 48-hour week at will so long as the
40-hour weekly average' was not exceeded in p„ny year. Such exemptions will
have a familiar ring to anyone 'exnerienced in the bu.siness of code formulation
The weekly hour proposals were affected by the nature of demand. Fields
which served the domestic trade most largely were inclined to put. a high limit
on hours in order that the highest seasonal demand might be met. This tendenc
was at the maximum in the Rocky Mountain areas where extremes of temperature
and of distances transported were fo-und. This was the argument of the posi-
tive brief presented August 1, 1933 by operators in Southern Wyoming relating
to hours of work to be determined in the proposed code for bituminous coal.
"The purpose of this brief", said the operators, "is to show conclusively the
necessity for maintaining a work day of eight hours in the coal mines of
Wyoming, and likewise to continue the privilege of working a maximum of six
days per week during the brief peak demand periods when work is available."
In the case of lignite and sub-bituminous producing fields such as Northern
Colorado and North Dakota, this problem was intensified by the difficulty,
or impossibility, of producing in anticipation of demand and storing this fuel
since its high moisture content causes excessiye degradation.
As would be expected of a code formulated under United Mine Worker aus-
pices, the general code included liberal standards on conditions of employment.
It incorporatci" Article 7a without q/aalif ications; provided for a universal
2000 pound ton for checlOTeighmen; for semi-monthly wage payments "in lawful
money or par caecks; for the check off of union dues; for freedom from re-
quirement to trade at company stores or to live in company houses; and for the
making of district agreements. In contrast to these liberal provisions was
the child labor clause: "No person under 16 years of age shall be employed
inside a mine". To the Southwestern Code belongs the honor of proposing an
18 year minimum age limit for employment "in or about a mine". Claims to
r*y"''Cf71he~LTt"tleTon~~Cc'de. ~
9837
-36-
honorable mention are weakoned, ho"'ever, ty the use of the hoary legalistic
device limiting responsibility for violations to t"iose "Icno'^ingly" violating
this clause.
Other codes formulated uyider exclusively operator ausnices displayed
distinctively anti--'anion tendencies and gave grudging compliance to the
requirement that Article 7a he incorporatec" in the codes. Thus the Ap-
palachian Code, representing about two-thirds of totfl production, added the
following two paragraphs:
"Tlie foregoin; provisions shall aprjly to each em-nloyer
in his relations to his o^7n em-nloyees, but no employer
shall be required to deal jointly with other employers,
or with re'oresenta.tives of any emnloye'^s other t^ia.n his
own, and any collective bargaining' shall be on behalf
of only those employees participating therein, the
em^oloyer being free to deal separately with any other
of his employees not so partici'ia.ting.
"Sec. ^. It is a condition of this code that no per-
son shall be rcouired to join pxij labor organization to
secure or retain employment or to receive the benefits of
this code; ajid the right of every individual to refuse to
join p labor organization, and his right to bargain with
his employer eigher indiviriually or collectively with his
fellow employees, free from the interference, restraint or
corrcion of any labor organization or its a ents, are
hereby pxnressly recognized."
The Western Kentucky Coc'.e also incomorated these provisions. Tlie
Sou th^Tes tern Code had a substitute for the first of those two pairagraphs
reading:
"It is expressly understooc! by anrl between all of the
subscribers hereto that no provision of this code has •
been ador)ter' '"ith any intent whatsoever to limit,, ab-
ridge or destroy the right of em^iloyer a.nd employee to
continue to bargain individually or collectively a.s
they may mutually agree u^on."
The Alabama Code stated the position of its adherents unequivocally and
pushed its statement to a logical conclusion in a demand for "employee ren-
resentation" systems or, more bltmtly stated, for com-nany unionism. As a
representative and frank proposal from a center of non-uiiion production this
statement is ouoted in full:
"For the reasons st' ted in Section 1, the acceptance
of said conditions shall not oe construed as abrogat-
ing the unemimous conclusion and unrierstanding of the
members subscribing to this Code that it is in the
interest of the public, of the coal industry, and its
employees, based on i.iany years of harmonious relations
and freedom from centrali-^ed or standardized inter-
ferencer directeil from other rc,:ions (a) that the
plants of the members sJiall 'be o^ien to ca-nable worlcmen,
9837
-87-
without discrimination "by reason of their memtershiTn
or non-mem'bershir) in a.ny lator organization; ("b) that
the emiDloyees of members • shall he eaually as free from
interference, restraint or coercion to join as not
to join any lahor organization and that the right to
freedom from such coercion shall not be waived by this
Code; (c) that no. member sl^all be under any obligation
to deal with any labor organization, or its ret)rcsent-
atives, directly or indirectly, \7hich shall violate
these -nrinci-oles; (d) that no reauirement of any or-
ganization or re-oresentation of employees shall be
received or considered which would have the effect of
violating or concurring in the violation of the State
law or rules ado-oted -Dursioant thereto or unlawfully
delegating the duty or res-oonsibility of the em- '
"oloyer under the law; and (e) that the conditions
adopted shall not inroair in any -oarticular the rights
of employer and em-oloyee to bargain individually or
collectively as may be mutually satisfactory to them
or tjrevent the Selection, retention or advancement of
emr)loyees based on their individual merit without
regard to thgir affiliation with any organization.
"Section 3.; .In addition to any means of discxission
or negotiations established consistently with Sections
1 and 2 of this Article, each member shall establish
and maintain a -olan and system for emt)loyee re-o-
resentation, to the end that discussion of wages and
working conditions may be conducted and concluded
■ororantly between the member and the emoloyees of each
member (or their re-oresentatives) who shall be in-
formed of local conditions and are directl.y affected,
such -olans to be submitted to and subject to axj-Droval
or mo(?if ication by the i^oard to assure their adequacy."
There was a large amount of agreement in regard to sales t)olicies. The
standard -Dro-oosal was that it should be deemed a violation of the Code to
sell below "the fair average cost of -oroduction amd sale (of the -oroducer)
■olus a reasonable margin of -orofit". Costs were to be computed "in ac-
cordance with standard accounting loractice and the rules and regulations
promulgated by the Bureau of Internal Revenue for the determination of Federal
income taxes". Both the general code and the model codes as well as codes
oased on them contained standard contract clauses.
Such provisions for price contr'.i a.prieareri in the great majority of the
codes, Indiana operators added the phrcije "and the cost of competing fuels"
to the fair average cost of production. Southwestern Coal preferred the
"mine run cost of production" as a basis for nrice making. They added a pro-
vision to the effect that "the Board of Directors shall, from time to time,
determine fair and reasonable minimum prices on the several grades, sizes and
classifications of coal". This was concurred in by the Indiana and Wayne
and Appanoose Codes. The Applachian, Western Kentuclcy and Alabama Codes also
provided for t:ie fixing of minimum prices but preferred that the respons-
ibility be lodged in a Marketing Agency formed on the model of Appalachian
Coals and including "coal producers representing the major portion of the
9837
--88-
tonnage of the district". Evidence of severe competitive pressure in
Ala"bsrQa is given by the standards for price fixing uy the Marketing
Agency set up in the Code. Sale is to "be "at prices, limited hy freight
rates, "by competition with other fuels and other fields and other pro-
ducers" as determined by the agency. And again, "the agency shall "be
authorized to provide for permitted variations from the price schedules
determined, "by it from time to time to meet competition". Any violation
of the price provisions entailed a penalty of 50 cents per ton as liquid-
ated damages.
Trie 2ocky Mountain-Pacific Code carried its price provisions forward
';vith a holdness that approached temerity. There was to "be standardization
of contracts of sale, and of sizies prepared, as well as definite price
lists. Moreover, these standard sizes and minimum prices were incorporated
in the Code. District Control Committees were to revise the price lists,
esta"blishing from time to time "fair and reasona"ble minimum prices on the
several grades, sizes and classifications of coal produced, such prices
to be based, upon the cost of production and competitive inequalities".
The Code further provided for a truck differential to be added to the
mine price. This v?as based primarily on the additional costs of loading
this coal and carrying on at the mines vv'hat v/as essentially a retail
business, but there v/as clear reference also to the dependence of the
coal consuming public and coal producers on the service of retail dealers
and of railroads. Here are materials for nice moralistic accounting of
competing interests and for careful determination of the essential duties
and privileges of code mal<:ers. Finally an article provided that the open-
ing, developing or operating of new mines should be a violation of the
code unless it were first clearly shovm that such action would serve
public convenience and necessity. This pi-oposal was based on a declara-
tion that existing mines had "an annual productive capacity of several
times tiie qxiantity of coal pi-oduced therefrom and sold in any year hereto-
for" . It may be noted here that the Washington Code, v/hile it shows some
differences in form, vras in complete agreement with all these price con-
trol provisions.
The Off. Railroad Coal Mine Operators of Illinois went a stage further
and provided for allocating tonntjge. It v/as made the duty of the Emer-
gency National Committee, subject to the approval of N.R.A. , to maJce
periodic "estimates of expected Off Hailroad Coal Mine consuj-ription; and
based thereon to establish ... an equitable production quota for the Off
Hailroad Coal Mine Operators industry and for each division thereof."
All the codes agree in submitting , miamerous items of unfair trade
practices. Tiiere was substantial agreement as to the content of this sec-
tion. They did not contribute to the difficulties encountered in form-
ulating a code of general application and vdth one exception did not draw
fire in the code her.rings. Kence this review is content with a general-
ized statement. The operators v/ere concerned that unordered coal should
not be forwarded, that there should be no rebates allowed below established
prices, under any subterfuge, that "business should not be bought by special
concession or services, that coal should not be misrepresented or sold
under a competitive trade name without authorization, and that breaches
of contract should not be induced. The item v/hich drew fire in the
code hearin:;s pertained to the growing practice of trucking coal. The
model code carried a positive section declaring!
9837
-89-
"The retail distribution of coal is a necessary
agency in the marketing and distribution of the
product, and 'is a -nublic necessity to the con-
. su-.ier thereof. The distribution of coal by motor
trucks from mines to consumer direct eliminates
rail trans'oortation and o-oeratep to make the
retail distribution un-n r of i tabic and destroys
such agency. The sale and distribution: of coal
in motor trucks at less than the nori:i£-il rail
freight rate on such coal and the retail dis-
tributor's cost and -orofit in hanc'ling at
destination is hereby declared to be an imfair
tr'Tde -oractice. "
This attempt to fix retail tdtIcps for trucked coal at levels rletermined
by the cost of shiioping over railroads and handling through retailors ha.d
im-nlications of manifestly dubious T)ro-oriety. In the general code it was
softened to a proviso that a representative committee be a-nnointed to in-
vestigate the subject and file rcco;:ainendations within thirty days. Even so
modified, it was attached by those entrusted with the interests of trucking
companies.
The ITorth Daxota Code crar)hasized the peculiar featiires of lignite mining
and distribution. It made the Worth Dakota Independent Lignite Operators
Association the administrative head. As a significant element in the
"peculiar features" it may be noted in passing that although this Association
included over a hundred operators its members employed approximately 1000 men
or an average of 10 per operator. In Exhibit C this Code designates as a
"corrupt practice" the selling of lignite coal at a lower rate in one market
than in another. Allowance was, to be made for difference in grade or quality
and in the actual cost of transportation. The letter of transmittal explains
that this provision was aimed, at -the practice of the large strip mine operatoi
who are alleged to liave been accustomed to make (Quotations lower than these
general prices within the territory of small mine owners.
9837
-90-
Tli9 I^iA Chief and. Iiis aides foimd time in the midst of feverish
activities during late June and Jul"/, to keep close touch '.7ith the com-
mittee of o-ierators and of union officials engaged in the v.'ork of code
formulation, hention has "been made above of General Johnson's appear-
ances before the bituminous coal Ouerators in Tashington on June 5,
1933. Me also addressed the annual meeting of the National Coal Asso-
ciation on Jime 16th, commending its action in recommending a, mod.el cod.e.
On several occasions he held conferences ^.-ith operator's cominittees in
TTashington. On Julj'- Cth, spealiing to the conference of opera.tors a,nd
union officials engaged^ in formulating the general code, he declared
"that it r/as the hope of the G-overrjnent tha,t codes could be worked out
covering the major fields and that after thorough study ajid analysis it
might be possible to "eave them into a single code making due a].lo'"'ance
for ddffering living costs and other factors in the several prod.ucing
areas". This hope of the Adjnini strati on :7as never lost sight of and '.va.s
brought forward nith increasing insi stance as code msJcing progressed..
Thus on Jul]'- 12th, President Hoosevelt at his press conference, su,ggested
that if regional codes for the industr.7 vere adopted there then arose a
host of neT/ problems as to territorial divisions and as to the assignment
of various coal fieldts to one or pjiother territorj^. At the close of the
code hearings on August 12th, it -.as authoritativel"/ stated that every
possible effort rrould be made to bring the industry under 'a single code.(*)
On August 17th, the President, the Administrator and Deput-"- Administrator.
Simpson conferred rrith a cominittee representing the Appalachian code.
The President sto^ted. that he "anted a "universal codie".
Despite these hopes and efforts the Adoninistration had a lively,
sense of the ddfficulties involved in securing so large a measure of co-
operation, "hen the Appalachio.n code v/as submitted, General Johnson and
Deputy Administrator Simpson assured the Committee that they considered
their achievement .in combining over t'JO-thirds of the industr;'- measured
b;?- tonn04"e "miraculous".
I:arl3' in August strikes broke out in the steel-corapanj^ mines v/ithin
the Connelsville district of Pennsj^lvania. The danger that this
disturbance of labor relations might spread v.'idely aroused the apprehen-
sion of the Administration and led to the intervention of ilEA. Adminis-
trator Johnson and to the formo,tion of a special board of F.rbitration.
Since the truce r/as arranged to hold "pending hearing and determination
by the President on the coaJ codes no^/ filed rrith K?Jl, " it v;as advis-
able that tnis business be expedited. Hence the hearing date originally
set for Aiogust 14-th v.'as advanced to August 9th. This nas Hearing To. 26.
The official notice -.vas carefiJL to state that "the Codes for the Bitiimi-
nous Coal Industr"/ in their present forms merely reflect the proposals
of the industr^', and none of the provisions contained tlierein are to be
regarded as having received the a"oproval of the i'ational Hecover^^ Adjnin-
istration as ai^plying to this indu.stry".
( *) See the Bulletins of the rational Coal Association at appropria.te
dx).tes.
9837
-91-
Tlie hearing lasted four days from August 9th to 12th inclusive.
Some 50 v;itnesses v.'ere heard and a '.;ealth of exliibits,, statistical and
graphic, were presented. The chief impression gained from a survey of
the material is that the hearing r.-as dominated b;^ the prohlera of inter-
district v/age differentials. (This question is discussed in Chapter 71
of this study.) In addition every district spolcesman felt ooligrted to
give detailed evidence of the difficulties and losses met b"/ operators
in his area, to strte -the technical diff icijJ-ties encoantered because of
adverse geological conditions, to relate the burdens imposed by freight
differentials, to disclose the inroads made by competing fuels and to
defend! the vage ajid labor -nolicies of his adherents. i.Iuch can be learned
of the industrial situation here but digesting of the material \7ill not
be attempted in this chapter. On other questions of capital importance
there v/as little discussion at the hearing. Several district spokesmen
expressed their conviction that general administration of the industrj^
V7as impra.cticable. This was not only true of spokesmen for smal-l oper-
ators, as in Preston Cotmty, 7est Virginia, who feared the domination of
large operators and "long ra,nge control" considere'd both geographi call;'-
and in the business sense; (*) for detached fields, as "estern Kentuclqy,
which preferred a sepa.rate code but allowed that the conditions might
be met by "special treatment"; (**) nor yet of those spealcing for
associations of operators in individual states, such as Indiana and Ala-
bama. In the former the plea was for local autonomy with no control by
other districts although willingness was e:rpressed to submit to govern-
mental administration. (***) In Alabama the e^rpression was less restrained.
"Tlie non-representative character as to Alabama of ?my national or inter-
regiona.l coal code and the exceptional status of the industr;^ (was felt
to be) demonstrated by the analysis of the economic condition of the in-
dustry in Alabama" a.3 outlined. The Alaba^na representative spoke of the
"necessity for a separate code for the field reLated to the necessities
an-d adjninisterod loaally". Less helpful was his reference to the
"truculent intention to sciittle the area" manifested by competitive
interests. (****) He gave only grudging a.ss6nt, under questioning, to
the "orinciple of government supervision but agreed that there might be
permojient machinery' for daily consultation with IIRA and that that agency
might have the right of approval in detail, as the work of code adminis-
tration progressed.
(*) Transcript of Code Hearing, Vol. IV, p. 200.
(**) Ibid, pp. 581-2.
(***) Transcript ut siipra., Vol. Ill, pp. 515-6.
(****) Transcript ut supra, Vol. Ill, pp. 478 et seq.
9837
-92-
Biit opposition to a ~enerrl Code ertendad to representatives of
great area.s v/iiose achievements in securing the adherence of various dis-
tricts to a single code might have "been enpected to incline their
thou~hts to a na.tional scheme. Thus the I^ocl^;- Ilountain P3,cific repre-
sentative vc.s requested to malce a most earnest appeal to the Administrator
that his territorjr be considered as an cntit,7 and not hrought under any
Code uritten for pjay other area in the United States. The hasis of this
opposition r-as declared to be their hopes for effective adininistra,tion. (*)
Host impressive of all such e:-oression Tias that of the sponsors of the
Appalachia.n Code. IIot'Tith standing their Inclusion of 70 per cent of the
nationa.1 output ^jmder a single code, their ritnesses i7ere committed to
a demand for a separate code and an independent administration. They
'".'ould meet the 131A. staff on "pii eqaa.l footing but not in a supervisory
capacity". Agrin more bluntly' stated in response to questioning, the
spokesman said: "T."e don't v:ant (the administration) to have poner to tell
us hoT, to run our mines, or hov: to sell our coal." It v/as conceded that
"any nanted facts ^.Tould "be made availaole to the Government". (**) In
some part the attitude of this group v/as due to the belief that price and
market proolems v/ould be handled 'by marketing agencies on the model of
the Appalachian Coals, Inc. They had been engrged in actively promoting
such organizations in 1933 before codes v:ere in prospect and they expected
these B::oncies to function successfull;'- v/ithout other measures of in-
diist:-;,^ or of govGrr„.ient control. (***)
Advocates of a single code for the industi^^ "ere limiter to those
^"'ho had assisted in the form^xlation of thi general code. Their attitude
V7as positive ano. vigorousl:" errpressed. Thi^s Kr. Harrington stated that
the "general code gathering 'u-as clearly?- of the opinion that one national
basic code for the industry '.jE'.s caviled for ''oy ever"^ practical cor->
sideraticn of the nev; attempt to restore pros^iority". (****) Mr. C. F.
Hosford T/a-G equa.ll"- positive. "I quite agree", said he, "that '..'hen 3^ou
ta3:e the uhole greater Apps.l.achian ?xi,nge, it is absolutely impracticable
to divide that into various districts and to set up a number of codes for
competing districts becruse they arc overlapping both in production a.nd
in marketing, and that the adoption of numerous codes varying in their
provisions Till serve only to bring confusion". (*****) Mr, Taplin con-
curred in these statements and added to it a declaration of desire that
the "government supervise and direct not onl''- t'le cool indxistr;"- but com-
petitive fuc-ls, s^ach as oil and gas, and have provide-;"^ in this Code a
(*) Transcript ut siipra, Yol._I, -pp. lo7-8.
(**) ^ Transcript, "t nupra, Vol. I,-r^p. 48 to 70 Pascim
(***) See the tcstiraor^r of Charles F. O'lieil, Ibid Vol. I, pp. 10 et seq.
Par.r.im.
(****) Ibid, Vol. II, p. 229.
(*****) Ibid, Vol. Ill, .3p. 438-9.
-93-
planning board for that purpose". (*) President John L. Lewis placed
the United liine TJorkers on record as favoring the administration of the
entire industry by one board and said "it is our opinion that there
should be added to the Board the function of economic planninj'^ for the
industry". (**) .
The ciuestion of hours v'e^s discussed a.t sone length. On the one
hand representatives of all the union factions agreed in demanding the
6-hour day and 5-do;y veek. This T7as an old issue with union men. Their
argument, originally based on the desire to spread their limited, \7ork
opportunities evenl3'- over the ;''ear, '.;?s strengthened iraneasurably by the
emphasis placed by i'.I.Pu.A. on measures for spreading employment. (***)
Operators' representatives urged an 3-hour day pointing out that the
mine le-fov.t and equipment xiere adjusted to that period. The problems of
loading and hauling 'vere central in their arguments. Hooms could not be
cleaned up and jDrepared for the ne::t shift of cutting and shooting men
in less than eight hours. There v?as vigorous protest from certain
sections also against a rigid limitation of Tieekly hours. Seasonality'
of demand joined to the diff icxilt^r and e:rpense of storing coal, the^r
declared, made necessar;'- an extension of the mpximum v:eekly hours to 48
in the months of highest consumption. (****)
Questions of price control might vrell have been er^Dected to receive
extensive attention in the Code hearing since practically a,ll the pro-
posed codes s"uggested as a price basis the cost of production and since
a majority of them asked for the setting up of actual minimum prices.
Some codes, e.g. those included in the Hocl^j^ fountain Pacific group,
carried actual minimun price lists. At the hea.ring, horTever, ver;- slight
attention v/as given to problems of price fixing. The eastern operators
ex;oected this matter to be handled by marketing agencies. l.Ir. Harrington,
in presenting the general code, declared the minimum coal price article
to be one of the most important in the Code. He described the evils re-
quiring correction. "In the stress of competition", said he, "pxid in the
effort to keep mines in operation, even prepared coals, at times, have
been sole belon cost, amd v/ith slack or fine coal, this has been the I'ule
rather thxin the exception". (*'****) But of discussion of methods and
(*) Ibid, Vol. II, -yp. 278 - 9. ~
(**) Ibid, p. 310.
(***) See the testimony of Jolm L. Leuis, Vol. II, p. 347 et seq. of
Progressive liiners' representatives, 7ol. Ill, p. 555 et seq.
of rational Iliners' Union, Vol. IV, p. 593 et seq.
(****) Cn the 8-hour day issue, see the infor.ning testimony of lir.
"uchanan, an operator in Illinois, TJest Virginia, Kentucl^ and
Arkansa.s, Vol. II, pp. 384 et seq. On neekly hours, see i.ir.
Collins of the Hociry liountain Pacific group, Vol. I, p. 164 et seq.
I'.T. I.icAuliffe from TTyoming, Vol. II, p. 399; Ilr. Heaps of lona.
Vol. IV, p. 540 et seq.
(*****) Ibid, Vol. II, p. 242.
9837
-94-
agencies or of economic and industrie.1 dif f iciilties, there '7as rarel5r
a hint e.t the headings. The representative of Southern Ohio Coals Inc.,
possibly "because this s.gency T,-a.s directly'- concerned with price making,
made some contrihution at this point. As noted above, he stiggested the
inclixsion of the competition of other fuels as a factor in basic prices.
TJiiile an independent operator interested in mines located in Indiana
and Illinois called a.ttention to the difficulties inherent in csij attempt
to set a single basic price for all mines, he preferred to appl;^ the
"average cost of production to ea.ch individual mine operation and not to
the avera^ge of all the mines in a district". Since this contribution to
scientific price fixing stands almost alone, a further quotation is
justified. Perhaps the moral is that open code hearings are not the
place for such discussion.
"There are four or five different veins in Indiana and
Illinois and it is easy to see that p„ lov; cost operation in one
vein, bj'- reason of high cost operations else\7here in the same vein
might have a high minimum cost placed ^ipon it vmich vrould prevent
it from competing rrith its neighbor mines, in a different vein even
though his ov/n low cost uonld othervrise permit him to live. It
notild follow therefore that the minimura cost as betvreen the different
veins v;ould have to be relr.teo. to each other and fair differentials
established. All these in turn would have to be related to all
other veins from aav other districts competing in a. common market
with the necessarj'- differentials. You can rea.dily see that it would
soon become the worst complicated and complex structure imaginable.
'lO, differentials are bad enoiigh in wage scales vathout bringing
them into the question of 'orices.
"I would further point oiit that a slight mistake in classifying
any mine v/ith p, higher grade of coal wotild prevent such mine from
selling its product until all the other mines with the better grade
had been sold out, even thoiv'^/i the cost of production of the e::amole
mine v.-ould permit it to sell its coal at less price than the minimum
fixed and still make a fair profit." ( *)
A significant event at the herring, in view of later difficulties
in correlating the four codes dealing v;ith coal, \/as the fire dravm
from wholesaling and trucking interests by certain features of suggested
codes. The geographical set up had been drawn to cover the entire United
States, bi\t certain cities were separated from their natural affiliation
on geographical lines and included in neighboring divisions "because of
their effect on the marketing of the product". (**) This was true of
Cinciimati and of St. Louis.' The origineJ map suggested an intent to
create marketing areas 'Tith attached producing territory on the lines of
war tiirfe control. The attitude of the objectors is best presented in
their ov/n '/ords. "Eae Code purports", said one, "to be a Code for coal
producers but the districts cover not only the coal producing parts of
(*) V-AC, Vol. Ill, pp. 435-6.
(**) Ibid, Vol. II, p. 234.
9337
-95-
the United States, but the coa.1 consuming prrts, end. it is thought by
manj'- of the vholesalers tha.t these acijninistrators may in some na;^ intei—
fere r/ith the wholesale coal trade. Especiallj^ i:a this the case in St.
Louis." (*) In St. Louis the objection was to a "foreif'^n administration"
since the city had been attached to Illinois.
The trucking interests rere similarly positive in voicing objection.
They called attention to the fe.ct that a code for the motor truck trans-
portation industry/ tras in t>-e making and uere convinced "that any motor
truck transportation clause vas irrelevant to the purpose and intentions
of a coal industr-y code. It would be discriminatory in character, and
would have f. tendenc^y to harrass and opioress the local coal mines ...
using the motor tn.i.ck as a means of transportation in the movement of
coal to their natural ms.rkets." (**)
Another matter presented v;as the child labor clause. Effective
presentation was made of the vicious charsxter of including the vrord
"knowingly" in the act and of the desirabilitv of a minimum age of 18
years for inside vforkers and for those engaged in hazardous operations.
To these sLiggestions the operators were amenable. There was some pre-
sentation of safety conditions and .desirable neasures of betterment.
The cause of the negro miners was adequately discussed. The different
union factions aired their mutiial grievances and, to a degree, declared
their relative strength. Incio.entally, some operE,tors, notably of
Alabama, (see Transcript of Code Hearing Vol. Ill, pp. 503-5) voiced
stern opposition to union contracts. In such discussions, the current
auestion of including in codes language qualifying 7 (a) was seldom
candidly faced. The head of "J.R.A.'s section on Research and Planning
contributed a statistical snjnmary of historical and competitive con-
ditions drawin,'5 to the follovang conclusion:
"Throiigh organization of tiie factions within the industr]?-
under a. code and providing an instrumentality for the gradual
development of economic planning v-'ithin tlie industry and in re-
lation to competing or pa.rellel fuel and energy indiistries, an
opportunity is now afforded for the conservation of the natural
resource of coal and for the conservation of the human and capital
resource so that instead of continuous decline and waste, disem-
ployment rather than eraplojTnent and even unemployment, banlcruptcy
rather than profits or even bare solvency — instead of continuing
the descent toward economic zero coal can enter upon a new era of
recovery." (***)
At the conclusion of the hearing, interested proponents of codes
were requested to be available on AiJgust 22nd. It was understood that
the Administration would present a code at that time and such a document
(*) Ibic, Vol. I, p. 147.
(**) Ibid, Vol. Ill, p. 454.
(***) Ibid, Vol. IV, P. 682.
9837
v?r,s -orei^erec b- Aiigust lotl\ "but never released. On tlipt date a con-
ference comprising some 200 interested T)arties met for a brief session
T7ith Deput7 Ac^ministrator Simpson and Gensral Coxmsel Pdcliberg. The
press had annoimced th?.t a, code uoald be presented. Instead the pre-
siding officials asked for the selection of representatives from each
district to attend a conference the ne;:t o.&i''. TJhen these delegates met
the^r uere addressed by General Johnson, Deputy Administrator Simpson
and General Counsel Richberg. The burden of these speeches seems to
have been the desire of the government represente.tives to alla-'^ fears
that e. code '.7as about to be imposed on the industry and to give assurance
that each of the large producing districts of the countr;'- ^.Tould enjoy
"absolute autonomy". (*)
There ensued a period of medv/ conferences. Representatives of \^A
v.-ere meeting daily 'v.'ith representatives of the various districts in an
endeavor to secure agreement on a system of vage differentials. In the
event, the;,'- uere successful in securing, acquiescence, if not agreement,
by the representatives of all districts, a2:cept Alabpjna. The governjnent
in tha-t case prescribed a rate of $3,40 although the operators could not
be induced to agree to a higher rate than $3.20. The four men repre-
senting the Appa-lachian Code: Messrs. J. D. Trancis; J. D. A. llorrovr;
Charles C lei 11; and R. E. Taggart, 'by their unceasing activity'- earned
for themselves the sobriqu.et of the four horsemen. Representatives of
a.11 the districts vrere constant].y in VJashington and from the nearly
continuous conference, the. outlines of an acceptable code gradually
emerged.
It is evident that the questions of labor costs and interdistrict
nage differentials v.'as the major factor in delaj'-ing agreement. In late
August and early September ;the- Appalachian operators, north end south,
rrere engaged in '.Tage negotiation v.'ith the United iane T.'orkers' Union.
The successful negotiation of a vfage agreement covering this highly im-
portant coal producing area, settled manv controverted nage questions
and furnished a solio. foundation, comparable to the earlier Central Com-
"oetitive l^ield agreements for basic vages in outl3'-ing districts. This
agreement T:as signed September 21, 1933. There is interesting comment
from General Johnson ijaider date of Au^'ust 21st, regarding the character
of these conferences. After referring to the ijilierent difficulty of
reconciling- differences on such issues as tht.t of the open and closed
shop, he continued:
"i"otr/ithst£:nding this there has been majiif ested no dis-
position to obstruct. On the contrar}^, everybod}^ is sincerel3^
seeking agreement. Our conferences have been amiable and the
arguncnts ha.ve been earnest '..Ithout being a.crimonious. The
delegations arc composed of reasonable men,, 'jho. realize that their
points of vic'7 are in conflict, but vho are equally concerned
v.'ith the '.7 elf are of the industr-y end .the eucccss of the iIRA pro-
■^ram. Under these circiunstances, I'm -oorfectly stiro i/e \7ill
(*) Bulletin iTetional Coal Association, August 19, 193C
9837
-97-
reach a conforta'ble arran£:ement, and that a code '"'ill issue
presently. " (*)
A full- record of the conferences could onlv Tae uritten at this
date loy one of the central figures therein. It \/ill he most regrettahle
if the inside historj'- of these meetings is not preserveci.. As an example
of the educative effort necessary to "bring into agreement many men, re-
presenting diverse interests, cjid for r;hom clear vision of essentials
T/as often obscured liy the memories of old conflicts, . such a record v;ould
be of transcendent interest. However, the stages in the development of
the code are fairl^^ clearly marked. As noted above, TEA officials drafted
a tentative co6.e August 18th which they were careful to label: "This
tentative draft has not been a'op roved in any respect by anyone connected
vfith IHA, but is made available only as a basis for discussion and to
facilitate the formulation of a basic code for the bit-ominous coal in-
dustry'-". This draft was never released, as a whole, but on A-'Jgust 24th
four sections dealing with administrative features were given out.. On
September 7th a so-called basic bituminous coal code was -published over
the name of Administrator Hugh S. Johnson, together \7i.th notification
that written statements offering objections, or amendments, to its "oro-
visions woulci. be received until 6 P.il. of September 9th. In -fiie light
of such comment, the Code was to be revised and presented at a public
hearing on September 11th. A hearing of the character suggested did not
event-ua-te but on September 13th revision of the -previously published
four sections was put out. On September 15th an agreement on a nev/ly
drafted form was reached liy representatives of Divisions II, IV and Y
and on September 18th received the approval of President Roosevelt, with
some modifico.tions by executive order.
The request for criticism of the September 7th Code aroused a storm
of objections. As stated by G-eneral Counsel Pdchberg at a hearing on
September 12th at which he made the only speech: "TJe have had filed a
great many helpful statements and suggestions of improvements of that
code. That was desired. 7e have had filed a certain number of somewhat
impassioned arguments and criticisms of code provision that rie had not
presented and criticism of an administrative machinery which we had not
thought of setting up, all of which has been quite a waste of time."
Plainly the atmos-phere of conference rooms had grown heated. There was
discontinuance of plans for public hearings. Hereafter the Administra-
tion relied on conferences to discover and compose difference of opinion.
In these efforts, 131A officia-ls were greatly helped throught the forma-
tion, at their suggestion, on September 12th of two Basic Code Committees,
one on adjnini strati on of the Code, the other to consider the content of
the Code as r. v:hole. This vfas outside of the question of the minimum
wages, to which separate treatment was given. On ■ each Cormnittee, Divi-
sion I was to have four members; Division II, two; and each of the others,
one. Separate groups, desiring to do so, might also send representatives
to the meetings of these committees. In a large measure this was the
"("*) Press release, August 21, 1933.
9837
raachiner]- through Trtaich the final forin of the Code vras rrorked out.
It T-i".]. he convenient to follov: the cLian£v.es mr.ce in successive
drafts of irn'oortant sections of the code. ITirst as to the geographical
basis, it '..ill "be rer.embered that the "general code" had proioosed a five
area division covering the entire country. Tlie August 13th draft made
six. Of these, the last three, the Southern or Division III in the ap-
■oroved Code, including Alabajna, Georgia and Southern Tennessee; the
Southnestern or Division IV, i;issouri, Kansas, Oklahoma, Arkansas and
Texas; and the Uestern or Division V, including all Roclq'- I.Iouhtain and
Pacific States; remaineo v;ith little subsequent change. Horth and South
Dalcota uhich had been included vdth Iowa, Illinois and Indiana, i/ere
added to the Western Division in the September 7th draft ojid thereafter
that Division remained unchanged. During August and early September,
operators in Torth Dakota, by letters and telegrajns, nere seeking ap-
proval of a separate code for their lignite industr3'-. Besides the
Dak:otas the Central Division in the August IBth draft included Western
2[entu.cky as x.'ell as the three States, Iov.fa, Illinois and Indiana, vjhich
finall-/- made u.p Division II. The first proposal vas to divide the
Appalachian Code territory into tv;o divisions; the rortheastern, in-
cluding Pennsylvania, I.iar3rland, Ohio, Hichigan and TTest Virginia north
of the Kanav/ha, district; and the Appal achiaji, comprising the rest of the
territorj'- of Division I except for '.."estern Kentucls;^. The next revision,
that of August 24th, provided five Divisions, combining all the
Appalachian territors'- including '.".'estern KentucJc.^ but throwing Ilichigan
into Division II. 3y the September 7th revision, these Divisions had
talcen their final form.
Aci-ministrative provisions of tlie original draft included a national
Bituminous Coal Administrative Board "consistiiifg of members representing
the three parties at interest, namel;7, producers, emplo3^3es and con-
sumers. The number of such members and the specific diities to be per-
formed shr.ll be determined b" joint conference at v.'hich the three such ,
classes of parties at interest are represented, together with repre-
sentatives of the AcjTiinistrator". Zach Division, by action of the pro-
d.ucers in the district, was to establish its own single administrative
agency "for the ad:ninistrrtion of its own affairs within the limitation
of the T.1.3..A. and this Code". Ap'oeal was to be from these divisional
boards to the rational Board v/hich, subject to revie*..' by the At'minis-
trator, '.vas "to constitute a court of last resort on all matters re-
ferred to it and its findings sliall be binding on all subscribers to
this Code". To provision was made for districts within divisions nor
for local control within divisions. The second draft was materially
changed. Vo general boa.rd was provided. 3ach division v.'as to establish
a Divisional Code Authority "for the arlministration of its own affairs
to the extent authorized in liM and tliis Code". Here is found the first
mention of Presidential Members. One wr.r. to be appointed in each Code
Authorit''-. The President also was to have po\rer of modification or veto
over every action of the code authorit.y. In each Division, Marketing
Agencies might be established and controlled by the Code Authority.
These provisions v.'ere repeated in the September 7th proposals and in
addition provision was again made for a national Bitiominous Coal Board
of ten members; five to be awnointed by the president from nominations
9837
made by each of the Code Authorities, and the others to he the Presidential
Members of such Code Aut/.oritics. Powers granted to this hoard were in-
definite and shf.dowy. It was "to have the ^^oi-^ers provided in the Code and
reriort from time to time to the Presicient urion the o'Dcrf'tion of the Code".
Such administrative -oro-iosals aroused the sponsors of the Appalachian
Code. Their criticism submitted Se-otember 9th s-oeslis of "paternalistic
interference of the Administration in management" and of "management
obliteration". They exi:)ressed their a.ttitude to^rard tae nrooosal that acts
of Code Authorities should be subject to modification or veto by the Ad-
ministrator as follows: "It would be difficult to conceive of any more
abject state to which management can be relegated". "Our first fundamental
objection", said they, "is based on the fact that the Code as -nro-nosed
de-nrives the owners of the -orODerty of "oractically all the rights of
managers".' They "oointed out that while they re-oresented some 70 -oer cent of
the -oroduction, they were -olaced on a par with each of the othe^" four Divis-
ions in administrative re-iresentation and that their one member of the
■oro-oosed board eat in a board of ten, five of whom were governmental an-
T)ointees. "The result is", read their iDrotest, "that the 70 -oer cent of the
inr'ustry which we re-oresent will have a 10 per cent rei^resentation on the
National Bituminous Coal Board." Later ' they declare: "We are not willing
that any other coal -nroducing section should nartici-oate in the control of
the affairs of the Appalachian district".
Of similar tenor was the protest of the Alabama operators. "This basic
code", said they, "'^ould displace the machinery for real self-determination
proposed by the Alabama Code and would substitute control by the Ad-
ministration". In their opinion "the sole fuh'ttion, of the Government is
political". They make their position clear: "We must insist that any code
with which our division is exioected to com-ily must contain provisions for
actual self-determination or we will manage without it." Modification or
veto of the acts of Divisional Code Authorities by the Administration, in
their opinion, reduced tjiose authorities to a "fi;;ure of speech". "The
audacity of that clause", reads their protest, "is sufficient to disclose the
theory of the Code". In concluding they state their belief that "the purpose
and effect (of the Code) would be the transfer to political control of the
basic functions of wa^es, prices and distribution".
The tentative draft of September 13th showed the effect of criticism
received on the preceding' form. The Divisional Code Authorities were to
consist of not more than 15. members, all but one to be elected by a di-
visional association or a committee of producers. Voting was to be primarily
by tonnage under regulations prescribed by the Administrator. Marketing
Agencies might be established v/ithin a division by a voluntary association
of producers f^'anctionin:; under general rules and regulations prescribed by
the Divisional Code Autiiority but, be it noted, not directly dependent upon
that body for its organii^iation. The Industrial Boart" also was made over to
allow £rreater representation to the districts of largest Production and to
place control securely in the hands of the ind\istry. Four members "were to
be designated" by the Code Authority of Division I; two from Division II;
and one from each of the other Divisions. Membership for the five Presidentia
Members was retained. Inasmuch as the ill-defined po^'ers of the Board were
neither enlarged nor strengthened, it is somewhat difficult to understa^nd the
importance attached to its composition by the operators. As stated in this
draft, it was to meet on call of the administrator, wl.o was ex-officio Cha-irma
9837
to consider and ranke recorn.aendation "of a.nendnents or other measures vrliich
iTip.:/ statilize and inmrove tlie conditions of the industry and riroraote the
p"'i"jlic interest therein".
These "TDvisions remained substantially unchanged when the Code reached
t.ie President e'xceT)t that the final draft allowed the formation of Suh-
divisions i«rith a Code Authority in "peopra-niiical areas" within the Division.
The desirability of such a,ction had been forcibly stated by the siDonsors
of the Arj^ialachian Code in their -protest of Sentember 9th. As their fifth
fundamental objection they state: "that the -nro-nosed code undertakes to
control the coal industry along national lines rather than u?3on the natural
district lines estaolished by the location of coal deposits." They called
attention to the /reat dic-narity in size, measured by tonnage, of the Livisior.
set UTD and say of their o'^i Division:
"No one board can adequately hfmdle the com-
plicated labor, rnarketi 'ig nnd "oroduction areas
of Pennsylvania, Ohio, eastern Kentucky, Vir-
ginia, T'lest Virginia, and Northern Tennessee,
involving 70 -per cent of the country's output,
and give attention to the needs of Horth Caro-
lina, lo""cr Michigan and Western Kentucky. The
solution is to be foimd in splitting the
so-called divisions into units less un^Tieldy and
with co.:i-:ion problems."
Prior to the Code hearing of August 9th to l,?th, the Proposed codes had
practically all provided for the collection of data and generally had allowed
that it might be available to governmental agencies. The unfortunate draft
of August 18th proposed thet each employer in the industry should "furnish
duly certified report to the President or to such other figency as he may
designate, in such substance and form fs may from time to time be required".
Such reouireraents disappear entirely from the September 7th draft except that
the records and the data of Marketing Agencies and Code Autliorities were to
be open to inspection by the regularly ap'nointed agents of the Administration.
In the approved form this requirement was again written in. It was further
provided that the Code Authority must collect and com-nile any reports reouired.
and that the Presidential Member was to lavf autliority to examine books and
records of the producers in h.is Division.
In this record of successive changes in the Centr^'l Adm.-i.nistrative pro-
visions may be clearly seen the play of opposing forces. On the one hand,
the operator: were jealous of governinental control. Indeed t'ley resented any
sort of central control, even industrial. Each district and group desired
complete self government. Such an attitude was both natural and inevita,ble,
but unfortunately it was incompatible with the necessities of the situation.
'Tills "sick industry" needs not only centralized control but a strong ad-
ministration. This its leaders consistently refused to recognize. Instead
the tendency was toward localizpd control. In addition the small or)era-tors
feareri domination of the industry by the large companies and their own
elimination. The large companies were aroused by any 'iroposal which based
control on voting by members rather tlia.n by tonnage. At the same time they
rebelled against any proposed set up which gave the C-overnment a majority vote
in any board or authority. Any siog'gcstion that control should pass to the
administration aroused tlie "imrjassioned" outbursts to which General Counsel
9837
-I'Jl-
RichlDerg referred. Their feeling reached its logical exnression in the
recalcitrant attitude dis-olar/ed toward furnishing the government with renorts
and data. This record is. reminiscent of the successful legal "battles which
o-oerators waged against the collection of cost data by the Federal Trade Com-
mission in r)Ost-war days. Fro^^osed codes had frcauently provided for as-
sembling of cost aata but almost always under carefully devised -olans for
lodging them in o-^erator orgpnizations. Tiie line between that and reT)orting
direct to the G-overnment wr s one which the -nroducers stubbornly refused to
cross.
The formulating of measure;s for the settlement of labor dis-outes makes
an interesting story. Here the administration code drafters had a greater
measure of success. Develo-pmcnts e't the tim.e generally strengthened their
hand. Union organizers were extrpordinarily active and threatened strikes
were numerous. The xiationol L?bor Board had been set uo on August 5th, 1933,
and had intervened in certain coal strikes. Under these circumstances,
agencies for strike settlement were welcomed and the bituminous coal indus-
try held a strong preference for its own agencies as contrasted with a na-
tional board operating in industry generally. iNTone of the codes "oroposed
by the industry had contained any section dealing with the settlement of
labor dis-nutes; but the four sections published August 24th calle;! for a
complete set uv: mine, local and divisional adjustment boards and a National
Bituminous Coal. Labor Board. The adjustment boards were to be comr)osed of
representatives of emt)loyers and employees: The National Board of three ap-
■oointed by the President was to have an im-nartial Chairman. The divisional
adjustment boards were to settle local and oistrict dis-outes if possible.
Wheii such efforts failed the dispvites arising in any of the five divisions
were to be passed on finally 'oy the National Board. In effect this set up
was retained in the September 7th draft. This -olan for adjustment and labor
boards drew fire from the o-nerators' representatives. The objction of the
AiD-nalachian Code sponsors can best be stated in their own words:
"The set-UT) for ho.ndling distjutes affecting hours,
wages and conditions of em-olo^/ment involves un-
necessary ste'os and ■'jnjustif iable expense. It
tends to delay and to -orolongation of disputes.
It gives the oioportunity for considera-tion of
comparatively sira-ole -nroblem-s by too many tri-
bunals. It takes no account of the rights of
the individual em-oloyee or of any grou-o of un-
organized employees. It is peculiarly designed to
drive em-nloyees into a union. We believe the
manner of handling mine disputes can and should
be simplified and made applicable to all employees,
regardless of their affiliation or non-eff illation
with any organization.
"The Article lacks any provision prohibiting stop-
page of work at the mine while a labor dispute is
under consideration by the pe-^sons or tribunal to
whom or to which it is referred to adjustment.
Absence of such provision makes for sporadic or
protracted ptoppage of worx at. the mines as the
case may be.
9837
-102-
"The section treating of lal^or relations does not
provide any suitable method whereby the obligations
of labor can be made enforceable against the enialoyee
or em-nloyees."
In like temper the Alobaraa Ofierators attack the idea of divisional and
district adjtistment boards. These, as they see the matter, could "be created
only by orjranized collective bargainin,';". They are opposed to a National
Bituminous Coal Labor Board whose conclusion is made final. "This", says the
protest, "is not mediation. It is final determination by political authority
and should be eliminated or amended. ... it presupposes unionization of the
entire industry within ten days of its effective date."
These criticisms played a part in causing a ret'iraf ting to the extent of
setting UP a Bituminous Coal Labor Board in each of the five Divisions. The
members of these Boards might meet as a Kational Board to handle inter-
divisional controversies, or matters affecting more than one division because
of its effects on competitive marketing, or matters affecting the general
public or the welfare of the industry as a whole. All these Boards were to be^
ap-oointed by the President and each of the Divisional Boards had three members' -
one selected from nomination by the Code Authority; one from nomination by
organizations of employees; and an impartial Chairman. The approved draft
added a second board for Division I so that in the final set-up, that Divisiori
hsd a North and a South Board. It may be noted in passing that the anti-
cipated press of business for these boards due to strikes did not eventuate an
the provision of six Labor Boards, proved unnecessarily cumbe'i^some.
In the draft of August IPth and in that of September 7th, had been in-
corporated decidedly liberal p'-ovi'-^ions governing conditions of employment.
These included Article 7 (a) of K.I.H.A. without qualification as well as all
the sections written into the "general" proposed code. This, it will be
remembered, had been largely influenced during its comi^osition by delegates
from the United Mine Worke:^s ' Union. Such clauses in any case must have
been expected to draw fire from operators of non-union territories, but the
situation was complicated 'oy current discussion, developing much more heat
than light, as to the inner meaning of Section 7(a) itself. About this time ^
also the emnloyers had succeeded in writing into the At\tomobile Code a state-
ment qualifying 7(a) to the extent of declaring thn,t "employers in the
industry may exercise their right to select, retain, or advance employees
on the basis of individual merit, without regard to their membership or non-
membership in any organization". In conrnon with other employers engaged in
code formulation, the operators sought similar inclusion in the Bituminous
Coal Code. Thus the Appalachian representa.tives strted:
"We still insist that this clausp must be
included in any code of fair competition to
which we are to agree. A similar statement
in the Automobile Code has been approved by
the Administrator and the President, and there
is even more reason for its inclusion in this
Code."
9837
-103-
Their second fundnment^l objection re.ndp: "tne Ip.bo- r,rovisions are
throughout desiOTed foi- o-oerf-tors only iu connection ^itli p lahor union"
giving no recojrnition to the rights of individxip,! emnloyoes or grour)s of t
eirmloyees. Later they declares- their belief that Article 7(a) of N.I.R.A.
"not only does not require that workers organize hut exoressly recognizes
their right to deal individually". The riarafT'inh calling for organizrtien, the
reel must "be eliminrted if they "are to continue to operate their mines.
.Otherwise as owners of these ^roTjerties, re canr.ot "be res-oonsi"hle for either
the safety of the emnloyees or the control and management of the properties."
The Alabama operators manifested a similar viewpoint ^nd called for the
inclusion in the Code of an interoret^" tion '^f 7(a) jointly issued by the
Administration and the Crenerf 1 Counsel of I'.IuA. on August 24th. In the draft
sent to the President, this statement was iiiclude.' as Scl'^edule B.
It was a some^-fhat labored docioment. Tlic initial statement declared tlmt
"the plain meaning of Section 7(a) cannot bo changed by any inter-ore tat ion
by anyone". The words "onen suo'o" and "closed shop" ali'^e "are not used in
the law and cannot be written into the Irw". Subsequent rihrases endeavorad
to steer a course between the declaration that employees are to ha.ve the right
to orga.nize and bargain collectively through reT5resenta,tives of their own
choosing and to be free from the requirements of emrjloyers that they join
company unions, and the rights claimed for em-ployers to deal with individuals
or with their own men. if they so desired, and, "oerha-os, if their em-olpyecu
s'nould nrove amenable in that desire. Local imi ons were legitimate pnd might
be called com.pany unions, reads the statement, but these must be free from
em-oloyer control and must be truly rcnresentativo ':^f the em-ao-ees affected.
To determine such facts "the I'.H.A. "dll offer 'its service to conduct an
imr)artial investigation and if necessary, " secret ballot . to se;ttle the
question". Lihewise, IT.R.A. would "oromote and aid coonerrtion between emrjloyer;
and era-nloye^s in the making and maintenance of agreements. This meticulous
stating of the respective rights of the two riarties had no more effect on the
irrepressible controversy than did the voluminous and o f ten acrimonious
discussion at the time. The essential qu.e"stion was, and is, what hap-nens when
the rights of two narties to a conflict are both ima^iestionable and ir-
reconcila.ble. In this i:)ragmatic world when that situation is foiond in the
field of industrial relation strikes and- lockouts follo-v. ITo other solution
was discovered by the "Srtional "Recovery Administration.
Maximum hour provisions were first stated as in the gene^^al code at ^2
hours per week for '6 weeks and 40 hours for the rest of the year, with a
■oroviso that the emr)loyer might elect to or)erate 36 hours per week through-
out the year. At no stage of code f or.aulation was a s\ig.;estion made for any
othe- daily standard than 3 hours. The September 7th basic code repeated
these limitations. This drew from the !"^orth Dakota operators an original
criticism. They would suspend the limitation on hours "during emergencies
caused, or restilting from .bli7.za,rds, below zero temperature or other similar
conditions beyond the control of the employer". However, the final revision
contained a fL^^t requirement for an .l-hour day and 40-hour week. The first
administration draft also contained a clause -"hich would allow employers and
employees to join in petitioning the administra,tion for a su.spension or
mocif ication of the limitation on weekly hours. 3y September 7th the plan
was advanced of allowing employed miners to propose sharing work with un-
em-nloyed workers attached to the mine. Such plans might be sanctioned by
district adju.stment committees in case of fai].ure of agreement in mine
conferences. Emplo?/"ers assailed this as a clear case of invasion of the rights
9837
-104-
of management, The final dral't af'',ded a United list of exemp.ted occxnpa-
ti.ons, "sxt^^ervisors, clerks, technicianG" -uid employees handling, man
' trips or c?.rin,:; for haulat^e anuinals. It retained the sliarin^; of work
provicion out limited its effect to cases in which "mat-uaJ afo-reomcnt"
. cordd be secured.
Wage clauses shoved an interesting development. The first adjnin-
istration draft proceeded on the "basis of setting up a basic rate (unspeci-
fied in the draft) to be applied to "tracklayers,, bottom cagers, drivers,
trip riders, grip;')ers, vmter ha.ulers, r'lachine haulers and timbermen". It
further stated that "existing relative differentials" for other classes
were to be maintained. Outside workers wore a^lso to have a minim'um day
wage which, however, had not been determined and written into the Code.
Jour adjustments iiere allowable on lines sr^-gested in the general code:
a percentage differential below basic rates for districts south of the
Ohio r.ivor not including Division III territory; rates by joint agreement
for the Southwest; existing rates above the basic levels for western
states; and percentage rates below for Division III, The September 7th (^,
model marked the inio.tion of Schediilo A. for v^ages quoted by districts.
It was confined to quotations for inside men. Other classifications
were covered by the req"i.ireraent tiiat "customary differentials" above or
below the basic rainin-uxn rates must be maintained. It v/as further "oro-
vided that contract rates negotiated collectively should not be changed.
The employers att-.c]-:ed the occupa'tional listing as based on an
obsolete classification. A better statement would h^vo been to the
effect that no generally adhered to classification existed. The different
fields and .districts ha.ve always fxii-nished the greatest variety of wage
and occupational clasc.es. They also assailed the requirement tliat
differentials be ma.intained, as a scheme necessarily resulting in
rigidity of v7ago structure, and developed, at some length, an argument
current at the time that II. 1. 3. A. did not provide for the setting up of
a sched'ole of wages but 'rather intended to, have a single ba.sic minimum
wage established .for unskilled men. This v/ould apply under mining con-
ditions to outside -labor alone. Conti^ol of differentials "is to fix ^
ma.ximxim as well as rainimu-n rates" in direct contravention of the H.I.R.A.
clause which provided that "no attempt sh^.ll be made to introdvxce any
classification according' to the nature of the work involved that might
tend to set a maximuri as well as a minimujTi wa^ge".
Despite these ;orotests tiie fina-1 draft containcid daily and hourly
rates for each district for both outside and inside workers and called for
the maintenance of customary differentials not only for other classifica-
tions of errrrloyocs but for tonnage and piece workers. Even at that last
date, September 16th, Schedule "A" was incoirrplete. For fourteen districts,
including all the submarginal -reas, no rates were stated but were "to be
:orescribcd by the President nrior to the effective date of the Code".
Seemingly in an endeavor to soften the asi^erities of wage differential con-
torvcrsy or norhcps, to r)ostpone the evil day of final settlement, pro-
posal had been included in these administrative drafts for provisional hour
and wage determinations to be modified according to the results of an
early investigation. In September 16th draft, this paragraph was in the
following form:
-105-
"As soon as possible after the adoption of this Code,
the national Recovery Administration shall nndertal-o,
through a designated committee or agency, an investiga-
tion for the purpose of reporting on or hefore December
31, 1933; upon (a) the practicability and cost -(assuming
the maintenance of existing re.tos of pay) of applying
to bit'ominous coal mining a shorter work day and work
week, (b) the effect of'an advisability of revising
wage differentials in the various divisions and districts
of ti-^ industry and in the event -of recommend';", cliange
Gpoci'.ication of the amouiit thereof; (c) the z'^J.::s prices
obtai.-.ed for coal, or reasonably to be anticj-pa^ed, up to
the time of the reiDort, for the purpose of dc'^erming whether
v^agos and em^^^loyment can be fu.rther increased or maintained
without inriosing undue burdens upon the industry."
The sections dealing v;ith the setting of minimum prices contained
to receive less attention tlia.n their importance should have dictated.
Throughout the period of code formulation wage and labor matters -csorbcd
the major part of the time and attention vf all parties in inter-.i>.,.
Under administrative liandling, however, price matters were given nore
space and the procedure for fixing prices became more definite. i'lnce
these clauses were not essentially changed it will be sufficient \o state
in outline the provisions of the proposed basic code of Septemlor 7.
The basis of lorice fixing was the fair market price. This T>ras not to bo
measured by costs of production but rather by the amounts "ncr^n-— ry to
carry out tho purpose of the N.I.R.A.j the paj'Tr.ont of miniratim -atos
herein established, and other wages properly based thereon, and t:^o fur-
nishing of stable employment for the workers necessary to maintain the
industry". In addition account might be taken of "competition v-i '.h
other coals, fuels, and forms of energy and heat production". Prices and
classifications were to be established cither by marketing agericics re-
presenting at least two-thirds of the produci;rs of the commercial tonnage
of a district, nr in the lack of such agencies by the Divisional Code
Authorities. Prices were subject to the approval of the Administrator.
In order that he might be well informed, tho Presidential Members of
Code Aiithoritics were givon adequate au.thori-y to investigate tho records
and data of marketing agencies and of Code Authorities.
Coramc ;t on those provisions was scanty and inadequate. Some excuse
is found fir this in the fact tl:!at operators, at the time, anticipated
that they,'would bo allowed opportunity to discuss these features at
length in a public hearing. Ihe Appalachian protest found the basis pro-
posed for price fixing to' be "visionary and impractical". They feared
the obstructionist activity of minorities which might be larger than one-
third, vifhen marketing agencies were to be set u.p, and they flatly stat«
their conviction tl:a,t a Code Authority is not a proper body either to es-
tablish a minimum price or to classify coals. This belipf was':not elabo-
rated beyond saying that "the size of the Appalachian Division is
sufficient reason for this statement". The Alabama spokesmen objected to
having all prices subject "to revision at will by the Administrator."
9837
-106-
Certain other features nay be "briefly stated.' The child labor pro-
iiiLiticn was set at 17 years in the first draft, reduced to 16 years on
September 7 and a^^ain raised to 17 years for inside workers or for those
cn/saged in hs.zardous occupations and witn a provi'so that any higher re-
quirement iniposed by state law should prevail. The proposed planning
board for all interrelated fuel and energy industries found favor in the
first draft but disappeared thereafter. Provision for an investigation
of conditions surroujiding trucking of coal was written into both the
August 18th and September 7th drafts. Humerous vigorously worded pro-
tests were received alleging that siich action would be detrimental to
small mines and was an invasion of the field of the trucking code. The
clause was omitted from the fina.l revision.
It must be uiiderstood that unceasing efforts were carried on by
agents of N.H.A. and by cooperating representatives of the industry to se-
cure an acceptable adjustment of the wage differential question. Serious
doubts were expressed as to the adeq-uacy of the adjustment finally reach-
ed. ■(*) It must be granted that the problem was one of enormoiis difficulty
and that any definite settlement was a long advance over the pre-code
cliftos in the wage situation. Soipe union districts were not provided for
in Schedule "A", e. g. Warrick and Vanderburgh Cotinties in Indiana, and
some others accepted the solution reached with great r eluctance. It may
be noted further that Schedule A was effective only until April 1, 1934. (**)
On trade practices no controversies arose. This was not because
of any feeling that these provisions -were of slight importance. It rather
meant that general agreemicnt existed 3-s to desirable standards. The first
five of the 13 sections on Unfair Practices were concerned with prices.
The ten following were adopted with clarifying revisions form the model
code reported June 16, 1933 by the Code Cotomittee of the national Coal
Association. They included all the matters proscribed- in that report.
The remaining three sections had been developed in the discussions held
since that date. Ho. 16 provided that special prices might be made on
overseas exports; Ko. 17 and Ho. 18 forbade Hidden discounts through
Commissions to shove middlemen in sales to industrial consumers or to
retailers.
On the 16th of September the teclinical advisor of the Indxistrial
Advisory Board recommended acceptance of the Code as .drafted on that
date. He expressed doubts as to it's effect on prices, affecting the
use of competing fuels, ' and as to the results on wages and employment af-
fecting industrial relations. He thought the greatest threat lay in the
development of small trucking mines. "I am sorry", said he, "to see the
national Government ha.ve to supervise the industry but under the sliao.tic
conditions, I see no other way out." Ho v;as also "sorry to see prices,
fixed but time will tell if its workable". This recommendation was 'con-
cufred in by the officials of the Industrial Advisory Board. (***)"
(*) In the report of Dean Elmer A. .Holbrook, Technical Advisor on Coal
to the Industrial Advisory Board,
(**) Full discussion of the wage differentials is found in Cliaptcr IV.
(***)5ee the report in H.R.A. files.
9837
-10?-.
On the following day, Deputy Administrator Sinroson reported the code
for presentation to. the President and Administrator Johnson approved his
report. It is worthy of note that the Deputy Administrator claimed credit
for N.H.A. ,in promoting cooperation vvithin the indvistry. "It was largely
in response' to H.R.A. effort", says the letter of transmittal, "tliat there
came into t ing the ilorthorn Coal Control Association and the Smokeless
Appalachian Coal Association representing almost all producers in the
Appalachian Coal ax-ea which produces approximately 70 per cent of the
national bitiU'-dnous coal tonnage. These associations join in present-
ing a Code of Fair Corajoetition, this heing a romarls.hle exliibition of
cooperation among coal producers who have heen engaged for a generation
in competitive operations." The letter states also "that the Administra-
tion was active in facilitating the negotiation of the Appalachian
V/age Agreement vmich "was of the' utmost importance in "bringing about the
submission of the Code for the industry as a whole". Certain recommenda-
tions follow, all of which were carried out by President Roosevelt's
Executive Orders of September 18th and 23th:
1. It was definitely stated that all coal producers were obligated
to finish designated governmental agents "such statistical information
as t he Adjninistrator ma-y deem necessary as well as to transmit "P.eports
and ether information compiled by the Code Authorities".
2. Provision v;as made for the appointment of the three members of
the Industrial Board in additio:-! to or in substitution for the five Pres-
idential Members of Code Authorities.
3. ' Schedule B, being the Johnson-Richberg explanation of Section
7(a) of H.I.R.A., was eliminated since attenrptod interpretation of that
section "lead to confusion and misunderstanding".
4. On September 29.th the conroleted Schedule A of basic mdnimum
rates was a-rjroyed znd voting membership in the hational Bituminous
Coal Labor "^oard was restricted to the "impartial representatives of the
President". Other members participated only in an advisory capacity.
The agreement reached on this date with tne operators of captive mines
in the steel industry may fairly be regarded as a constituent part of the
Code, It will be remembered that the outbreak of industrial "disputes in
those mines caused the advance of the code hearings 'and that the formula-
tion of a code was expected to aid in the settlement of these strikes.
The employers in this branch of the coal industry, without subscribing to
the Bituminous Coal Code, agreed to conraly with the ma,xim\-ira hours of labor
and the mini:„Tjm rates of pay so long as tiiat Code remained in effect. The
President's approval was made with the understanding that hours, wages and
working conditions were to be as favorable to the emrployees as Ihose pre-
vailing in the district in which such mines were located. The agreement
was signed for 21 steel companies, including all v/hich had been concerned
in the ■...•. strike, and comprising a substantial majority of the steel
ind-astry captive tonnage. '
9837
1 1 . a::3it3:.z:'ts '::> 'jkz jobz; :]heiii yonosz Aia histoity
Iii^riiY: the ::erioc. of aooii'-, eif^hteen nontlis -.'hile the Sitxrnnous
Goal Code -'as in opera.tion it --aS noJ-if iet. "oy ei,c:ht ar.iencjients. The
first of these approvec. iirrch jl, 13 jh i-ecuced the naxinui.! hours to 7
per Co.y and 55 per v?eek, and iia^de £. general revision of vrage rates.
Anenoj.ients 2 and 3 approved April 22 and June U respective!;'-, revised
these rates in certp,in districts. - The Uth .anenc'-.-ient approved IToverfoer
5» lS3^l-> provided for the estaolisliment of' statistical bureaus "oy each
code r.uthorit3^ for the furnishin;; of infor..:atiO:a fron ea,ch code nenher
to the ac:j!iinistr£ttor and for pa^nnent of the errpense o- a.d-:iinisterin,'-j the
code ''02^ the producers, llie fifth a;nencu-.ient , approved January S, 1535.
forhade the naJcing of contracts, v/hether for i. ir.ediate or future delivery,
at prices iDelor? the fair narhet price at the date of such contract.
Ainendnent si::, effective Januarjr 25, lS55r inclu.ded a conprehensive
revision of the iiethod of esta.hlishing fair /larhet prices and provided
Boards of Arhitrs-tion to settle price natters in dispute. The seventh,
a.s approved ilarch l';-, lS35f directed that each code autliority should
have one nenlDer representative of organized labor. The eighth and last ft.
axiendment e-tended the probisions of the Code, vrhich otiierrise termi-
nated April 1, to June l6, 1935* This had particular reference to nage
and hour clauses. ' . . ■
The Code ■ -as adopted ma,6.e the nage and hour provision effective
only until April 1, 153^'+. It stated also that a conference 'vas to be
held on Jajn.ua.rj'- 5 "between representa-tives of enoloyers and enployees
opera.ting under the Code, toget.ier ^rith representatives of the N. H.A.
for the purpose of deternining vrhat, if any, revisions na.y be desira.ble
of the \7ages, hours, or differentia.ls. " It 'vas anticip.ated tha.t reports
fron IT.E.A. 's statistical Section Tfould be available by that date to
guide the conferees in their deliberations. Largely because it \7as not
possible to collect and compile these" data in tine, this conference nas
successively postponed to Febraa.ry 12, February 21, ilarch 1, and uas
finally assembled ..'arcli 26,. A special study made l)y six mining engineers
vras published under date of February 12. ' The field examination i7as ma.de in ^
Kovember and December, 1933* The enginesi-B had been instructed "to P'
determine the effect of the Bituninous Coal- Code on the industry and. the
practica-bility of substituting a shorter v;ork-day and nork-ueeh" for
'he- code hours. Their conclusion nas adverse to the shorter hour propo-
sed and read as folloT^s:
"With full appreciation of the (desirability
of crea.ting additional e/Tploj'ment, vfe have
concluded from the fpxts brought forth by
this investigation, tha^t the Bituminous
Coal Industry is not, at this, time, finan-
cially or competitively able to decrease
the nork-da;.'' or 'vork-'.'eek without detrimental
consequences to employers and employees."
In addition to this report, cost data compiled by the rI.R,A. Bitumi-
nous Coal Statistical Section for the iionth of November 1933» ^-^d.
emplo^'-ient and earnings reports for the period November 1 to I5 had
been released at various dates prior to Ilarch 31»
9237
-109-
A further fr.ctor caasinc (iela;" and -uncertainty resialted from the
ouality of control over ninintiin v/ac:e rates. On the other, hand these
rates '7ere definitely set do'm in the Code; on the other they vere
suDject ot the ri^jht of employees to hargain collectively.. The original
Appalachian agreement, sifnad Septenher 21, 1933 has rerved as a "basis
in fixing code i7age rates. Its effective period e:ctended only to April
1 anc" its coverage, while siihstantial, did not include sone 30 per cent
of production. The prohlem arising was a difficult one. Hou v/as
agreenent to he sectired in the Appalachian fields without assurance that
other conpetin-': fields would adopt provisions consistent with the agree-
ment there reached?. Similar qriestions were pronptly raised when the
joint conference a,ssenhled on Jehruary 21. Smokeless operators,
desiring to negotiate ceps.rately, ■■.•ere not represented. Whereupon one of
the nost influential operators declared th-at assurances of the estahlish-
nent of proper competitive relationship with the Snohele^s Field would he
a necessary prereaaisite for the participation of the interests he
represented ir: an agreenient. This difficulty was r.iet hy a suggestion of
President Le-is, of the United I'inc T:7or:cers, that the two conferences pro-
as to the relationship of wage rates
outside districts remained an open
ceed conciirrently.
Ihat the duestio:
in the A-o'oalachian
field to those i:
one.
A further corTolicrtion arose fro:! the conclusion of a -jage contract
in the Ala.hp,na district on ilarch lb. This -'as a result of strikes ini-
tiated on -rehi-aa-ry I9. The disputes led to much disorder and it was
necessary to call out -the naxional ruard to police the mine field. At
the height of the disturhance lOpOO men were on strike. The settlement,
which was to hold until April 1, 1935, '-"^as -i^-fi-e on the hasis of the wages
existing in commercial nines. This, is to say at co.de minima. (*) Although
.the &greenent contained a clause to the effect that it was suhject to
modification "::,■/ further oxder of the Aojninistrator or the President, it
.was the clear understanding of the opero.tors and of the medip^tor who
induced the .miners and operators to negotiate the agreement that the miners'
representatives had dis.clai^.ied any intention to. seek further increases in
the wage scales. (**) This ri.vif'>-ity in the wage scale in a district
closely competitive with the southern Appalachian added materic.lly to the
difficulties m.et. hoth hy .the Joint TTage Conference and by the Code Con-
ference which assembled on Ilarch 2.5..
Proceedings on that day and on ilarch 2S were devoted to presentation
of the opnions of various districts regarding desirable amendr.ients. So
far as these la-tterr, touched hours, the sentiment e:-roressed was favorable
to a modification in the direction of greater fle.pibility, with longer
mar.imu:-! hours in the busy season rather than to a shortening of m.azcimum
hours. Comprehensive a.rgur.ients of this character ;7ere made by spokesmen
for Korth Dakota and for the Socky-Liountain-Pacif ic Coal Association.
There was e.n undercurrent of a"G"or.ehension, however, based on persistent
(*) Coal Age, k'arcn 193-I-, - p. II5.. 7age rates are st?tec'. in issue
for Aoril, - r). I52.
(**) See the testimony in the Transcrir-t on the kadif ication Proposal
(April 9*, Voluj-ae I, pp. 31 et seq. and the affidavit ,of General J. C.
Persons. Ibidd pp. 35~"7«
9S37
-110-
r-.:nors that the Ac'ninistration vas aooiit to present oi-o_.:.osals for raclica,l
notification of ho^Jirs and v:ages. At the close of the second day of the
heai-in(2, Deputy AcL:.iinistratoi- Ellis, in response to a o_uestion, declared:
"The acjiinistration feels that "oeca.use
o.f the short leiifctL of tine represented
oy the cost state-.ients, it is in no po-
sition at this tii.ie to nal:e definite
recori lendations. "
Tnen the hearings convened on the afternoon of ".iarch 30, the
character of the r.eeting hed radically chan;:;ed. There ivas a, nev;
chairman or "npderator", assistant Chief Counsel Snith, '7ho announced
th?,t the neetin^ constituted, the first conference provided in the Code to
raeet January 5« Ee reported that the Appalachian Joint Conference had
signed a.n agreement last evenin,';; .'alcinr' sulDstantial changes in the pro-
visions as to ma::iav!j-i hours and ninim^aia -jages. These changes nere incor-
porated into & proposed a:.iend-:ient to the Code sponsored "by three sub-
divisions of Division I: Eastern suhdivision, 7estern Pennsylvania, and
Ohio and "by all districts of the Central ".line 'v7orl:ers' organization.
The changes proposed -.7ere to appjly to all five divisions. Hours Tere to
"be reduced to f per day and 35 P^r 'veel:. The clauses as to excepted
classes had been revrritten in the light of code er'perience. Schedule A
had "been largely, and in oone districts, radically revised. In Division II
ninina day r/age rates, "both inside and outside, rere not to be changed.
Hourly rates 'vere increased since the pa^'inent originally applied to eight
hoxirs nor; covered "out seven.' In Division V, for the ;iost part, a similar
statement applies. In district K, ho^iever, comprising South Colorado
and re'.7 iie.-:ico, inside day rates -vere to "be raised from $U,U!+ and $U,US
to $5.10; outside rates from $3-75 ^^ c?H,10. Norta .and South Drkota
inside rates :/ere to "be stepped up [50 cents per day from $U.00 to $U.50.
A similar increase on oiitsic'e rates 'vas to "oring them up to $3.70 from
$3»20. In Division I, a.s a generaJ. statement, "both inside and oxitside
minima rates -'ere to be advanced ko cents. This 'jould raise the inside
rates in District A, comprising Pennsylvania, Ohio, iiichigan, and the
Panhandle District of TJest "Virginia from $U, bO to .'?5,00, The otxtside
rate in this district had "been $3,S0; it was to "become $U.00, In
District C, incliiding all the rest pf Division I e::cept ITorthern 7est
Virginia and 7estern Kentucky, t"ne corresponding increases -lere from
$4.20 to $U.60 and from $3,20 to $3,60. Northern "Jest Virginia, which
had enjoyed a 2U-cent per day differential under District A, nas given
the same rates, $5,00 on inside and $'l-,00 ou-tside. For T7ostern Kentucky
inside_day rates 'Piich had"becn $U,00 became $U,60; outside rates of
$3tOO "became $3«75» '^I'^e radical revisions v,'ere applied to Divisions III
and IV, In the latter insic'c c.'^jy rates of $3.75 ^lere to "be raised to
$U,60 or to theiates of '.District C. Outside rates, honever, were to
"be raised to the level of Distript A, $U,00 or kO cents above District
C's ne'7 rate. In Division III, the severest increases were proposed.
The inside day rate was to "be $4, 60 and the outside day v/age $3,60
;throughout that territory'-. District J, or Ala"bajna, Georgia, and two
counties of Southern Tennessee hac"' had an inside rate of $3.^0 and an
outside rate of 02,Uo, The proposal thus '-'as to advance outside rates
"by 50 per cent, inside das'- wages l^y over 35 P®^ cent. In District J-1,
conprising the remaining counties of Southern- Tennessee, the code rates
9S37
hr.d ^oee::. set at 03.C4 inside pt.c $2.84 outside. ITMlc these -iroposed
adva: ces were less severe f.ie rartlu-r -n-obler. of erasir.^ an intra-
divisior.f.l difi ere: :tial v.'a,s ii-volved.
r,:.rther chaii/,es v^ere -iro-^osed affecti:-.__ t o:-.:-.a.r-e and other tIocc
rates ;iay;ients. In the Code these rates had not been prescribed beyond
the _£neral declcaration that "exist oniar" differentials" v/ere to be
nai.-.tained. In Amendixient i'o. 1 " an increase of 10 cents ^er ton for
-^ic;x:inini-; 8 cents :oer tons foi- raacMne mining; 1 cent per ton for
c-atting and of 9 per cent of all yardage and dead v/or!" rates v/as pro-
vided." In addition it v.'as s-iecificall3'- stated that in the districts
where vr&^.e increases were to be laost pro?:ounced, nar.iely: northern West
Vir,l:-,ia, Vfestern Kentuc]:;^ the Southwestern States and in Division III,
the tonnage and piece worh rates should Hbe further increased by an
amount sufficient to ma.intain the parity" between these --layraents and the
new daj' wa^e rates. These areas becane storn centers of the ensuring
discussion.
Wiuh this anncunceraent by "Moderator" Snith, the hitherto somewhat
huadruiTi proceeding became aniri^.ted, to use a mild ejroression. It nust be
understood the,t the proposed ainendi-aent had not been so much as seen
before it was rea.d in the ODcn meetin_: by the representatives of the dis-
tricts most affected. Copies were not available for their use- in the
hearing of March 50. 'he extraordinarily rrpid march of events "orecluded
such norni£vl 'orocedure. As stated in the hearin;; by one of the Chief
actors: "The agreement wa,s finished s.nd signed at 3 o'clock this morning
and a code sjnendment came out of the Divisional Code Authority at noon
today." (*) The conferees were further -mzzled to understand the :TOsition
of the auninistration. Mr. Smith stated: "We arc forced to act very
q.uichly in this situation, at Icest to the extent of putting out a pro-
posal. So for the pur;>ose of puttin.: out a •^roposal v,-hich, in its nature,
v;ill be more difficult to change after it is out tlian before, we are forced
to :.re5uxie that anyone './ho rer.iiains silent ^ives his assent." Again in
respanse to a question he a.nsv;ered: "The ac'iministration has no thou_Jit
of putting out this proposed sjnendTient as it is tead today, as the
Acxiinistration proposal at this time. We are going to confer, in the
li.^ht of v/hat ha,s been said today, aiid will be said, tomorrow. Before
the end of the day, I thieZ: en announcement can be expected. "(**)
Although somevrhat dumbfounded by the suddenness of the proposed
s.raend'iient , the representatives manifested s- degree of self-possession
and self-restraint. The general attitude was one of loyalty to the Code
and to the administration, joined with a feeling that such important matters
could not be decided without sufficient sime for consideration a.nd for
consultation with their constituency. Some of the districts most deeply
concerned exniressed a more vigorous rea.ction. ^'he Southwest 's represen-
tatives contented themselves with a statement that they objected to the
a-mendj-.ient and desired tine to consult v/ith their members before cjnressing
their o-r;osit ion.(***) Northern T7est Yiginia sent in a letter and brief
(*) Johni L. Lewis, Transcrip.t, March 50, Volfjie III, P. 559.
(**) Transcri-it, Voliuae II, :.Tp. 306 a.id 3'//.
(**1) Ibid, :o. 313.
-112-
under date of llarch 2S, statin£: their conviction that "an;/ attempted
changes in \:a^ze differentials at this ti:.ie are to tie deprecated." (*)
The spol:es:.ian for TJestern iLentucl:;- found the proposed rjiendjnent "anaz-
ing" in "that certain gentlenen have vmdertalien to fix the na/^es
and TTorkin," conditions for evcryliody in the coal industr:"- in the United
States and e.slied that it be -lade effective on April 1," This proposal,
if adopted, he declared, "^-ould "be aosol\itely destiiictive to the T7estern
Kent^^ck7 coal field." (**) The Alahaia representative felt that 'the
ajiiencj.ient 'Tould "be destructive to the industry of his state. Bet^Teen
da-ys Division III Code Authority held a neeting and passed resolutions
read into the record of the next day's proceedings 'rhich "challenged
and denied the validity/ and the propriety of the proposal and the right
of the Adninistrator or the Presicent to prontilgate or declare the sa '.e
effective," Should such action he trken, read these resolutions, "eadi
producer located in this Division shall oe and is hereby released fron
any obligation to observe the sane a.nd shall be free to teice any action
■,'hich it iiarj be advised to challenge the validity of any such change,
proclanation, order or axiendnent. " (***) 'Jhatever else this action nay
signif-y it proves the capacity of the representatives of Division III
to nr.tch the Aclnini strati on and the proponents of the anendjnent in
celerity. At the last Day's procead.ings, Ilarch 3I, a public hearing
on the ajnendnent had been aniio^inced for April 3.
However, the anenc^nent as proposed I larch 30 na-s approved by
Adninistrator Jolmson on lia.rch 3I ■'"-i^-c becaj.ie effective April 1,
"subject to further nodif ication***on the ba'':ic of cause shonn, either
at a public hearing thereon -.'hich shall be held on April S, 133^, or .
other-vise." The apology for r:uch s'adden action I'as stated as follcTs:'
"a serious ejergency beinf; threatened in the Dituninous Coal Industry."
The cha.racter of that energency nay perhaps be deduced fron a Statement
of President Le-rris, of the United liine liTorkers, read in the light of
the traditional policy of that organization to cea-se norJ: nhen contracts
ter-^inate. "An energency, " said he on ilarch 30, "confronts tlie industry
no:7. The contract is e:rplring in a great "geogrrp.nca.l area of the
industry, _ The code 'rages aa-e errpiring in other a.rea.s. It is essential
that the G-overn^-ient nove at once to protect this situation fron possible
confusion, . (****)
Hearings on the nodification proposals lasted three da-'s, April 9
to 11 inclusive. There rras considerable discussion not ge mane to
A^iendnent ¥.0, \ and considei'able_ tine given to e:'tend presentation of
the "age differential situa.tion in particular districts. This problem
is discussed later in this study. All that rrill be attei.ipted here is
to follon the developnents lead.ing to anencbients llos, 2 and "j. Spokesnen
for certain districts, notably iTorth Dakota and Io'7a, arg-aed that
(*) Ibid, Volune III, p. 320
(**) Ibid, p. 312.
{***)l\A6., pp. 3os-3S2-3S^-.
(****) Ibid, p. 370.
SS37
•He
reduction of hours "belo'T G per C.c.y '7as i roractice.l. Feinted and repeated
references ^'ere lade to the en;:ineers' report in this connection. The
operators association on Montana sent resolutions endorsing the Adjninistra-
tor's order of _ iiarch 31. Aside fron these expressions, participation
by representa-tives of Division V \7a,s linited to discassion oy spolresnen
for tTorthern Colorado and for the Southern Colorado-iTe'T i;e::ico districts
o.f their relative 'jage situation and their competitive position as
conapa-red to the So"atb.7estern fields. The;,- -^ere not seriously disturbed
"bjr the anendnent "out felt as sta,ted "o'j the representative fron Southern
Colora.d.o and Kei7 iIe::ico thr.t in case their basic '7ages vere changed they
shoiild be put on the SEuie I'ates as the southwest, ( -') In sij.iilar fa,shion
the representatives of operators in Division II ^lere :ore concerned uith
rela,tive ■:Tages bet';een thenselves and closely competitive a,rea,s than they
T7ere v/ith the bs,sic na-ge price. It '7ill be reneubered that the changes
na.de effective April 1 had all beeM in the direction of strengthening
the '7age cost position of operations in this Division.
Qiaite different '7ere the presenta.tions for the t'-'o stori-i centers
in Division I: 'Jestern Ilentucky and Northern "Jest Virginia. Fron the
fir^t it -/as declared, that the ne'- '7age scale neant the slou stranguJation
'.7as Trilling to go along on the Y^J'^o'^J^ clay a.n6. -.'oulc, try, at least, to pay
the original code -.'ages for the shorter 6.ay. This vas felt to be
equivalent to the change accepted b- Indiana and Illinois and the ;ia::inu::i
increase vrhich 'Testern hentucliy should be as^:ed to assuie. A sentence
ma,y be quoted as illustrative of the temper of the presentation: "V'e
earnestly request," said one re:.jresontative, "a careful consideration of
our situation i7hich contains lany eleuents tha,t are local and peculiar. "(**)
In Northern 'Test Virginia the a.tmo sphere had gro'7n decidedly :.iore
heated. The ba.c;:ground of the controversy for tha.t district vas laid
in the joint '7age conf e'..ence. On ; Larch I7, the delegates fron Dlorthern
ITest Virginia rrere called upon to justify their nage differentials.
After some discussion of this issue, they '■'ithdre-7 fron the, conference
o,nd did not participate in the agreement a-s si';ned inarch 30» I-^ the
amencbment hea.ring they repeated a p.vomosal, made to the United hine
"iTorhers avnd rejected b;'- th.eia that tlie operators '7o\i.ld agree, under protest,
to 'pc.j the Korthern Appr-lachir,n dry rates and '70uld apply the same piece
'7orl: raises as became effective in Division I, This position they justi-
fied by data sho'-ing the high outpu.t per mian per day from their mines.
At the tine of the hearing the mines of the district ■7ere generally closed;
12,000 miners nere idle and the operators' spokesy.iaji felt themselves to
be "fighting- for the verj' life of the' fistrict," They called for an
immedia.te order restorin;;' previous conditions pending an investigation
of the facts presented, (***)
(*) . Tra.nscript of hearing, Volirie II, p. 51U.
(**) Transcript, Voluie I, -gp. 1^7-217.
(***) SeQ the testim.ony 'of Tred A. hrafft, Volnjue I, p. 267, et seq
and of J, Hoble Snider, Ibid, p. 28U et seo.
9S37
Fron Division IV crjae spokesnen to rGher,rs3 at iGn^th the doleful
history of their losin^r; coiipetitive sti-u.^^'le Trith oil and gas and, since
the code ■'oeca'.ie effective, r/ith producers of coal in Illinois. They placed
emphasis also on the fact tha.t the '7a.,-;e rates incorporated in the anendnent
abrogated their contracts rrii;!! the United h'ine 7orhers. In the iTords of one
Titness: "In the absence of intervention hy the Administration, lu-, Le'vis,
and his or-anisation are ::orally -and legally hound to xrorh under the con-
tracts nhich they have solicited and sirjned e.nd i7hich they h?ve continously
assured us nould he carried out to Aoril 1, 1535," The spohesnen vera
sincerelj^ convinced that the deep nines of this territory coulc' not operate
under the ne-7 rates and that the application of such rates '-rould nahe in-
possible the accompli sbnent of the prir:e purposes of the Code. These
statements were nade in e::cellent tenper, considerijig that all shaft, slope
and drift nines r^ere closed. The appeal rras to the aoxiinistrator to give
the situation in the field cr.re"ul consideration before ncJcin,';' permanent
the rates provided in the amondaent. (*)
Division III presented the r.ost difficult situation of all the storn
centers. The operators, as stated by then on liarch 31, \-ere fully deter-
mined that the amendnent should not C'o into effect. They had closed their
mines as a first move and later applied to the federal courts for a, tern'oo-
rary injunction restraining the S, 2.A. from enforcing the amendment. . This
order nas iss\ied April S, after rn all c\-- -ir hearing. The operators rttenpted
to reopen the mines April 5, uncer thr- ter'is of their contract signed
ilarch 17. This move -.'as ballced. ^q-j the.niners refusal to v,'orh, ' In the
April hearing the Division presented a solid front, Alabrjna being joined by
Southern Tennessee and Georgia both in prohibitin:; the nsg-e increase and
in e:rpressing their belief that the ra.iendiaent procedure ijas both irregular
and illegal. The position of the Southern Tennessee operators uas tem-
perp.tely if positively stated, "TJc do not deny, " said their spokesman,
"that our position is improved and that our chance for economic salvation
is brighter today than it uas prior to October 3, I532," They prerented
"the simple and specific request that in any revision of the Code of Fair
Competition their territory should be continued in the present relation-
ship to the inciustry, " (**) The Alaban.a operators, 'judging from the
presentation nade by their rep^resGntatives, ijere outra.':ed both oy the proce-
dure adopted in puttin-"; thro\igh the Amenc; lent and by the la--oxit of the
nage increase proposed for their employees. The latter ■:ove nas character-
ized as an "effort to blanlret Alabama tinder a revolutionary rate increase,
'-'hich, it must be kno-vn to every nan in the room and every member of the
ao-ministration, vras utterly imjoss'ible for them to pay, "(***) In the plea
first n.ado by Ala.bama nothing further vras advanced than a request for a
rescinding of the amendment as applied to Alaba.ma to be follo^Ted by care-
ful consideration of the '.-'age and hour situation in the light of all
available data. Then it became evident later that the hearing rra?:, to close
rrithout sv.ch action a final declaration v/as -rritten into the record.
(*) Transcript, .Voluic 2 testimony of :;ossrs. TT. C. Shanl;, p. hkj,
kr. Charles S. keith, p. l-l'!-!-; nr. rutorbaugh, p. Uy.., and kr. S. k.
Thompson, p. 51U.
(**) Transcript, Voluie I, pp. 03-S5.
(***)Transcript, Volume I, p. 25.
9237
Tills ^tptoH'^nt '7a3 larred "b;" sor-'e ertrava/iance o'" lc:n.rj.i3.rjc e:rolained, if
not e::cu.3ec'., 'b;- the enoticnal cvesznve under nhich the spol-esnan
lajorcc. A pas'je,2;o nore positive than yiolont, read:
"So frr as -^.'e are concerned i7e nave" de::'initel'- and
finally detemined that ■'Te rill not conforM any
f\irther to an-'- one nan detemination of polic" and
dictation in rep-adis.tion of the essentie-1 hasis
r.nd covenant of the code. That conl-asion on our
part is final and \re are prepared to tahe the con-
sequences to save the indiTstry fro:.-! a destination
Y7orse than the econo'Tic chaos of the past."(*)
A later' ste^tenent froT the Code Authority of Division III -.Till
give another an;~lc of the position of sox\thern operators. It concludes:
"In conclusion, \ie respectfiLll],.- point out tha-t any
policy of TDlanl:eting. wa^-jes south of the Ohio is a
social rather than an econonic C'-sture and is not
warranted ty the econo-iic oasis of the Recovery Act,
Congress plainly did, not iiitend tha-t the Act should
he employed to relocate industry or distrihution,
or close do^'.'n industry in the South, In vier of the
certaint;r that Alaha'ia has not tahen an.d does not
propose to ta're advanta;je of its lo'/er scales to
tahe any coiipetitive hiisiness on a lorer nine price
hasis, it -'ould he unjust and not in harnony rith
the economic "basis of the Act to inpose any scale
on Alahana rhich the recorded fpcts do not JListify. "(**)
?ron e"ch of' these risbricts and for the ind-istry r;enerally,
representatives of the niners' orf5;rni:i-s.tion spohe. in suoport of the
anend-uents and defended the "a^ie rates written therein. It is no
reflection on. the cappcit:/ of these spphesnan to state that their
ar/^meiite "ould have "been nore effective in a rage negotiation than in
the current proceedings. They ("id not present a scientific justifica-
tion for the proposed, rates hut rather addressed their attention to the
needs of rdners. The" did not imdertrhe an errposition of the' comparati-
ve natlirrl diff icu].ties," marhet coi.ipetition, or freight rate situations
of cMfferent districts. Rather they enlarged upon the desiraoility of
larger nage-earners incoiies.
In extenuation of the fail-i-.rc of ijjai'on spohemen to nahe acc^arate
and scientific argoojients :;ay "be cited th:? errpert testimony of the
head of i''I.E,A,''s Research and Planning Division to the effect that the
essential c.ata vere not avp,ila,"ble for such an exposition. Und.er d.ate
of harch 30, 153^> this official reported to Ad; linist rater Johnson
•.-.'ith reference to the Snolreles-^i fielct, "The evic.ence of the report
i'or the ITovemher I-I5 payroll indicates inequalities in the tonnog:e .
(*) Tranr.cript, Yolx.-ie III, p, 7'o.
(**) iiemorandu.-!, 1T..:.A. fileo, under date of Arril ik, I33U.
o7
-lib-
rates lietveen ITortli anr. Sov.tli. Ho'7:ver, it is f-lt that the results for
one oerioc. aro not adeo-aate or conclv.sive at least for definitive and
precine deter-aination. " (*) At the close of this hearini]; the sane, of-
ficial '.7as handed the thorn;;' covriission to .'.al:e findin^js as to the pro-
priety of the -je-:;e diff erentiFJs inco3.-po rated into Ai-iencxient llo, 1. In
his report dated April IQ, he stated arain and more precisely the "basic
data sittiation. "It rTiist ho erphatically stated," reads this docunent,
"tliat the statistics conpiled oy the Coal Unit of Hesearch and Planning
carmot he used as an autonatic deter:iinator of rate differentials. The
taoles conpiled to date cover only the nonth of Hovenher, e,nCi for sorae
of the data only one pay period, Novenoer I-I5, is included. The naterial
included ho'7ever, is the hest in existence. The iJoveraoer fiyiires are
decideo.l;'- inadequate as a hasis for forecasting the results "Thich ni^ht
obtain fron any changes grov/ing out of the Anendiont. "( **) The report
nahes four ."prelr.iine-ry recoraaenda,tions, " as fcllo'-'s:
1. The :;iaarirru':i increase in hasic ;iini'iuin day
rates to he SO cents.
2. A concerted effort "be nade to have rail-
roads pay higher prices for coel no'i
"being delivered on contract.
3. So".ie attempt "Ije -.lao-e to prevent "duinping"
of natural /-as.
U. l>To cha.nge he :iac.3 in the n even-hour c'ay.
The report also viade d,-finite reco'i'.ondation for day rates in each
of the four storrn centers. Tha/c for "Jest Ilentucky \7as as hrief as
positive. "It is recor.i;.iended, " reads t"ue report, "that no charge fron
the Ar:ienc'j:ent he ..lade." Kort"iiern 'Jest "Vir :ini;?, having accepted the dajr
rates of t"ne a:.-!cnd:ent, this natter is asrni^ied to be settlec"^. As to
piece v;orl: rates the recomendation is that the natter be referred to
the Illation?! 2itf:.vinoa.iE Coal Lahor "joard for consideration, Tor the
Southwest, relief fron the '-'Sge increase to the extent of 25 cents per
day T/as considered to be justified. This reduced their.ise to 60 cents
per day in conformity '7ith IJo. 1 above. "The increase of 60 cents, from
03 .7? "to $U.35 per day for inside shilled labor," reads the Pieport, "is
■■jarranted by econouic juo^nent of all factors," and is "necessary'- to
naintain a proper relationship ''ith coriosting districts." 3econ".endation
for Division III '7as divided but in both cases_ lolloped the rijile of a
So cent p3r day -.iar.inv.n increase. Por' Soufnern Tennessee this neant a
suggested increase fron $3.oU to $U.UU per dpy:} for Alabaaa, from $3.'+0
to $^.00, These reco-r':enda.tions for "Jestern Ilentuchy and for the So^ith-
•jest ^7ere follo'vcd exactly by the Acninistrator in Ara(jn&-.ient No. 2, vrhich
he approved April 22. '"?he difficalties of Northern .'Je.st. Virginia
oeeungly uere not submitted to arbitration. In that district, as i7ell
as in Division III, a compipriise see -.s to "liave been reached through
private conference of '7hich no record is avrilable. In Northern 'Jest
Virginia the (.'xiy rates of Atiendient No, 1 ^rere accepted. The clause
comanding further increases in 'oiEce rates to maintain oarity of
(*) QvLoted in the Transcript, April 3, Volume. I,, p. 25O.
(**) Heport, p. 1.
Sc^37
-117-
earniiv;s, ho'^evei-, i7as noc'.iriec". to ■ci-escri"'oe definite increc.sec of ?;"
cents on loaC.in;:; rates and -g cent on the cutting: rates. These increases
i-'cre accepted, liy the operators and the majority o" the nines in the
district, imich had "been closed since April 1, reopened on the 23rd.
3y a rrage agreenent concludec". •'7ith the United liine 'iTorhers on April 27,
the district cane into the ;;ener3l Appalachian agreenent, The Northern
West Vir:-;inia operators reserved the rij-^-ht to protest, at a later date,
a.-'^ainst these -'a^-e increases in case any iniustice hscane apparent hy
Seuteuher l.(*)
In Division III a further reduction of 20 cents on day rates
belor; those reconnended 'oy liesearch and P-lannin^ va-s nade. This "brought
inside day rates in Southern Tennessee to OU. 2U; in the oslance of the
Division to $3.^0. On the 'basis of these rates Alatama operators
entered into nef^otiations with the United Iline V/orliers. The district
had "been harassed iDy riotin-'^;, necessitating the decla.ration of martial
la\7. Settlenents -;ere finally reached in liay and the Livision returned
to nor;.:al operations.
In ".Testern ::entuc;-.y Aiienderient iJos. 1 and 2 led to a coiralete and
final rupture on -Ta/.'e rates oet\Teen the operators .in the district and
E. H.A. The operators fil.." an application, on April 26, in the United
Ststes District Coiu-t at Louisville. It nas granted on Hay 2 and a
^Tritten opinion filed liay ig, Judt;;e Dauson chara.cterized the application
of K.R.A. orders to the ..lines of Kentucl:;^ as the "holdest kind of
ustirpation. " He quoted opinions, of the Supreue Cou.rt to the effect
tha.t "nining is not interstate co:T''.erce a,nd the po^'er of Congress does
not extend to its re;g-alatibn as such." liines reopened Liay 3, altiiough
the United Mine' '.Torhers laintained a.strihe in Ohio and J ulilen'berg
Counties until late in Hay. The original pasic code rate of $U.OO
'vas paid ap/clyin.^- to the 7-hour da:^. Thus regretably closed the his-
torj- of Western I'entuciv' s participation in the Code v,'ag3 and hour
strj-cture. Thror.';hout the re;-,mxning period the district pu.rsued an
inde-oendent course, pres'unahl:' lalntainin^"" the hours ajid nages just
stated. (**)
The Scuth-'estern strtes re'Tused to '^ cceot the adjustnent proposed
"by Amendment ITo. 2 and the deep, -lines re.ip.ined closed, although strip
operations '-'ere generally 'forlung. This neant aho\it lG,OGO r.en id.le and
2,000 on.sy. The operators '7ere loath to resort to court proceedings.
Instead tney strongly desired to contiirae und.er the Code. An acceiDtalile
coLirse of procedure was foiind 'jhen the administrator proposed to. send his
technical assistant to :jal:e an investigation of the field and report
direct to him. Such an investi.^ation ivas carried on during June. (***)
(^) Protest to i:.I.~.3. , Octoher j , ISy'-.
{**) Coal Age, iiay, p. ISS , June, pp. ^5^-5
(***) The report of Ut, Godfrey li. S. Trit has not Tseen foimd.
SG37
-113-
Ag a result, seemingl/ of this re-oovi, Ain^uirlment i'o. 3 vns s-;?provecl June
4, becoLdnt; efiectivs a v/eel: lator. It -JTrovided a f-artlier decrer.se in day
rates in Heev rainea frora $4.35 to $4.00 for inside labor and from $3.75
to $3.55 for outside For]-er5. It should be noted that this action created
a new r/age differential since strip mines ■■/ere continued on the rates of
Amendment llo. 2 or $4.35 and $3.75. Tnere was- further revision aff act-
ing:- "oiece rates. This v;as required in the interest of maintaining parity
bet\;een day wa^^'es and T)iece work earnings because of the very consider-
able reduction made in the day rates -oro-oosed for the Southwest in Division
IV. It is not anparent how this revisi'^'n of -liece rates fitted into the
Code amendment lefjal oicture, since the ne'v/ rater, v/ere never incor-^orated
into the Code. They were, however, made effective in the Division
through the De^-iuty Administrator and the Labor 3oard. It seems that an
agreement was reached at VJashington on Juiie 13, betv.'een the Deputy Admin-
istra.tor, the miner and the orierator renrerent-^.tive on the Labor Board
for the Division. This agreement fired the oicla'/dning rate at 3 cents
above the ori^\;in-'l Code rate. The combined machine cutting and loading
rate was to be advanced 7 cents from that base, while yardage and dead-
work rates were to be increased 9 oer cent. This adju:^tment, while not
fully satisfactory to o-ierators in the Southwest, was ■icce^ited and an
agreement in conformance with it ;.-a:.' wor]:od out between the Arkansps-
OklaJioma Coal Ooeratorc' Af; '-.oci- tion ajid the United Idne Workers. (*)■
There had been incori^orated into Amendrients ITos. 2 and 3, a i^ro-
vision aprjlied to Soiithern Tennessee, to '.Vojtern Kentucky and to the
Southwestern St:\te3 which read:
"PURTHES GEDIRSD tht^t, in view of the differentials ac-
corded Distric', G, and in vie'.v of the situation e::isting
in District H, pending further order there shall be no sales
by operators of said Districts into the normal cons^'oming
markets of another District which is subject to higher rates
of T)ay, at any prices for coal of comparable grade and
Duality, less than the -rice for such coal in said market
charged by such other District, and there shall be no de-
structive invasion of such other consuining markets and, in
the absence of satisfactory agreements governing this matter,
the determination of the Administ:L-ator on coruol-int of any
such destructive invasion skall be conclusive."
This summary stat-m.ent of the stormy events atteiiding the passage
of Amendments ITos. 1, 2,, and 3, cjffinot indicate the intensity of the
controversies aroused. Ike chief i)n!3ression o;ained from a review of the
transcrir)ts, briefs, and corres-^ondence is to the effect that the Code
during its first months of oper- tion had conferred substantial benefits
on its members. These benefits they were reluctant to forego even
thou^gh they were outraged by the methods ado-Ued in formulating and
■oromulgating Amendment Ho. 1 and \rere sincerely convinced that the a;?-
-5lication of the wage and hour orovisions would re.m.lt in their
(*) Corres-'^ondence in II.H.A. Piles, and Arkansas-Oklakoma Wage Agree-
ment. See Voluiie, V/age Agree-ients in Bituminous Coal Industry,
p^. 407-19.
9837
•119-
financio.l o.GGtr-action. In '.-ny c-vcnt all -^-.b-e 'Mstricts, erice'ot ".Testern
IZentiic'."'', fouglit -.mtterc out to an acceptaoli^ co:ipro::ise -ritiiin the
fraiie-^orl: of tlie Coce anc. :r'i--.tr.ined tlleir place is a re:;^Alatec in-
dustry. In the lir'.'ht of the cai-lier hir^tory of that Code, during its
forna-tivc perioc., as '-ell as in this story o;" tha st:.-u/;yle over anend-
inc ^7a.':;e and hour clraises, this result testified iiipressivcly of the
stren^'th of their attrchiient to code-procGCure,
A..':end;.ient ITo. U ha.d reference to the collection of . statistica-1
data, the a/;encies co':pilin^' then, the nature of reports to oe suh;.iitted
and the apportion: :ent of ercpenses incurred in such ^70 rl,:. It "as defi-
nitely declared th?.t failure to six"bnit siich reports v.'ould l)e a. violation
of the Code. Discussion lerdin;; to such proposals iTa.s had at the neetlng
of the "Jational lituninov.s Coal Industrial Board on Janua.ry lo and I9,
IvJjU. At that ti le De.:uty Idninistrator Ellis, called up the i.iatters
of assesp'-ients and reports with reference to their hearing on enforce-
:ient. He stated that in several cases operators refusec to furnish
eithei assessnents or reports .and that as a conseruence Code Au-thorities
'.Tere ]iandicap;jed in carryinr on their '-or!:. (*) In part, difficulties
arose "because such failures to report hac. ^ot teen declared definitely
to he violations of the Code , in part, "becuise th.e smaller conpanies
did not heep records. vhich. lurnished the sv.l)stEntial rolune of data
called for. Tl-;ese na-tters ^rere referred to a cornittee considering
the forniilation of a definite plan for enforce!:ent "'Thich reported
rij-linQS on January 15 to he issued hy the Acuinistration to all Code
Aiithorities. These ru.lin^js caJ.led "cpon every producer of coal to
fu.rnish such statistic?! information as the Aciiijtistrator dee:.ied neces-
sary, "The failure, ne£;lect or ref"..sa.l of any cor.! producer to fur-
nish the statistical infor;.mtion required" T/as to he a viola.tion of
the Code, (**)
The Appalachian 'Jarie A;';;reehGnt si.-jned inarch 30s 153^+ contained a
provision for a. i'"orth-So\ith Corraission to investir^'iate the e::istin^:
differentials on tonnaye and Crr; '.■a,;:e ' rates. In that connection there
was incorporatec. in the s^^reeiaent thie follciny clause:
"The Appalachian 'Ja-e Conference jointly
reco:tiends to 1>I,2,A. that the fdtu;-iinous
Coal Code Unit of the f.esearch and Plan-
ning : Division he continued for the pur-
pose of asse f^lin;^- rnd conpilinr; proper
statistical data. "(***)
TThen the Deputy Administrator announced at the anendr.ent hearin;^ on
April 11, that the Administration could no longer assume the cxoense
of collecting f.nd conpiling cost rnd -TO.ye datr, the president of the
United nine Workers declared his helief that "their reports -'ere very,
valuable," He stated also the desire of his organization for three
specific foms of infornation: one for a detailed report on earnings;
another for costs of prodiiction correlated -jith earnings; and a third
a "brief end s-i:role su.Tiar3' of nine realira-tion f.o.o, the nines," He
Tras further of tjie opinion tliat such infoi'nation '.'Of.ld prove the only
(*) Transcript of heeting, January I'L, p. 20, et see.
(**) Ihid, January 12, p, 3.
^g**) ■^E'dJe Agree:-.ients, ut supra, p. 32.
-120-
safegiiard for the Government in certifying minimum prices with fairness
to both iDroducers and consumers. For the use cf the Korth-South Commis-
sion, it was essential that the d-'ta be collected and compiled by an im-
partial agency. The Deputy Administrator canvassed the representatives
present and received assurance from spokemen for Division III; Division
V; ".Testern Pennsylvania; and from the Sou.thwest that they desired the
statistic^ reporting to be continued. (*)
Following a suggestion made at this time a conference of represent-
atives of all code authorities and of II. R. A. was held in Washington,
April 18, to 20. Consideration was had of the statistical forms and of
the data to be furnished. "It was decided to decentralize the collection
and compilation of the statistics and to have the wor^: done by the organi-
zation of the Divisional or Sub-Divisional Code Authorities, under the
authorization of the Presidential L'erabers. The supervision of field
offices, the final assembling and review of the reports will be made by
a separate Bituminous Coo.l Section of the Research and Plaining Division
in "..'ashington. " Since some of the smaller Sub-Divisions were not equipoed
to handle the work of compilation a canvass was to be made to discover
ho^r rarny code authorities would desire to hrve this work dene bv the Coal
Section in 'Jashington. Questions of the Budget were discussed a-ad a pro-
visional division of e--:penses made under which the "Government assumed
the expense of the 'Tashington office rent, printing and distribation of
forms, and miscellaneous office reouirements (except payrolls')." (**) In
these arrangements, the desire of the representatives of the industry to
retain control of statistical work deserves notice.
Under date of May 7, IT.H.A. out out a program for Continuation of
Statistical Reporting under the Bit\iminous Coal Code. The recorar.aendations
summarized above had "been carefully reviewed and analyzed from the view-
point that the statistical progr^-m should contribute os':much as possible
to the solution of the problems confronted in the administr tion of the
Coal Code and should be organized as to methods of compilation and veri-
fication to merit unquestioned acceptance by the various areas within the
industry, by labor and by the cublic." After discussion of the forms to
be used and a careful definition of "iian Starts" the prc^ram proceeded
to lay down the method of collecting and compiling statistics. Code Au-
thorities were to be offered a choice between: sending the reports direct
to IT.H. A. for review and tabulation; or handling the reports in the Code
Authority statistical office and se.-iding results to i'.R.A. for review
and certification. It was estimated that 12 offices would elect to per-
form this statistical work in the Code Authority office. In these cases,
"to provide adequate bases for checking, and verifying reported data
and permit \anqualifiea aporoval of results by i'J.R.A., two representatives
of the Administration were provided for each of these twelve districts.
One of these was to be an office representative whose duty was to b© « to
supervise the work of collection, review, compilation and forwarding of
statistical material and to carry cut instructions as to checking individ-
ual mine reports, and preparation of unifor-.i tabulation.'" This suggests
,,i*) Transcript, April 11, Day Session, op. 611-616
(**) Minutes of Meeting, 'J.R.A. Files
9837
-ir,;i-
that aside from the matters of verification and i.-noartiality,". these were
Questions of uniformity of Dreparatiori aiid comDorability of data to con-
sider. The second Administration official was to be a field auditor who
was to "verify reports at individioal mines, assisting in the iDreiDaration
of mine reports whenever necessary, and otherv/ise assist in the collect-
ion of reports and the verification of results." '.iith this organization
it was proposed to collect monthly reports through ivovember 1954. A
detailed budget was submitted with this program amounting to $207,500
per annum. This amount would be reduced to $172,917 or .53 mills per
ton of 1933 nroduction, on the basis that the industry finance emr)loyees
salaries from J-ane 1, 1934 to April 1, 1935. (*)
This set uo had been criticized by the chief of the K.R.A. coal re-
search section on the basis that the 12 field auditors and office repres-
entatives mrould not insure accurate and comparable results. Twelve new
men might be exoected to differ in "abilitv, zeal and energy in super-
vising the work of the various offices." Past exroerience had indicated
that work done in the Code Authority offices might have to be done over
in Yi'ashington because of "many errors and discrepancies." (**) At a
later date these objections were restated and enlarged by the technical
adviser appointed to carry out the investigrticn of wage differentials
provided for in amendments llos. 1 and 2. "I do not see how," said this
official, "the Central Statistical Bureau could be respo-isible for the
collection, compilation and sn.iilysis of the da.ta celled for *** --jnless
it was in a position to supervise all the "orocesses involved." Again with
reference to his own function; "The study of differentials would he
greatly impeded and might even be subject to challenge if the data now
being collected were dis-oersed i.mong the several Code Authorities and
subject merely to local control. (***)
The original oroposal, out of which Amendment I^Io. 4 came, was sub-
mitted under date of July 7, oy Eastern Subdivision of Division No. 1.
This draft provided for the setting up of statistical bureaus in each Sub-
division under e, Ivianoging Director who might be secretary of the Code Auth-
ority but might not "be an officer, director or erai::loyee of any Producer. "
This agencv was to receive and compile all data and, if violations of the
Code were revealed by the data received, wo<g to make reriorts to the Sub-
divisional Code Authority. The Presidential member of the Code Authority
was to be given access to the records "to the extent necessary to deter-
mine the validity of any complaint." Expenses were to be assessed to the
industry on a tonnage basis. This driift was submitted to the va.rious code
authorities and had been endorsed on Jul^r 27 by 6 Subdivisions of Division
I, by Illinois Subdivision of Division II, by Division III, by both Sub-
divisions of Division IV, and Dv the Northern Colorado Division of Division
V. Opposition was expressed by all the Subdivisions of Division V, except
one, by 2 states in Division II and by the ».ichigan and ^estern Kentucky
(*) Pro3,Tam, etc.. Bulletin II o . 27, II. R. A., Lay 7, 1954, N.R.A. Piles
(**) Memorandua, ?. ^. Berauist to Leon Henderson, May 2, 1934, 11. 'R. A.
Piles
(***"> iiemorandum, W.E. Hctchl^iss to Leon Hendersoii, Aug^ast 12, 1934,
II. R. A. :^iles
9837
— ] 22—
Subdivisions of Division IV The last named district ex iressed its vie'Js
f.s follows:
"Me believe tne ict itself and the Code are sufficiently compre-
hensive to nro-^iae for whatever statistics each Code Authority
deems necessary to its individual reouirement. "
The OTDoosition, of, Indiana was bv-.a nine to eight vote. The Smokeless
Code Authority .yoteo. 'onanimously for adoption of t.:e ? leiid'ient'^ The
disapproval of division V was based "upon' '-the fact that the arnendiaent
was not necessary to proper Code Administration in the various districts
of this Division and b:cause of the- ei-rpEnae involved." It will be noted
that this action waa a. revers-l of the comment f rora this area expressed
at the Hearing .on -April 11. (*"*
The proposed amencjnent was ne?:t sent out to the industry under date
of August 1, tog:thor with a notice of opporljunitv to bj heard. Instead,
of a public herrln^, hcwcver, the proced'ore was adopted of inviting
"criticisms, objections, or suggestions," to be submitted prior to August
11. The Administration reserved the right to modify the proposal in the
light of information received. (**'' On Au^ist 14, a revision was made
at the instance of the Legal Division. The essential change was to make
the Presidential L'ember of each Code Authority resDOnsible for "collect-
ing and corapilin.5 all reriorts." The iianagin^^ Director, of . each statis-
tical bureau was to "operate under the- direction of Presidential L^emher."
The Legal Division was of the opinion that such enlargement of Adminis-
tration Control was essential to make the statistical records legal as
a basis for compliance suits. The revised form enco^untered "many ob,ject-
ions from Code Authorities." (***) Quotations from the protest of the
Code Authority of the Subdivision which sponsored the original proposal
will indicate the character of thes? objections. "The revision," reads
the letter, "is entirely unacceptable to our Code Authority. Our Code
Authority is opposed to nailing a Presidential j_i;.ibef the .sole custodian
and agent for tne receipt of trade association reports. Our Code Author-
ity prefers that the st,'itistic-nl informpticn collected by it from its raen-
bers shall be handled jy the official staff of the Code Authority, as it
is paid for by the operators directly." The Subdivision was not opposed,
however, "to the establishment of a Division of tesearch and Planning to
do such statistical work and research v/or^: as would be properly na.tional
or inter-district in scope." (****)
Under stimulus of these objections the f iua.l draft of the proposed
amendment was sent out on September 17. "This final >",raf t, " said the
covorin-^^ letter, "incorporates practicall-'- all the coitents of the original
(*"! Letters and Tele :rams, J.R.A. Files
(***) Administrative Order, ilo. 24-52
(***) i.lenora.ndum, Deouty A^Jninistrator, lilllis, September 18, "^lA Tiles
(****■) Letter of Charles O'lliell, Chairirian, Code A-ithority, t'.R A. Files
9837
•123-
proposed amendment which was airproved by the major portion of the industry,
and omits the features which were objectianal to the Code Authorities, but
includes points deemed necessary by the Legal Division." This revision
placed custody of cost and "orice data in the hands of the statistical bureaus
set up in each divisional and subdivisional area. It charged such bureaus
with the duty of compiling such records. The Llanaging Director was to rsDOrt
any violation of the Code disclosed b^' these d- ,ta to the Presidential T'em-
bers, who was given oov:er to reauire cthor re-oorts and who was given access
to inspect the books and records of producers. A new section (9)' was writ-
ten in as follows;
"All producers subject to the Code shall furnish to any government
agencies designated by the Administrator such statistical information
as the Administrator may from time to time deem necessary."
This will be recignized as a copy o:' the clause on this subject in the
proposed general code.
This finaJ revision received the at)ijroval of all divisions of '".H.A.
These were not unqualified In all instances. Thus the Labor Advisory .
Board was of the opinion that it would be fpr ^ireferable to have the collect-
ion and comiDilation of reoorts nle.ced. iinder "the direct suTDervision of a
central statistical agency of the Administration if only for aake of uniform-
ity and comparability betwe n the several divisions pjid subdivisions." The
Consumer Advisory 'Board su :gested that the oroposal should be so amended
"as to give gre;:.ter assurance of impartiality." The Director of Research
and Planning added the following comment to his aooroval*
"It is understood thrt this in no way overla;os or replaces the
Bitui'iinous Coal Statistical Unit of the Division of Research and
planning nor takes away a,ny of its functions."
This qualified aor^roval was o^r ted October 5\ 1934 and seems to represent
the last barrier to final action, j.iost of these aporovals bear dates near
September 20. On ilovenber 5, the Araendnient received the apioroval of the
I'Jaticnal Industrial Recovery Board and became immediately effective.
This recital has significance for the light it throws on the deep
seated nature of the bituminous coal operators' determination to control
their own affairs with the mini luin of governj.;eata.l restraint. Kot even
the acknowledged benefits of tne Code and their evident keen desire to
continue and enlarge those benefits could shake their conviction that the
confidential data reported must repose in the keeping of men drawn from
the industry,' n-.'t in governmental files. From their vievrpoint it v/as un-
fortunate that such convictions regarding the private character of price
and cost data do not square with the desire of these oioerators to have
governmental aooroval and authority oehind their system of fixed prices
and of a regulated industry. If fixed orices are to be relieved from the
taint of monopolistic oractice they jaust be authorized by fully informed
governmental agencies.
Amendments Kos. 5 and 6 wer-: resultant "roM the continual difficulties
e:ooerieiced uiider the Bitiiiuinous Coal Code over i. the raaintainance of fair
lorices. Full treatment of this subject will be found in the discussion of
9837
■124-
prices under the Code. At this point only a sup.nary statement of events
preceding the adootion of these amendments will be presented. The Code as
approved September 18, 1933 had no provisions for administering these fair
market prices beyond their determination by raarketin-5 agencies or code
authorities with indefinite powers of aoiDroval and review by Presidental
f'iembers and the Administrator. Contests iraiediately developed between com-
peting districts over their relative prices. {*) By June 19S4 these dis-
putes he.d reached an acute stage, requiring machinery for settlement. Tem-
porary expedients wer-^ adopted in Division I and II at the suggestion of
the Deoutv Administrator, providing for the publication of; price changes
at a sufficiently early d: te to allow of their review by interested oarties.
Thereafter an attempt to correlate cor-ipetitive -orices might ;'be made in
meeting of joint marketing committees. Later in the same month the Presi-
dential ; embers of the subdivisioaa.1 Code Authorities in Division I (ex-
cepting w'estern ''entucky"), were constituted a Board of Review. Decision
of this Beard to be binding must be unanimous. In July the so-called
Adams plan v/as set un in Division I r-roviding for an allocation of tonnage
to the different subdivisions. H^intenance cf this allcction was to be
effectea D"- periodic rjrice adjustments. The immediate cause for amendments,
IIos. 5 and 6 was the announcement on December 12 of the lestern Pennsylvania
subdivision that they ^-'ould not continue their support of the Adams plan
after December 31, 1934.
Further com-olications a rose because of the laublication of statements
by TDrorainent il.l.A. cf/icials to the effect that orice-fixing provisions
in all codes would be discontinued. In response to representations made
formally in resolution sponsored by the Code Authorities of Divisions I,
II,: and III, r,nd informally by interested groups of operators to members
of the Administration, the i^ationsl Industrial Recovery Board issued a
statement in October declaring:
"The Bituminous Coal Code of 7rir Coipetition and all its provisions
are in full force and effect.- If at any time it should develop that
changes should be considered, none will be made by the National
Recovery Administration until the industry has been consulted and
has been given an opoortunity to be heard. "•• (**)
By this tine a serious abuse had developed threatenin; the disruption of
the entire price structure. * Orders were being solicited for contracts
riinning beyond the termination of the Code, at Code prices until June 16,
1935, ana at prices after that date which made the entire contract an
attractive proposition. Complaint was made also that contracts effective
before the Code was adopted were being extended for a yeir or more from
April 1, 1934, thus, in effect, ijjidercutting the code prices.
(*) See the Records of the first meeting of the national Bituminous Coal
Industrial Board, January 16-19, 1934, il. R. A. Piles
(**) Bulletin, "'r.tionr-1 Coal Associatioa, Octobor 13, 1934.
9837
These practices led uiroctly to the prcoos; 1 of an rraendment by the
SmokSless SuDdivisicn by v^hich the rarJcing of a contract for future delivery,
carrying a price below the fair market nrice effective on the date of the
contract, because a violation of the Code. The covering letter exoressed
the belief of the Code Authority that this proposed amendment would "pre-
vent and set p.t rest a great deal of uneasiness that will become more notice-
able in tiie industry as we a-oproach the contract period for the coming
year," This proposal was londer date cf llovember 20. It was sent out to-
the Code Authorities and secared ar)-orovals: in Division I; Eastern sub-
division, Northern Panhandle of '.Vest ''"irginin, Ohio, northern 'Test ■''irginia,
Southern I'umber 2, 7estern Kentucky and Hichigan; Division III; Division
IV, Arkansas-Oklahoma; Division V, Utah. Anprovsl of the Eastern subdivi-
sion was by iinaniraous vote. {*) The o-ilv record of disap-oroval foxond was
that of "Jestprn Pennsylvania, also bv a unanimous vote. On December 27,
notice of -oublic hearing on January 4 was issuer".. This covered the above
proposal as "Schedule A" and also a r3roiosed ".mendment "Schedule 3" writ-
ten in the N.R. A./Legal Department, the essential clauses of which pro-
vided that the "National Industrial Recovery Board through such agencies
as it may designate, shall iivestigat^i costs and thereafter shall proceed
to determine and publish stated raini^aum trices."
Meanwhile the Legislative Cciuiittee of the 'latiinal Coal Association
had been busily considering these m-tters. The Committee reported h. ving
held sixteen meetings between June and October. They reported in the
latter month, among other conclusions, that "the nadntentince of fair min-
imum market prices is essential for the protection of hours cf labor,
rates of pay and condition of employment set uo for the industry under the
provisions of the Code." La.ter this Committee drafted a leE,gthy proposal
for amendments to Atticle VI and tII of the Code covering the methods of
determining, publishing and administeriie; Coce prices. This proposal incl-
uded provisions for setti-'.g up of suodivisionr.l, divisional and of a
National Coal 3oa.rd of Arbitration to which boards m'atters in dispute
could be taken for deeision. These drafted omendiaents V7ere approved by
the Executive Committee of the Association ^n Januarv 3, and submitted to
the National Bituminous Coal Industrial Board meeting in Washington on that
date. This Board debated the proposals at length in day and evening sessions,
made certain modifications and injected their new version into the public
hearing which convened on tne follov/ing day. Their draft agreed in es-
sential provisions with the I'ationf.l Coal Association version. However, it
provided for a sin-;le National Board of iixbitration to which indivldua.l
producers, subdivisiois or divisions might appeal. Hearings were to be
arranged before price ranking bodies, ' either ma.rketing agencies or code
authorities, in the case of coi.rola.ints regarding published prices by interest-
ed parties.
Neither in the paolic hear in ~ on Ja^nu-^try 4 nor in the much more im-
portant meetings of the "ationa.l Bituminous Coal Indistrial Board on January
3 and 4 was an3r oDjection encountered to "Schedule a" beyond, that of the
Vfestern Pe;iis^''lvania Code Authority. Tne Jational Coal Association draft
(*) S-'^e statement by the chairman,' Transcript of Hearing, January 4,
p. 102
9837
included these provisions also. Accordingly, this rmendjaent rncved prompt-
ly to adoption. Under aaoe of January 7, 1935, the aooro-val of il.R.A.
Advisory Boards v:as secured. This was usually routine and unaualified.
Heseprch and Planniu^' e::oressed its approval in more vigorous fashion.
"The Division feels," reads the letter, "th-t this aiasndnant is absclnt;=ly
essential to effectua.ts the -ourposes o± tne Code and accordingl;'- reconraends
the adoption of the amendment at the earliest possible, date . " Inasmuch
as this odoption took place ne""t da^'^ nnd provided that, the anendjnent be
immediately effective, the action .tn^cen may be regarded ns -^n e'xilicit
adoption of this suggestion.
Despite the press^jj-e for iriedi'^te action tha .'-mendment of price-
fixing meas-ores, which v^ere the subj3ct of i\jiiendment No. 6, proved a more
difficult and len.-^.'thy process. The fundamental difficulties were t\''0. On
the one hajid the whole 'latter of price-fi:-:ing ds e public policy wa,s under
heavy fire; on the othe:. there was the oerennirl contest betvreen advocates
of governmental orice-f Ij.in?; and these who would retain control of price
matters in the hands of representr-tives from the industry. This fundamental
difference of vie'/rpoint is cles,rly illustrated in the two proposals under /
discussion, ijovern-i^ntal price-f ixin.i; v.'ps def initelj?- written into "Sched-
ule B." Control of prices by the operators was the i":evn>"te of the amend-
ment proposals originated oy the Iv tional Coal Association and adopted
with modifications by the ..lational Bituminous Cor 1 Industrial Board, a
direct Quotation will be helpful. "I think it is perfectly plain," said
one member of the board, "to everv operator in this roou -nd to all other
represente.tives that it is very necessary to hc'ive so';e sort of price-fixing."
"V/e are for price-fixing c.efinitely vfithin the industry, suoject to all
the necessry veto pov/ers of the Government in order to protect the public. "(*
These Quotations seem to represent fairly the opinio':s erroressed at the
board meeting oy industry members v/ith one exceotion. xUi operator from
the Panhrjidle of ..'est Vn-ginia attending the same meeting expressed him-
self vigorously on this question. " ..'e are very much in favor," said he,
"of the governments' fixing the prices. l?e do not feel that the Govern-
ment or any other group could make such a colossal blunder in fixing and
carrying out price-fixing arrangements as ther^e Code Authoi'i ties, as pre-
sently constituted, h-ve done. V/e welcome the opjcrtunitv to wor'-' with ^
the Government on a price-fixing program such as they outline here in
their proposed auiendment." (**")
Despite these difficulties ana differences of opinion fairly prompt
action v/as secured. After the public hearing on January 4, the y'ational
Bit-ominous Coal In'^ustripl "oard held further unavailing meetings and
conferences with '.R.a. offici;\ls. Axi adjournment was then talcen to allow
the operator representatives to return home and consult with their consti-
tuents. On returning January 9 their recalcitrant attitude toward govern-
mental price-fixing had been reenforced. The record of the public meeting
on that date indicates an almost complete iripasse. Spokeraen for the in-
dustry made an effective point of the need for iraiaediate action coupled
with the statement that "a change in the price-fixing machinery and methods
{*) Mr. D. C. ''.eay, ". eeting of IT.B.C.I.B., January 9,, 1935, p. 18
(**) Hr. ?,. G. l.athiott, Ibid, p. 19
9837
at this time would only add confusion, rather than be helpful." (*) In an
effort to find a wav through, the essential feature of the II. R. A. proposal,
price-fixing by the National Indu- trial Recovery Board; was incorporated in .
the ITational Bittaninous Coal Industrial Board draft. .This clause read:
"The national Industrial Recovery Board, through such instrumentality as it
nay designate, shall establish and -oublish schedules of ainiraum fair market
prices for 'the various grades, sizes and classifications of coal." This
compromise proposal was debated on January 10, and after a night's dela,y,
to allow some consideration and communication by. wire with the home front,
came to a vote on January 11. It was defeated by aji 8 to 6 vote. The labor
representative was recorded as "passing."
In order that the attitude of members of the Board may be clearly pre-
sented, it will be appropriate to include here a direct quotation from a
leading member.
"I want it clearly understood that the gentlemen who voted against
that motion -are, not doing so because they wanted this nrice structure
to break down. , .1 think that most of us feel that it is a peculiarly
inappropriate tim.e for this- proposal to be advanced.
"•Vfe are all on notice that there will be legislation in this present
session of C'ongress, the question of whether price control in this
industry shsAl 'be exercised with the initiative proceedings from the
operators, or whether it Is to be ii.roosed by the Government being one
of the issues around which that legislation will be fought.
"Therefore, we feel that it is peculiarly unfortunate that the repre-
sentatives of the Government at this time should propose the initiation
of the Government control and fixing of prices, ^and that it 'bs done
under the implied threat of a withdrawal of any price stabilization in
the industry, if it is not acceded to." (**)
The member just quoted moved that a small committee from the Board be
appointed to confer with the National Industrial Recovery Board " with a view
to seeing if it is not possible to continue price stabilization, either as
it is now or with the amendments proposed by the riational Coal Associationo
or some other appropriate amendments that are in accord with the present code."
On January 16 this committee reported back to the following effect: "If
we can say to the National Industrial Recovery Board that the members of this
Board, without a dissenting voice, advocate putting into effect the proposals
which we .made a week ago Friday, that these will be put into effect, if not
for an indefinite period, certainly for a period .of three months, from now.(***^
Such a unanimous, vote was accordingly secured. The proposal was submitted to ■
the Advisory Boards and secured their assent albeit, in some cases, grudg-
ingly given. The Industrial Advisory Board gave an unqualified approval.
The Labor Advisory Board "had no comments to offer." The Legal Advisory
(*) Ibid, p. 3, Statement of Hr. O'^'eill
{**) Mr., Morrow, Transcript of He- ring, January 11, p.; 20
{***) Transcript of Meeting, January 16, ,1935, p.. 3
9837
Board "passed the subject" on the basis of facts presented to inducate that
the existing provieions are entirely inadequate and ir.sufficient to main-
tain the hours and wage provision of the Code and "with the determination
of the Board that the subject will be effective only through April 30, 1935.
In similar tenor tne Research and Planning approval limited the effective
period to 90 days and expressed the belief of this section that the amend-
ment "did not give material promise of improving the stability of the price
structure in the coal industry." Wider proposals were made by the Consum-
er Advisory Board, Its members had been "given to understand that the
National Industrial Recovery Board has promised this industry a further
opportunitj'- to experiment in self government." Although they felt in
some measure con.strained by this promise they considered that the amend-
ment "failed to afj'ord adequate protection of the public interest and would
undermine confidence in the administration of the Act." They proposed to
add representatives of consumers to the Board of Arbitration, nominated
by their 'Board, together with others responsible for statistical inform-
ation to be nominated by the Division of Research and Planning. In ad-
dition to these precautions the 3oa.rd decreed that W.R.A. should retain
the right of i*eviewing decisions of the Arbitration Board, and Code Au-
thorities. These approvals bear dates between January 21 and 24, inclus-
ive. On January 25, Amendment Ko. 6 was approved. The report of the
National Industrial Recovery Board to the President cites two reasons for
the amendment: the existing provisions "are entirely inadequate in view
of the necessity for changing and improving the methods and procedure in
establishing fair market prices;" and "an extreme emergency confronts the
Industry occasioned by the custom of malcing forward contracts, under which
the price for the delivery of coal might jeopardize the hour and wage pro-
visions of the Code, resulting in serious labor disturbances to the detri-
ment of the public." V/ith reference to the last clause, it may be perti-
nent to interject here that wage agreements lapsed April 1, 1935, and
that the President of the United i;ine "Yorkers ha.d been a member of the
small committee which dealt with the national Industrial Recovery Board
in the final negotiations for this proposal. The Amendment became effect-
ive immediately and remsaned effective only until April 3'\ 1935.
Amendment No. 7 provio.ed that each diArisional and subdivisional Code
Authority should "have one member who shall be selected from nomination
submitted by the accredited and recognized organization of employees."
Although this provision was not incorporated into the Code until late in
its history, it must not be "oresuraed that labor representatives were with-
out influence in the Bituminous Coal Industry throu^out Code history.
Prom the organization cf N.R.A. the- President of the United Mine '.Vorkers
had been one of the most influential and forceful members of the Labor
Advisory Board. On January 15, 1934 he was a.ppointed to the National
Bituminous Coal Industrial Board. Next day he si^jnalized his entry into
the councils of this Board by the following pronouncement:
"I would like to participate as a menber of this Board in a constr-
uctive way. I don't want in any way to embarrass the ne:nbers of
the Board v/ho are operators by being too forward in making suggest-
ions. I recognize that the primary obligation for the management
of the commercial side of the industry lies with the operators. I
want to encourage them and to assist them to make good their' obli-
gation, but I want it thoroughly understook that failing in their
9937
attempt to regulate this industry ninder the self-government plan that
the interest I represe.it ik not disposed to sit idly by and see the
structm-e v/hich has -ororaised so nich for rai the poeple of the industry,
who have been in misery f ^r ^'•ears, -ulled do';7n inch by inch and step
by step to the state of demoralisation that existed before we \inder-
took this grea.t exoeriment . " (*')
He put his thou.-;ht ex-plicitly in another "Dissafre. "If the Bituminous
Coal Industry," said he, "is lonable to govern its'-^lf to a DOint where it
can orotect the price structure, the interest I rerresent will re?;ard the
situation as a breach of the contract, pjid will -andertake to withdraw our
members from the mines in the coal areas where the situation exists until
such time as the situation can be ironed out." (**) The immediate emerg-
ency was met without callin-^; upon the union to make good this commitment.
But the possibility persisted a:id was renewed in a letter written by the
union president to the Administrator under date of December 17, 1934. The
paragraph of significance here read:
"Failure unon the oart of the Ifetional .Recovery Administration to
take effective steps to most the menacing situation in the Bituminous
Coal Industry will comriel the United iline workers of ./^jnerica upon
its own initiative, to take sach ste'DS as may be deemed necessary to
protect the interests of its aenbership . "
This letter was mimeographed oy certain Co^-e Authorities and went out to
"a great number of the represent'itives of the Industry." (***)
It will be noted from the date of this communication that it made
part of the discussion leading to the adoption of a:nendraents Nos. 5 and 6.
The letter had called for a meeting of the National 3it\iminous Coal Indust-
rial Board to consider appropriate amendments. The writer of the letter
took occasion at the following meeting of this Board to propose the amend-
ment prcviiing for labor representation on code authorities. This was first
done at the close of the second day's meeting, January 4, 1935, without
sufficient opportunity for discussion. It was defeated by an 8 to 7 vote.(***'
On January 11, l.ir. Lewis reneved his motion v/hich was carried, without de-
bate, by p vote of 10 to 4. (*****) Negative votes came from the South and
the Southwest.
Failin,^; an er-noression of arguments at the meeting a summary of Mr. Lewis'
( (*) L'linutes of Meeting of National Bituminous Coal Inudstrial Board,
January 16, 1934, t). 44
(**;) Ibid, p. 41
(***) TranscriT3t of Hearing, January 4, 1935, vv. 79-81 Full text of
letter on or). 94-97
(****) Transcriot, "o. .368
(*****) Transcript, pp. 34-36
9837
remarks to this point before the oublic hearing on ":iiDlovTnent Provisions
in Codes of Fair Comretition may be st-^ted. He siDOl'e on January 30 as
a representative both of the United Mine T/orkers and of the aT.H.A. Labor
Advisorv Board. His renarks on this subject have been officially svon-
marized as follows:
"The Rational Coal Industrial Board has endorsed an amendment for
labor represent?, tion on the coal code authority. Labor has a right
to reiDresentaticn on code authorities because labor is the residual
sufferer from erro^-s of laanage :ient; Inbor has a stake in industry,
in intelligent management and operpticn and has an eaual right to
contribute to an intelligent solution of the problems. The only
objection which industry can have is that they do not wish to
associate with representatives of labor in orivate councils which
dominate industry." (*)
i*^ Abstracts of Soeeches at the He-ring, p. 16
c
9837
-131-
Pursuaiit to the favorable vote received in the Ilationo.l Bit-uminouG
Coal Ind-dstrial Loard, the i^roposed aijendnent was sent out to the in-
dustry. There 'va.s considerahle opposition. This v/as stuimarized ty
the Actinia Deputy Administrator in the follov/ing terms:
"A fev/ protests to the Amen&nent Irnve been received,
including Code Authorities v;hich represent a rela-
tively small minority of the total coal tonnage pro-
duction of the co-'jntry. The nature of the protests
against labor representation, as received, is briefly
summarized as follows:
'No demand and unnecessary; might lixait open and con-
fldentia.l discussions; might deter code support and en-
forcement; no substantial reasons for; violation of
principles and policy of Code for self-control of In-
dustry under Governmental suroervision; ui'.fair and un-
warranted; breach of spirit of the Code; not serve
any useful purpose; employees* interests amply secured
by labor Boards; Presidential Members suff?.cient on
Code Authorities; no labor rratters before Code Authori-
ties; contracts 'give pmple in-otection to labor and cover
all angles of relationship; nothing to do with marketing
of coal.'" (*) . .
By this time the movement for labor representation in the Bitumin-
ous Coal Industry had reached the point where two Code Authorities had
voluntarily elected labor members and a, third xia.d initiated steps for
such election, Kotice of opportunity "to submit, criticisms, objections
or suggesrtions" before February 11 v/as sent out February 2, The La.bor
Advisory Board and Research and Plannin,:^ Division gave unqualified
approval. The Legal Division found it necessary to reconsider a pre-
viously expressed opinion. They were troubled by the absence of any
provision tlmt the National Industrial Recovery Board should "accredit
and recogiiize the organization of employees" submitting nominations.
On reconsideration the Division found tiiv.t the langua.gc might be "validly
subjected to this interj^rctation" and passed the 'Iraft submitted. The
Consumers' Advisory Board took a.dvantage of the opportunity to suggest,
again, the inclusion of (!;on3i:iiners ' representatives on code authorities.
The Board's letter f^arthcr suggested that these additional members
might appropriately be nominated by the Labor Advisory Board and the
ConsuiTiers' Advisory Boards respectively. ' The Industrial Advisory Board
gave disapproval to the mea.sure, Its members were not 'r»illing "to
acceiDt the principle that labor shou.ld Ir've the right to participate on
an equs.l basis with management tinder )9r>y pl-xn of industrial self-govern-
ment." -They recognized tkat certain highly orga.nized industries have
labor representatives on code authorities both with and without vote,(**)
(*) Volume II, Amendment ITo, 7, p. 2
(**) Volume II on An:iendment Ho. 6 in N.R.-^. Files
9837
-13:5-
The reconsideration of the Legr.l Division's opinion, dated I.ferch
23, seems to Imve removed the lest barrier to final rqovrovD.l since this
action vms taken next day. The Administrative Officer of the llationc.1
Industrial Recovery Board took occasion in his letter to the President,
recoranending approval to say;
"This is a, hi,;,hly organized Industry and the request
of the ITational Bitimiinous Coal Industrial Board for
a representative to be a member of each Divisional
and Subdivisional Code Authority is considered to be
fair, and it is believed, end. we hp.ve accordingly so
found, that the services of members upon each Code
Authority selected from organizations of employees
*** vnll tend to facilitate the Administration of
the Code and procure conrpliance therev/ith."
The Amendment was .-. ccordingly approved by the President to be effective
immediately.
The final ajiiendment to the Code which was ITo, 8, did not change
the substance of any part of the Code. It simply provided tlmt certain
provisions should be extended unchanged to June 16, 1935, v^hich was
the termination date of i'l.I.R.A. The wage and hour provisions were
to expire April 1, 1935. The Joint Wr.ge Conference sitting at this
time he,d felled to reach agreement on March 30, In this emergency the
National Bittiminous Coal Industrial Board was hastily called to consider
the situation. They proposed, with t'le sanction of representatives from
both the union and the operators, tha.t the existing provisions be ex-
tended as stated. Since the fadr tra.de practices, method of estcblish-
ing prices and administration set up by Amendi-nent ITo. 6 were to expire
by limitation on April 30, the same extension was recommended for these
sections. Action of the Board v.'as unanimous except for the qualified
votes of the two representatives of Division III, They had asked for a
review of their wage and hour situation and did not wish their accord
with the proposed ajiiendment to prejudice tlTr.t case.
The urgency was so great that no attempt was made to secure public
expression regarding the amendment. The Advisory Boards were asked to
pass on -the proposal and gave unqualified approval except in the case
of the Consumers* Advisory Board. Tliat body repeated its recommendation
for comsvirner members on Code Authorities inade in connection with Amend-
ments Hos, 6 and 7, Tlie Acting Deputy Achninistrator in his letter rooom-
mending ap-oroval included the following statement:
"The Ifetional Bittiminous Coal Industrial Board, con-
sisting of represent', tives of eiirployers , of err^jloyees,
and of the G-overioment, believes th;,t an extension of
the presently existing rates provided in the Code to
June 16, 1935 will afford at least a continued oppor-
tunity to secure agreement upon a new schedule of min-
imum rates without the tremendous economic loss to
the nation which closing a large number of mines on
April 1, 1935, by reason of lack of provision therefor,
would certainly occasion.
9837
"The proxiiTiity of the expiration date, April 1, 1935, of
the provisions involved and the emergency confronting the
Industry do not penriit of holding a public hearing."
It is worthy of note tlxit this A:iicndment met the emergency success-
fully by passing through all its sts.ges in a single day. The minutes
of the meeting of the iM>.tional Bi tui-r.inous Coal Industrial Board, all
the letters of approval "by advisory "ooards, the covering letter recom-
mending approval, and the final approval of the National Industrial
Recovery Board all hear the date of March 30. In the light of this
evidence the conclusion seems warranted tiiEtt hy tliat date H.R.A.
ma,chinery had heen keyed up to a high pitch of efficiency.
9337
134
BITUMINOUS COAL PRODUCTION, REALIZATION ^
MINE CAPACITY ,n thi UNITED STATES 1899 - 193A
A
1
Full-t«l>« c«
«
'^''\-'\
(V
MUIT
1
1
da
1^
i, ^_.
\
,
/
---
-/
y
r
\\
r
1-
/
/'
/
/
-^
\
/i
/\,/v
\
2 500
/
/"^
/'
'\
p
•0(
uct
V
ion-«
r
Z
/
/
/
/
\/
/^
\
-iu.
200
100
0
1
/
>
•^
/
/■
y
\
/
/
'••. ^ ^
^' ••
•- ~
I
/er
.„
val
ufl per ton
n
ill
ill
Ill sill
SOURCE: U.S. 6E01-0GICA1. SUBVEY /VSD U.S.BUREAU OF MINES.
PBCnAStC BY BITUMINOUS COAI. UNIX
OF RCVIEW, N.R.A, UNDEI3 PIRECTION OF F.E.BET?(}UIST.
'capacity under N.R.A CONDITIONS AND
WORKINO TIME NOT AVAILABLE
-135-
CHApgEH III 1/
PRODUCTIOIT AXTD L'IST?J3U?I0r B^CTOHZ A1!D UnyZR TEE CODE
A. rroc'jj.ction and Ilinin^- Cg/oacity: The trend of biturainous coal
Ijroduction shows a continuous ups'^/inj^ until the V/ar -oeriod, and then
flattens out for the suhsoquent years. The onlj^ serious deviation from
the level estcOjlished "by the War occurred after 1929. Another feature
is that mining capacity has al'vays c;Kceeded rctual production, and
often by Icxre amounts. The trend of ca-oacity, however, fails to
follo\7 the same course as thrt of production. Where production tends
to reach a given level during the War years, mining capacity con-
tinues to increase, jui.iping shariply upwaj-d after 1919, and failing to
shape hacj: towards its former relationship v/ith output until after 1933.
The upswing in the trend of bituminous coal production was ra.pid.
Output practically doubled in each of the two decades following 1890.
Production during the latter year ajnoimted to 111 million tons and this
was increased to 212 millions for 1900, and 417 millions for 1910. The
half billicn iTia.rl: v:as reached for the first time in 1916, about the
time the trend bega,n to flatten. It v;ill be notices for the suc-
ceeding years, until the depression tha.t annual output shows a tendency
to fluctuate around the 500 million mark. During the depression output
dropped to 310 million tons for 1932, the lowest annual output since 1904.
Improvement is noted for the next two years, production advancing to
334 million tons for 1933, and 358 million cons for 1934.
The mining capacity indez shows the possible production of the
existing labor force over a given number of days. G-cncrally a base of
either 300 woi'king days or 230 -worsting days is used in setting up the
measure. The former is a full working year, while the base of 280 days
makes allo\;ance for break-down or other operating disruptions. Capacity
based either way has always exceeded actual production. By using the
measure of 280 working days, capa.city was nearly twice as great as
production in 19g2, and 27 per cent greater in 1929. Wot only has
capacity been above x^roduction over a, year but also during seasonal
production pealcs. (See "Americans Capacity to Produce", llourse &
Associa.tes, p. 448). It is to be noted, hov/ever, that mining capacity
has not always been a measure of the possible amount of coal ' that could
be raa.de available to consuraers. Production v;as limited during many of
the months of the War and Post-War periods by transportation shortages.
Production and Industrial Activity; At least four-fifths of the
bituminous coal tonnage is consumed by industry. ITot only is there
little or no storage at the nines, but a large part of industry has no
facilities for storage over any considerable period. Purcha,sing coal
accordin_ to present needs is accepted pra-cticc. As a result, coal
mining is sensitive to genert.l changes in general industrial production.
The relation of bituminous coal production to general business
activity is measured i:i the annual indexes of the Federal Reserve Board.
1/ Pre-or.red by George A. Lamb.
9837
-Ic5-
indexes. For inst-.^nce, m-".uy of the coLn.iodities in tlig^ goner " 1 index v/ere
stil?. in ■-, stv.e of developraent for soiae ye^rs -^ftcr 1919, \7Mle "bitiominous
co"l had re-.ched ,-■, -■er'!' c.v.ri-v;: the '7ar.
I'TLBX OF EITI^ilfoUS COAL rAO'oCTrV AS
coi,!>.^-H:r" v/iTr I.:::::: of iiV usthial
FFO]^UC''IC -, BY niAlS. 1919-1934
(1933-1925 -,ver-ro = 100)
Bituininous
Index Indiistri-'.l Frodi'iction CoaL
SOUECF:
'Totr.l M-.nui--.ct-.ires Hinerrls
t'eder^.l Zoser-re Boarc
lude:;
.1919 85 34 77 89
1920 87 87 89 109
1921 67 67 70 79
1922 SG 86 74 73
1923 ■ 101 101 105 108
1924 95 94 96 93
1925 104 105 99 99
1926 108 . 108 108 110
1927 106 106 107 99
1928 111 112 106 96
1929 119 119 115 102
1930 96 95 . 99 89
1931 81 30 84 73
1952 64 63 71 59
1933 76 75 82 64
1934 79 73 86 69
9837
-ib?..
The chanres of the two indo:ces are generally similar. E>'ceptions are
founJL for tv;o different periods; 1919.^19^1, and 1927«19,?9. A partial
exjlanaticn for these differences may he found in the mrlce-ups of the
indexes. Por instance, raaxi.3- of the commodities in the general index
vere still' in a stcge of development for some years after 1919, v/hile
hitu.3inous coal had reached a peal: during the War.
The narhed seasonal character of l)ituminous C'al production is
indicated in the accompanying taole. These figures renrcscnt an
average index for monthly production for the years 1920 to 1954. Tne
index uas figured by using monthly data for the years shovm, adjusting
with a 13-month moving average, and then obtaining the arithiacthic
means of tlie ' items, of each month after extremes had heen eliminated.
It will he seen that Octoher, on the average, was the "ncalv month,
followed in order by Jamiary, D-scember, and November. A difference
of 37 points separated .the low month of April from the Octr-bcr high.
An average. monthly index for general industrial production is not
available for a corapaxable "oeriod, but those published fail to show
as wide a- range between the high and low faonths as do thr bituminous
coal indexes, or dor^hd industrial indexes correspond generally to the
bituminous coal indexes.
Average Monthly Indexes for Bituminous Coal
Production in the United 5tateg.,_192P-19"^4 (*).
January 115,0
February -.,..101. 7
March.- 1^*3.1
April 80.9
May 85.2
June 87.5
July 89.2
August 98.1
September 103,2
October. 117.9
ITovember 107.5
December. 109,7
(*) Tonnap;e Data from U.S. Bureau of Mines
B. Production of Ai-eas;
Mining areps lend themselves to various classifications of both
geographical and geological nature each of which is used at nnc time
or rnother,
G-eological Provinces; The northern and Middle Appalachian province,
generally referred to as the Appalachian region, includps the bi-^
tuminous coal fields in Pennsylvania, Ohio, flajryland, West Virginia,^
Eastern hentucliy, Virginia, and Tennessee. This province accounts for
70 por cent of the production of the United Statos, The next region in
importance is the Eastern Interior, including Illinois, Indiana, and
Western ICentuchy, which mines 17 per cent. Another 3.0 per cent is
produced in the mines in Alabama, sometimes termed the Southern
9 857
-138-
^rml'\chit,n :;royi:ice. T/.e reinainint^; prodMction, less than 10 ;ner cent,
cones fro.i areas sce.ttered throughout the country, the nost inporte.nt
of T.'hich is the Roclc;,' I'ounfcp.in re^Tiion with 5 ;Tcr cent of the total.
The rest of the tonnage includes the output of hichigen, Iowa, Ilissouri,
Kansas, Aihansas, Ovlahoma, YJashir.iton, and of the lignite fields in
irorth LE-'xta and Texas.
Production hy States: As between states for the year 1934, West
Virginia vrs theleadint^ cor.l producer with 27.4 x^er cent of the
total output, with Pennsvlvania as a close second with 24,9 per cent.
The standing of other leading states in ;oroduction is as follows:
Illinois with 11.4 per cent; Kentucl-v, 10.6 per cent; Ohio, 5.8 per
cent; Indiana, 4.2 per cent; and Alabama, 2.7 per ce2~.t. 'For the
states v;ect of the i.Iississip"^i Eivcr, .Kansas and Colorado, 1.6 per cent
a,nd 1.5 ;)er cent respectively, lead in output. The relative positions
of the cofl producing states hr.ve shifted at various times. Pennsylvania
was the leading producer until 1927, when TTest Virginia advanced to the
lead for the first time. The former state returned as leader oy a slight
margin i::. 1929 and 1930, end .then gave wa^^ to West Virginia for the suc-
ceeding yeaxs. The relative imi^ortance of Illinois laas. decrea,sed in the
last decade. ?or a n^.-moer of years :)rior to 1922, Illinois produced
about the saxne ?mo'ojit of coal as Tiest Virginia, while until 1926, it
exceeded Kentucly. During the time that Illinois had decreasing
tonnages, both ^iest Virginio. a.nd Kentucl:;' were enjoying increased out-
puts, the former pushin^_ rbove Illinois by 1922, and Kentuck;^ reaching
the Illinois level by 1926, a losition it has since held. Ohio pro-
duced at fbout the saiue level as Ecntucl^^ until 1923, but thereafter
showed a decrease, while Kentucly advanced to a higher position, Thus,
since the War, Pennsylvania, Illinois and Ohio ha.ve lost in relative
sta.nding among the leading coal producing states, while West Virginia,
and Kentuclqy have bettered their positions. ' Indiana has shown little
tendency to change its rani: in production, but Alabama, from about 1924,
has exr_ierienced a. steady decline in out")ut until 1933, when it appears
that its downward course v/as. checked. . Kansas enjoyed a better position
in 1934 th^n for many years, , while the other large western producer,
Colorado, h£,s shown little absolute, change for many years.
Production by Fields: Designations for coal fields have been adopted
by the United States Coal Commission and defined in detail in Part IV
of its reports. The leader for manj'- years has been the Pittsburgh field
which rained about 21 million tons in 1935, or 6 per cent of the total
tonna^^e in the country. Other leading .fields are Connellsville;
Central Pennsylvania; Fairmont in northern West Virginia; Panlmndle -
Pittsburgh llo. G in West Virginia and Eastern Ohio; Pocahontas, Tug
River, and Windin^, Gulf, the low volatile group in Southern West
Virginia; ?nd Kanawlia and Logan of the high volatile fields in Southern
West Virginia. Ohio's tonnage is fairly v/ell distributed over a half
dozen fields. Eastern Kentuclrij' is largely made up of ITortheast Kentucl^y,
Hazard cj;d Harlan. Central and Southern are the largest fields in
Illinois. As to the Appalachian region, the designation ITorthern and
Southern fields s.re often used. A line draivn from east to ¥/cst through
the center of West Virginia roughly is the division between the tv/o
groups, with Eastern Kcntuclqy falling in with the Southern fields.
9837
-139-
Proc-uction b:^ CoC.e Areas- 5". .e cccle areas, v.-cre set lo usu£.lly vdtli
.re£;ard to {i,eolOf;:lcal and £eo£ra,phical characteristics, and for that
rea.son t'lie Lonnage corroarisons a,lready made may "be applied to the Code
Divisions and Subdivisions for general purposes.. Production figures
for the code territories, however, have lieen con^iled for the years
1.920 - 1934. In regard to Division I, it may be said that the largest
losses for tiie area of the ITortherr Subdivisions tool: place in the
first lia,lf of the 1920 to 1934 period, vYith the important gains for
the area of the Southern Subdivisions being registered at the.t time.
The decreases in the ITorthern Subdivisions were less than the in-
creases ir. the Southern Subdivisions. In general, it may be con-
cluded that the largest losses for the ITorthern Subdivisions took place
in the first half of the 1920 to 1934 period, and thr^t the important
increases in the Southern fields were also registere'^ at that time.
The decreases in the Southern field« were also registered at that time.
The, dacreanes in the Jfortharn Subdivisions ver. leoe tr^n tiie m-
(jreaSBS in the Southern Subdivir'ions. ;
Over the 1920 - 1934 period, mines falling in Division II lost
a lar^'c part of their proportion of the national tonnage. These mines
accounted for 22 r)cr cent of the total production in 1920, -as against
16 per cent in 1934. Illinois was the largest loser. It i's evident
that the losses encoiontered in Division II were to the gain of
Division I and, in tui-n, the gains in Division I were made by the
Southern Subdivisions.
The depression affected all the mining ^reas in about the same
manner. The slirres of the various Divisions in the tota.l tonnage
chp.nged little after 192.9,. and the sane is true of the Subdivisions.
Neither did a great deal of change appear after the Code. Western
Pennsylvania,, which hit r low point due to the depression, advanced
ags.in by 1934, while the Onio Subdivision apparently v.ras able to better
itself uaidcr the Code o-ocration.
C . Distribution of Bituminous Coal : "
Data that give the flow of- bituminous coal from mines to markets
are not conrolete for any. single year, though for 1929 information is
available for the origin of tonnage consumed by states, exclusive of
raiiv/ciy fuel and bunker fuel.- This is the most detailed record of
movements for any of the years since the Wai-. In addition, there is
also ava.ilable for 1929 the origin of bituminous coal used by all
railroads of the v.arious districts designated' for reporting purposes
by the Interstate Comiaerce Coiiimission. Statistics on particular move-
ments liavc been recorded for other years and provide helpful measures
of changing conditions talring place in the distribution of bituminous
coal.
The flow from the Appalachian-, fields, because of varied trans-
portation facilities and location of markets, ass-unies a nnjnber of
definite movements. One of those is the tidewater mov.cment which
consists of the tonnage moved to eastern ports by rail, durapfed over the
piers, rnd loaded on vessels for rcsliipmcnt or use. In 1934, this
ajnountcd to 29 million tons, .or slightly over 11 per cent of the coa.l
9837
-140-
procluced in the Appalachian fields. Another movenent is to the G-reat
Lalzes v/here, lil:e the tidev/ater toiinai^e, the coal is reshipped by
vessel, or used as ■hunlver fuel, Coinmercial tonnage shipped to Lalce Erie
for transhipment is known as Irlze cargo con,l, and accounted for 36
million tons in 1934, or 14 per cent of the AppalacMan' production.
Coal ship;}ed all-rail to ITev; Englard points is compiled currently, but
not by fields of origin. This movement amouitted to 5^ million tons for
1934. For the same year, all-rail coal to Canada, which is separate
from l?I:e cargo coal, ex^Torted to that country, amounted to 730 thousand
tons. A Eiovement distinct in character is in connection v/ith the tonnage
origine.ted by vessels on the Ohio River and its tributaries, which
amounted to 12\ million tons in 1933, the latest yecr of available dat^s,.
Most of this river tonnage moves but a short distance, though part,
hnown as ex-rivcr coal, is reshipr)ed by rail. The rest of the
Appalachian coal moves to market all-rail, except for trucked tonnage
which lias become prominent in late years and represented about 5 per
cent of the shipments in 1933. A majorit;- of the trucked shipments
moves fron mines to adjacent mai^kets. An important all-rail movement
reported currently is v;estbound from the Ap-ialachians. This movement,
eraountin , to 69 million tons in 1934, not only reflects the important
competitive situation between the Appalachian fields as to the large
western rmrket,. but also shov/s how these fields compete in a common
territory with those mines located in Illinois, Indiana and Western
Kentucl^-. Concentrated movements arc not general for fields outside the
Appalachians where, instead, a smaller amount of coal is produced and
distributed to many markets over a v/ide area.
i.Iovements of Bituminous Coal in 1929; The detailed statistics for
1929 provide an excellent cross-section of the flow of bitiaminous co»,l.
This material shows the wide market for che larger fields, and the
general interstate character of bituminous coal marketing. It indicates
that not a single coal producing state furnished its ovra coal re-
quirements, and thiat there was not one producing field not in competition
with one or inore other fields.
According to the state groupings, the largest amount of coal con-
sumption is in the East ITorth Central States: Illinois, Indiana,
I.Iichig'.ui, Ohio and Wisconsin, which used 163 million tons in 1929, These
figures exclude railway and bun],:cr fuel, v/hich by nature cannot be
classified by state consumption, though two of the reporting railw^
districts, rc\. England and. Southern, may be made cornparablc because they
follov/ state boundaries. In the larger consuming areas, railroad con-
sunntion follows the direction" of general consumption. Bunker fuel is
too small in tonnage to have great influence on the total results. The
next largest amount of coal v;as used in the Eastern States. Both of
these groups, East I'orth Central r-d Eastern, together used 280'
million tons, or 72 per cent of the total, a proportion that probably
would change little if railroad fuel could be figu.rcd in. The order of
importance as to coal consumption of the remaining groups are: V/cst
llorth Central and Southeast, each of which used atout the s.ame tonnage;
and ITow England; Intermountain: Southwest; and Pacific.
The l(„rgc market consisting of the East ITorth Central States re-
ceived 72 per cent of its coal from the Appalachian fields, over
3837
-141-
f our-i-ifths Leing delivered all-rail, and the rest, .except -.for a small
a;-ouiit of ex-river fonraft'e, v'as siiip;,ied via the G-reat Lahes. ?lie princijpal
A-ipalachipji fields -chipping r21-rail into this territory i^ere Ilanawha Lo^'^n;
Kenova Thacher; PocEiliontas, Tn,-; River, and Western Pennsj^lvania. Tonnarce
noving fro;;.: the G-reat Lakes is not listed 03^ fields of ori^jin. The re-
:iainder of the coal enterini-i this territory, aside from a few thousand
tons originatins in niscollaneous fields, cfj-e fron Illinois, Indiana .and
TJestern Zcntuclry, Nearly all the coal from the latter . States, ho-ever,
•.•as confinfed to the Illinois, Indisjio, siid: 'iTi scons in narhets.
3it-aj-;ino\is coal ccnsvjned oy the last'ern States ori:;;inated in the
Appalachiali fields, aside fron a a'.all tonnage imported. Tlie lar.i'er part
of this to'nnage xi&s mine'd in the llcrthem fields, of T/hich Western .
Pennc3^1vania, Central PenncylvnXiia and Jlorthern West Virginia r'ere the
nost i'.roortant. As "betveen the Southern fields, the Kanawha-Logan-,Kenova-
Thacker district supplied the Irrgest ton.age, follo'jed by Hew River-
Winding G-'Lilf and Pocaiiontas - Tug River. The So^athern fields, hovrever,
h^.d a sizea.'ble share in il'.e tidewater coal c on siu-.ed in tlie Eastern States,
The West IJorth Central Strte? nttained their coal from nany sources,
the largest amoiuit originating •in Illinois, 'dth finother heavj'" movenent ,
of the lal:e cargo coal. All-rail shipments originatir^g in the Appalachian
region consisted alnost entirely of tcnna.-.e iron the Southern fields.
Pfodueing states, such as Kansas, Missouri and Iowa, marketed most of
their- tonnage in thc^West Ilorth Central States while* also competing in
this territory, were, heavy shipments from Arkansas, ' Oklahoma, llewtle-ico,
Colora,do and Wyoming.
Alabama supplied 11;- million tons of the hitui.iinoLis coal consumed in
the Southeast, hut nearly twice as rra-;h' cn:ie to. the sane territory from
the Soutliern Ap^jalachiaJi fields., Vfestern Kentucrijr also shared in the
market to the extent of nearly d-'. million tons. Railroad coal used in the
Southeast originated in the sa;)e general way as did the commercial tonno.ge.
Of the remaining groups of States, llev; England is the most important
cons'ca;ier, ApT)roximately three-fourths of t.ie hituninous coal consumed in
Hew England was tidewater, including so'ie rmported coal, nen.rly all •^•he
i-est ; roving all-ra,il from the Hnrthem Anpalachiaii fields. New England
railroad coal originating in i:h_ oou^cnern fields aJio\-uitiug to 50 percent
of the total, was tidewater tonnage. The la'x'ger prodacin:: states in the
far west ;:arket their tonnage over r,^ vado area,
Zie sources of coal used for rodlroad i'uel are given in Table .
Illinois was the leading producer of railroad coal, followed oy northern.
West Virginia, Central Pennsylvania, and Pittsburgh. The Southern fields
were able to share less in the railroad -'cirliet as compared \.-ith other mar-
kets. Information supplied by the Bi^reau of I.'ines shows that freight was
paid on only 31 percent of the railroad coal.
Interstate Chara-ctejr of Shijaiejnts,^ 1,9_29: The e::tent to w'-iich bi-
tamino^us coal shipments are ii^terstate or intrastate ha.ve been calculated
'by the Bureau of Lines for 1929. Res-alts of this studj?" show that 74 pei^
cent of the total distribution was in the form of interstate shipments and
railroad fuel, a conservative fig-j.re,
9837
•142-
BITUlvilWOUS COAL SHIFPEI) TO ITEW ElJGLAiro BY RA.IL MD BY l-TORTHEEU
Aim SOUTHEHM TILEYjATEK POETS, 191S - 1934, III ITET TONS
(Compiled from published reports of the U. S. Bureau of Mines)
Tide-;ater si
lip-.ients to IJEW Elx^GLAM) b
: All-rail
receipts in
_ GRAM TOTAL
From
i^EW ENGMHD
Nev7 York
Prom
Philadelphia
Hnjnpton Roads
Total
£;
and Baltimore
and Charleston
Tidewater
Net Tons
1919
9,555,000
3,132,213
5,253,169
8,385,382
18,040,382
1920
12,223,000
4,308,085
6,148,359
10,456,444
22,579,444
1921
8,374,000
2 , 840 , 707
6,017,924
8,858,631
17,232,531
1922
5,812,000
1,715,523
9,175,835
10,892,458
16,704,458
1923
9,634,000
3,702,907
9,571,415
13,374,320
23,003,320
1924-
6,985,000
2,108,325 ,
9,379,905
11,488,230
18,473,230
1925
7,756,000
2,257,249
11,205,213
13,453,452
21,219,462
1926
8,0-x5,000
2,443,082
10,505,856
12,948,938
20,993,938
1927
7,232,000
2,239,410
12,589,571
14,828,981
22,060,931
1928
6,473,000
1,645,656
11,798,96'^
13,44-x,520
19,917,620
1929
6,781,000
1,569,976
12,874,909
14,444,885
21,225,885
1930
6,149,000
1,646,628
12,379,796
14,026,424
20,175,424
1931
5,611,000
1,098,673
11,547,464
12,646,137
18,257,137
1932
4,5-14,000
703,976
9,913,663
10,617,639
15,151,639
1933
4,767,000
791,171
10,559,355
11,350,526
16,137,526
1934
5,422,000
1,083,718
10,662,416
11,751,134
17,173,134
9837
BITOiniTOUS COAL SKIPPED TO i^W ElIGMND BY MIL AND BY WORTHEBIT
AKD SOUTHSM TIDEWATER POETS, 1919 - 1934, IK I'ffiT TOWS
(Coin;oiled from published reports of the U. S. Bureau of Mines)
(Contiraied from i^age
Tidewater
shipments
to lim ENGLAira b
All-rail
receipts ii
G-PAJ'ID TOTAL
Year
1 from
IffiW EKGLAH
D IJew York
From
Philadelphia :
Ka?-pton Roads
Total
: a
and Baltimore
and Charle
3 ton
Tidevrater
percent
^lof Total
1919
53.5
17.4
29.1
46.5
100,0
1920
53.9
19,0
27.1
46.1
100.0
1921
48.6
16.5
34=9
51,4
100.0
1922
34.8
10,5
54.9
65.2
100.0
1923
41.9
16a
42,0
58»0
100.0
192-1-
37.8
llo4
50.8
62.2
100.0
1925
36.6
10.6
52.8
65.4
100.0
1926
38.3
11.5 _
50.1
61,7 ,
100,0
1927
32.8
10.2"
57.0
67.2
100.0
1928
32.5
8,3
59.2
67.5
100.0
1929
31.9
7.4 ,
60.7
68.1
100.0
1930
30.5
88.2 '
61.3
§1.5
100.0
1931
30.7
■ 6.0
63.3
69.3
100.0
1932
30.0
4,5
65.4
70.0
100.0
1933
29.7
4.9
65.4
70.3
100.0
1^ 1934
51.6
■ 6o3
62.1
68.4
100,0
a From records of the Coraraonvrealth of Massachusetts, Division on the
Necessariqs of Life,
b Cargo coal diimped into vessels consigned to l\ev England as reported by the
railroads operating tiderrater piers,
Bj/ F. C-. Tryon pjid ¥. H. Young
Coal Economics Division
United States Bureau of Mines.
November 4, 1935,
9837
•144-
Tidetrater Move^.ent; The data on particular movenents, 1920 - 1934,
adds further information to the data on orodaction by areas. Fnere the
production figures by years indicate shifts as between states, areas* or
subdivisions, the data on novements show how these shifts have been related
to changes in market areas.
Changes that have taken place in the origin of tideijater coal are
readily apparent in the table entitled "Shipments of Bituminous Coal to
Tidewater, 1920 to 1934 Inclusive", and the accompanying chart. Southern
Subdivisions No. 1 and ITo, 2 have slightly increased their proportions,
while the northern areas have lost. The annual tonnages of the tidewater
move^ient have fluctuated a great deal, reaching a high of 58 million tons
in 1926, wlien exports increased due to the British strike.
The final destination of tidewater tonnage has varied notice-
ably since 1920, I;aring the ea.rlier years of this period, both bunker and
foreign fuel were of importance, and the rest of the coal was divided as
to "inside ca^es", New England, and "other tonnage" or that coal shipped
beyond the capes and destined to ports Of.tside of New England. The
tendency over the 15 years, bo^^evcr, has been for the New England coal
and "other tonnage" to gain in importance until accounting for most of
the tidewater movement, and for all the other divisions to decrease.
Interesting fa.cts Are brought out when the effect of tidewater coal
on the New England market is given consideration. The proportion of all-
rail receipts, which originate alQOst entirely in the northern fields,
decreased after 1920, while the yiarj of tidev.'r.ter coal is increased.
Likewise, the tonnage shipped from Hampton Roads, the port used by the
southern fields, also 'increases ov3r the period. Hence, the southern
tidewater coal was increased in the New England market both at the
expense of the northern all~rail rjid tidewater tonnage.
Lake Cargo Movement; Bitwr.inous coal shipped to Lake Erie makes up
the largest concentrated coal movement, A separa.te lalce movement, thoia^
of far less volume, is found from Lalce Ontario ports, but this caJinot be
included in the lake cargo description due to the absence of data.
The r:arked shifts as bet'-reen the mining areas originating lake
coal has been one of the outstnuding events in the history of this move**
ment, Eyen since 1920 large fluctuations are noticed for the producing
regions. It will be seen, for instsjice, that the Ohio Subdivisions,
which produced one-third of the lake coal in 1920, accounted for only
3 percent of the tonnage in 1927, end. was not successful in regaining
anything like its former status in the later years. Western Pennsylvania
has sharp reductions after 1923, and did not begin to regain its old
share in the lalce business until after 1927, Northern lest Virginia's
proportion varied over the oeriod, with a tendency to lessen in the
recent 3-ears, Southern Subdivisions No. 2 gained rapidly after 1923,
and though having some decrease after 1927. renains the leading producer
of la]:e coal. The trend for Southern Subdivision No, 1 over the period
h8,s been a gradual increase in its proportion,
9837
i a
fl
ll
I
as*.
B -^ n
£2?
a s «
sag
!5I
3 RS-
S '^ «'
?6?
sSI
« (C =■
a - R
51 I
33
:R 8
V. »
,3 8
K»'
3&' E
IC« 8
ill
m
i u
! k
iff
Hi
S |l
I f.fl
i-^. Ml
ll i
!f ' ill
-1 1 Jill
1 i\ I
llir^
-I'S'siSiiaia S)t.
145
i
'
Shipments °*' Bituminous CDal to Tidewdter.
Relative Importance °^ N.RA Sub-Divisions -
1920 H934
1
[
1
! i
1 1
1
i
♦fletaJ
30
II
■
r""i
li
1
1
■
!
i
1
i
k
1
1
1
1
ll
; !
i
1'
■ ■
eastern! ^
|i
1
11
1
1
I"
1
1
1
i!
11
SUB DIV)
1
1
1
II
1
1
1
1
1
1
1
1
1
W.M. c
I
■
■1.
'i
NO.W.VA. 10
;
ll
1
ll
1
1
1
1
I
1
I
■ II
III
' a.
■
1
.
1
SOUTHEPN ,0
■ '■
1
■
1
■ '■
■
■
1
ll
ll
SUBDIVISWNrW.2
11
1
li
1
1
II
1
1
1
II
II
SO
1
i
■
j
[
40
^m
1
.1
1
1
1
1
1
1
1
1
30
■ il
1
ll
1
1
1
1
1
1
1
1
1
SOUTHERN
■
■
I
n ■
■
■
■
■
■
1
■
■
'■
1 20
SUB nViSKM NOLI
1
1
l!
1
I
1
1
1
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Movements °^ Bituminous Coal t° Lake Erie
Ports ^' Transhipment: Relative Importance
or NR A. Sub-Divisions • 1920 - 1934
dSBlli-dtVWdii'^
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•149-
Toledo is the main port for lake cargo coal, handling 52 -perc ^nt of
the tonnage in 1925, 49 percent in 17.2?j ar.d tetTraen 40 and_ 45 •,*•.
percent for the other years snown. This port is used mostly by the
southern fields. The rest of the tonnage is dumped at various ports
hetneen Toledo and Buffa.lo, the T-qost important oeing Sandusky.
Hearly one-third of the coal transhipped hy vessel from Lake Erie
ports goes to ports on Lake ivachigaii. while another fourth goes to Lalce
Superior ports. The proportion for the latter has decreased sharply
since 1927, a condition not caused hy a declining market hut because the
Lake Superior absolute tonnage changed little while the general lal^e
movement vras increasing,, Proportionate increases are recorded for tonnage
moving to the Welland Canal and beyond, to Lake Erie ports, and to the
St, Clair River, Lake St. Clair and Detroit River ports. The movement to
Lake Huron and Georgian Bay ports has changed little, while the tonnage
to Sault Ste. Marie and River ports has declined. Eighty-two percent of
the lake coal was destined finally to domestic points in 1934, the rest
going to Canada.
The distribution of bituminous coal from the Laices is traced for
1929 in a study of the Bureau of IJines, (*) This study, while only
separating the Lalce Superior ports, fiimishes a picture of the movement
of coal from the Lakes, The major part of the Lake Michigan coal is
consmied in Wisconsin ajid Illinois. Coal from Lai-re Superior docks is
used largely in Minnesota, though large amounts are shipped to Wisconsin,
North Dakota and South Dakota, and a heavy tonnage is used as railroad
fuel. This Lake coa,l, in competition with all-rail coal from Illinoisj
Indiana, Western Kentucky, and the Appalachians, makes the Northwest
one of the complicated market areaso Other large shipments from the
Lakes go to Michigan, Ohio and ITew York, but a smaller part of these
movements is again reshipped by rail. The total lake cargo coal going
to Canada in 1929 amoun.ted to 6 million tons.
Shipments Westbound; T7estboun.d tonnage from the Appalachians in-
cludes all shipments destined to points west of Pittsburgh, Erie and
Buffalo to the Rocky Mountain States; and all north of the Ohio River,
The far vrestern states include Kansas, Nebraska, South Dakota and North
Dakotao All coal from Illinois, Indiana and Western Kentuctiy moving
into this market territory is part of the total.
In a comparison restricted to Northern and Southern Appalachian
fields, it is seen that the latter increased their proportion in the
westbound movement -until around 1927, after ^^hich there is little
change. The Northern raining areas, in the aggregate, suffered decreases
until 1924, and then had little ch.-=Jige.
A different resiilt appears when Division II is included in the
comparisons. From 1923 to 1934, the proportions of the Northern Appala-
chian fields change little, ranging between 21 and 25 percent. The
Southern Appalachian areas, however, increase until 1927, and then
follow a level ranging betv/een 43 and 46 percent. Illinois and Indiana,
particularly the former, decrease as the Southern Appalachian increase,
(*) m. C. D. No. 3, Supp.
9837
-150-
raalcing it appear that the lose of Illinois was the gain of the Southern
Appalachians.
(The reader will observe that there is a statistical appendix to
Chapter III.)
3837
Shipments °f Westbound Bituminous Coal "'-*•• Appdlachians
and from Illinois. Indiana, ^'^ Western Kentucky: Relative '
Importance °^ N.R.A. Subdivisions- 1920 - 1934
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CHAPTER IV. (*)
LA30R - G3L.-E2AL A13 FRS-C0D5
SECTIOI-I-A.
1 . Collective Bargaining - ".Yais;e I-Iegiotiations and Industrial
Disputes.
Introduction: The Bituminous Coal Code soiight to stabilize
the bituminous coal mining industry by effecting a stabilization of wages
adjusted between competing districts and b;r fixing and stabilizing prices.
Such stabilization of the industry could not be achieved without recourse
to collective bargaining. It is impossible to comprehend the fundamental
problems which the N.S.A. faced in the formulation and administration of
the Code without giving considerable attention to the tradition and his-
torical background of collective bargaining in the coal industry. Un-
like some other industries, collective bargaining in the coal industry
did not arise de novo with tue passage of the National Industrial Ee-
covery Act. However, by 1933 collective bargaining in the coal industry
had almost disappeared, despite the fact that such bargaining on an ex-
tensive scale harked back to the year 1898. Although the N.R.A. did not
initiate collective bargaining in the industry, it revived, extended and
gave neT/ em.phasis to the procedure. In order to facilitate the wide
acceptance of collective bargaining, the' IT.H.A. did not make radical
innovations, but rather took advantage of the past procedure. It is
therefore, necessary to consider the conflicts and struggles for collect-
ive bargaining in some detail if the problem under the Code is to be
understood. The principle of collective bargaining as set forth in
Section 7(a) of the National Industrial Recovery Act and in paragraph
(a) of the Bituminous Coal Gode(**) is of basic significance for the
bituminous coal mining industry. The interrelationship between prices
and wage costs plus the high proportion which mine labor cost represents
of total production cost require stabilized wage levels. Moreover,
since a large amount of coal is sold on contracts extending for one
year or more, it becomes absolutely necessary that labor costs, as ex-
pressed in wage rates, be known in advance. The collective bargaining
principle of the N.I.R.A. was, therefore, of peculiar significance for
the bituminous coal industry. Perhaps more than any other industry, the
bituminous coal industry had struggled to arrive at ,an understanding
between employers and employees which should apply over wide geograph-
ical areas.
00 .P.-i-ji? :'doy IO-/--3 Irrino.
(**) Employees shall have the right to organize and bargain collectively
through representatives of their own choosing, and shall be free from the
interference, restraint, or coercion of employees of labor or their agents,
in the desig-nation of such representatives or in self-organization or in
other concerted activities for the purpose of collective bargaining or
other mutual aid or protection; (2) no- employee and no one seeking em-
ployment shall be required as a condition of employment to join any com-
pany union or to refrain from joining, organizing, or assisting a labor
organization of his own choosing; and (3) employers shall comply with the
maximum hours of labor, minimum rates of pay, and other conditions of
employment approved or prescribed by the President.
9837
The long history of efforts to estahl-ish contractual relations
"between operators and mine v.'orkers "based upon agreements "by collective
action regarding wages, hours, asidrrarking conditions is fraught vifith
violence and "bloodshed to sec^ure union recognition, intense and often
unfair competitive conditions, introduction of new producing fields,
mechanization and rearrangement of the competitive pattern. These
collective "bargaining agreements are predicated upon the existence of
organizations of operators and mine workers and upon the willingness of
tile employer to surrender some of the advantage held "by him when making
individual targains with each employee. Collective "bargaining may also
"be attri"buted to the operator's desire that Ms competitors pay a wage
scale comparable to his ov/n so as to assure fair price competition. The
transcript of the Bituminous Coal Code Hearings of 'August 9-12, 1933 con-
tain many references to the competitive relationships arising out of
wage differentials as esta"blished "by wage agreements dating back a great
number of years. In addition, by the time the Bituminous Coal Code was
adopted both industry and the N.H.A. recognized the need of union organi-
zation and collective bargaining in order to secure stabilization of
wages. (*)
A proper understanding of the problems relating to collective bar-
gaining as they arose dioring the period when the Bituminous Coal G'ode was
formulated as well as when the Code operated, requires a rather detailed
description and exposition of the negotiations from the earliest years
forward. Closely related to and, indeed, a part of the collective bar-
gainii^ procedure are the numerous stoppages in minijig operations when
negotiations have failed or when existing wage agreements have been vio-
lated. These strikes and lockouts affect widespread fireas because the
industrial, disputes arise out of collective bargaining negotiations
which are interstate in character. Because these industrial disputes
interfere with the flovr of interstate commerce of a basic cominodity
essential to many industries and to a. large .number of domestic consumers
and also because these ■ disputes have 'often been attended by destruction
of life and property, they have necessitated governmental intervention
upon many occasions and have made' a deep impression on public thinking.
The H.E.A. recognized that peace in the industry or continuity of oper-
ation was essential to attaining its objectives of increased purchasing
power and increased employment. i!iius, even before the Bituminous Coal
Code Trent into effect the i'liR.A. cooperated in every way with the United
Mine Workers and the captive mine operators to settle the strike in
Western Pennsylvania (August and September, 1933). Similarly, the I-I.R.A,
established Divisional Coal Labor Boards and a National Coal Labor Board
so that labor disputes might be settled expeditiously without resulting
in stoppage of work. In a sense the N.R.A. sought to re-enact the role
of the U.S. Pael Administration when the emergency war time demand re-
quired uninterrupted mining activity. .
Only by studying the traditional militancy of the mine workers and
the constant resistance- of the operators can one understand £ind appreciate
how remarkable was the scope and degree of collective bargaining effected
•under the influence of the N.I.H.A. and the Bituminous Coal Code. When
one recalls the breakdown of union organization and the depths to which
collective bargaining had fallen after 1957, the revival of collective
(*) See discussion of wages, hours of v/ork and collective bargaining
under the Code in the follov/ing section. Wage differentials are treated
in a separate section.
9837 I
■bargaining in the industry with the T'assage of the IT.I.H.A. stands out
even more as a great accomplishment.
One of the serious difficulties in tne Dituminous coal industry
regarding collective bargaining becaiae increasingly apparent after 1919
v/ith the rising importance of the coal producing areas south of the
Ohio Hiver. The traditional basic wnge negotiating unit for several
decades was the Central Competitive Field. Collective bargaining for
this area - Illinois, Indiana, Ohio and. Western Pennsylvania - was pre-
mised upon an East vs. West co:;:petition. This competitive pattern had
shifted to North vs. South, but labor insisted, in opposition to union
operators, in maintaining the outmoded relationship while non-union
southern competition increased. The expiration of the Jacksonville
Agreement (March 31, 1927) found the union greatly weakened and in sub-
sequent years the disintegration was more complete. Not unt:' 1 the advent
of the N.R.A. was the new competitive pattern formally recognized in the
Appalachian Wage Agreement of September 21, 1933. Thus, the II. H. A. served
as the vehicle whereby the collective bargaining structure could be re-
habilitated and modernized to meet the new competitive situation.
1861 - 1898.
Inasmuch as collective bargaining reouires organizod action, it is
necessary to recount briefly the organization of the mine workers. The
period 1861 to 1890 was featured by a great number of local and national
miners' unions, all of which were pcorly organized and short-lived. The
areas in which this intermittent organization took place were primarily
Illinois, Indiana, Ohio and ViTestern Pennsylvania. The mine workers
attempted to hold joint wage conferences with the operators, but were
generally unsuccessful because of internecine rivalries and poor operator
representation. The first joint conference for the above named areas
was held in 1886. The conference idea was of short duration and by 1889
it had been abandoned.
The failure of the joint conference of 1889 and the subsequent un-
successful local strikes emphasized the need for collective bargaining in
dealing with the chaotic competitive conditions existing in the industry.
A joint convention of the National Progressive Union and the National
Trades Assembly No. 135 (Knights of Labor) on January 23, 1890 laid the
foundation for uniting the two organizations under tne name of the United
Mine Workers of America. The union was of the' industrial tj'pe including
all workers in and around the mines.
The United Mine Workers sougiit to reestablish the Interstate Joint
Conference in 1891 but v/ere unsuccessful. From 1891 to 1897 only district
bargaining could be effected. The m.iners' convention of 1897 decided to
call a general suspension of work beginning July 4. The strike was
successful in that it was settled by calling an Interstate Joint Confer-
ence of the entire Central Competitive Field. (*)
(*) State Basing Point
Ohio Hocking Valley
Indiana Indiana and Indiana Brazil Block
Western Pennsylvania Thin Vein Mines
Illinois Danville, district
9837
—155—
The Central 'Competitive Field iDecFjne the -unit in v;hich the agree-
ment v/as negotiated that substantially fined the basic wages, the hours,
and the method of payment for the a^^reement period throughout the 'bitu-
minous coal indut^tr;'.
1398 to 1916
Central Competitive Jield; The jrear 1893 marhs the real 'beginning
of the Centi-al Competitive Pield agreements. The joint conference of
1898 laid the foiindrtion of an institution for collective bargaining
in the Central Competitive Field which functioned for almost thirtj'- years.
It broTjght about uniformity in day rates and working hours and standard-
ized the screens use it to obtain Itijn^o coal. (*)
Yearly agreements v;ere GUccGssfull}^ made in the Central Competitive
Field from 1898 to 1903 with increasing advantage to miners in rages and
working conditions. In 1904, a tTro 3'-es:r agreement was made at a slightly
reduced wrge scale because of the moderate industrial de:oression. The
1906 conference broke tip over the question of the wage scale and the joint
conference was unable to agree ixpon a new scale. The miners wished to (
recover the loss sustained in 1904 and an advance over the 1903 scale,
while the operators were only willing to renew the 1904 ws^e scale. The
deadlock was broken by the opero^tors agreeing to pay the 1903 scale, but
contracts were negoti-ated locall;.' in each district. In 1908 Illinois re-
f Lised to be a party to the joint conference and formulated a separate scale.
It is interesting to note, however, that the Illinois agreement was made
after the agreement of the joint conference and was based upon the latter
contract. The agreement made hy Indiana, Ohio, and Western Pennsylvania was
based on the 1907 .scale established by V£irious states and districts and re-
mained in effect until 1910.
At the 1910 Joint Conference, the miners asked for a 10 cent increase per
ton for tonnage rates. Illinois again refused to join the conference. The
failure of the conference to rgree resulted in an rdjournment v/ithout setting
a rate. Each state or district made a separate settlement with the result thai
a 5.5 per cent increase was obtained in most instances.
In 1912 all the operators in the Central Competitive Field entered the
joint conference and an increase was granted to the nine workers. (**)
(*) Uniform day rate for inr.ide skilled la.bor ^^as $1.90 throughout
Central Competitive Field.
(**) Interstate Joint Agreement, 'Indiana poles, April 25, 1913 between Indiana,
Illinois, Ohio and TJestern Pennsylvania and United Mine TiTorkers of Americ
Picknining Piclcmining
(Screened lump) (Hun of mine)
5 cents a ton increase 3 cents a ton increase
"e stern Pennsylvania (thin vein) Illinois
Ohio - Hocking Valley Indiana - Bitur.dnous
Indiana. - Block and Bittiminous
I.Iachine i lining I.Iachine I lining
(Screened Itimp) (Run of nine)
4 cents a ton increase 5 cents a ton incroase
TJestern Pennsylvaiiia (thin vein) Illinois
Ohio - Hocking Valley Indiana - Bituminous
Indiana - Block and Bit^ominous
9837
The 1914 Joint Sonference gave rise to consideralile controversy
over the v/age scale for mine run coal "both jjick and machine mined.
Failure to reach an agreement resulted in adjournment and individual
district "bargaining.
Southwestern Interstate Field: The United 'line Workers in 1898
organized a district in Arkansas and the Indian Territory (District Si)*
At the saxne time District 14 (Kansas) and District 25 (i issouri) were
organized. In 1903 Texas was organized and joined to District 21.
This latter state, however, is not considered a part of the Southwestern
Interstate FieM.
In 1900 Kansas and Mssouri held a joint wage conference and
negotiated a wage scale. The operators in iirkansas and in the Indian
Territory refused to enter into the negotiations. (*) The large opera-
tors were willing to psy 50 cents per ton,, which was 5 cents lower than
the union demand, arid also wished a 10-hour day as against the union
request for an S-hour day. Failure to come to an agreement was followed
"by a disruption of mining operations in Arkansas and in the Indian
Territory which lasted until 1902. Considerahle vidlejice accompanied
the industrial dispute. The disturhances were ended in 1902 when the
president of District 21 met with the large operators in St. Louis and
reached an agreement which provided for an S-hoxu" day, semi-monthly pay
days, and a 55 cent' tonnage rate.
The operators in Lassouri and Kansas met in Kansas City, Missouri,
on JvJie 19, 1903 for the purpose of organizing an association.. This
meeting agreed to adjourn to a later date and. to invite operators from
Arkansas and the Indian Territory. At the next meeting on July 9, 1903,
in Pittsburg, Kansas, 71 operators from 4 states representing 80 per cent
of the coal output and 50 per cent of the operators were present. The
Southwestern Interstate Coal Operators' Association, ¥/hich was formed
at this meeting, entered into a joint conference with the United Mine
Workers. An agreement was signed applying to Districts 14, 21 and 25
and effective from September 1, 1903 to August 31, 1904. Tiiis agree-
ment was the beginning of a collective bargaining procedure, patterned
after that of the Central Competitive Field, v/hich continued with slight
interruptions until 1924. (**)
In 1906, the Southwest asked admittance into the Central Competitive
Field, but its request was denied. (***) Wage conferences were arranged
and agreements were made periodically after 1903. Representatives of
Districts 14, 21 and 25 of the U.M.W.A. and the operators biennially
formulated wage scales and agreed on conditions of labor in 1904, 1906, etc,
(*) Hyan, Frederick!., "The Development of Coal Operators' Associations
in the Southv;est" , Southwestern Social Science Quarterly. September, 1933.
(**) Ibid, supra.
(***) Co.ql Age, October 29, 1925, p. 597.
9837
-153-
Collective "bargaining in the Southwest was complicated "by the dom-
inance of four large producers. A:i additional conplicating factor was
the existence of some 20 operators Icnown as "independents", who refused
to join the operators' association, but paid the union scale and main-
tained union operating conditions. These latter operators embarrassed
the United Mine Workers' position when joint conferences and negotiations
were taking place. The operators' association, in 1910, in order to
effect a stronger organization sought to bring all operators into the
association. In the spring of 1910, the United Mine Workers asked for
a 10 cents per ton wage increase. Tlie operators refused to accede to the
request and stoppage of v/ork ensued. The operators' association then
proposed a program for the operators which stated that:
1. Only non-union labor be employed.
2. Large operators should control the market and that smaller
operators should receive a bonus when their share of the
market was not secured.
The industrial dispute continued for 5 months. When the dispute was
settled the operators agreed to grant a 3 p'ent.per ton wage increase and
to m.aintain union conditions.
Slight attention has been given to the industrial disputes during
the period 1898 to 1916. This period is treated for piirposes of back-
ground information. Wage negotiations during this period are considered
significant since they served as precedents, but labor disputes during
this period did not have the same significance. Most stoppages of work
during these years grew out of the biennial wage contract negotiations
and were suspensions awaiting a new contract rather than an actual strike.
For example, the year 1912, notwithstanding a general suspension in the
union fields which lasted about 35 days, was an exceptionally good year
for the soft coal industry and the suspension did not indicate fundamental
labor unrest.
The suspensions which occurred in the even years when wage con-
tracts expired from 1900 to 1912 were all similfir in character. The
usual procedure in these suspjensions has been described in the following
language:
"They (the suspensions) began with the formulation
of demands in the biennial convention of the union,
astutely timed to fall in "even" .years - years marked
by national elections. This was followed in regular
order by resistance of the operators to an increase,
apprehension of buyers over interruption of supply,
active buying to accumulate reserve stocks, advance in
price, then idleness at the, mines for one, two, three
months or longer. The early weeks of a suspension were
frequently marked by a slackening of demand; then as
consumers began to exliaust their stocks the price again
rose, inducing the importation of coal from the outside.
Press\ire of consumers to bring about a settlement appeared;
sometimes it was exerted directly, where the railroads
owned mines to supply locomotive fuel; sometimes it was
9837
■159-
exerted indi^ectl;^^ through the usual channels of
distribution. The u:iion operator was moved to grant
the miners' demand - first, "by the spectacle of other
coals, sometimes from a union district that had made
an early settlement with the union, invading his own
territory, and second, by the desire to participate
in the active market and obtain the attractive prices
created by the temporary shortage." (*)
Although the consumer bore the burden of increased prices attending
the suspension, the price rise was not great. Even in the industrial dis-
pute of 1910 when union miners in five states were out for nearly five
months, spot delivery prices rarely rose above 25 to 50 cents per ton.
The decline in business activity, be-.3inning in the last half of
1913, was not irainediately r-eflected in the bituminous coal industry.
By April, 1914, however, conditions in the coal industry were unsoun.d.
Twenty-five per cent of the tonnage in Illinois wns in banl-oruptcy, aiid
the southwestern interstate region was in little better condition. (**)
In Ohio, a prolonged and serious labor ■ dispute beginning early in 1914
kept the mines in much of the state shut down well into the year 1915.
Tile dispute was waited over the method of establishing wage rates to con-
form with the Green Anti-Screen Law which required that the miners in
that state be paid for ,all coal mined- rather than only for the coal
passing over screens. (***) The adjustment finally agreed upon resulted
in a reduction of wage rates in that field.
1916 - 1934. ,
The Central Competitive Field wage contract of 1916 for the tvjo
year period, April 1, 1916 to March 31, 1918, reflected the improvements
in the coal industry arising from the European War. The liew York Agree-
ment, as it is generally termed, provided for an increase of 3 cents per
ton to tonnage workers and a 5 per cent increase to day men. It also
■provided for the run of mine system of pa^/ment for the entire Central
Competitive Field. (****)
(*) Tryon, F. G. , "The Effect of Competitive Conditions on Labor Relations
in Coal Mining". The Annals of The American Academy of Political and
Social Science. Vol. CXI; No. 200, Jfoiuary, 1924, p. 38,
(**) Tryon, F. G. op. cit. p. 89 '
(***) Fisher, Waldo E. and Bezanson, Anne, Wage Rates and Working Time
in the Bituminous Coal Industry 1912-1922, University of Pennsylvania
Press, 1932, p. 53
(****) Previous to this timie the screened method of -payment v;as in effect
in this area, except where state legislation as in Illinois provided for
the run of mine basis. The miners had been trying for many years to have
the wage scale based on the weight of coal as it came from the mine. They
claimed that the pa^.Tnent of wage rates based on the amount of. coal which
would-pass over screens of a certain mesh and area was subject to abuse.
The area in square feet varied; the size of the mesh was not uniform;
spreaders placed on the screens broke up the coal and made a disproportion-
ate amount of fine coal pass through the screens; and the screens were
not kept in repair.
9837.
-160-
Hov/ever, it soon 'became apparent, as early as the autumn of 1916,
that the increase in wages received by the miners v;as not equal to the
increase in the rapidly rising cost cf living. The miners "became dis-
satisfied because wages in other industries were mounting and profits
in the coal industry were increasing in excess of those anticipated
when the contract was signed while their wage rate remained stationery.
Furthermore, non-union employers were voluntarily advancing wages,
throwing o\it of line the wage adjustments in neighboring fields.
In the Southwest, some 16 operators (later joined by Oklaiioma and
Arkansas operators making over 70 in all) brought their grievances against
dom.ination by the large operators before the joint meeting in Kansas City,
The miners objected to the automatic penalty clause in their contract
which provided for a fine to be deducted from pa^^ when the mine worker
was absent from work without cause (strike or wrlkout) . These Oklahoma
operators indicated an intention to separate from the Southwestern Inter-
state Coal Operators' Association. As a result, the Joint Wage Agree-
ment for 1916 - 1918 contained a provision to the effect tiiat its terms
were effective only while the operators were members of the Association.
Shortly after 1916, Oklahoma withdrew from the Association and organized
the Oklahoma Coal Operators' Association. The joint contracts made by
this group and the United i'ine V/orkers duplicated the provisions in the
agreements for Kansas, Missouri, aiid Arkansas.
Labor difficulties in Central Pennsylvania and in ilorthern West
Virginia made evident the need for a readjustment before the expiration
of the 1916 agreement. Tlaere was a considerable increase in the amount
of time lost due to strikes and lockouts in the non-union States of
Alabama, eastern Kentucky, Tennessee, and Virginia, as well as in the
union stronghold of Illinois.
On April 12, 1917, a joint conference for the Central Competitive
Field was held in which the operators e,greed to aii advance of 10 cents
per ton for pick and machine mining rates and 60 cents for day men,
effective until April 1, 1918. ITo increase was allowed for yardage and
deadwork. Although this joint conference led to a general wage increase,
it was only temporarily satisfactory. 3y the summer of 1917 the miners
were again asking for an increase in wages. In Auf;ust new labor dis-
turbances occurred in Illinois, eastern Kentucky, and Tennessee.
The passage of the Lever Act on Au^^st 10, 1917 was significant
in its applications to the coal industry. The legislation gave the Pres-
ident power to fix prices, tfike over and operate plants and maintain con-
trol over the production, distribution and consumption of necessities.
Even more significant was the creation of the Fuel Administration on
August 23, 1917 with Dr. Harry A. Garfield as Chief.
The maladjustment between wages and cost of living led the mine
workers to demand an advance of 15 cents per ton for pick and machine
men and $1.90 for day men, plus a 20 per cent increase in yardage and
deadwork rates. The operators were willing to maJ-e new agreements but
only on the condition that increased costs should be offset by increased
prices.
9837
The joint conference which reconvened in Washington Septemher 25, 1917,
at the request of the Tael Administrator resulted in the . "Washington
Agreement". This agreement is sometimes called the "Garfield Agreement"
and should not be confused with the Garfield Awai'd 'mich vms made in
December, 1919.
The TiTashington Agreement was made on October 6 aaid established a
new wage scale effective IJoveraber 1st. Rates for pick and machine mining
were advanced 10 cents per ton; in the Block Coal Field in Indiana the
screened coal price advanced 12^ cents per ton; day labor received an
increase amounting to $1.40 per day; and yardage and deadwork rates were
advanced 15 per cent. The following table shows the increase for November
over April of 1917:
Piclaninin^; (R.O.M.)
Illinois (Danville)
Indiana ( except Block)
Ohio (Hocking Valley)
Western Fenn. (Tiiin Vein)
Apr. 16. 1917
Cents per ton
74.0
74.0
77.64
77.64
lov. 1. 1917
Cents per ton
84.0
84.0
87.64
87.64
Tractanen ( Irisida Skilled Labor)
Apr. 16. 1917
Dollars per Da^,
I^ov. 1. 1917
Dollars per Day
Illinois, Indiana, Ohio
and Western Penna.
3.60
Outside Common Labor
.00
Apr. 16. 1917
Dollars per Day
IIov. 1. 1917
Dollars per Day
Illinois, Indiana
Ohio
Western Fenna.
2.96
3.35
2.70
4.36
4.75
4.10
The objectives of the
following language:
Fashington Agreement were set forth in the
"Tlie following agreement, supplemental to the existing
Interstate and District agreements, is entered into with
the hope and belief that the advance in wages will result
in an increased production of coal and the abolition of
local strikes."
Several provisions of the agreement gave rise to later difficulties
in labor relations because of differences in interpretn.tion and dissatis-
faction. One provision stated that, "Subject to the next Biennial Con-
vention of the United Mine Workers of America, the Ivline Workers' repre-
sentatives agree that the present contract be extended during the con-
tinuation of the War, and not to exceed two years from April 1, 1918."
9837
-162-
Another provision, known as the "penalty clause", was intended to in-
sure continuity of production during an emergency period. This clause
in its final form provided tha.t if mine workers should strike at any
time without first cringing their grievances to the Coal Administration
for settlement, each striker v;as to he fined one dollar per day. The
employer after collecting these fines "by deductions from the pay en-
velopes, was to pay them over to the Red Cross. Similarly, a lockout
by ail employer was also subject to a fine of one dollar per day for
each man affected. The Washington Agreement also carried a clause
stating that it wr;S to become effective, "only if the selling price of
coal shall be advanced by the U. 3. G-overnm.ent sufficient to cover the
increased costs in the different districts affected aaid will tal'e
effect on the first day of the period following the order advancing
such increased prices". President Wilson on October 27, 1917, issued
an order stating that the "scale of prices prescribed August 21, 1917....
is hereby amended by adding the sum of 45 cents to prices so pre-
scribed." The Washington Agreement was officially accepted by the
United Kine Workers at their biennial convention in January, 1918.
The details of the Washington Agreement as to wage scale and
labor provisions are significant because they represent the first
serious attempt of the Federal Government, through the Agency of the
U. S. Fuel Administration, to regulate the bitu-minous coal industry.
Although this regulation arose out of a war em.ergency situation it
faced many of the same problems faced by the NHA in a peace time
depression emergency. It should be noted also that at the time the
Bituminous Coal Code was formulated, wage rates in the few union con-
tracts then extant had fallen to the level of the llovember, 1917 v/age
scale.
Stabilization in labor conditions in 1918, while motivated by
patriotism, was (greatly influenced by the Government through the Fuel
Administrator by anticipating and adjusting grievances. In August,
however, the miners appealed directly to the Fuel Administration for an
increase in wages because of the continued rise in the cost of living.
The request was denied on the ground that dealing with wages "in each
industry separately is inevitably and constantly to increase the cost
of living". They appealed to the President on November 15, but were
refused because the Government was "stabilizing vifages" .
Dissatisfaction with the Washington Agreement was clearly evident
among the miners in 1919. This discontent arose out of the contention
that a new wage agreement was necessary since the war had ended. Con-
siderable controversy existed over the interpretation of the clause
stating that the Washington Agreement shall be in effect for the duration
of the war and not to exceed two years from April 1, 1918. Mine labor
contended that the war ended on ilovember 11, 1918, whereas the operators
held that a state of war legally existed \mtil the Government ratified
a treaty of peace. The mine workers argued that the Fuel Administration's
control over prices had been relinquished (abolished on January 21, 1919)
and that operators were therefore free to raise prices. (*)
^ ^As a matter of fact, the U.S. Geological Survey shows that the average
realization per ton f.o.b. tnine for bituminous coal in 1919 was $2.49 as
against $2.58 in 1918. Furthermore the average snot price per ton was
lower than the January, 1919 price in each succeeding month until
August when strike threats raised the price.
9837.
-163-
Tiie labor unrest was further displayed "by the disturhances vithin
the organization of the United Mine Workers. An insurrection against
the international union was led "by .the officials in District 12
(Illinois). The United Mine Workers Convention of September, 1919 wrs
also the scene of a bitter struggle regarding the seating of a delegate,
Alexander Howat, who had previously been erroelled from the presidency of
District 14 (P^ansas) .
The rebellion among the miners fo\ind expression in their demands
at the convention. These demands were:
1. A 60 per cent increase in tonnage and yardage rates and
for day men.
2. A 6-hour day and a five day week.(*).
3. Time and one-half for overtime eui6. double time for
Sundays and. holidays.
4. Abolition of the "penalty clause".
5. llo sectional settlements to be allov/ed.
6. All new controcts in districts should e:qpire on the
same date.
7. District agreements should be retroactive and effective
from date of the interstate contract.
The operators based their oprosition to the mine workers' demands
upon the following arguments: ,
1. Production costs vjere already excessive and a 60 per cent
increase in wage rates T;ould double these costs.
2. A decrease in working time '--ould cut production :nd further
increase costs.
3. Strike threats were being vised as a weapon to force a new
agreement. (The operators interpreted the term.ination date
of the %shin:.iton Agreement to be April 1, 1920 and refused
to grant any increase before that date.)
Ho agreement could be reached at the reconvened session of the
joint conference on October 9, 1919 ^nd on October 15th a strike call
was issued to tftke effect iJovember 1st.
The issuance of the strike call gave rise to governmental interest
in the situation. A meeting of the joint scale conir.ittees to be held at
(*) This demand for the 30-hour week, although it aro^e out of insurgent
groups in 1919, became a basic argument of the United Mine Workers in the
Bituminous Coal Code Kearii'.gs in 1935.
9837
the Department of La'bor on October Sls't v.'as called "by Secretary Wilson.
This meeting continued for foi-ir days. Despite even the President's
intervention efforts, the meeting adjourned on October 24, v^'ithout
agreement.
Attorney G-eneral Palmer, meantime on October 21st, petitioned the
U. S. District Court in Indianapolis for an injunction restraining the
officers and members of the United Mine V'orkers from carrying on the
proposed strike. The petition was based upon the Lever Act providing
for war-time control of food and fuel. (*) The Attorney General stated
(October 29) that the government had a right to prevent the strike be-
cause of its ille;3ality. He held that the Arm.istice had not ended the
war and pointed out that war emergency statutes were still in effect
according to the courts.
President Wilson requested that the strike order be recalled since
it had not been approved by the individual members of the United I'ine
Workers and since it interfered with the efforts of the government to
restore normal economic conditions.
Labor was seriously. opposed to the government's action on the
ground that the Lever Act hfid been intended to prevent hoarding and
profiteering in war time and that e promise har" been made that it yrould
not be used to bring action against workmen.
Judge A. B. Anderson, of the federal Court at Indianapolis, on
October 31st handed down a temporary restraining order that was operative
until November 8th when a hearing on the temporally injunction was to b e
held. The hearing on the government's motion for a temporary injunction
resulted in the granting of an injunction. In the new restraining order
the defendants were required to issue a withdrawal and cancellation of
the strike order vhich wr.s to be distributed and circulated among, dis-
trict and local unions in the same manner as the strike order had been
issued and this to be done by Hovember 11, 1919.
(*) Section 4 of the Lever Act made it unlawful "■.to conspire, combine,
agree or arrange with any other person (a) to limit the f.ricilities for
transporting, producii-g, harvesting, manufacturing, supplying, storing,
or dealing in any necessaries, (b) to restrict the supply of any neces-
saries, (c) to restrict the distribution of saiy necessaries, (d) to
prevent, limit, or lessen the raanuf.acture or production of any neces-
saries in order to enhance the "orice thereof" .
9337
-161
The United Mine Workers' officials issued craicellation orders
plong the lines laid down by the court, hut the strike preparations
went forward. (*) The Bureau of Mines estimated that 418,279 men or
67.2 per cent of the total numher of men employed in the industry were
engaged in the industrial dispute of 1919. The strike at its naximura
tied up 71 per cent of the coal producing capacity of the coimtry. In
many fields -- Northern Pennsylvania, Fitts''o\argh district, Ohio, Michigan,
Southern Appalachian, Indiana, Illinois, lov/a, Arkansas, Oklahoma and
YiFashington — the strike was 100 per cent effective. Fnile in part of
central Pennsylvania, Curnherland-Piedmont , Pairmont, l;ew River, Missouri,
Kansas, Monttoia and Wyoming, the strike at its height affected 90 per
cent or more of the productive capacity. In some fields the strike was
100 per cent effective from ITovernber 1st to the middle of December. In
other areas the men were out only a week or two. (For a statistical pre-
sentation of strike effectiveness in 1919 see Table I.)
_ Since a joint meeting beginning on November 18, h-d reached a
deadlock the Secretary of Labor proposed a i:;;eneral wage increase of
31.6' per cent as a basis of settlement This amount supposedly represented
the increase in wages to tonna^ge v/orkers necessary to correlate with
increased living costs a:id extended to day workers. The proposal was
accepted by the miners and approved by the operators on the condition
that the Fuel Administration would increase prices sufficiently to yield
a profit. The conference adjourned and Secretary of Labor Wilson's pro-
posal was referred to Dr. G-arfield. The latter stated his conclusions
to the miners and operators on November 25, He refused to approve the
31.6 per cent increase and offered instead a 14 per cent increase
(&arfield Award) . The new figure was derived from the same Bureau of
Labor data used by the Secretary of Labor but was based on a weighted
average increase to all miners necessary to adjust to the increased
cost of living. Tiie miners refused this proposal but the operators
readily accepted it.
Federal troops were sent to West Virginia, Pennsylvania, Tennessee,
Wyoming, Utah, New Mexico, Oklahoma, Kansas and Washington to protect all
men who desired to work in the mines. A public statement urging strike
settlement was issued by President Wilson on December 6th. After a con-
ference with government officials, the labor representatives announced
on December 10th that the miners would return to work with a 14 per cent
wage increase. They resumed work on the coiidition that the President
of the United States should appoint a commission of three, representatives
of the miners, operators and the public, whose report should b e accepted
as a basis of a new wage agreement and of an adjustment in prices, if
necessary.
The Cor.i.nission, known as the United States Bituminous Coal Commission
was appointed on December 19, 1919 and began hearings on January 12, 1920
and reported iiarcn 10, 1920, v.hich was within the 60 day limit set for
its activities.
(*) Considerable controversy developed over the v.'ording of the union
order. It was argued that the order was so worded that the local unions
paid no attention to the cancellation order from the international union.
9837
-166-
TABLE I
Liaxinum extent to v;hioh the productive capacity of the cool
districts vms curtailed during the great strikes 191C and 1922
st. Capacity
"e strike
Central Fen-.rylvania
neotior.s
Section B (ir.Y.C.S.R. " "
Section C (Buffalo, Rochester
and rittsbur^h R.R. c:
others)
I'orthern Pennsylvania
Pittsburj^h, Fa.
r^n:.andle, .est Virginia
estraoreland, Latrobe, Greens-
hurg, Legonier
Connellsville
Somerset
Cunberland - I-ie'.nont
Fairmont, .est Va, e/
l^orthern, Ohio
Liohigan
Southern, Oi'.io
:.ortheastem Lontuciy
Kasord, Kentucky
Konova - Vhackor
Logan
■..e-.v River
"finding C-ulf
Pocahontas '•■ Tu.-; iliver
:;outhv.'ostem Virginia
Southern Appalachian ^
iilabpma and Georgia
V.'estern Kontuo!:y
Indiana
Illinois
loiTa
ICissouri
Kansas
Arkansas
Oklahoma
1 orth T'akota
l.ontana
Colorado
Utah
".:ev; I.exico
'..ashington
" ."y oraing
Total United States
100
a/G7
100
o/'95
61
44
5
a/35
0
a/81
6
it>8
38 /
90 S/
85
87
100
95
100
100
100
o/lOO
98
a/'5S
0
a/15
0
y
Zy
57
48
58
100
c/lOO
100
o/lOO
100
100
99
93
99
94
100
96
100 ,
79
50^,
-J
25
37
98
Jist. Prod,
in 1918
71.4
73.3
61,629,000
a/ 25,000,000
a/ 16,000,000
a/ 20,629,000
8,051,000
48,299,000
3,255,000
17,701,000
35,677,000
7,194,000
7,073,000
20,104,000
50,287.000
1,465,000
15,768,000
7,109,000
2,364,000
13,324,000
7,024,000
10,307,000
9,292,000
5,156,000
23,120,000
9,041,000
11,712,000
3,202,000
19,252,000
10,833,000
30,679,000
89,291,000
8,192,000
5,638,000
7,562,000
2,227,000
4,813,000
2,261,000
720,000
4,533,000
12,408,000
5,137,000
4,023,000
4,082,000
9,438,000
579,281,000 ■
a/ Fartly estimated.
^ Of the capacity of the iiarlan County Operators iissoc. 61> ivas closed but the LjTici. :. ines
continued to operate,
c/ Certain stripping pits and lines serving purely local -trade continued to operate,
d/ Less than iialf of 1 per cent.
e/ Includes all of "i.orthom 'lest Virginia except Panhandle and Cumberland-riednont Districts.
f/ Inolu-':es all high-volatile coal produced in Southern .I'est Virginia except that in Tew
River, Logan h i'.enove- i'hacher districts.
^ Includes Tennessee and all of SoutheastJCentuol:y except harlan County
h/ Exclusive of production in Alaska, California, Idaho, '.."o. Carolina, Oregon and
South Dakota.
Source: "Coal in 1919, 1020, 1921" pp. 505-506; "Coal in 1922", pp. 510-61S. Based on
vreekly production fi,-;ures.
;i'j:v,: Those figu-es represent not the • ercontage of the mines closed dcvm by the strike
but rafrer the percentage of miners that v;ere absent from vrork ar.d therefore show
the lart of the nonoal producing po-Jfer of the district shut off by the strike.
It does not mean that 81,. of the mines in the Connellsville district v^ere thrown
idle by strike for a large number continued to operate with depicted forces. It
does mean that something like 81.; of the employees vrere e.hsent from vfork at the
na-.ent of maximum effectiveness of the strike and that potential shipments v.- ere
out to something like 15> of v/hat had been possible before. Because ti»e moment of
maximum effectiveness did not come in all districts at the same time, the shut-
dovm over the country as a vfhole vms never quite as great ns is here indicated.
9837
-167-
Despite efforts to hnve the U. S. Bitminoas Goal Conmission arrive
at unanimous conclusions, such agreement "?3 not reached. The Coranission
presented -lajority and minority awards. The majority awa.rd provided for
an increase of 31 per cent to tonna£:e nen and 20 per cent to day wori^ers over
over the rates prevailing; on Cctoher 31, 1919 prior to the G-arfield Award.
This award meant a wage increase of 24 cents per ton for mine run coal,
pick and machine, 20 per cent on yardage and deadwork, a ;-1.00 per day
increase to day men. It refused to grant the six-hour day, recommended
setting un of hipprtite' - groups in various districts to study wage rates
and T/orking conditions, and stated that the awc.'.rd shoujd "be effective for
two years from April 1, 1920. The minority award differed primarily on
the low increase to day workers. The Commission's award applied only to
the Central Competitive Field and the outlying districts under the control
of the union. But the award recommended that operators in Alabama,
Tennessee, Eastern Kentuclcj'-, and Marjrland should arrange to effectuate
the provisions of the award in order to maintain industrial ;oeace" and
tranquility.
A suDsequent joint conference held in New Yor^- on March 29 led to
the formulation of a joint interstate agreement (effective April 1, 1920
to Ilarch 31, 1922) which incorporated the Co-mission's award.
Despite the joint agreement, however, the award "as received with
considerable dissatisfaction in Illinois, Indiana and Ohio. The chief
causes, of discontent were the use of each district to adjust internal
differences, the retention of the penalty clause, and the inequality of
the T.'age increase to day workers as against tonnage men. The refusal of
the Illinois operators to accede to the mine worker' s 'demand for ?r2.00
per day increase was followed by strikes in many Illinois mines. The
operators held that these walkouts were illegal and in violation of the
Commission's award. They petitioned the Fresidert to take action in
checking the strike. The matter rm.s referred to the Secretary of Labor
who on July 25rd, appointed three conciliators to go to Illinois to
attempt to end the strike.
Meantime the strike had spread to Indiana, Iowa, Ilansas, Arkansas,
and parts of Ohio and Pennsylvania, president TTilson stated t'lat upon
resum-ption of work by the miners he v.'ould invite the interested narties
to a meeting of the joint scale committees for consideration of any in-
equalities '.Thich may have developed from the Commission's award.
Following the receipt of this statement ,^ the union ordered the men
to return to work. By August 3rd, 50 per cent of the Illinois mines
were operating s,nd a week later po^actically all the mines in Illinois and
Indiana had resumed work.
A meeting of the joint scale committees was called by the President
on August 10th. This meeting was held August 14th in Cleveland, Four
days later the conference adjourned without agreement. Separate district
agreements were then authorized. A joint agreement in Indiana led to an
increase of $1.50 per day for day workers. Similar settlements were
made in the other three states in the Central Com-oetitive Field, as well
as in the Southwestern Interstate Field.
9837
-168-
Aside from the dispute arisin£^ over the day men wage scale, the
union r/as exerting its efforts to retain and organize areas in the South.
The international executive "board of the United Mine Workers, upon peti-
tion of the Alabama officials, surveyed the conditions there on Septemher
1st, and authorized a strike on Septeinoer 7, 1920. The union stated
that its "basis for the strike was the refusal of Ala"bama operators to
accept the Bituminous Coal Commission's award. The operators regarded
\inion recognition as the dominant issue. Thj strike involved 8,490 men
for an average of 94 days, ending Pehruary 22, 1921. Several months
after the strike had "been in effect, it was suhmitted to Governor Kilty
of Ala"bama for ar"bitration. The C-overnor's award was unfavora"ble to the
miners. The strike marked the loss of Ala"baraa to the United Mine Workers.
Perhaps the most "bitterly contested strike of the year occurred in
the Kenova-Thacker (Mingo Countjr, 'Jest 'V"irginia) in the Tug River "Valley,
"between West "'/irginia and I[entuc!:y.
The depressed economic conditions of 1921 resulted in two trends of
development (1) operator dema.nds for wage agreement revision with union
refusal in m3.nj coal fields (2) in other areas agreements with the United
i.iine Workers were "broken. John L. Lewis annoiinced a policy of no wage
reduction and no step "baclrward.
By the middle of the summer of 1921,' demands for wage reductions
came from operators in Pennsylvania, Washington", Iowa, Kansas, Colorado,
West "Virginia, Tennessee, Ala"baraa, Texas, and Missouri, producers in
the Central Competitive Field (with exception of Ohio) were a"ble to
withstand the competition from the non-union producing areas, "but the
areas "bordering on the non-union fie!lds were hard hit. Central
Pennsylvania producers com-oe ting with the non-union fields of Westmore-
land and Somerset requested wage reductions, as did Georges Creek and
Fairmont operators facing similar competition. These requests were
not granted.
In Washington, Texas, and Colorado wage agreements were changed
without union ssJiction. Washington operators announced a return to the
Octo"ber, 1919, wage scale and contract rates effective March 15, 1921.
The union refused to accede and many m.ines "began operating on a non-
\inion "basis. Colorado Fiiel and Iron Company announced (August, 1921)
a return to the 1917-1919 scale. It was approved "by the Employees
Representation Plan, "but the union employees went out on strike.
In Texas some 800 miners were engaged i;i a strike.
The United Mine Workers continued their efforts to organize the
non-uni'on coal fields of West Virginia, centering in Mingo County.
The emplojTnent of Baldwin-'Felts detectives "by operators and the eviction
of striking miners from company owned houses, intensified hostilities.
The Governors of "both West Virginia and Kentuclcj'- requested federal aid.
9837
In June more violence occurred. About Auf^ast 20th hundreds of union
miners assenbled at Marmet, U'est Virginia vdth the intention of marching
on Mingo County, some eighty miles distant. The march began August 23rd
and two days later it was reported that 4,0C0 miners were in the assem-
blage. Hundreds of individuals were deputized by the Logan County sheriff
preparatory to halting the advancco The Governor appealed to the War
Tepartment for troops. A liVar Department representative investigated the
situation and interviewed the district union officials which resulted
in halting the advance. The alleged firing by state troopers upon some
armed miners (August 28) resulted in a renewal of the march. A proclama-
tion issued by the Presic'ent on August 30th ordered the marchers to
disperse. The area was placed under martial control a few days later
when some 2,000 troops arrived. Conditions soon quieted down and by
September 8th some of the troops v;ere withdrawn. All the troops left the
strike zone by December 6th, but many miners continued on strike.
The wage agreement, made in 1920, called for an interstate joint
conference to be held prior to April 1, 1922. As the expiration date
(March 31, 1922 ) of the joint agreement approached, efforts were made
to begin new negotiations. The mine workers extended invitations to the
operators to meet in a joint conference at Pittsburgh on itanuary 6th,
Indiana and Illinois operators accepted the invitation, but the Pitts-
burgh Coal Producers Ass'-ciation and the Southern and Eastern Ohio Coal
Operators Association refused to attend. Because of inadequate represent-
ation the meeting was called off.
The coal operators were becoming increasingly dissatisfied with
the collective bargaining arrangements with the union. The business
depression beginning in 1921 was attended by decreasing sales realiza-
tions for coal, while wage costs were fixed and inflexible. Moreover,
the operators argued that the interstate agreement for the Central
Competitive Field was unsatisfactory. They argued that mine labor was
demanding negotiation in unwieldy units, whereas the proper basis for
negotiation was the individual district because of the differences in
competitive conditions affecting each one. The operators also contended
that the original conditions - East - West competition - which resulted
in the Central Competitive Field arrangement had gradually disappeared.
The increasing significance of the southern coal producing areas, "m-
pecially West Virginia and Kentucky, in the competitive markets plus
the fact that these areas were largely non-union and so not subject
to fixed i='age agreements made for a North-South competition rather than
the East- lest which had previously prevailed.
Despite the fact that the mine operators' contentions continued
for more than a decade and that they were besoming increasingly opposed
to collective bargaining under the old Central Competitive Field pattern,
the United Mine Vvorkers strenuously resisted any rearrangement of the
collective bargaining procedure. The union was aware of its ineffective-
ness in bargaining on a Korth-South basis bacause the southern fields
were mostly unorganized.
9837
-170-
The union did not agree to a clian.j:e in the collective 'b&rgaining policy
Tontil 1928 0;^ vhlch time it ha.d "been grectlj'- rea'rened and manj'- operators
had tiirned to open-siiop operation. The inaoility of the industrj?- and
lator to rer.cgusf thenselves to the changing competitive relationships rras
perhaps a primar/ eiirplanation of tlis disintegi^aticn of collecive "bargaining.
It was not imtil the passage of the T.I.Ti.A. TThen Section 7 (a) of that Act
operated to unionize areas both north and south of the Ohio Hiver that the
collective bargaining pattern rjas changed sc as to recognize the Forth-
South competition. The mine rrorkers, follov/ing the dictates of a reconvened
convention, renewed their' invitation to the operators to meet in a joint
corjference on Llarch 2, 1922. President Harding on Jehruarz 24th instructed
Secret? rj- of Labor Davis to use his efforts in bringing about a joint con~
ference. Secretary" Davis found the response to his efforts unsatisfactory.
Tlie refusal b;- the operators to meet in joint conference v:as folloi'ed
by an official strike call issued on Uarch 20th to be effective Llarch 31,
1932. Tlie strike begsji April 1 and soon became fairly complete. (See
Table II.) For the countr:>- as a'whole, 460,589 men or 67 per cent of the
total number of men 'employed in the industr:,'- rere engaged in the strike. (*)
The averrge number of da;-s lost per nan on strike amounted to 117. The
strike was 100 per cent effective in Michigan, Indiana, Illinois, Iowa en.d
!7yorair^ (see Table I ). Other areas which were almost corapletelj'- sliut down
(90 per cent or more) were Central Perjisyivania, Pittsburgh district, Ohio,
Kanawha, iiissouri, ICansas, Arkansas, and i.Iontana.
A nijjnber of factors combined to make the 1922 strike the greatest in
the industr;;-' s histor;'-. Although the United I.Iine 'Workers had been losing
strength, especially in the fields south of the Ohio River, strong support
for the strike was gained In/ the walkout of approximately 100,000 miners in
the non-union areas of Connellsville and Somerset in Pennsylvania. These
areas, producing more than 4-0,000,000 tons annually, had talcen a negligible
part in the 1919 strike, but more tlian 80 per cent of their production was
curtailed in the 1922 strike. In contrast to this support are the losses in
strike effectiveness in 1922 as against 1919 in Panhandle, {1. Va.); North-
eastern Kentucky'-; rew Hiver (TT. Va.); Southern Appalachian, (T7. Va. and S.
IC;^.); Harlan, (l^'-.); Alabama and G-eorgia; and '7e stern Xentuclr,'- fields. Op-
ponents of the international union claimed tha.t the union officials had
betra:-ed the strike by. allowing District 23 (TJestern Kentucl;^^ to continue
production on the old" wcge scale until April, 1S23, ( **) and b-'- signing a
two-;'err contract in District 19 (Southeastern Kentuclc;'' and Tennessee).
(*) Coal in_ 1922, U. 3. 3rj:-eru cf I!incs
(**) Since the 7est"rn IZentuclcy contract did not expire until April 1,
1C23, the United liine 'Tor!:er officials held that they '-ere obligated
to uphold the tradition of not violating an existing agreement.
9837
-171-
Tatle II
Percentage of F'^ssible Full Time Q-peration
of Union Bituminous Coal Mines Before ,
During, and After Strike of 1922 1/
Jan.l
Coal Districts
Apr.l
Ar)r.
May
July
July
Aug
Sept.
1922ay 29
27
1
29 lb/
19
2
Oklphoma
59.6
15.0 :
.3)2.0
16.4
11.9
16.0
42.6
Iowa
76.4
0.0
0.0
0.0
0.0
0.0
97.1
Ohio, eastern*
46.6
0.0
0.0
0.0
0.0
0.0
47.7
Missouri
66.6
0.0
2.0
4.1
5.0
7.0
53.8
Illinois*
54.5
0.0
0.0
0.0
0.0
0.0
62.8
Kansas
54.9
12.0
14.0
24.3
21.6
14.7
84.5
Indiana*
53.8
0.0,
0.0
0.0
0.0
0.0
m
Pittsburgh, rail*
39.8
0.0
0.0
0.0
0.0
0.0
m
Central Pennsylvania
50.2 •
11.9
11.1
11.6
11.6
14.4
72.7
Fairmont
40.0
3.8
5.5
m
4.1
10.9
41.8
Kentucky, western
c/
37.7
59.3
76.1
70.5
52.9
51.9
45.7
Pittstur?: , rail & river*
31.9
0.0
0.0
0.0
0.0
0.0
m
Kanawha
15.0
2.1
6.1
10.0
6.1
8.7
19.5
t)lxio„ southern*
24.3
0.0
0.0
0.0
0.0
0.0
49.4
1/ Wyckoff, Vertrees J,, The Wage Policies of Labor Organization in a
Period of Industrial Depression, 1926, Johns Hookins Press, Based upon
U.S. Geological Survey reports in Coal Age for period covered,
aj Strike began April 1, 1922.
b/ Strike ended August 19, 1922. September 2nd was nearest to a complete
report fcr the districts listed.
c/ Western Kentucky worked under a. no-strike agreement.
* Members of Central Competitive xaeld,
NR No Report.
9637
The transportption situation in 1922 addud greatly to the effect-
iveness of the co,-^l strike. On July 1, 1922 the Hsilray Shopmen went
on strike in protest ng.iinst wr.ge reductions^ .In addition, the rail-
roads were iacv,'d vdtna gtnerai car' shortage at its iiiaxiraaia exceeding
179,000 cars. The supply of cars '''as wnollj inadequate to meet the
demands of the increased outuut in the non-union fields. Even after
the coal strike end.d (August 19, 1922 ), the car "shortage continued
bocause of the unusual consumer' demand.
Fear of a coal shortage plus the violence which attended the strike
as at Herrin, Illinois and at Clif tonville, V/est Virginia, led to
government intervention. The President on Juno 28th called for a confer-
ence at the Vv'hite Eouse for July 1st. The operators' and minurs' rep-
resentatives met with the President'again on July 10th-, .'at which time the
President pro-oosed that:
1, The miners return to work at the wage level of March
31st until August 10, 1922.
2, A coal .commission he created consisting of three -mine
worker representatives-; thrc?e operator representatives
and five Presidential appointees. The decision of this •
grou-o to he final. '
3, Tne comjiission shall detLrraihe within 30 days frgm
July 10, if possible, a temporary basic wage scale 1d
be effective until l,'arch 1, 1923. If this scale cottld
not be effected, then the commission should continue
the 1922 scale, ' " ,
4, All phas.es of the industry should be studied by the commission.
The miners and operators indicated willingness to accept, but the
miners withheld acceptance of arbitration. Pittsburgh operators, on the
other hand, suggested separate arbitration for their district, 1917
wage scale and elimination of tiic check-off. .
The operators were assured of 'governmental support where mines -
were run with strike-breakers. Telegrams were sent to the governors f,?
twenty coal producing states offering federal sunport v,'herc state
agencies were inadequate. Troops '^ere held in readiness for strike du1:y.
On August 1st, the luiners invited' the Central . Competitive Field
operators to a joint conierence to be held in Cleveland Augu.st 7th.
Illinois operators refused to attend, insisting on arbitration. 'Less
than 20 per ccnl; of the Central Competitive Field's tonnage, mostly
from Ohio, was represented at the conference. Later .on producers in
the outlying fields were admitted to the meeting. A sub-committee report,
favoring a renewal of the March 31, 1922, contract and a, re;sumption
of work met with a pproval on August 15ti-i. It was also agreed to hold a
joint conference in Cleveland on October 2nd. At the latter meeting,
provision was made for a commission to formulate n method to negotiate
a wage agreement for April I, 1923 and that a joint conference be
hold January 3, 1923.
9837
-173-
. Pri-op iro this time, hoAfever, the United Mine Worker President
recogniztd the inpbility to tring the Central Com-oetitive Field
operptors in line as a unit. He, therefore, made it possible for any
groups or individual operp'tors in the. i'ield to enter into the agreement.
As a result, it -^as said thpt the Central Competitive Field could no
longer be considered as a basic unit. The 1922 wage agreenient exteaid^-J
the previously existing (1920) basic day ^vage rate of $7,50 and was
based upon ccllectivc bargaining rather than arbitration.
By August, 19, the agreement had been signed by the majority of
operators in Ohio, Fairmont field, Liicnigan, and in part of Central
Pennsylvania so that coal was already beginning to move. During the
following week (August 20-25), additional agreeiaents were signed in
Kanawha, Michigan, i.lontana, Illinois, Indiana, Wyoming, and Southwest
Interstate Field. Several days later agreoraents were signed in the
State of Washington and by important producers in the Pittsburgh district.
Althor.gn the strongly organized fields had resximed work the strike
continued in fields of t?/o types:
lo Formerl;/ non-union areas where men had struck and
continued to hold out for recognition and wage con-
tracts. This group was represented by the Ccnnells-
ville district and parts of V/estmoreland, Somerset
and Central Pennsylvania.
2, Areas where operators were unwilling to renew the
agreements formerly in effect that had expired on
March 31st. In this group belonged the Chesrcekkc
and Ohio section of Kanawha and part of the Georges
Creek and Upper Potomac region.
Meantime, President R arding in his address to Congress on August
18th, asked that a law be enacted providing for a commission to
investigate the industry. Enactment took place on September 22nd and
on October 10th, the President named the members of the U.S. Coal
Commission. This agency was to make its first report by Jaajrary 15,19^.-^.
The general freedom from industrial disputes during the year 1923
was largely attributable to the urgent request made by the U.S. Coal
Commission that operators and miners meet in joint conference. The
meeting took place from January 17 to 21st, 1923. A tri-state agreement
was signed by the operators of Illinois, Indiana, and Ohio. Sonewhat
later the Pittsburgh Producers' Association and the Pittsburgh Coal
Company joined in the agreement. The contract was made effective until
April 1, 1924 and provided for a continuation of the wage rates in the
previous ag eement. It also provided for a readjustment of inequitable
differentials ih the various districts. The Southwestern Interstate
Field alsP continued its agreement.
Perhaps the only important industrial dispute in 1923 was that in
Gvunberland - Piednont fields of Maryland and West Virginia. This dis-
pute was really a heritage of the 1922 strike, having begun on April 1,
1922. It was not declared ended until November 22, 1923.
9837
1924 - 1933
A j':int ccnference of operator'- a,nci^ inin3rs' r3'-)reRent?tiv8s
for Illinois, Indiana, Oliio, and. Western Pennsylvani? began on
Fotruary 19, 1924 at Jacksonville, Florida. This conferenca renev/ad
tlx8 -previously existing wa^^ie rates for tae period April 1, 1924 to
Marc:. 31, i?27. In the testimony presented tefore the Senate Com-
mittee on Interstate Coanerce, v-ihich v/as investigating conditions
in the coal fields of Pennsylvania, West Virginia, and Ohio,
Johai L. Levifis, United liine Worker President, stated taat tne a.gree-
ment was ra;vde possihle thro^ig^.i tue cooperation of the agencies of
t.-ie Pederal Government, tie Depa,rt nent of Justice, Coiitaerce and
Lahor ^^a-ticip? ting. (*)
'',7-ien te Jacksonville Agree:nent was negotiated, the '.Yestern
Kentuclq/j Kanavua fields in Southern West Virginia, and Fairmont o.nd
Morguitown fields in Northern West Virginia operated on a union hasis.
Tlie ICana,vii£i and Western Kentucky operators refused to "become parties
to tie Jacksonville .Agreement and closed down their mines. Since
the sit-'.ia.tiai involved the survival of the iinion in these fields, a
bitter struggle ensued. The industrial dispute dragged on many months
and resulted in the elinuno.ti ,n ■, f the United Mine Workers from taose
fields.
At tie time of tlie Baltimore Agreement (co.unterpart of the
Jacksonville Agreement for Northern West Virginia), liL^rch, 1924, t-iere
were 79 union and 74 non-union companies operating in Northern West
Virginia, (2C2 coirroanies were idle). (**) The union mines produced
70 percent of the tonnage. One month later, it was s,ahd, that the
union ccmpc'.nies ur.d decreased from 79 to 49 anr] that taeir tonfietge had
fallen tc 60 percent. Tiie passage of, less, than a year (January, 1925)
found onl-y 24 union companies, continuing operations, while non-union
.comp.?Jiies h?,d increased to 129. John L. Lev/is estimated, that 25,000
men were effected in this area.(***)
(*) ■ har.ings before the Com.uttee on Interstate Coiiimerce,
■'■ United States Senate, 70t.ii Congress, 1st Session, S.
■■Has. 105, Vol. I, p. 378. Mr. Lewis pointed out that
t: a government assistance is> confirmed in the twelfth
annualrcport of the Secretary of Commerce for the
VtTCcl year ending June ZO, 1924, pp.13 and 14.
(**) Coal Age, January 14, 19,]6, p. 45 et scq.
(***) ■.;er.rings on S. Res. 10-5, 70th Congress, 1st Session,
Vol. I, p. 331.
9337
•17£
Tlie struggle between the union and non-union operations was
characteristic of the industry throudiout the period 1924 to 1927.
Por raanjr -laiths after the strike of 1922, wage rates in non-union
fields approximated union rates, but late in 1923 wage cuts were re-
ported. Socn after the signing of the Jacksonville Atireement, most
non-i-aii-'n opera,tors reduced the rates first to the 1919 scale and
later to the 1917 level or lower. Tnus while many non-union mines
were paying between $4.00 and $5.00 for inside day labor, the union
fields wer2 faced with a standard day V7age of $7.50. Many operators
in onicn fields felt they could not pay the Jacksonville scale and
shut dovrn their mines, heavy stocks of coal accumulated in 1923 in
antici;Dr.ticn cf a suspension of activities were carried over into
192<': and served to depress the market. .4n example of the competitive
advrntr.ge cf the lo¥/er wage scale in the non-union: field may be
seen m tie fact that in 1924 non-union Western Kentucky sold coal
at an average sales realization of $1.73 f.o.b. mine, whereas in
Indiajia, its union coiUpetitor, the average sales realization was $2.16,
a difference cf 38 cents per ton. By 1925, t-ie competitive advantage
had increased to 58 cents per ton (•;il.44 in Western Kentucky as against
$2.02 in Indiana). (*) In addition to the advantage in wage rates,
the non-union fields (primarily east of tlie Mississipoi River and
South of t- e Ohio Siver) were better off since they were newly developed,
havin\, entered into production ma^ e recently than the central competi-
tive region, and also because they produced, in general, a coal of
superior qv-ality.
The differences in the cost of production were reflected in the
fact t.iat business v/as diverted from the northern to the southern
fields. Between 1923 and 1926 production in Ohio decreased 31 percent,
in Indiana 12 percent, and in Illinois 13 percent. (**) As against
these decreases. West Virginia showed an increase of 33 percent,
Kentucky 41 percent, and Virginia 20 percent.
The coaipetitive conditions described above were evidenced by
constant efforts on the part of the union operators to secure wage
rate revisions. Since the union v/as' adamant in its opposition to
wage scale changes, three separate developments were undertaken to
break the United Mine Worker contractsi (***)
(a) Indiana - A number of mines in Knox Co'iinty entered
into cooperaiive mining sciemes in order to circum-
vent the contract wage scale. Mines were "leased"
to groups of miners and former subordinate officials
of the operating companies. Tie lease set up stand-
ards cf work for t^e lessees (miners) and provided
(*) C:cl in 1925, p. 397.
(**) Coal m 1926, p. 429.
(***) Coal Age, October 8, 19?5, pp. 491 - 495.
9837
-176-
tiat f-ie sales agent of tie lessors (operator?)
sa^uld receive 10, cents per ton. Tae United iline
"Torkers opposed tae plan and t.ireatened miners '
witli loss of union mernbersnip. A temporary in-
jvjicticn, seeking to restrain United iiine '/'iTcrker
s,cticn, was later dissolved. The union was
successful in its attack.
(b) ?:.i:ieroy Bend-Qliio - Tlie Ohio district conven-
, tion of the United i/iine Workers (19-^5) resolved
t„ "bar miners engaged in cooperative mining
sa/.e^aes from union membership. Cooperative mining
in 'hio v;as li.aited to . small enterprises, i.iore
si:^-nific£jit tlian cooperative raininj; was tie open
e^ttack made by Pomeroy Bend operators aj^ainst the
Jacksonville Agreement. The lea.der in the move-
■■"aent to return to the l\Tovember, 1927 v;age scale
was tie Pittsburgh Goal Company. Soon a nu:nber
of other companies followed suit. Considerable
;property damage and ph.ysical violence occurred
in th.e effort to maintain the contract sale.
(c) 7o?tei-n Pennsylvania - Tne Pitt spur gxi Coal Com-
pany, on i.iay 1,9, 19^5, closed tne last of its
■5<'.- mines operating., on t. e Jacksonville scale.
It be^an reopening its mines (August 20) ori an
open sncp basis with reduced weige rates (1917
scale). Other companies in t..ie district follow-
ed suit.
According to the testimony offered by a United Mine Worker
official at a Senate Co:-i.rdttee hearing, tne Pittsburgli Coal Company ei:*-
ployed 16,000 men prior to August, 1925. (*) ' After the mines were
reopened on an open shop basis, union miners were bitterly opposed.
By 1927, the company was employing 9,000 men.(**)
Tlie Consolidation Coal Coiiipany, operating in thrj Fairmont field.
of '.Test Virginia, coased to operate on the United Mine Worker contract
on June 1, 1925. (***) Other operators in that region as well as in
tie adjoining Mcrgantown fieldg .entered upon a similar prograin.
(*) Ibid, supra, Vcl. I, p. 13.
(**) Ibid, supra, Vol. II, p. 3323.
(***) Ibid, supra, Vol. I, p. 576.
9837
T.ie ant.:racite strike wliic]i began on September 1st served as a
temporary relief for te depressed bitu'nmous market. The chief
beneficiaries were tiie smokeless coal fields in So-athern '.Test Virginis
and Central Pennsylvania and higli volatile lump coal producers close
enoUi^^i to t>-e anthracite region to participate in tiie demand.
Tlie situation in the Southwest Interstate Field during tne
period 1924 - 1927 was similar to tnat in other areas. The non-
union movement began when tiie operators delayed from March 28, 1924-
to.l'^yS, 1S24 before consenting to a 3-yaar extension of the rates
which had applied from 1920-1923 (Kansas City Agreensnt). Operators
had re-uested a reduction in day rates from $7.50 to $6.00 in order
to meet th.e losses to competing fuels and the lack of a home market.
■Tit.', in less than s. :aonth after t/:e sign^n^ of t .3 Kansas City
Agreehient, .mines in tae i/icCalester-Wilburton district (OkLaiioma)
reverted tc tl'.e November , 1917 scale. B.y Jul.y, the open shop move-
ment was fully loiider way and violence occurred. At the end of the
year (19.54) onl.y the ■lenryetta district in Oklalioma continued to
retain the agreed scale. Eirly in 1925 the "'enryetta district
ceased t:v maintain the Jackscnville-Xansas City Agreerrent. A strike
order was issued in August, 1925 against all mines in District 21
(Oklahoma-^urkansas) paying less than tae Jacksonville scale.
The r/oen shop movement in Arkansas wa,s not really in full
swing until 1925, alt-iough one operator broke witi tne union in
January, 1S.54. Industrial dispu.te data Si.LOW tiat 32percent of the
men in the Arkansas fields were on strike in 1924 and over 15 percent
in 1925. (*) The average days lost per man on strike in that area
were 75 in 1924 and 8 in 1925. Although the percentage of men repre-
sented as striking in Oklahoma was lower than in .Arkansas (21 in
1924 and 5 in 1925) the dura.tion of the dispute was longer (110
days lu 1324 and 48 days in 1925 - average days lost per man on
strike) .
Labor conditions in 1926 were alleviated somevThat by several
factors working together. One factor was the increase in industrial
consumption at home. Despite the fuel economy and the competition
of oil said water pov/er, home industry demand exceeded that of the
imi-nediately preceeding years. Some additional 12,000,000 tons of
bituminous coal were needed to replace the loss resulting from the
ant];.ra,cite suspension vmich continued from the preceding year into
early 1926. Added to these factors w,'?.s the general walkout of the
British miners on Ife,y 1, 1926, resulting in an expansion of sea-
borne exports, total exports of bituminous coal in 1926 reached
21,510,000 tens, an increase of 450 percent over 1925. (**) The
expert tr^-^.de was beneficial to tue eastern bitUiiiinous coal fields,
especially these of Pennsylvania and lest Virginia. Interior
(*) Coal in 19.26, pp. 422, 4,23.
(**) Ibid, Supra, p. -^.24.
9837
fields also lienefitted Eiiice the cometitive -oressure from eastern sliiioT>ers
was lessened. Alabama --iro duct ion was stimulated' in tlie late fall when
delay in loading e::nort coal at eastern -loorts caused diversion of foreit,-n
vessels to Pensacola.
Tlie market conditions caused 07 the British strike resulted in a
tem-porary increase in non-union wat;e rates. A numoer of -anion mines in
Pennsylvania and Ohio had closed dovm, but with hi^,her prices res\uned
production at the Jacksonville scale, llearov open shon operations were
soon contiDelled to increase their wage rates. One lar^e conrpany in the
Pittshur^i district, which had been operatint^- open shoT since August,
1925, aimounced^ a-i increase in wa.;;e rates (effective October, 1926) to
a level 5 per cent above the Jacksonville scale. (*) This exannle v;as
follo?/ed by other -j-iroducers in the same region and in the Connellsville,
Panhandle, and Kanawha fields and even in kentiiclcj/, Tennessee and Virginia.
Tiie relief to the northern fields and union operations was temporary.
Before the end of the year declining selling -prices brought wage reductions
in the Cumberland-Piedmont, Somerset, Cambria, and Freeport districts, and
at some o->3erations in West Virginia and Kentucky/.
Those o-perators who co-iitinued to -nay the wage rates siiecified in the
Jackso-nville Agreement demanded a reductio-n in wages w-Jien the old contract
e:oDired on liarch 31, 1927. At a meeting of the Ohio Coal Operators' Asso-
ciation held at Columbus, Ohio on January 6, 1927, a r^ro-nosal was adopted
which provided that the o-perators should have a nev/ wage scale which would
be sliding rather than fir.ed and v/hicii virould be "continuously competitive"
with wages paid in the non-union fields of the South (see Figure I). Tliis
proposal was again submitted to a i.ieetiaj 01 representatives of operators
for the Central CoiTipetitive Field at Toledo, Ohio, on January 19 and was
approved on the behalf of Illinois, Indians and Tfestern Pennsylvania. The
oiperators were generally agreed that the Central Competitive Field as a
wage making unit was dead and -chat competition was no longer east-west , but
rather north-south.
Piirsuant to the terms of the Jacksonville Agreement, representatives
of o-Derators and miners met in joint conference at i'Aecmi, Florida on Feb-
ruary 14, 1927, for the -puriDOse 01 negotiatin; a new agreement. The con-
ference was deadlocked over the operators' proposal for a reduced sliding
scale which was strongly su-nported ''oy Ohio and Western Pennsylvania and
was formally endorsed by Indiana and Illinois. This proiposal was rejected
'o-j the miners upon the ground that it offered them no' protection against
having to accent the wages, hours, and working conditions of non-union
miners employed under individual contract, in non-union territory. The
conference adjourned sine die on February 22nd.
(*) Coal Age, i'ovembcr 4, 192S, p. 541.
3837
■i?;}-
T.s tini:n policy, corninittee announced on Febriaary 23rd that any
outly..ni' -.1:'. strict could continue on tlie old scale after i.Iarch 31,
witicut prejudice pending a settlement in the Central Competitive
Field. Central Pennsylva,nia and Lvi'di^an accepted this proposal,
as did pridiicers in Wyo■-"ain^t; and ot-ier far 7ifestern States. T.ie
Soutl-v/eet end. Iowa declined. At a, ;ne5tins neld in Indianapolis on
Febru-ary Sotli, tlie policy coavnittee extended tne same privilege to
districts and individual operators in the Central Competitive
Field. Individual agreements wer3 made by some companies in India/na
and Illinois. In lestern Pennsylvania t>-e steel affiliated opera-
tors slmt down on March 31.
'Titli tie legal expiration of the Jacksonville Agreement, a sus-
pension of bitu-minous coal mining began on April 1, 1927. The dispute
involved directly about 175,000 men, exclusive of 15,000 miners in
Central Pennsylvania who suspended work on July 1st. It affected
more or less directly mining operations in a widely scattered number
of states — Illinois, Pennsylvania, Ohio, Indiana, Kansas, Missouri,
and Iowa.
In Illinois a large nuxnber of tlie miners suspended work from
April imtil the follovi^ing October. Baring this period there were
various attempts at negotiation. Finally a third conference, late
in Septeir.ber, led to tie signing of a truce agreement on October 1,
efiect:.ve ujitil April 1, 1938 maintaining the Jacksonville scale.
T--e Indiana miners and operators faced the saiiie difficulties
in negotiation. A strip pit contract was successfully negotiated
in April, but shaJt mine conferences broke up over the scale of
wages tc be paid. Finally, on October 7, Indiana also made a tem-
pore.ry r.greem.ent with the union. Similar settlements were made
in Iowa on October 4th and in the Southwestern district on October 6th.
Operat:rs in Ohio, Pennsylvania, and West Virginia refused to meet
union demands. Ohio operators issued an ultimatum that fornier em-
ployees were to return to work before July 15 on 1927 wage scale.
Oliio, wit.-, a few exceotions, and Western Pennsylv-ania had definitely
broken with the union erA were operating open shop. (*)
Tlie major part of t.ie decline in total out^Dut after tne be-
ginning of the suspension may be attributed to tne cessation of
work in the union fields north of the G-iio River. While these areas
showed a sliarp decline in production, important non-union states
south :i tlj.e Ohio Hiver shewed increased productivity. (**) A com-
parison 01 production for the seven ma: t::.s, April to October, 1937,
with t,:e corresponding period in 1926, showed a decline of 77.8 per-
(*) 14 operators in Ohio (middle district and few small operations
in riocking) signed an agreement with tne union which ran
from September 1, 1923 to i.iarch 31, 1930. The basic inside
scale was .$5.00 per day and the pickmining rate was 87 cents
per ton.
(**) Coal in 1927, p. 333. See statistical discussion of strikes
and lockouts at t-.e end of tnis section.
9837
cent in Illinnis; 46.9 -rercent in Indiana'^ .14.1 , percent, in Pennsylvani
and 67. G 'tiercent in GMo. Contrary to tiiis recpr'^. of i.sclining pro-
duction, IZentucky tonnage increcsed 19.2 percent and :/e?t Virginia
6 percent. T's.e two largest producing states souti 61" tae a'lio Hiver
and nearest tc the markets norurall./ served "oy tae llGrtiiern States
counteracted tlie restriction m tlie union areas. Consequently the
strike did not carry the threat of a coal shortage. In fact, lietv/een
April and GctclDer, only some 13, 000, COO tons were withdrawn from
storage. M
(*) iDid. svcpra. P. 33 3
L
9837
-181-
FIOTHE I
Wage proposal Submitted to the Joint "Tage Con-
ference of Operators and. Mine "iforlcers s.t I.iiami,
Florida, February 14-32, 13,^7
('Raskins' (operators') Resolution)
2e it resolved,
(1) That the wage scale for the Central Competitive
Field couiinencin^ April 1, 1927, must be continuing and at
all times a co npetitive scale wita tae wages and conditions
prevailing in "/est Virginia and Kentucky.
( ":) That in order to make effective Cia/use 1 a Goai-
missicn be selected by the resoective 'oarties to t..iis Agree-
ment consisting of four L'iners and four Operators and firee
mediators to be mutually chosen by such Commission; or should
such Conraission be unable to agree upon three persons to act
as med?.ators, or for any rea.son whatsoever shall f a,il , neg-
lect or refuse tc select such mediators, then the Chief
Ju-stice of tie United States Supreme Court shall at once
select such mediators, and sucn selection shall be accepted
by bot;.L pe-rties to this contract.
(5) That the duties of such Com:nissio n shall be as fol-
lows:
{^.) To determine a competitive wage scale for the Cen-
tral Competitive Field.
(b) To readjust such scale from time tc time in order
to mainta-in comnetitive conditions.
(c) To have final jurisdiction in all grievances appealed
from the several districts.
(d) To perform such other duties as may be -.greed u'con by
the Jo'.nt Conference of Miners and Oioerators.
9837
TilBLE III
I'luiriber of Men and Average ITumber of Days
Lost Per i.Ian on Strike in Selected Joal
Producing State? in 1927
(Derived fro:n Bixreau of Llines DrJzz)
i of Total
Avg.
No. D?,ys
Approximate
men employed
lost
"oer man
Stc.te
nmnber of men
who went on
on
?trike
strike
North
Illinois
67,000
37
150
Indiana-
17,000
71
136
Icwa
5,600
64
145
Ol-i-.
26,000
74
214
Pennsylvania
1/
41,700
27
158
Sour tj. west 2/
Arkansas
390
10
107
Kansas
3,000
43
130
:,iissouri
2,650
43
127
Okla'-iouia
163
3
156
Sout:-.
JLla'oc^'na
N
0 S T .^ I K :3
Kentu-ckir
1,300
3
14
Tennessee
50
C.7
60
Yir'-inia
K
0 S T ^ I K -^
•7e-=t Y .r^inia
08O
0.8
48
1/ Centrr.l Pennsylvania - 13,000 uien v/ent r.n strike July 1st.
2/ Vj^iXf Iterations in these areas coeratei open shop between
19-/- exi'X 1927.
9837
•182-
Tj"r/;-3 negotip.tions "based upon the Central Competitive Field as a
unit no longer being possible, collective bargaining took place for
individual districts of areas r^here union organization v^ras still effec-
tive. By 1928 most of the operators in tne States of Pennsylvania,
Ohio, end pprt of Indiana, reopened their mines on an open-shop basis
at lover wage rates in order to meet the competition of the 'onorganized
districts.
The expiration of the "truce" egreements on April 1, 1S28, marked
the cii.rtailment of mining activitj'^ in a number of union districts. The
most important areas thus affected were Indiana and Illinois. The na.jor
portion of the time lost due to industrial disputes in 1928 may be ex-
plained by the renewal in that yerr of the suspension that had prevailed,
during the middle of the preceding year.
On February 8, 1928, a joint conference of Illinois operators and
miners sought to negotiate a. ne'" contract but adjourned v/ithout naicing
an agreeiiient. The operators offered $6.00 per day for day men, and 34
cents tonnage rate, a ne'" ra.te for v/orkers in mechanized mines and im-
proved working conditions, but these were rejected by the miners. Strip-
ping operations and machine mines were informed that they i-'ere permitted
to operate on the Jacksonville scale after March 31st. The Illinois
operators at a meeting on Karch 28, agreed to make no state association
a^^roenient except at a wage which would modify the Jacksonville scale
ajid allow Illinois to regain its markets. Strip mine operations, however,
renewed the truce agreement until Karch 31, 1929.
ilany minirag operations in Illinois were suspended after April 1,
1928. The international policy ccmmittee of the' United Mine Workers
on Ju.ly 18th released district organizations from adherence to the
Jacksonville scale as a basis for ne-' negotiations. Prior to the policy
co:ni:iittee aJinouncement (May , 1928), a number of miners' local unions
in various parts of Illinois broke with the United Mine Workers ond
negotiated agreements on a lower basis than the Jacksonville scale.
Although the United Mine Workers had made agreements with some in-
dividual operators, no general resiLmption of work took place until
September 1st when a joint committee of operators and miners in Illinois
annoiuiced an agreement! The new wage scale reduced basic day ra.tes from
$7.50 to $6.10 and tonnage rates from $1.08 to 91 cents (piclonining) .
The contract was to beco.iie effective September 15, 1 = 28, and continue
ULitil 1 larch 51, 1932.
In Indiana a similar situation applied and an agreement ?^as reached
at Terre Haute on October 18, 1928, between the Indiana Goal Operators'
Association and the miners. The contract was effective from I'lover-rber 1,
1928, to March 31, 1930. The wa^e scale ¥;as the ssjne as in Illinois.
This contract was twice extended (one year each time) and so was in
effect raitil March 31, 1932.
5837
-13^
In Septemter, l'J28, under left-v.'ing leadership, rank and file
miners from eleven sta.tes organized the riational lUners ' Union. It
represented an insurgent movenent, essentially revolutionary in char-
acter, and arose out of the "Save the Union" activities of progressive
and left-uing miners who demanded a more militant policy from the
United i'ine '.Torkers .( *) The organization took advantage of the des-
perate condition of the bituminous coal miners owing to low wages,
short time, and unemplojnnent . A number of spontaneous local strikes
in the Pittsburgh district about J-une, 1831, led to a strike wave '^^hich
spread into Southeastern Ohio and northern West Virginia. Mass picket-
ing c'jid demonstrations occurred. Ey the middle of June some 20,000
miners r/ere involved. In an effort to counteract this labor upheaval,
it is said that the mine operators turned to the United Mine Workers. (**)
The Creighton Fuel Company and the Pittsburgh Terminal Coal Corporation
signed contracts with the United Mine Workers in July, 1931. In the
Scotts-Run field of Monongalia Co-onty, northern West Virginia, some 28
companies made a similar agreement.
About this time (June 27, 1331), Hr. Prank Taplin, President of
the Pittsburgh Terminal Coal Corporation, wrote a letter which has
become public information and ^'hich indicates why his company returned
to collective bargaining negotiations and also shows the close relation-
ship between wage and price competition. This letter stated in part
that :
"For the past four years these operators who have
dispensed with Union agreements have had plenty of
time to view the experience of running without any
fixed wage scale or without having any labor organi-
zation to deal with. It must be admitted that the
situation is even worse than when we dealt vdth the
union. I.iaiiy operators try to keep their properties
operating by cutting -orices to ridiculous figures, x
then go back and cut the wages of the miners, and
this continues until the level of the miners hf^s
been brought down so lovr in some places e.s to be (
a disgrace to the co'ontry. Personally, I v/ould
much prefer to deal with the United Mine Workers
than with these ruthless, price-cutting, wage-cutting
operators who are a detriment to the industry."
C
(*) Watkins, Harold H., Coal and :.:en, 1931, p. 230.
(**) Lor.vin, Lewis, The American Federation of Labor, 1833, p. 263,
9837
"The Southern High Volc.tile fields have "been cutting
vrages as well as the Torthern fields, aJid they are
likely to get 'into trouhle '/'ith the communistic ele-
ment of miners, r-.nd "before v.'e get throTjgh we may find
that the only vay to solve the wage pro-tlem is to put
all competitive fields under a vrell mane-ged union V7ith
a fixed living wage scale, to ^-Thich the miners are en-
titled, hut T.'hich never -can he done without a union
Dscause the operators nill not stick to any decent
fixed wage seale if they are left to their own devices, "(*)
The Pittshurgh Terminal Coal Corporation renevred its contract
in 1932 and 1933.
Another insurrectionist movement against the internationa.l or-
ganization of the United Mine Workers came to a head in March, 1930,
when the district union officirls of Illinois (District 12) held a
convention at Springfield, Illinois for the purpose of reorganising
the United Mine Workers. The feu?, between the district officials oJid
the international administration headed hy John L. Lewis was of long
standing. (**) The Springfield Convention delegates chose Alexander
Hovrat as chairman and later as president of the "reorganized" union.
Ho^7at liad heen president of District 14 (Kansas) -and had heen expelled
hy Lewis. It was claimed that all of Illinois, Ife.nsas, and the Soiith-
vrest irere with the reorgpnized union. (***) The district officials
held that the nation^jl officers of the United Mine Workers had abrogated
the constitution hy not calling a biennial convention in 1929. The
national officers, meantime, demanded that the officers of the Illinois
miners relinquish their authority and possessions to a. provisional dis-
trict government set up by the national executive board. (****) The
charter of District 12 hsd been revoked on October 10, 1929 and the
Intern^,tional President had appointed provisional officers. The dis-
trict officers asked for and secured an injunction restraining the In-
terna-tional Union and its af^ents from revoking the charter of inter-
fering in district affairs. The attorneys for the International Union
sorgjht to have the injunction dissolved. The hearing took place on
( *) liitujQinous Coal Code Hearings, August 10, 1933, Vol. II, p. 27:1
(**) Cf. events of 1919 Convention - the rebelling elements in that
convention had the same leadership as appeared in the 1930
Springfield meeting.
(***) Watkins, Harold M., Co-1 and Men, 1931, p. 229,
(****) Bloch Louis, Labor Ag-reeraents in Coal Mines, Fore'-'ord by
"liary Van Kleeck.
9837
Decera'Dsr 16,- 19.29 a,nd on January 30, 1930, the court refused to dis-
solve the injunction. ( *) '• ' ■
At the saine time as tne Springfield meeting, ■ a regular conven-
tion of the United iv'ane T7orl-.ers, was held at Indianapolis to strengthen
the constitu.tional and tactical position of the' administration. Loth
conve:itions appealed to the A'nerican Federation of Lahor for support.
President . G-re en made efforts to hariiionize the two fpxtions and to sup-
press dual unionism.
After a year of hitter fighting, most officers of the Illinois
district made their peace "ith the International Union. However, a
"r.c-ix^.- rnd file" convention Tvas held at St. Louis on April 15, 19"1, at
rpich somg 30,000 miners were represented, some 25 per cent of whom
T:ere Illinois miners. The convention was unsuccessful in launching a
nev; ujiion,
Scne of the. most sorious lahor disputes^ involving representation
of lahor for collective ■bargaining i^nd validity of union contracts,
r/hich \7ere presented to the lituninous Coal Lahcr Boards d.ijjring the
V:3A period arose in Illinois het^'een the United iane Workers and the
• Progressive Iliners. At the present T^riting, the controversy het'^een
these t".70 unions continues imahatedj Issues and personalities are so
intei-vie-'ed th-t no real solution has thus fpr heen possible.
. The year 1532 marked the lo^^est dei.iand for uitmninous coal since
1904. It was a year of falling prices and heavy financial losses.
P.elief of the uneuployed was especially sr-rious in many communities in
tiie hituiainous coal fields, i-'here other industries to fall hack upon
',:ere lac'r.ing and resor.rces .ere already exiia,usted "by yerxs of depres-
sion dating hack to 1924. (**) , The Ajnerican Priends Service Coy.iuittee
recognized the situation as a special relief problem. With the aid
of hoth ::;uhlic and private funds, the .committee at the peaJ-c of its ac-
tivities in 1932 fed miners' children in! :353 commxmities in 41 co\m-
ties of '.■est Virginia, Kentucky, Pennsylvania, Southern Illinois,
Tennessee, and Ii;aryland. This relief work wa,s supplernented by other
agencies covering coal p,s well a.s other ind-us tries.
Tlie 3\ year contract in Illinois expired on I'arch 31, 1932. On
Au^gust 10, 1932, after a. suspension of 19 weeks and a referendum vote
of the miners, a nev; contract was effectuated '-hich extended until
.r-rch 31, 1933. By the terras of this contract the pickraining rate
was reduced to 68^ per ton (Danville basing point) and the sca.le for
inside sJcilled men "was set '."t $5.00. On December 22, 1933, the fori.ier
( *) proceedings of the United I'ine I/orlrera of Anierica, 1930.
(**) hinurals Year Book, 1932 - li.33, pt . Ill, p. 381.
9837
contract ''as extended until I->rch 31, 193':>.
VJlien the wage scale v/aa dra'-n up und.^r the Bituminous Coal Code,
Illinois, being already under contra,ct until 1'3?5, kept the saxae ccale.
Under the amendment to tne Gof:l Code, April 1, 1934, the day rates re-
mained the same "but the hours worked per day were reduced from 8 to 7,
thus resulting in an hourly increase. The rates for pick and machine
mined coal were increased IC and 8 cents respectively.
'Jiien the Indiana contract expired a suspension occurred v/hich
lasted imtil September 10, 1952, when the Indiana operators and miners
negotiated a new contract to be in effect until March 51, 1935. J?or
the first time the scale for day men dropped below that of Illinois or
$4, 575 a.s against $5. SO. The rate for piclonining v;as 68 cents.
Under the Goal Code Indiana retained its contract rates althoiigh
the amend-nent of April 1, 1934, rdded 10 pents to the piclvmining and
e cents to the loading rates, while hours worked per day v/ere red-'.ced
from 8 to 7.
By 1952 labor organization in the bituminous coal mining indus-
try was almost completely demoralized. The brepkdown of the Jackson-
ville Agreement (1924-1927) tmd the subseouent reopeing of mines on
an open shop basis ?/as a severe blow to collective bargaining for the
United i:ine 7/orkers. The spread of non-union operations meant declin-
ing mevflbership and increasing finpncial distress for the United Mine
TJorker organization. In addition, the disaffection existing within the
rpjiks of the organization weakened its collective bargaining power.
Per exojnple, the Unite Mine "./orkers in 1J23 claimed an average paid-'^i-P
me-,.foership (exclusive of members exonerated from paying dues because of
strikes, etc.) of 445,734 men, 3ret by 1929 their membership had fallen
to 400,000 and by 1932 their claimed membership was 308,300. (*) A
United liine Worker official stated that the auditor's report showed
163,793 members in the orgsjiization for 1952. (**) Another indication
of the declining strength in the United iiine '.Yorkers may be gotten from
a survey of the financial statements submitted at the conventions.
These statements are not su.f- iciently detailed in character to disclose
txact information as to the income and expenditures of the United L'ine
YJorkers. They do sho'-', however, a definite decrease in the balance
on hand for almost every audit after 1925. Thus on December 31, 1923,
the United Mine Y^orl-cers reported that the balance on hand amounted to
$1,177,021 and that no finpjicial indebtedness existed, yet by December 31,
1953 (even after the increased membership arising under NHA) the bal-
(*) Lorwin, Lewis, op. cit., pp. 476-477. This author estimated that
t;io dues paying merabersiiip in 1932 was nearer 150,000 (p. 497).
(*=:<) proceedings of the United Kine V?orker Convention of 1932. Strte-
ment made by Mr. Eindmarsh.
.857
ance on h^nd pjiio-untec to only $311,E6-j>. This financial T^eahening aay
De r.ttriouted to declinin~ m.3nitsi-sliip and losses in union areas.
In Septemtsr, 1932, the' Profre;:sive I'iners of America ^tere or-
^rr.ised from the elements I'hich had not ret-urned to the United i:ine
TTorker fold. A hitter anttgonism continued het^'een these two rival
■Lmions.
1933
The most important events of the year 1333 for the hituninous
corvl industry centered around the President's HecmplojTnent A^reeuent
and the pas'sai5.;e of the National Industrial Hecover'y Act. The months
ir.ii.:ediately precedinr: the emergence of a single code for the hituninous
co^l industry pnd its approval "by the President on Septemher 18th ver©
er.CGedingly important for the United Mine T-iorlcers.. The union engaged
in a r,'hirlA7ind Cfimpaign using all its energy p.nd. f-'onds to bring the
miners into the union fold, , ,
The union organizers vere remarkahly successful • in their efforts,
Uith-the exception of the cpptive mines affiliated r'ith the steel in-
dxistry, no very s-'rious resistance against the United hine -jorkers nas
mads. The organization campaign among the mine workers in the Appala-
chian coal fields did, ho'vever, have to contend rith strikes in Central
Pennsylvania, vfestern Pennsylvania., Ohio, Northern V.'est Virginisi Xent\icl<y,
Tennessee and Virginia. In general, the appeal to Section 7 (a) of the
ITirA as a recognition of the right to assemble and to organize \7as ef-
fective. Six veeks after the passage of the Act, the United nine Work-
ers claimed that their membership included more than 30 per cent of the
mine vorkers in the country.
The officers of the union aovealed to the President tha.t a con-
ference be organized under the a-ispices of the Government to effectu- ,
ate a ^Trge agreement. Thin conference convened in 'v/ashington in July,
1935, and continued through August '.nd the major part of September. /
The meeting of the Appalachian coal opera.tors and representatives of ^
the United Jiine Workers, respectiveli", representing more than 70 per
cent of the national tonnage and of the employees negotia^ted a v^age
a/greenent Fhich becaj'ae effective October 2, 1S33. It established a
more closely competitive wage relationship than had ever prevailed in
■the industry. It established, in general, a base rate for skilled in-
side day men — tracklpyers — of $4,2^ in states south of the Ohio Pdver
cnc. ;?4,6C in the northern states in the Appalachian region. It was
effective until March 31, 1931. Schedules as to basic day wa^es ( in-
sic.e [^killed and outside common labor) for all districts in the United
Str.tc-3 -'ere vritten into the pitmoinour; Goal Code..(*)
(*) The rctual details of wr.ges and hours under the IMRA are discussed
in the follovinr sections.
9337
Tli3 imion drive in Pen 'sylvMiia to orgrnize the mine vorkers -rorer.d
to tp2:e in r.ll o-errtions in I:---Gtte Coiint;-, Pen" s"-lv?-Aia, ?,s '-'ell o.s c,
nurater of ::ines in TeGtmorcl&i:"., Greene, "iVr- shin?'ton -.n.:- Alleghany Covjities.( *)
A stirke followed involving considerp.'ble violence. Fen.r that the strike
might spread to all nining regions ea.st of the ! ississippi led the ?.?..A.
to intervene. A truce pgreenient, aoproved hy the President on August 5th
was intended to have the miners ret"ui'n to trork A'ugust 7th, but ^nas not
rholl • s-iiccessful.
A ne-" strike, involving some 55,000 miners, hroke out in Western
Pennsylvania after a meeting at Pricedale on Septernher 13th. The strike
w,as originally directed at the delay in adopting the Code, "but was la.ter
trfijasfor:.ied into a demand for union recognition, \'hen the steel comp":.:ies
operating crptive' mines hesitated to sign v/pge agreeme-its. (**)
i'he strike, once under v;\y, spread rapidly to "practically all uines
in VJestern /nd Southwestern ^ennsylvrnia. At its height the strike involved
ahout 75,000 men, of '"horn 20,000, largely in central Pennsylvania, returned
to vork. on October 3rd. Cla.shes heti/een pickets and mine gua.rds occtu-red in
severd instances. After intervention of United Tine Worker officials and
the ;■,?. .A., the steel coino,anies (Seote, iher 2;) signed an agreement to observe
the hovers ajnd wage' provisions of the Coal Code and to observe Section 7(a)
of the iy.I,.?..A. Further difficulty arose over the question of the check-off.
President Roosevelt on October 6th sirrjaoned steel representatives to a
White House conference v'here' conditions governing future negotiations Mere
discussed. Ey October TSth, or. acticalli" all the coinmercicl mines reopened,
exceot those in the Coniellsville field. The ca.ntive mines vrere shut down
until after October 30th r.he'n tne Presid.ent held another conference a.t ^rhich
the cueck-off was conceded. (***)
So.ie 12 o^oerators in SoutJ-iern Ohio had resu^-ied contrr.ctua.l relations
with the United kine Wor.kers. This contr-.ct mss entered into on June 15,
1933 and -as effective "until such time as state agreements could be :.iade,"
The scala for inside skilled nen was -^3.23 per day.
The Progressive kiners of A.ierica negotiated a, wage contract '-ith the
Illinois Coal Producers' Associati^'n on April 1, 1933 which was effective
until karch 51, 1935. The contract -rovided for the sai^e scale as in the
United kine jorker agreeiieat.
A noir.ber of operations in tne Pocaliontas and Tug Hiver districts, in
Southern Uest Virginia, alsq ■►--re closed by strikes early in October. Some
1,50,: to 5,000 miners in Arkansas and Oklahoma stopped work in Septe/.ber
in protest against the wage scale set up in txie Code and returned to work only
on the promise of an upward wsg-e revision. Some strikes in Lee and TTise
Counties, Virginia, took place over the auestion of vjaion activity.
Industrial disputes in tae Soutn centered arouiid the questions of union
recognition, the check-off, and employment of checkweighnen. Ten Alabajaa
mines, employing 2,000 men, were affected by a strike in October whic/i continued
until the middle of the month. The strike was ended by the esta.blishne-at of
J*) Coal Aii.e, Aujaist, 1953, p. 285. """^
(**) Co^a Aj:e, October, 1935, p. 354.
(***) Coal Age, Kovenber, 193':, p. 355.
9837 I
-190-
collective "Dargair.ing:_nr,chine::7. In Southern Tennessee (Octoter) .nines \-ere
closed dovTi "becaiise of distrereeraent regarding the chec]:-off . This strike
ended Octooer 25th "hen the'^fe.'^e p,gree;Ment included the check-off <
Soi.ie disturbances occurreo. in the 'hoc'.:/ 'Ount'.'.in re^^ion vhere the
N-tion. 1 : iners Union organized strikes in Gallup, m-i i exico, and in Carbon
Coiuit;-, '^t-^h.
Tlis industrial dis'outes described c,bove, even thoiigh mp'.ny of them
occurred after the Bit-uminous Co-^l Code becjiae effective (October 2),
chc.r.acterize the stresses ;,nd strpins vrhich had to be adjiasted bet'"'een
ooer -.tors and miners after years of chaos anu disorganization. Thej^
rejrjsent _:robleuis of local rearrejigernent . Once these difficulties 'Tere
settled, production for-:'ed ahead.
Regarding the coal industry, it has been said that:
"In no Ouher industry, T'ith the possible exception of agricultiu-e,
iia.s the classik;al conceot of unr3strictec competition as the automatic ,
rnc. beneficent regmlctor of prices and wage rates sh0T,7n more serious ^-
defects." (*)
The Corl Industry, oerhaps more thrn any other brEnch of industrial activity,
stood to gain from the control of wageij ano v.:rice cutting.
1334
Prior to the e:cDiration date (i'arch 31, 1934) of the Appalachipn
Agreoiient a ne-' wpge contr-ct r-as negotiated providing in general a basic
inside skilled day r^te of $4.60 for states south of the Ohio River and
$5.00 in states north of the Gnio diver. (**) It also provided for an
increase of 10 cents per ton for picbnining, 8 cents per ton for machine
mining, riz increg^se of , 1 cent -per ton for cutting, t^nd for all yardage e-nd
deadvor:: rates an incre.-^se of S obrcent. It est'blished a ■uniform 7-hor.r
daj'" prid a five-d?^- ^reek for mine vorkers in the Appalachian coal fields,
with exemption granted to certain classifications of labor. This schedr.le '^
?/as rrritten into the Bituminous CopI Code.
Tao 3-ear l'd34 represented the first full yeci.r under the Bitnminoixs Coal
Code. In terms of the industry ^en3Tsll'-, coraparrtive peace prevailed. In
soecific instances, ho^^ever, industrial disputes carried over from the
preceding ye?r still harassed the industry. Controversies regercdng the
captive nine O'cerations in Division I pnd the United hine Tvorkers vs.
Fro';res3ive Liners of Aiierica. in Illinois (Division II) had their origins
prior to 1934. i;iother group of distn.rbances srose out of dissatisfaction
Fith the ^endment to the Code (April 1, 1934) and its changes in hears and
W'ves. In many cases mines Fere shut down as a protest. Later modifications
of the dment alleviated conditions, although certain areas '?uch as
Western Kentucky were definit'ily alienated (sec Chapter VI).
(*) ::iner-ls Ycrrbook, 1934, Part III, p. 55r..
(**) The situations arising under, this nev; '7jtge agreement are treatec
Chapter VI.
9837
Consic.eralDle -ancertfanti^ existed as to the proper p.uthority having-
jarisdiction over tiia co-ptive mine operations in Western Pennsylvania. Tlie
National Labor Bof-rd held thab it had no authority over these mines imtil
freec.om from the jurisdiction of the Biturainous Coal Code could he estah-
lishec., The Divisional Co-il Lr.oor Board, on the otner hand, stated that
since tnese mines had signrpd the Prasident's Reemployment Agreement, they
were not suhject to the Coal Code. The prohlem concerned captive mine "'age
a,55re3,.ients gjid vrhether the-se should he niade with the union officials as
individuals representing the employees or as officials of the United :;ine
Workers. The ITaticnal Lahor Board held hearings on H . C. Prick Coke
Compan;- ; nd affiliates Januar- 4th and 8th end rendered its decision on
January IStl:. The Board set up a contract vdiich r^as a compromise. As to
the check-off, the Board declared taat the check-off clfuse in commercial
mine ac-seraents should apply to captive oper'^tions, hut in deference to the
opevp.tor's contentions added that;
^nothing in the foregoin;; shall "be construed to deny to rny employee
not a memher of the United Mine Workers the right to make voluntarjr
assignments of his vages for dues or payments to any organization of
7/hich he may he a memher, or for any other purpose".
The findings in the Fric' :, ^^Vational Kining and Sharon Coal & Linestone
cases Tjere applied by s-apalementary order to the Inland Collieries, Consumers
i.Iinin;-^-, Republic Steel, A-lleghrny Corl & Coke, Crucible Fuel, Weirton,
Shannopin sjid Vesta Coal cases. (*) The ll-tional Lrhor Board during Jan-'j^.ry
also ordered elections to be held ?t several mines in Tfestern Pennsylvania.
In Illinois violent outbux-sts in the controversy between the United ilne
Workers ■.nd the Progressive L'iners continued to occar. Especially tro^^ble-
some v/as the question of which union should represent the miners for the
purpose of collective bargaining. Petitions vere received demanding a
state T'ide referendum. The State Legisl",t-!.u-e also pas'^ed a resolution
calling for such a referendiitn under national ^"uspices. The Chairmen of the
Divisional Coal Labor Boord (Division II) declsTed in fey that no authority
existed in lT.a.A. or the Bitn^iinoxis Coal Code for a state wide referendum.
He held that a vote could bo held in determining the relationship between pn
employer and his men in a given plant but that no authorization existed
ap'clying to all employees of -11 employers in a given industry.
In specific instances, the board ruled that when a contract, arising
out of collective gargaining, was in force at a given mine, the contract
must continue imtil its expiration date. Where no such contract existed,
an election was authorized to deter.jine the employees' representatives.
A strike for union recognition hegaji in Alabama at two operations on
February ISth and spread so tiiat it included approximately 2,0CC men in
Bibb and Shelb?'- Counties. (**) National Crua.rd troops were ordered into
Coleanor, Alabama on February 25th to maintain order. Delegates from 25
locals voted a strike on March 4th at operations in 7»alker and Jefferson
Counties. The strike, ad its height, involved over 40 mines and 10,000
men. A wage contract patterned after the Fpick agreement was signed' iiarch
16th b^- Alabajna operators representing 80 percent of the commercial tonnage
in the ^tate. The Division III Laboi Eoarc. had held by a 2 to 1 decision
that the walkout was a violation of the Bituminous Code and ha,d ordered
a ret-u-n to vrork by . arch 12th. The contract contained check-off, check-
weighien. and pit committee orovisionr, .
9837 (*) Coal Age, Feb. 1934, p. 82. (**) Coal A^e, I .arch, 1934, p. 115.
Lp.lior difficulties in lr,te Ap'.il vn<i."';.y- revolved 1,-^gely n.roiond
revisions in the ur.Te rrtes embodies in tile T.H.A. nodifying order of April
22nd. Sone violent oufbrea'.s occtirred in Al-.Ofma. The DeBardelelien Coal
Corporr.tion, one of the two large .compajiies not ;oa.rties to the i>rch
agreenent, signed a contract on Ta:' 23rd ;g::'antin.g the check-off. (*)
'.Jestern -i-entuclr' mines in Hophins, T/eoster, Union and Christian
Counties, iThich had shut doni in protest to the $4,50 day scale esta.hlished
in the AP^il 22nd. order, reopened on ley- 3rd under, the protection of a
Federal Coxirt restraining order. The unionized nines in Ohio and ^uhl-
enherg Counties renained closed until May 14th, when a fev/ mines reopened,
Ifegotiationshetneen Harlan (Kentuckjr) ooerators and the United Kine
Workers in April failed. This district continued to he troublesome and
on I'ay 4th, lI.Ii.A. representatives reouestsd an investiga.tion. !^o
investigration was made for ,,l::ost a. year. (**) The report resultin- from
this investigation depicts such o-eplor^ahle conditions as dishonest elections
and denial of individiial riyhts and lioerties.
In the South^rest, shaft .-liner; r^-nained idle in lay, "hile operators
threatened court action and a'v7aited the completion of m '-.R.A. investi-
gation TThether the $4.35 day scale in the April 22nd order \7as ercessive.
Strip mines continued to opera.te although a strij-:e at the open pits in
Llinden, yissoiu-i in '.'.r:/ evidenced miner discontent.
The Roslyi'i - Cle Elu-i field in Washington v;as affected "by a strike
call on ^ril 1st i.ia,de h-j tlie 'Jestern L'iners' Union. The Division V Lahor
Bor.rd declared that yny United Pine TiTorkers joining the insurgent union
T7ere hound h^'- the contr.act made h;/ the regulp,r orgaaiizr.tion.
Statistical SuoDleuent — Industrial iPismtes; The effect of industrial
disputes upon the prooueti :n of oituninoiis coal is clearly illustrated v^hen
monthly production dr.ta are plotted r.gainst ma.n-da.y3 lost r^er je^r due to
strikes and lockouts. These data, shorring the inverse rela.tionship hetreen
ind.ustrial disputes and production for the period of 1917 - 1'935, are set
forth in Chart I (Pennsylvania, Ohio, and ''est Virginia.), Chart II (Indiana,
Illinois, and ^^entucicj^) , . and their accompanying ts-hles. The selected states
vrere so grouped as to "bring states together nhich a.ra generally recognized
as entering into direct competition v:ith one another. In ea.ch chs.rt, two
states, Tisua.lly considered unionized, are cojaparod -'ith a state that has
"been predomina.fel;'- non-union.
The first major disturbance in the oroduction of coal shown in Chart
I occurred during the strike of 1213 which lasted from IJovemher 1 to
Decemher 12. The strike was effective in most of the important coal
producing arenas of the United States. It will he noted that in Pennsyl-
vania the monthly production imnediately prior to the strike was over
17,000,000 tons. During the strike period this production declined to
approximately 7,000,000 tons. In Ohio, for the sane period, monthly
production decreased froii sliyhtT/ mare th-^n 5,000,000 tons to a, negligible
sjiount. The 'production decline in VIest Vir .-inia was less sharp than in
(*) Coal A:;e, Jvaie , 1934, p. 254.
(•**) -.'; port of Governor's Inviestigation Commission on Harlan County Coal
FiL-lds, June 7, 1935.
9037
either fenns.ylvania or Ohio, Similarly, the raan-dn^'-s lost due to strikes
and lockouts in '."est Virgini.^ were not as sif-nif ic^nt c.s in the other
tno states. The threat of ■•. suspension of mining aclivities existed
several months orior to the ;i.ct-c:/jl strike and monthlv "oroduction in all
three states anticipated the threatened strike. In Penns^^lvania the
strike was very effective in the organized fields, hut did not apply
to raa,ny of the non-union or captive operations. Ohio, ^'hich was a
strongly organized state, had j;n eliaost complete suspension. Since >'est
Virginia was less unionized then the other states, the strike was less
effective there.
Following the de-oression year of 1921, the tnreat of a strike in
the early months of 1922 was clearly reflected hy the sharp rise in
monthly proouction in all three states. On April 1, the suspension
took place and it continued ".o aoout the middle of j-Ugust , 1922, The
number of man-days lost due to industrial disputes in Pennsylvania during
this year amounted to 18,039,000, Despite the fact that the strike call
a-Qplied primarily to union men, a niJ-raher of non-ionion miners in the coking
fields in the vicinity of "estmoreland and Somerset also went out on
strike. As a result the decrease in "oroduction durin,i: the strike :oeriod
is more pronounced in 1922 than in the strike of 1919,
In Ohio the nui.iher of rarn-doys lost during the year 1922 amounted
to ap-oroximately 5,503,000 anr the decrease in monthly production is
indicated h- a decline from over 3,000,000 tons to almost nothing. The
man-days lost during 1922 in -"est Virginia exceeded 5,000,000, The
production data, ho-jevor, do not show a very sharp decline during the
strike period. The less sharr) decline may he explained hy the fact that
the strike was effective only in the unionized portions of the state.
The non-union arep.s in I7est Virginio. gained hy the strike and exerted all
efforts to increase their out-^ut.
After 1922, we find no major lahor distm-hances in Pennsylvrnia or
Ohio until 1927, althou;:h sor.ie operations in "Jestern Pennsylvrnia ^7ent
on a non-union basis after a shut do'jn early in 1925. In 'Test Virginia,
however, a more serious labor dispute took iDlace during the year 1924 and
continued into 1925, This dispute arose out of the fact that many mining
operations ¥rere shut down cue to thu contention of the o"oerators that
they were unable to "oay the scale of wages set by the ""altimore Agreement
(counterpart of Jacksonville) and continue to compete with non-union
operators.
The Jacksonville Agreement terminated legall?'" on Auril 1, 1927, and
the failure to arrive at a new wa^e agreement resulted in a suspension
of mining in Pen?isylvari.ia and Ohio. The man-da^-s lost in 1927 in
Pennsylvania aporoximated 6,500,000, In Ohio the?/ amounted to 5,605,000,
Monthly production declined sharply, indicating the degree to which the
suspension was effective. It will be noted, however, that in neither
Pennsylvania nor Ohio v/as the suspension as pronounced during 1927 as in
the industrial disioutes of 1919 and 1922. The ery^lanation is largel"- to
be found in the disorgonization of the union in both areas. The loss of
man-days in 1927 in "est Virginia was negligible \7hile monthl- production
rose to a high level, indicating the degree to vrhich Hest Virginia
benefitted from the suspension of mining in the cor.roeting States of
Pen;isylvani8- and Ohio,
9837
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A slight rise in the numoer of lar.n-da'^s lost due to strikes and
lockouts occurred dui-inc: 19C1 in both Pen^isvlv-nia and ''est Virginia.
This rise reflects scattered and sooradic labor disturb.vnces in the
vicinity of the lairmout field in '''Gst Virginia and in the Western
Pennsylvrnia district. In a large 'oart these disturb'inces grei? out of
the discontent eidstin-^ among the miners because of low irage rates and
threatened reductions in wa.q;es, as ■'all as the lack of em^^loyment
accompanying the general depression e-dstinf.; tlii^oughout the country'-.
In Ohio in 1932 a similar situa,tion a„rose. Lian-days lost due to
strikes snd lockouts mo-unted in excess of 2, 000,000 and production
declined sharply, Tlie labor dispute vas not successful in averting wage
reductions nor in securing a collective bargaining agreement.
The sharp rise in the loss of man-days during the summer months of
1933 in Pennsylvania is a "oai't of the discussion of collective bargain-
ing under IJ.H.A. and v/ill be treated in Chapter VI.
The statistical data on monthl"- production and maji-days lost due to
strikes and lockouts during the period 1917 - 1935 for Indiana, Illinois,
and Kentucky- are set forth in Chart II and Table II. These three states
compete directl- v.'ith one ajiother. Indiejia and Illinois represent highly
organized areas, vhile Zentuclr (exce-ot for 'Testern Kentucky uo to 1925)
is predominately non-union.
Daring the strike of 1919 -oroduction in Indiana and Illinois
declined almost to zero, '.Thile in Kentuckr^ any loss in tonnage due to
striking union labor in TTestarn ^^entuclr^ is concealed b"^ the increased
output in non-union Eastern ifentucic:-- which produces the major portion of
the state's tonnage. It shoixLd be noted that in consequence of the strike
threat TDroduction mounted rapidly immediately prior to the effective date
of the strike. Indeed, monthl-^ -oroduction in Illinois increased from
slightly over 4,000,000 tons in the middle of 1919 to over 8,500,000 tons
during October, 1919, One mic- also observe that with the ending of the
strike and the resumption of Liining activities, production hit a relatively
high point, indicating effortu to recoup the losses that occiirred during
the strike period.
The great industrial dispute of 1922 is cle€a-l>- reflected in the
production data for Indiana and Illinois where effective union organization
bro-ught a complete susr^ension of mining activities. The sharply curtailed
production is reflected in the increased nunoer of man-days lost during the
year, in Illinois amounting to 11,548,000 and in ^ndiana approximately
3,924,000. j>aring the same "oeriod, Kentucky production increased from
ap:oroximatel^^ 3,000,000 tons a month to over 5,000,000 tons. This
increase is e:qplained b;- the fact that the organized miners in VJestern
Kentuck"- worked under a no-strike agreement and therefore continued to
produce tonnage which replaced much of that lost in Indiana and Illinois.
In the non-union fields of Kentuclc"- production continued at an even greater
rate during and because of the strike in the contiguous states of Indiana
and Illinois,
The next industrial disoute as reflected in lost man-days occurred
in Kentucky/ in 1924, Tliis situation arose out of the contention that the
OToerators were no longer able to pay the \7age scale specified in contract
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for 1923 - 1925. ConsideraMe discontent develo-oed among the organized
miners and in many instances mines v/ere shut do'vn to "be reo-oened later
upon an open shop "basis. After 1925 the State of KuntuclC'^ as a whole
was almost entirely non-unioii.
The period 1934 - 1927 sho',7s very few man-days lost in Indiana and
Illinois.' The e:q3lojiation for this situation is to he found in the
Jacksonville Agreement which was in effect during this period and which
represented a joint agreement "between miners and operators.
The next indication of labor unrest is found in 1927, On April 1st
of tha.t year the Jacksonville Agree ent terminated and the conference
held in Miami which sought to negotiate a new agreement ended in failiu-e.
The organized miners in Indiana and Illinois suspended work on April 1st
on the "basis that they had no contract. The industrial dispute lasted
from April 1st to September and into October. As a result, for the year
1927 man-days lost in '^ndiana approximated 2,500,000 and in Illinois
exceeded 10,000,000. In Kentuclc^'", to the contrary, man-days lost
were negligible and prodviction rose sharply. Uon-union Kentuck^.^ gained
in production diu-ing the dispute period at the expense of the neighboring
organized states. The termination of the strike in 1927 came with a
"truce" agreement for Indiana and Illinois which provided for a
continuation of the previous contract wage until April 1, 1928. It will
be noted, therefore," that earl" in the year 1928 rjroduction in both
Indiana and Illinois increased, antici-oating the possibility of a
strike with the termination of the "truce" agreement. TThile the new wage
agreement was made in 1928, there were scattered interruptions but no
major dispute equivalent to those of 1919, 1922 and 1927.
The next sharp rise in man-days lost occors in Illinois in 1932 and
to a lesser degree in Indiana. To a large extent this loss is attribu-
table to the ending of wage agreements in both states and the development
of new v;age contracts. The loss in man-days and in production during
this -oeriod was also due in riart to the refusal of some miners in Illinois
to accept the reduced ?/age scale in the new United ^■'■ine "Torker Contract,
The data presented in Chni^t III and Table III illustrate graphically
the effect of the three major strikes oh production for selected com.r)eting
states. The production data for the strikes of 1919 (November and half
of December) , 1922 (April to August) , and 1927 (April to September) are
compai-ed with that of the comparable months in the base years of 1918,
1920 and 1925. (*) The losses and gains in production during the strike
periods are indicated by percentage deviations from the base line.
During the 1P19 strike, Illinois, Indiana, Ohio, Penns^-lvania, and
West Virginia showed losses in production, while for the same period
Virginia and Kentucky showed gains. The percentage losses in production
(*) Each base year was selected with the view toward its representativeness
and freedom from disturbing factors. The year 1918 was chosen, even
though production was subjected to war time demand, because it was a
full year of government regulation and continuous production. The
choice of 1920 as a base year rests on the assumption that it was more
representative than the depression year of 1921, The year 1925 was
chosen as being closest to the strike year 1927 without having a
disturbing element as the British strike in 1925,
9837
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i-i Illinois ap-nrordmnted 73,4; in Indiana, 74.1; pnd in Ohio, 76.5. In
..V.n:is2'lv:'nia the loss .••no■unte^ to 37.0 oercent, and in Uest Virginia it
amo-unted to only 4,9 pex-cent. Tiie losses in Illinois, -ndiana and Ohio
were more -Dronoimced thtm in Pennsylvania, and "'est Virr';inia "beca^uso the
former states were more hi^^;hl•'^ unionized --nd sus'oensions were therefore
more conmlete, Virginia, tonnai^e, d:''jLin>^ the strike period, gained 15.7
percent and Kentucky, despite tno fact that the V/estern Kentucky field
was organized, gained 0.3 percent. Virginia, "being completel;'- non-union
in character, \rorked a.t capa.cit-'- and took advantage of the situation
existin-?; in the strike areas.
In the strike of 1922, the percentage loss in production in
Illinois was 94.0; in Indiajia, 96.4; ir. Ohio, 83,5; in Pennsylvania 65.1;
and in West Virginia 10.5. It will he noted in this instance that all
the areas show increased strike effectiveness dui'ing 1922 as compared with
1919, (*) Again the States of Virfdnia and Kentucky show tonnage gains
diiring the strike period, Virginia gained 8,2 percent while Kentucky,
where oiganized lahor continaed to i^ork under their contract, gained
48.6 percent in production.
Tile strike of 1927 ?/as not as effective as that of 1922. Illinois
showed a loss of 89.7 rjercent in production, Indiana showed a loss
of 42.4 percent and Ohio 69 percent, v/hile Pennsylvajaia,' s loss ajnoxmted
to only 2.5 -oercent. The striking decrease in Pennsylvaxiia strike
effectiveness is largel;' ezxlained by the increase of non-union operations
in that State. 17est Virginia, which ha.d normally shown losses during
strike periods, in 1927 showed a gain in production amotuiting to 26
percent. In this instance, again the e:qplrnation lies in T7est Virginia
having 'become a non-imion State. Virginia.' s gain in production was 6.6
oorccnt and Kentuck;,^ gained 57,5 percent.
(*) The significant increase in strike effectiveness in Pennsylvania
during 1922 is to "be attributed to the walkoat of non-Tonion men
at the captive operations in the v;estern ^^ortion of the state.
9837
2. CO'JDITIOrS OF EMPLOYl.EEi^TT
Introduction; A c^eat variety of factors influence the conditions
of enrploynent in tlie 3it"aminous Coa,l Industry, Soir.e of these factors
B.Te natuxal in clia.racter, ^vhile others are social or institutionalized.
For example, coal mining must necessa,rily take place where coal de-
posits occur. It, therefore, follows that in ma.ny instances mining
cohDTiuiiities will he located in isolated mouiitainous areas, often far
from any normal center of population. Mine workers . frequently are
located in cnmmunities v;hich are unincorporated and where all the prop-
erty is OT/ned hy the operating company. Opportunities to live in houses
or trade in stores not woned "by the comp-ry are often not ave-ilahle.
In the mountainous or isolated r reas , onport-unity to engage in colla-
tere.1 employment does not exist so tii£,t the miner ]:iex-haps more than in
any other occxp^tion is wholly dependent u^on the emjTloyer, Thus, it
is not surprising tlia.t to many investigators the company tov/n talres on
the appearance of a feudal estate.!./ Where the employer maintains his
own police force and owns every square foot of land, as v/ell as the
houses and stores, and v/here he controls all T/orlc opportunity and may
even dominate the school and church, the che.racteristics of a feudal
domain T-ecome evident. The ch•^racter and policy of the e'raployers urder
these circumstances, 'become es^ieciolly significant for the m.inor.
Certain practices 'nsivc developed in the coal mining industry v/hich
through custom and hahitua.tion h:^ve come to Tbe recognized in the union-
ized areas as requisites of er.TOlor.Tuent, The method and manner of pay-
ment and the deductions from the miners' pay ha.ve become traditional
in certain areas. The union in its collective "bargaining process and
in the wage agreements lias recognised this situation. I'any v^age con-
tracts go into considerahle detail as to checteeigliraen, pay periods,
scrip pa^-TTient , the check-off, company house rent, pay deductions, etc.
These aspects of the industry as they affected the operator-miner rela-
tions will he set forth in the following pa.ges.
Method and Ifenner of payment; 7/eighing and )[e_asurin^ - (Checkreighmen)
The three basic occupations in bituminous coal m.ining are those of
hand or i^ick miners, machine miners (cutters), and 'land loaders. They
represent between 60 and 65 per cent of all the vi&ge earners in the in-
dustry ,i/ These occupations are usually paid a rate per ton of 2,000
pounds, ru of mine. These men are k..o\TO in the industry as tonnage men
in contrast to the day men whose pay is based upon a daily ra.te. Since
payment is rade on a per ton oasis, it becomes necessary that the measure-
ment of the work performed !■© demonstrably accurate. This requirement is
significant also in view of the fact fhr.t cars are counted or weighed
on fae surface at some distance from the miners' worlcing places. Simil-
arly, yardage and deadwork sometimes referred to ?.s non-productive labor
requires carefrJ. measurement. The question of weighing and measuring
work performed ga,ve rise to frequent complaint and labor discontent,
Y/hore care are counted rather than ?reighed, the lack cnf -uniformity^^in
^ U.S. Coal Commission, Part 1, p,169; Seport on Special Policirg in ^
Industry in Pennsylvania, p. 8.
1/ U.S. Coal Coranission, Part III, p, 1318.
Reports to IT.R.A. ("C" Perm of Coal Section) show thjat in the period
December 1-15, 1933, 61fJ of all men em;;.loyed were paid by the ton,
9837 ■ ' ■
-204-
the size of the car led tomany a"buses or the siispicion of aTDuses,
Another cau.se of dispute hetv/een the miners and o'lerators was the
screened method of payment. "It v/as claimed "by the miners th'i.t the
payment of wages "based on the ajnomit of coal v;hic"n would pags over
screens of a certain mesh a.nd area v;as su'bject to a"buse. The area
in square feet varied; the size of the mesh was not uniform; spread-
ers placed on the screens "broke up the coal and made a disproportion-
ate amonjit of fine coal pass through the screens; and the screens
were not kept in repair." l/ The miners demanded payment on a, r\m-of- •
mine basis-coal as it came from the mine including lump and fine coal
without any preparation. In 1916 the run of mine basis of pajonent
went into effect for the entire Central Competitive field although
Illinois lip.d "been paying on this "basis prior to 1916. This situation
was of long standing, aJthough the unionized areas ^•' ere a,"ble to "bring
a"bout improvement. An illustratiovL of the conditions v/hich existed in
the latter quarter of the 19th Centviry may "be quoted here:
"False weights v/ere used. Large wagons, or pit-
cars, v.'ere frequently put in , containing more
coal tlia,n served as a. "basis of pa^nnent to the
miners; and, in many instances, a v/idening of
the spa-ces in the screens was resorted to, allow-
ing an extra amount of coal to pass through for
which the miner received nothing. So flagrant
]na,d these a,huses "become that in Illinois, Ohio,
and Pennsylvania-the miners sought redress through
legislation vfhich should require pajanent "by run of
mine or gross weight. Such a law ,v/as passed in
Illinois in June, 1897; a'jd, later, similar laws
were passed in Ohio and Pennsylvania," 2/
Siwrtv/eighting v/as not only unfa.ir to la"bor, "but it also represented
an ui.fr.ir competitive advanta^ge among operators. Thus for example, an
opera'. 'r. - Col. U. P. Rand - vra.s a leader in the esta"bliGhment of the
checlc=:'?i^',r,raan system in the ?Iocking Valley coal fields of Ohio in 1880. (")
L-.-sputes over v/eights in the union fields iia.ve 1. rgely disappeared,
ov/ing to the universal practice of providing for a checlofreightma-n and .
the constant v/atchfulness to insure the accuracy of the scales. A^
typical exsjirple of a clause dealing v;ith the checlCY/eightman in r. union
contract is as follows:
"Checlcv/eightman selected as required "by law from
among employees at the mine, may "be placed on each
tipple at the expense of the miners, and their duties
shall "be only those presori'bed "by the lavfs of the
State of ^.Vest Virginia. Ho checlcvreighman shall "be
'■ placed on- any tipple except where same is selected . .
"oy "ballot by a majority vote of jbhe. miners worldng
1/ Sufiern, A. E., "The Coal Miners' Struggle for Industrial Stat us, "p. 15.
2/ George, J. ";. "Settlement in the Coal-Mining Industry" .Qimrterly
Jourr^l of Ecconomics, Vol. 12 (1897-1898), p. 448
(*) Evans, Chris, History of the United Mine Yforkcrs of America,
Vol. I, pp. 91-93
9837
-205-
in said mine, Checlrweightmen sha.ll in no way inter-
fere vdtli the y/or.'ing force or the operation of the
mine a,nd shall De suhject to all the -oenp.lties pro-
vided in this scale contract" against other niemhers
of the vrorking force." _l/
The use of checlaveig-hmen vk:,s not confined only to the -union fields.
In some instp.nces, non-union operators allov/ed checlcvveighmen at the
mines, but this measure was not genera-lly true. During the 1920' s, as
the -ojiion lost strength, the loss of checkir/eighmen in the formerly union
areas v.as keenly felt. This need v,'as recognized in the Bituminous Coal
Code, Article V h), vdicrein provision v/as rnaode for checl::v;eigh:-nen.
Fay Periods: The matter of ;ia,y periods is quite important to the miners
and al=:o has som.e significance for the operating company. In the earlier
days of the coal mining industry, it was fairly common to pay miners once
a month. The relatively long interval octween pij' led to considerahle
hardships among miners. Miners, lacking in foresight and neglecting
budgeting, often fouiid that they lacked sufficient fxuids to carry them
to the next p.ay. As a result, these miner:? were compelled to seek ad-
vances a:-;aiast their pp.y. In such instances a condition of perpetual
indebtedness developed which tended -co hind the miner to the operator
and to restrict his freedom. Y/here the company paid in scrip, the miner's
pay advance was discounted so that his earnings A«;ere reduced. In those
areas where the compa^ny operated stores in competition viiith independent
enter^prises, the miner who received an advance felt influenced to trade
at the company store. The length of time between pay therefore served
to augxnent the operator's profit at the compa/ny store.
In the union areas considerable agitation developed for m^ore fre-
quent pay periods, (*/ Semi-monthly pay periods have become increasingly
characteristic of the industry. (See Table l) As a result, manyn of
the conditions de?-cribed above liave been alleviated, 'The Bitimiinous
Coal Code specificc.lly 'orovides for semi-monthly payment of wages,
(Article Y (c)).
Another practice, quite coraraon in both union and non-union fields,
w.as to hold back a miner's pay for the initial pay period, ."(See Ta.ble II).
Although the miner could claim this pay for work performed, the operator
could hold the wage reserve over the miner's head and threaten its loss
to the miner v;here the miner's action vra.s against the interests of the
company. It must also be remembered tliat a lengthy pay period and a
wage hold-back worked in favor of the oj^erating company since additional
fronds were available to it.
1/ Agreement betv?cen Northern West Virginia Coal Opercitors' Association
and District Ho. 17, United Iline Workers of America, Febri.iary 10, 1923,
(*) Evan, Chris, History of United Mine Workers of America, Vol. II,
pp. 120-121; Illinois Weekly Pay Fair, 1891
9837
- SOS-
Teal)! e I
Len^l
uli
of Pa;:
■ Period
of
Parent
Compan
ies
as
Shown
^y
He
;-oort.s
of Compj-
my
Stores
in the
Bit-uminous
Coal I
:ndustry,
, "b^
r States in 19:
34
1
State
Total
IT-umljer of Stores Whose Pa,rent Companies
Had Specified Length of Pay Period
One Two Semi- Tliree
T/eelr Weeks monthly weeks
Monthly
Ala'osma
37
Colorado
5
Illinois
4
Kentucky.'
3)00
New Mexico
5
Ohio
9
Pennsylvania '
161
Tennessee
13
Utah
6
Virginia
33
Washington
6
West Virginia
263
Wyoming
8
All others
8
4
18
209
2
5
2
79
5
2
IE
6
52
6
3
658
458
198
\j Derived from Tahle 17 (p,116). The Economic and Social -Implications
•of the Company Store ai^d Scrip System, il.R.A. , 1934, Based on
Questionnaire of the Bureau of Census,
9837
-207-
ratle II
llvxaber
of
Days for
fcich
Wafi^es a
re
Wi trie Id
hy
Parent
Companies as Shovra
by
Hei3orts
of
Company
St'
3res
in
the
1 Bit-urnin
OlAS
Coal Irxtus
iiz
, by States
in
UTjiTiher (
Df Store:
3 Wliose
Parent
Cpnipanies With-
0
held
Pay for
Specif
ied IJrtmber of
Days
Over
1-5
^1-7
8-11
12-15
16-21
22-28
28
Total
da;
Ys
days
days
days
days
days
days
days
Ala.taraa
37
13
11
13
Colorado
5
1
_
I
1
2
_
„
Illinois
3
-
_
_
5
„
_
Kentuclcy
95
1
„
4
20
70
1
xTew Mexico
5
_
_
„
1
4
^
Ohio
9
-
„
„
5
4
^
_
Pennsylvania
154
1
o
7
56
76
2
_
Tennessee
12
_
_
„
1
11
_
Utah
6
-
1
lo
2
1
„
„
Virginia
35
-
-
«
8
25
„
„
Washington
6
-
_
„
„
6
„
_
West Virginia
256
4
2
4
105
128
10
„
Wyoming
e
^
„
_.
„ ■
8
5
All others
8
-
"
2
3
5
"
Total
638
7
5
33
221
354
13
5
1/ Derived from Tahle 17 (p. 115), The Sconomic and Social Implications of
the Company Store aj:d Scri-o System, o-m. cit.
9837
-2C8-
Peductions frcm Waj'^es; It is a. custom of long standin.;^ in the coal
mining industry (both union and non-utiion areas) for operators to make
certain deductions from the v/ages of miners. These deductions fall
into two general classes - those for occupational charges and those for
domestic or personal charges. The former class includes charges for
hlaclcsmi thing, powder, dynamite, electric exploders, fuse, caps, carhide,
lamp, oil, iTiachine oil, and payment for the wages of p. checl3/eiglTman.
The second group includes charges for household coal, rent, hills at
the company store, and in some instances, cha,rges for tne support of the
doctor, hospit?,l, school, and hatlilaouse.
The agreements made in the union areas usually specify . .
the nature and the amount of the deductions which may he made. Since
these provisions ai'e fixed' hy bargaining between the- union and the
operator, they Imve ceased to be factors of discontent.
In the non-union areas these deductions are often refer-
red to as the operators' check-off because the charges are fixed by the
operator. It was frequently asserted that the operator made an undue
profit .on the supplies furnished and that. .the charges for services were
excessive. Miners in many cases objected. to making compulsory contribu-
tions for the upkeep of recreation halls, batlihouses, and hospitals
which were normally maintained by employers in other industries vathout
charge to the employees.
The deductions for occupational, expenses differed v/ith .
the various occupationa.l groups. For example outside daymen have no
charges, v;hile inside daymen's charges were, found to be seldom in ex-
cess of 1 per cent of the gross earnings (normally from one-lialf of 1
per cent to one per cent), — ' Deductions for occupational supplies for
machine runners generally avei-aged about 1;^ per cent of the gross earn-
ings. Pick miners and loaders are t le ones most affected by occupational
charges. Since these v/orkers represent approximately 55 per cent of
the total number of employees engaged in coal mining, it can be seen
that these deductions become quite significaht^ .S^ Piclaniners pay for
blacksmithing and for powder, carbide, caps, and other supplies. Where
the blacksmithing cliarge is made at a flat rate of 25 or 50 cents r.
month, the burden decreases with increasing tonnage output but during
a period of fev/ tipple starts this cliarge ma,y be excessive. Some mines
base the blacksmithing ciiarge on tonnage or each dolla.r earned. Occupa-
tional items tisua.lly cost the pick miner or loader 5 to 10 per cent of
his gross earnings. 3/
Differences in occupationa-l expenses are not due primar-
ily to the differences in clia.rges for supplies. For ex<ample, the powder
cost will differ with the shooting quiilities of the coal a.nd the methods
of mining. At some mines certain expenses are borne by the companj'^.
l/^U. S. Coal Cor.im.ission, Part III, p. 1243.
2j Based upon reports to i\f.R.A. ("C" Form of Coal Section) covering
253,136 employees for December 1-15, 1933.
If/ U. S, Coal Commission, Fart III, p. 1243
9837
-209-
Again, some companies may pay "tonnage" men on a day "baGis and furnish
them vrith supplies. This situation is, however, not corranon in the in-
dustry.
One type of deduction iias not heen discussed here previously. This
deduction, knovm as the "check-off " ,'lias been the subject of consider-
able controversy and deserves separate treatment. The check-off is a
system v/hereby the operator deducts or checks off from the mdners*'
v,'ages his union dues and assessm.ents , turning over the money thus
collected to a representative of the union. Under this system the •'Ji:iion
miners authorize the employer to dedu.ct from their pay the employees'
financial obligations to the union, whiich usually include national and
local dues, special assessments, and fines.
The check-off is said to i:iave originated in Indiana in 1866, its
purpose being to eliminate disturbances v/hich us-oa.lly accompanied pay
da;% i/ Prior to this time a committee of miners stationed itself at
the mouth of the shaft to collect dues fron incoming m.en. Individuals,
refusing to pay, v/ere subjected to severe criticism and in some inst-
ances, union men refused to enter the mines with non-payers.
Several factors lia.ve contributed to tne controversy concerning the
cneck-off. The operator objects to acting as a collecting agency for
the union. Originally the check-off system v/as used only for dues, but
it v/as gradually extended to include fines and special assessments, the
latter usually for strike funds. Thus, the operator felt that he was
directly providing the weapons Y/hich might later be used against him.
ilon-union operators argued that union operators conspired with the union
to organize non-u.iion fields by agreeing to the check-off, S^ • Similarly,
v/hile the check-off bears no essential or necessarj^ relationship to
either the open or closed shop, it has often actually resulted in a
closed shop, shutting out ncn-imion miners.
It :Tas been stated that a universal Ciieck-off system is unsound
from the standpoint of long-time union policy on the grounds tliat it
weakens union stamina and lessens close contact with union men,-'^' Be
tliat as it may, the check-off system insures to the union a steady and,
within limits, definite income. In the bituminous fields the check-off
has become an established institution,
Y/ith the advent of the l.R,A, , the United Mine Workers made rreat
gains in the unionization of coal fields. The check-off, usually with
a protective clE.use, was included in one 'form or another in the majority
of the new wage agreements and \?as included in all the old. The foll9w-
ing areas agreed to the check-off: ^-J Arkansas-Oklahoma; ITorthern Colo-
rado; Soiithcrn Colorado (including Colorado Fuel and Iron Agreement);
ij Enmiet, Boris, Labor Relations in the Fairmont, "'est Virginia,
Bituminous Coal Field, U.S, Bureau of Labor Statistics, Ju.ly, 1924,-p,6.
2/ Gasaway vs. Borderland Coal Corporation, U. S*. Circuit Court of
Appeals, Seventh Circuit, 1921 -273 Fed, 56,
3/ U. S. Coal Commission, Part III, p. 1337,
4/ Union Gains - Establish Collective Bargaining in Almost All Bituminous
Fields, Coal Age, March, 1934,
9837
Kansas-i issouri; Illinois; Indiana; Appmoose and Wayne •Counties, other
Iowa; Big Sandy-Elkhorn; Hazard; Harlm; Southern Appalachian; Western
Kentucky; Michigan, Ray axid Clr.y Cour^ties (iiissouri); ilontana; Hocking,
Coshocton, Hassilon, Eastern Ohio; Central Pennsylvania; Somerset
County (Pennsylvania), Western Pennsylvania; Ut,ah; Virginia; T/ashington;
Greenbrier, Kanar/ha, Logan, Ken River, PocaJhontas - Tug River; Williaii-
son; Winding Gulf; Korthern West Virginia; Northern T/est Virginia Pan-
handle; Southern Wyoming (inclv.ding Union Pacific Coal Conpany Agree-
ment), and Northern Wyoming.
llo check-off provisions i-^ere included in the follov/ing agreements;
Southern Tennessee; Tennesi-ee-Georgia; Georges Creek-Upper Potomac.
The check-off clause usually specifies tha.t the employees must
notify the mine mffnagement in V7riting that they are agreeable to the
wage assignment."' In the case of the Southern Appalachian Agreement,
provision is .made that the United Mine ITorkers will defend and -orotect
the operator against expenses, repayments or losses on account of con-
tention that the check-off was wrongful or illeg.al
Although the Bituiainous Coal Code in K.R.A. did not specifically
mention the check-off, it did provide that any deductions from em- •
ployees' pay, if not a matter of agreement, must he in confornitj' to
the general rules and regulations Tjrescrihed hy the Administrator.
(Article V, (c)).
A comparison of some contract provisions dealing vith occupational
and personal expenses, check-off, checlci:eighmen and -nay days is shown
in Tahle III.
Scrip Payment; The practice of scrip payiTient in the "bituminous industry
has long "been a subject of comyjlaint. Since payment in scrip, made
in the form of trade checks, coupons or tokens, is usually taJ'en out
in merchandise, numerous abuses nay arise. The most common abuses are
the discounting of scrip by compajiy stores or individuals and the
limitation of the employee's trade to the company store. As a result
regulatoi-y or prohibitary legislation vras- enacted, seeking, to control
the issuance of scrip and the practices of the comToany store, Ilary-
land enacted a regulatory statute in 18G8, Pour years later Penn-
sylvania passed a statute attempting to control wage pajnnents^ scrip
issuance and company store practices in the coal mining industry. 2.'
During the decade of the eighties, tv.'elve states, among which i-ere
Tennessee, West Virginia, O?iio, Kansas and Washington, passed similar
legislation. At present 32 states have laws relrting to comDrny stores.
|1/ wage .-^.-reenents in Bit. Coal Inf]ustr^r in 1934. U.' ..I.'. , p. 134
2./ The Economics and Social Im-olications of the Company Store and
Scrip System, IT.R.A. , llovember 16, 1934, o.lS
9837
Talkie III
COMFAPJ SPIT OF PROVISIOHS CT S:]LECTED COl'TTRACTS
■■•HIGH AFK]CT COIIDITIOITS OF S PLOTrliTViT l/
PERSOITAL EOCPE-SES
House Goal
House Rents
Mouse Lights Garbage
$2. PC
Smokeless
month -olus
■Jot
TTot
Not
del' chgs.
mentioned
mentioned
mentioned
Central
Code
not
-=ot
Hot
Pennsylvanir.
Price
mentioned
mentioned
mentioned
lestern Penna.
ic^;
IC^o
iTot
ivlot
Districts 5-4-5
Increase
25(^per
Increase
mentioned
mentioned
Ohio
ton in-
■Tot
Hot
Kot
crease
mentioned
mentioned
mentioned
$2.90 per
rot
Hot
not
tiicnigan
ton for
steam ip.
mentioned
mentioned
mentioned
Karylend
Code
1C>
TTot
not
Price
Increase
mentioned
mentioned
■Mo rt hern
Same as
$2.00 per
35(f' Tier drop
Harried men
W. Virginia
Smokeless
room per
where not
$1.50 per mo.
month
metered
single men,
$1.00 -oer mo.
Kanawlia,
Same as
Same as
not
Sout hern
Logan and
Sraokeless
Snokeless
mentioned
Hio-h
Williamson
Except Eig
except Big
except in
Volatile
same as
Sandy IG .
Sandy 35 rf
So. AiToal.
Smokeless-
Increase
drop, Harlan
i-'here men
all others
& So. Ar)pal.
elect Hr.
on a ton
45^ droT iHith
rate dp sis
6C 7J ma-:innjn
-oer light
\l Coal Age, March, 1934, editorial sup-clement
9837
Ill Continued
OCCUPATIOTMAL E:<PFTSES
Smokeless
Central
Pennsylvania
Emlosives
Operator disignates
explosives and sells
to loader at cost olus
hfindling; charges
Sane as
Smokeles
Smithing Charges
r of Ifo of lo-der
earnings per month
^d per ton for pick
Coal - -""d; per ton
for machine coal
Electric
cat) Ism-QS
8(f: per da;r per
shift ^7orhed-
loader res-oons-
itle for an;^
dampse
75!^ per day per
shift \7orked -
era^oloyee respons
ihle for any
damage
Western Penna,
Dists. 5-4-5
Same as
Smokeless
Same as Central
Pennsylvania
6(f: per day per
shift - en jlo5'"ee
responsihle for
any dam.age
Ohio
Michigan
Maryland
Same as Smokeless
Cost of Explosives
stjecified in con-
ITot
tract
mentioned
Hot
lio charge
m'-ntioned
for blacksmith
Same as
Smokeless
^ame .ns Central
Pennsylvania
Sane as Central
Pennsjrlvania
Hot
mentioned
6. 8^ per day per
shift - enployees
responsihle for
any dpjnage
ITorthem
W. Virgini-:
Same as
Smokeless
Same as
Smokeless
Sane
Smokeless
Southern
Volatile
Same as
Snokelef
Same as Smokeless
except Harl'-^n (no
charge unless
■blacksmith is
fu.mished
Same as
Smokeless
9837
Ill b
OTHTCa PHOVISIQIS
penalties Disposal of
Check Pay
a.nd fines fines collected
Check-off
"re i oilman <
J-ays
Smokeless
32.00 per
all fines
,1.00 per
miners
Semi-
day per inrn.
collected are
month for
h-^ve the
monthly
for illegal
to he donated
dues-maxi-
right to
and at
lockout of
to charity
m^im of $10
elect any
least
mine - $4.00
hy mutual
initiation
employee
t'7ice
penalty if
agreeuent
and no lim-
as check-
each
operator fails
it to s'oe-
weigliman
month
to collect pny
cial assess-
fine
ment by dis-
trict offi-
cials
Central
$1.00 -ler day
All fines
Same -s
must be an
Pennsyl-
oor man for il-
go to opera-
above -
employee
3a,me
vania
legr.l locliout
tors or uriion
$r5.00 limit
at time of
as
of mine--$2.00
den ending on
for special
the elec-
Smoke-
pen.':lty per nan
■"•liich side
assessment
tion
less
if operator fail
scar.sed lock-
to collect any
out
fines
Western
Same as Cen.
SaiT'e.as
Same as
Cannot
Same
Penna.
Fenrisylvania
Ce-.tral ?a.
Smokeless
interfere
as
Di st s . 5-4-5
with the
operators
in any
Sjiol:e-
less
Ohio
$1.00 per day
All fines
Opcraxtor
ma.nner
on 10th
oer man for
collected
must
c"; 25th
illegal lock-
to he used
collect -
Specified
of mo. -
out - no
for the
anouiat not
subject to
1 day
; penalty for
burial Fund,
specified
state la\7s
e-.rlier
failure to
f^afety or
paid by
collect fines
charity
checl:
kichi^an
j^Iot mentioned
Fines for
Hot
Not
On Fri.
loadlni'-; of
mentioned
mentioned
nearest
im-'mrities go
10th f:
to aid aged &
25th ea.
infirm. cri-Q-oles
month
only
by cash
or par
check
Maryland Sa.ne a.s Spr-g ^^ $1. .10 per mo* !Tot_ !"ot
Central Pa. Centra.! Pa. no limit to mentioned mention-
assessments ed
9837
'214-
CT^B F?0VISIP;T3
III "b Continued
Penalties
and fines
Hortiiern Spjne as
W. Virginia Smokeless
Disposal of
fines collected
Sane as
SmohelesE
Southern
Hish
Volatile
Kana'7ha, Log?n
Uilli^-'inson &
Big Sandy SPine
as Smokeless.
So . ADpal .
$1,00 per dajr
Kanawha,
Logan Tfilliam-
son A Big
Sp.ndj'' sane a.s
Snokoless
So . AiDpal. .
sare as
Centrr~l Pa.
Check
Pay
?d Check-off -reii^hman
da^^s
51.50 -oer mo Same as
-t least
no limit to Snokeless
tvuce ea.
sEsessments
no. 1st
T)^ day
on or be-
fore 15th
Kanar/ha, Logan Sane :is
S-ne as
1- ■■illianson S okeles
s Snoke-
sane as Snoke-
less
less. Va. $1.25
n?. all others
$1.50 mo. - no
limit to assess-
ments
and scrip. The legislrtion is -ooorly drarm and easilj' circumvented.
State legislation vsries as to negotiability or non-negotiahilit;-
of scrip. Five coal producing states (Alabama, Tentucky, Oklaiioma,
Virginia,, md TJest Virginia) require th?t the scrip be non-negotiable;
that is, only scrip presented for redemption by the original holder
may be honored. This measure may reduce discounting of scrip with in-
dividuals nho make a living therefrom, but it also places the compejiy
store in a monopoly position and has the effect of comr)elling the em-
ployee to trade ?t the conp=>ny store. Discounts on scrip are Tjrohibited
in tro coal producing states (Illinois and TTa.shington).
CociDlaints leveled against certain -nrovisions in the Retail Code
gave ris© to an investigation regarding the methods of using scrip and
the social and economic effects, 1/ The stiidy disclosed a great num-
ber and variety of arguments in favor of scrir) payment and in opposition
to it. The investigation was not concerned only '-rith the bituminous
coal industry. It also studied the iron -nd steel, lumber, te::tile, and
other industries.
Some of the ar^^^ients against the issuance of scrip
2/
1» EmTJloyees who do not use comx) ny scrip are less apt to
trade at company stores and so may face
_1 Economic -nd Social Imolications of the Comnany Store and Scrip
System. iT.R.A. 1934
2 Ibid, supra, pp. 7-10
-215-
the threat of discrimnation as to "'ork assignment, lay-offs pud dis-
chrxges.
2. Scrii:" limits tr/^de to comp-ny stores rrhere prices pre
higher thm at inde-oendent stores.
3. Use of scrip means assignment of en-oloyee's vrages gjid the
lack of cash mades it impossible for him to secure credit elsev'iere.
4. Scrip' as a credit -oractice kee^os the employee in debt to
the com.'oriij'' store. In some cases en'oloj/ers deliberately "oursue this
-Qolicy by maintaining -^n unnecosspry large labor force and bj^ limiting
the v'ork p.ssigned to each em->loyee.
The arguments in favor of scri^D -^nd the consequent credit practices
ar e ;
.1, Scrip-is p. convenience for the eirroloyees. It sim-olifies
bookkeeping ?nd rediices occa.sions for disoutes.
2. The use of serin h?.s been long established and the em-
ploj'-ees hs,ve become hpbitup.ted to it so that they have adjusted their
economic beha.vior accordingly. A change in this customary practice
T,'otild resu.lt in wides-oread hardship and genera-1 discontent.
3. The credit system red'ices the ris]: of robbery since
large amouLits of cash in the store or office b.ecome less necessary.
4. ComiD'nies are in better "oosition to make credit ad-
vances since they do not face much risk of loss, than a.re independent
merchants.
5. Employees during period of illness or unemployment or
other emergencies can. rely upon company credit without being ex-
ploited by loan sharks or becoming public charges,
A lengtliy vpy noeriod and the '-'itholding -of nages for the initial
pr.y period often result -in recourse to scrip or s-^me other form of
credit. Scrip, vhich is redeemable in cash one month from date of
issue, is often discounted because the em-oloyee cannot hold out for
that length of time, especially d-M-ing "oeriods vhen the mine is operat-
ing only paTt time. In. some cases Tvhere "non-transferable" scrip rras
issu'ed, it va.s found that /the. operating" comi>"ny arranged to redeem it
at face vaa.lue nhen ^srpsent-ed for .conim.odities or at a discount of from
5 to 20 pr cent "lien -presented for ca.sh redem-otion .by inde-pendent
merchants (Alabama, Kentucky, ^est A^irginia)!' "Tiers this practice
prevails, t'"o sets of orices are kept - cash and scrip - the latter
averaging 10 to 15 per cent higher thpjithe former. Of the 658
bituminous coal comir-ny stores "hi c.h reported, 153 or 23,3 per cent of
the total stated that they did not use scrip, but kept open charge
1/ Idem, -0. 6i
9837
-216-
accounts.— ' In some instaiices certain services sucli as medical services
or insvLTance -oremiums cajinot be secured for scrip ^nd it "becomes necessary'-
to discount scrip at a loss, normally from 15 to 25 per cent. 2/ rpj-^g
traffic in scrip in some comr.Tanities is considerable in amount.
Some 347 stores or 57.7 per cent of the 6C1 'bituiinous coal con-
v^nj stores reoorting, stated that their parent com-o-.iies issued scrip
on pay da.j-s.^ T/here this procedure is follo-'ed, it is possible for
some of the i?orkers to be chronically indebted to the parent compr-ny
and not receive pny cash for long "oeriods of time. In one case a com-
pany in ■''■est Virginia "ent for t^o years without even the formalities
of r. cash -oo.y day.
The investigating comnittees recoin^i:nded a change in the provisions
of the detail Code, This recorr lend-tion '•'as:^'
""To com-o^nj'- store or retail store shall collect
• by offset in the form of scrip, book credit or
othervrise, a,gainst the -'ages of any person other
than its own employees engaged exclusively in the
retail tr-^de, an amoujat for merch^^ndise sold by
s-id store in excess of 25 "Der cent of such pay
earned in any pay--oeriod.
Fo store shall -mrchase or receive or accept for
cash or consideration in trade or in pa:$'TQent of
indebtedness any scri-o at less than its par or
face value."
In addition the com:aittee recommended that regulations be designed
to insiire tlia.t the vrarker receive a reasonable oortion of his wages in
cash on -p'j day and tlia.t pay periods and pa,y hold-backs be limited to
one week. It also recoMaended that v/ages due should be paid only in
lawful money or par check. This latter provision vras already a paxt
of the Eituminous Coal Code (Article ?, (c)). Its effective date,
ho-ever, we^s postponed from time to time pnd finally ?n indefinite
stay was granted.
Con-QPny Stores; The comprny store or industrirl commissary is. closely
related to the histor " of the bitujninous coal industry. Many of the
richest coal deposits "ere found in isolated and often mountainous
regions and could only be developed by business men who were willing
to make the necessary cp-oital investments and ftirnish labor ^-fith houses
and provisions. There is little reason to doubt that the comprny store
was originally motivated by the concewt of service to the mining
TDO-oulation.
1/ Idem, 0. 90
2/ Idem, -o. 69
3/ Idem, ;o.98
4/ Idem, p. 2
The oldest Ditiiminous co-.l fields are thoss of the Central con-
Detitive field, coin^risin^; "Te stern Pe-ins7lvania, Ohio, Indiana, and Ill-
inois. Prodv.ction in these fields or-c-iiie increasingly iinrjort5.-it during
the la.st. tT.'o deca/Ies of the nineteenth .cevitury. iiany of the mining
opera.tions '-'ere located in reiiiote regions so that the' operating com-
•Da'--'.ies "■'ere compelled to auild houses for the miners, set up company
stores, ano provide other essential services to the mining comraujiitj'.
Conditions in these fields "-fere remarhably had ujitil the end of the cen~
tury,]^/. Iiany changes, ho'Tever, ha.ve tril;en pl^ce in these fields as a
result of their unioni ".action ?nd the development of surroiinding com-
munities. Conpfny controlled communities "ith company houses r-nd com-
pany stores have oecome relatively insignificant.
The development of nener coal fields in the early years of this
century h:,s Drought '-'ith it a ' continuation of the characteristics first
foTxnd in the older coal fields. Llaaiy rich coal deposits ^ere found in
the moujatainous areas of Ilaryland, "est Virginia, VirginiPv, Kentuclcy,
Tennessee, Alahama,,, Arksnsa.s, and Colorado. These neii. coal fields pre
more nountainous and in general more distantly located from large settle-
ments than vras true of the older fields. The development of ca-otive
mines in these nen coal 0.reas hy large ind-o.strial coroorations ha-s meajit
the develo;ome-:.t of a ,gre«^t many comp-ny to^-rns. In addition, it must he
reraenhered ihfit these regions i^ere mainly on a non-union basis ujitil the
advent of the F.H.A. ;-'nd the Bitixninous Coal Code. 3/ These ne^er coal
fields, then, are the ones vhere the comD^ny controlled coranunitj'-,
compan;^ houses, and coraprny stores still persist.
Any discussion of the corai^^^ny store is necessarily closely rela-ted
to credit policy and scri-o p';:yraent. It is necessary, therefore, to m?Ice
reference to the loreceding section of this manuscript. The distinguish'-
ing fea.tu.re of the company store is its exclusive right to collect m.oney
ovred to it hy its customers hy ded^icting sr.ch ohligations from the pay-
roll of the operating comTD-ny.
The ccnpany store may he O'^ned hy the parent compc''ny, a department
of the opera.ting company, a, subsidiary,, or semi-dependent store.
In those cases -rfhere the comisrny store is semi-independent, the operat-
ing comp ny malces a v^age deduction agreement Vrith the store. Commissary
rights are sold to outsiders for a percentage return (varying from 5 to
10 per cent) on the sa.lei; made for scrip or other tj'pes of credit. The
study of the company store system foi'^nd that for 653 bituminous coa.l
stores in 1934. 66 per cent .^^ere under a department of the pareiit com-
pany; 2C,6 per cern; nei'e subsidiaries of the company, and 13.4 per cent
The pra.ctices of the com-oany stores have been touched upon in a
number of invest iga.tions carried on by the Fed.eral Government. The
outstanding reports vrhich made reference to company stores in the
bituminous coal industry T7ere those of the United States Bituminous Coal
1/ G-eorge, J. E. The Co-^1 hiners' Strik.e of 1897, Qu'^rterly Journal of
Economics, Vol. 12 pp. 187-191.
2/ Cf. Section dealing '^ith history of i^age negotiations and of in-
dusti-ial disputes.
^/ The 'Lconomic and Social Im^ilications of Company Store and Script System.
0-1. cit. t). 80 .
9837
Co:-.ission (i::'20), the Unitec. States Cor.l Co. r:i scion (I32O) , U. S. Senate
Investif;ation 0;." conc.itionr. in' the coal ■fielc.s 01" Pennsylvr.nia, 'Test
Vir,-:;inia, and Ohio (S.ncs. lO^)- 7.0th Con^'resr,, 1st Session, lS2o),
Davis-Eell:" 3ill (lS2i2), anc. the. .U.; S.. Senate Investi';ation of conc.itions
in the coal fields of Harlo.n rnd., Bell. Counties, rientuck3- (S. 1:^65. I7S, Y^^i'-"'-
Con/-resG, 1st Session, 1S"2.)
Hix-ieroiis argu-'ients for and a£;a.inst the' coroanj stores have lieen lade.
So"-e of these contentions have alread;'-. .'bee-.i oresent'Bd in the preceding
section c'ealin^;,' ■7ith scrip paynehts. ' So;ie additional vievs op'oosinc the
conpon-- store are:
1. Co;jpan7 store practices reswlt in reducinif; the self-
reliance 0" the -eMployee ?/id shift the 'Ve.s -.on,si''oilit;- of iDtidgetini;; fa:iily
inco:.ie fron the houscTife to the store nanaj^er..
2. , Co: ipan-- stores foster economic ■oeona;je and are only a
perpetuation of the "true"':" systeii.
5. Co. :pany, store prices are hi;;;her than those of neighhoring
independent stores. , ^ ,■
U, Parent coupan;" o-med stores represent a dual enterprise
■"'hich reclains' '/ages 'that :iight other-."ise he retained hy the e"ip3.oyee,
A.gainst these statements a-opear those "hich hold thr.t:
1. The credit s"sten helps the enplo3'ee to hudget his o-'.Tn
expenses.
' 2, The covipan;- store' .protects ei.iployees .frou ercor'bitant
prices -.'Inch .:ight other- use he, charged h;.'' irresponsihle independent
;-nerchants ' in isolated coirranities.
3. The profits 0" the coupany store result in the eiiployer
paying 'better rra 'es.
U. The coviprny store,, .throu.gh its patronage, cncourrges locp.l
agriculture anc industry.
This controllers-/ apoeared again vhen euoloy tent conc.itions and
-provisions '.--ere discussed at the hearings held to for-.mi.ate the cor.l
code. One large northern operator' stated:
"lTo'7, p.ll over the liiddle '.Test, and I p.n -pretty
s-are in other districts, o'.ie of the -eanest
.lethods of u.nfair co-ipetition is ^agreeing to -pay
the len the standard scale a-nd then pay thera
in -phoney .lone;,' or tr,he had: his security "jy
rn.ising their rents or i •; sorae other "ay. . , "l/
Another ooerator "ith headquarters in Ohio, speal:inr: :"or the Central
Coal Association, said:
"In the non-union nines it is the --eneral practice,
that is, our raines a-nd eve-ryhody else's non-u'nion
■'.ines, -.'hen' the men do not trade at the conpany-
store cjfid pay -/hatever prices "are asiied, they are
let out. That is particularly ■ true in the Souths
I'^j.rtherr.iore, there is the 'oractice of -oayin • the len
1/ Bituii-nous Coal Code Hearings, Au-,u.5t 10, 1533, - p.' lOlj)
-219*i
"itli scri':. "Idcli ic ,;oof- ohl" n.t the co-ipa:i7 store, "l/
Tlie U.S.A. investi;;'atio2i O-' CQ-:',;xr rtoi'es fjenerr.ll'"', ir.de in 1S5^>
found that returns :P"ro: i the oituiinouG cor.l "'iclds -'ere concentrated in
the strtes of "Test Vir-:i:iir; , FG-.vis--lvr.nia and llcntuch;'.?/ "^he retu.rns
fron each o".' three otlier coal prof-.icin,-, st.-.tes represented a little ovei
one per cent of the total nufoer of 3%p The IZepstone Coal Director"/,
1^32, recorc ed a total of C3? coiipm;./ stores. The distrihution h/
states of t'le co:ro.''n7 '-tores is sho-'n nn the f ollo-.-in^-^ tahle.^/
Trjie IV
3istrij-tion of C^o Bitvuiinous Coal Co '.san" Stores
:r- States. 1^3'!-
I'ufjer irercenta^^'e
of of
Stores Total
Alaha-ia 37 5.0
Colorado 5 ' 0.3
Illinois ■ U O.S
Ksn-tud:7 100 _ IS. 2
Ne'-' ;;e::ico 5 '^•7
Ohio S ^'^
Pennsplvrnia iSl 2U.5
Tennessee 13 2.0
Utah G 0.9
Vir-';inia ;3 5*0
■Jashi n^';;t 0 n 6 0.5
j'est Vir-inia 2G3 Uo.O
■J^'-o.-.iinf; £ 1.2
All others £ 1^2
^otrl >o 100.0
It has Ion;-; heen arivaed that conpan" stores are nocessp.r^- to serve
isolated co rrtuiities. The investicatin;-; co-riittee found for the "bitu-
.unous corl industr" that 57.2 per cent of the co:rpan:'- r.tores ^7ere one-
___ . _ . . lid
seePa thp.t "ith -.nodern i.rprovc lents in trrjisportation and co;.L.iunication
facilities, isolation ca-n no lon;'_:er he l^eld as a valid ar^oj-.-.ent for
co:voa-n-.^ stores.
1/ Ibid, Supra, . Pi 10U3i .....
2/ r.cono.-.i:; and Social Inplication;:, etc. op. cit. p. 77.
2/ Ihid, r.ipra, p, 7^
5/ Itic, r.'S2.
SS37
-220-
rrequent couplr.ints lir?ve ocen ;:r.c.e to the effect tlir.t corop.ny
stores chr.rrjeC iii'jher prices for vie-.rciar.ndise thp,n rid independent
enterprises. This chr,i";e ir/- have soue vrlic-itp in vie-' of the fp.ct
that sorie five- states have le;'.;iGlated en the ;atter of prices chr.r/"jed
for £:oods at conpan;'- stores (Ar'-rnsas, Conr.ectic-iit, Indiana, Ohio,
•and Vir-inia). -''o\ir of these strtes produce coal.
A field inveT ti{;,'ation -ras Made of the prices charged Id^ 102
representative con;issaries and ?'5 independent . 'jrivatelp ovrnec.
stores,!/ The stud;-- compared coM.:issar;- prices -'ith those of the
neeirest independent cor.petitor £;ivinr; rue regard to coMpr.rahle ser-
vice, such as credit, deliver;-, and locption. In f^eneral the sane
foodstuffs, -rhich the U. A. Coal Co;.-!ission liad studied, '-ere in-
cluded. Since the investip-ators fotvn'" little difference in" the
general char cter o:" con: lis sari es, a '-;eopraphic:il i-atner than inc.ustrial
(■^.Toupin;; '.7as 'lade. The averrre prices chrr^'^ed op conpanp stores and
"bp incependents nere ,piven the sr ^.e veights -/hich the Con-iission used. 2/
In those instances 'There a.n are? '7<as investigated, -Viich the Coal
Connission had not stuoied, the n:ost cappropriate 'Teight of another
area '-'hose people has similar hahits '7as used. The follov'ing tahle
is a su.uiariza;tion of the price con.-.crison for those areas predoninately
interested in coal production.
1/ Iden, p. S3. ,
2/ Cf. u, S. Co.al Co • .issian, Part III, pp. l57?-7o
SS57
-C21-
Tr
"o^
.e V
Coinr.ri:
?.on o:^ V'etril
, J
'ricer of
roods in
3o:T}roiv
Stores and i
,n
:iei-;hbor
inf Inde-
penc
"-2 nL^ Stor e s_i
.n_
J:^ (1)
Per Ce-t Increase
of Co -.pan;: Store
■orices over Inde-
"Tv.-rjer F tores
Af.::re:
'■:ate of
-oendent Store
re"
ortecl
vvrht's i
avr. -vrices
Prices
District
■Co nr--
Inde-'jendent
Co^Toan:'
Indeoendent
Independent.
stores
storec
Gtore-.
-.stores
store priCBBi
Alabana
lU
Ik
UU.21
'+i; 7^
■ 5.9
(3irnin^"''
ban)
-y S
■7
UU.r;i
:ii.So
Eastern :
Kentuc,;
7.7
Er stern '
lennes
r.ee S
u
3-r.7? •
ji.kS
10. U
Vir 'T-^
i r. 11
11
^^2.77
Ui.ST
2.1
::ana-'.ia ,", ^^ ' U? :;7 . ^^0.52 U.6
lTe-7 Taver 2S
dnco 10
15 ^2.37
10
.OS 25.23 7.1
(1) The Icononic and Social Implications of the Conpany store and Scri'^
Svste:, >T. P.A. , 153^, p. So. These areas '-ere selected as l)eing Irrfel;
coal -roducinv in charrcter. The- Bir?'.iin:';hrj-.i -."istrict proljaol;-- also in-
cluded rs-jorts for the steel ir-tustr;-.
The avera.-;;e prices chrrf,'ed h'* co rpany stores, -'hen al^. itens vere
wei;:;hted and considered collectivelp, -vere hi'-hrr than those cliarr:ed "by
indepenc'ents in all areas -^-liich "ere st-u.ied. The range of difference
varied fro': 2.1 in Vir."inis, to 10. U in flastern Tennessee. It nust 1)6
re-.ie iterec" that cor.ipany stores (iiany of ■-'hon are :e-iT3ers of a co:v.iss<T.ry
chain) •■esc co v.Dred -Titn ir/ependent stores. If chain stores had 'been
included ■■ . the study, the difference in -trices -'ould have teen .oven
greater.
The' i.egree to i-'hich conpany stores a,re really "conpany^ nay "be seen
in the fact that 63.6 per cent of the 6U2 l)ituninous coal company stores
reported' that 55 f©^ cent or norc of their total sales -rere made to
con -.any enployees in 1933-1/ Appro-.inately S3 per cent of all the
1/ Sconoifiic and Social luplications, etc. op. cit. p. SU
9^37
stores c'-eclrrcc. th''t 'lore tli-'^.n '^Cf :ei- ce:,it o:" uiiei?' tot;'l srj.es •lei-e
:ir.ce to co rcr.n;'- c-:3lo:'ees. Onl-j I.5 ;3er cent 0:" the stores reported
,'?';■ _-er cei.t 0" les-: of totrl lousiness --itla co'-ior.n-- enplo7ees. T'-'O
vie-'s -ir-j he t;\':cn of t].is r,nr..l-sis - one, t'lat in these cor dimities,
corJ ;:ininf: '7,-,s the sole sov.rce of e:rolo" '.ent r,nc. therefore rll store
hr.sir.ess ■•oiili", ta --fith the c :-'A.o'jce or his household, the other, that
erolo^ees in the co-imiinit", 'lot en-r/ied in cor.l -rinin-, '-referred to
ti^r.de a.t nei -hoorin:-^;; indeprr.-^? "/'gg oeccv.se of price or service considera-
tions. A'lother indication of the jrtrcrr;;o of tlie co roany r-itores :'-P:j he
■otten fro'i ar. rnal^'sis of tlie t' pe of sa"'.es -'ade. A lp.r.';e credit
"br.siness i:idicatos conpanp e iplopee tra;'e.. Apr/ro-'inatelp G2 per cent
of the stores reported that c."sh s'\lcs in 1535 repi'osented 10 per cent
or less of total sales (no per cent o: all the stores had 5 per cent
or leso in c^sh srles.)l/ Only h ;:e:: cent O"" the stores reported cash
srlos aiountinf; to 20 per cent o:.- !oro of the totrl sales.
It is of interest to note the relati isfj/j o:" vora.fvnj ctore sai.es
to cor-ipanj' papro^'ls. for 3^2 stores repQrti.\' jo "ii sales anc" payroll
fipares, tae percentage --hich srles to e ';:0-opccr, re'-resented of the
annual payroll .-'or 1^33 'vas 33«^'-'- 2/ h'ncn tliese /ercentapes are
analysed hy states, it "i"i.l he ;iotec' t'lat those rreas --hich are hetter
orpanised or closer to urom '.;ettlo onts have lo--er percentayes
(Ohio', 7.S; Illinois 15.3). I^li^i hi --est ,percenta.-;es are found in
Tennessee, Vir^l'ii." , Alahai2-, a"id hentucl.:y.
Trole VI
' ' Percent
.r.-
e of Ani
rj.al Sr.les to Co:r:.^n-'' Ijnlo-'ees hv
-£2
Co
:ror,ny S"
tores to- Total Annual Payroll of
P
arent Ci
ar.jrnies in 1933. "^r' States
lAl-f
jer tores Percentaye Srolo-'ee
Strte
^^e;:
Dortlny Srles to totrl annual '
. . ^-or-roll . .
Alataia
3S • U2.-
Colorado
5 37.U
Illinois
2 7.3
ZZentuchy
S7 kO.G
he'7 :e::ico
3 23 . 0
Ohio
7 15.5
Pennsylvania
133 P-^^'O
Tennessee
13 ?3.5
JJtoh
• 6 52.0
Virr.-inia
30 • UU.7
Hashinc'ton
3 21.0
'Jest Virpinia
213 ^C.o
'.lyoninc:
S 23.1
All others
__ 3 . ■ 2^-^
532
1/ Ihid, P. 23.
2/ Ide:, P. SI.
-223-
'./aen r. •.7or::er c'.esires cr- cMt r/': a co vcriV' store, a/;/.ic; tion is
::r,oe to th'- "ooo'. lioeoer or store 'rnc:,"e:;. Acvrnces are usv.all; lac^.e
a^Tinst na -OS alrejc:".;;' earnoc", "but not c.we v.ntil ne::t payday, "Tlie p;-iOiint
of unrssi-ri-.od •.•'a;;;es ar'ainat v.'liich credit ir." "be e::tended in v.s-aall:'
ascertaine:" 1)7 tlio s toro rc-_:. rose- tat, ives. Occaslonr.ll-- credit is :;ivon
a,<';ainst f-ature or unearned '■veC, durii, ; -periods of tejiporar7 unen-
plo^^-'ent or i'' case of incividiial e..ier';encie3 s'acii as illness. Gut of
a totrl 652 stores roportin,-, 3^2 or 52.5 pc-r cent stated that they
had access to the coinpanp eirplopees' earninps.l/ Miere the payroll
laster of a parent covrpany issLies a store order to r.n enployee, there
is no need to have ?/:cess to earninf^s ' recorc's. Accessi^oility of
eaminps records is inportant s.s a checL or credit ertension and on
the vol^aiae of purchases :^ade "xj each e.iployeo. It is cirir.ed that the
latter checL: is used as a threat of ciscrir.ination p/jainst the enployee
Tho dees not huy at the conpa.n;- store. T'he lI.fl.A. investi^.-atin/j
coivr.ittee :''ound jut -^e" cases of direct and indirect pressure e::erted
on the e-.roloyee to trade at the co'-.an-- store. 2/
In fj-eneral, issuance of credit hy co-rpany stores is :';adc on a
■business oasis rather than a philanthropic Dr.sis. An analysis of
bad dehts inclcr.tos that the ratio 0:' losses frj total sales for the
perioc" 1^31, 1S32, l!^33, ^'^'i'- '5ix lonths of 153'l- rnoL-.nted to only one
per ccnt._3/ fhe losse'-. include hoth hac dehts and enploj/ee relief
hecruse -lost corrpany stores do not separate these itens. In the uajority
of cases J enployee relief is not an outri-:;ht p-rant, out rather a forn
of crec'-it "ith the vie^ of liquidation frora f^itare carninf,'s. The
follo'-in," tahle '-'ill indicate hy states the total sales and the losses
on had accounts and erjoloyee relief for the Year 1S33»
1/ I den, p. 53.
2/ Idem, -c, 1^.
i/ Ideu, p. S5.
■31
j24-
:o\e VII
Anoant nf 3ac". De'ots end Ih:lo:7ee 5elie:? anc Totr.1
Sr.les of I^it-aiinous Cop.?l Cor -.en--' Stores in.
Lo!:?os ry:. "or.c
Iletio looses
Str.te
■accn-nts r,n(;.
C?ot;;.l
to
e::--lo--ecs roll of
srlcs
total sr.les
Alp.'ba-a
Colorrf.o
Illinois
llentv.C- --'
iTe'7 '."erzico
Ohio
?enns7lvr?nir.
Tennessee
Utrli
Vir'-inir.
7c.s)ain'-ton
7est Vii nnin
■^ycnir;::
All others
0 3?,^?5.
$2,31-, SOS
O.S
^'Gl
233, 2B3
0.1
• 2,20^:
2G-,S90
0.1
Go.T&o
5,cc2,k36
O.U
3,ao-:-
527,035
0.0
^00,307
0.2
I. ■•■;^ 7'R
.lV,S'!-7,c35
1.6
:,-:7
653,155
O.S
UUd ^^1 '
1.5
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?,7o5,53S .
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1,202
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0.5'
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7S5.753
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^7^...
223,221
Q^
■1,067,241
1/ Zconoiic rnc Sccir^l I: ralico.tionc;.. op.cit.
O?
Co:n-i?fny Houses: The housing; fpcilities offered "by various mining
co:anranities are cuite iinxortant to the mine worker and his family.
Tnty pre significant not only in terms of general living conditions,
but also have a ouaring uron the conoitions of employment. The
conditions in bituminous coal mining rhicn led onerators to establish
company stores operated in a similar manner in the building of company
houses, kining o-oerations distantly ■ located from large settlements
or mining comirrj.nities which are company controlled are apt to have a
hif;h percentage of company oi'Tied houses.
The U.S. Coal Commission in its investigation of the bituminous
miners and their homes found three distinct territorial characteristics
in the coal fields. (*) Pennsylvania and Ohio v^ere fairly well settled
before mining operations began and although there are numerous normal
communitie.: scattered tiirou.ih the coal lields, between a fourth and a
h^lf of th',: laire ^'-orkers live in coapfny houses. Tnt cjouthern A'cpalachian
Area (-..est Virginia, Eastern Kentucky and Tennessee, Virginia, iiaryland,
and Alaoama) is more distantly lucated troi normal settlements and
larger proportions of mine --orkers - fivo-t/.irds to threo-iourths live
in company controlled comnranities. The third pi Lt> Qvoar (Illinois,
Indiana, Kansas, Missouri, an-' lea) '-ntre p^:riculture and industry had
established independent to'-'ns, '-nere satisfrctorT transportation fac-
ilities existed, and '-here the mining population ■•as predoniratelv
n?tive-born, onlv r s'.v^ll ^ro'-orti vji (ppproxinately 10 'ercent^* of the
mi'-'ers live in comT.'any houses.
Tatural location ox 'ninin.-; operations determines to a large
extent the tvpe of con-rranity and the housin.:; facilities whicn are pro-
vided, '.-here flat, open spaces or softlv rolling hills are the locale
of the miring to'-n 'ar, in the addle Western States anc paits of Ohio
and Pennsylvf '^ia) , considerable opportunity exists for providing
houses with fair sized vards,. play grounds, etc. Fnere, hov-ever, the
mi'^ing operf-tion is loc.-ted along a '"incing creek in a narro" valley,
'-ith shari-lv rising iiills, th.^- com .unity and housing facilities are
distinctly limited. Such locations ai e luite com ;on in the Southern
Appalachian Area. '..hile natural limitations do exist, most raininr
co-amunities evidence a lack of planning and pn inadeau-cy of epuipment. (**)
The houses are often poorly located, being close to tht, railroad tracks
and thf tipple. Tnuy are usuallv constructed o: the ci'.e.-pest material -
i-'ood i-'ith the outside linisned consistinf' of ' tataerboara "ailed cirectly
to the frame and often lackin^; m any sneathin •, except pernaps paper,
.ost 01 the roofs aie of coapositiun pape) . .mly a very small percentage
01 the hop ,es '-'e: e furnisiiec ^--ith inside flush toilets, bath tuDs, and
running '^rter, i any of the nouses are in a strte oi disrepair and the
pairting is oiten neglected. These latter condition ai e not memt to be
descriptive oi all co rrany nouses. It .rrust be lemtmjered that some
operating Cpi.ipanies lollof^ a policy oi iurnisnin.:- neat houses to mine
(*) U.S.Co^l Com liscion. Fart III, pp. l'i-1 ci-14Jb. ■
(**) See TeFtimony in James 'iTalter Jarter vs. Garter Goal ^o:ip.-ny,
Transcript of lecord. No.' 636, Sapreme Gourt oi tue United States,
October 1935, pp. 505-508; pp. 520-5:1, etc.
-226-
"orkei;s and rapintririing these- houses in p sptisf ^ctor '■ condition. To
some extent the housing concitrons pre renenc'.nt uoon tne miner pnd his
fp.'iiilv insoiar as they are '"illiniv to coonerate in hpvimj cltpnliness
pnd to tpke food care of the -rented urorjerty.
ore important for thf. -curposes of this section dealing rdth the
conditions of eimolov-aent is a disoussion of the terms upon vrhich the
uituiainous raine workers live in couiprny hoases. Before entering upon
the discussion, it imist 'be pointed out that the range and level of
rentals for company ovned houses are lov^er than for others. In pddition,
the occupant of the comcany o-ned house secures nis fuel arc often his
light at a lower cost t-.pn other 'age earners. in some instances, no
pocitiona"' cnai'ge is mace for '."pter even tiiour::h it oe "oicec to the
cre.aises.
The mam objective of a coal coviranv • nich ouilrs houses in the
Vicinity oi its OTerations is to ke<;r3 a suoi:lv o^ mine -oi-kers. hen
p mpn and his fa'Ti:!^.'- .lovf i-r-to one oi these houses, it is on that opsis
that he is e:anl0"-ed or -ill De eiacloyed by the comoany. Unlest the
corapanv's mines shut ^oyr., the miner ^-ho ceases to '--ork in the mine
rirast surrender his house to the man ^'ho re-plpces him in the mine. Ir
this i-'py the -iiiner living in a co r^-ar-r ho\i<.:e difiers in status- fro a
otne? individuals renting indcDe^ncentlv o-'ned houses. The mi^-er, in
these instances, does not rent the house ander tne ordmarv tenancv
la^'s, r^hich in everv state assure security of tenure, cays of grace
defore eviction even for -oroven oreach ox contract, and pn America"
citizen's doi.iinion ovf r his O'-n -ojemises during legal tenure thereof. (*)
The house leases used by copI coiana'^ies .ar^r riifer sone^-'hpt in
■onraseolocv, but the "^roviKions- difxer unly in tne degree to i-'hich the
company's rights are ixolicitlv stated and the .m-'^nner in ^i^hich claims
Oj orcinar^'- tenancy are abrogated. The leases shoi-' that: (**)
1. Tae lease tei d'-'ates automatic- ll/ ' iienver the mine '"orker
ceases, from any cause ■'•'hat soever, to --/uri- for tiie coal company.
2. 'Tile lease can usu^ll f bt terhiinated by either -party,
ordinarily ur;on five davs' notice.
3. Tne co!fl-oany mpv leg:--!'!.'"' i^ut the mine -orker ano iiis family
out 01 the house at' tr.L ternii-ia':ion of the lease "-ithout prejudicing
its claim for .- nv rental arrears and v-itnout incurring liabilitv for
damage resultin.'^ to the mine '-orker; ' jelon.-^-ings through eviction.
(*) U.S. Coal CJomusfiion, Part III, t?. l-;.:.?.
(**) Ibid, L-arra, p. Ivbt. CoTjif,:.-of con^jany houre leases nio^r be found
in the a-mendix to the same rfoort, cr-. 11.-79 - 16b6. Also testi-
mony in Carter Coal Case, jctober, Ibo;.-, Transeript of r.ecord,
Supreme Court of U'^itrc :^jtates, n. 44.-. and -^1:40.
4. The company rany nwy itself out oi mine workers' WF,-es for .
rent due pna fIso for dpraa^ies to rroueity. The co;appny insy glso,
pccordin,F' to some lepsvs, "dthnold all unpaid 'rages at the termina-
tion of a lease, until the ^rendses are surrendered, According to
others, the coimDeny 'nay retain oerrflpnently $r,.vJO for ercli day tne
■Dre;nises are occu-.iec by the iiine '-orker or iiis f a nily alter the
lease '-r s teriainated.
5. The com'.^any reserves the right to enter ano inspect the
-ore'nises at anv time and to make and enforce rules ano regalr-
tions ailectinr the r.trtetr. or roads utior i-nich the premisep abut.
6. The /line '"orkers, accon ing to soae lenses, nust not enter-
tain or harbor u:?on tuc crcp.ises rersons objectionable, to tnt- com-oany.
Some leases urohibit ta'rinf- lodgers or uOard.ers unle^tnese are
eraplOTees of the corarian-^r. Other leaseK strte that the mine "orhers '
rights in the rremises are only ^s -leans- oi in.-rfcss or egress for
himself and family.
These -provisiv-nv, "hether they be in the interests of la'" and
order or to inrure inore eiitctive control over, l-bor sivrrly, do
make for legal insecurity of house tenure lanc limited dominion ot
premises during tenure, A provision ''hich st.-tes that a miner '"ho
loses or gives up his job ''for any reason '-matsoever" loses the
right to occup-r his nouse irom the d-^y ne ceases to '-ork, is open
to aDuse. ; sudden 'altercatior v^ith the iiine boss may end in dis-
charge for the miner anr loss oi .lome for the miner's family. Like-
"•ise, the mine '."orker approaches the bai'gaining process with consider-
able timidity since not Only iiis job out also shelter for ni s familv
mr^v be in jeopard^^. Some o-"er^tors hpYe contender th-^t these pro-
visions "'ere mere for.'is anc rarely used. Senate investigations con-
cerning conoitions in coal lielcs have f ounc , ho'-'ever, that in some
instances where co-.iipanies went irom a union to non-union basis (*) or
'-•nere companies soueht to prevent unionization (**) eviction oi miners
irom their homes, of ttjn in the ''inter season, '7as not uncoiaT.on. It
is not lair to cite such evictions as illustrative oi the general
situation, out thej>- do represtnt a tni'eat against the miner's
security. Thus, the miner and his familv face not only a cessation
of inco.me, but a loss of sh.^lter ^nc the expense of moving.
Industrirl Police - (a) CopI ptiC Iror Police: The svstem of
incustrial police (more ccm:ionly i-:no'-n as coal and iron police), has
been the suojtct of bitter controversy in the bituminous coal industry,
especially in "ennsvlvania. rhile thi. industrial police svstera is not
peculiar to the coal incustrv, it nrs received lore iTuDlicity '-ith
(*) Hearings on S, -es. 105, Investirjation ol :,onditions in 'joal
Fi-lds of Pennsylvania, .est Vir-;inia, and 0,;io. ly.-b.
(**) re rings on S, Res, 17b, Irve- tigation ol Conditions in Coal
, iulds of 'Jarlan anc 'ell Counties, Kentucky, 1932,
reference to this inrustry than perhap;.^ for any other excepting the
steel inoustry. Tiie incustrial iDolice haa three attribut'.s vnich
especially oistin^xii&her tnem from i-'atchmen guarding taeir emDlovers'
proiDerty. (*) Thev had the pover to arrest on a ^^-prrant; their emioloyers
'•'■ere not liatle for their unla^"ful acts unless dune in -Darsur'nce of
cir-ect orders; and, pDove -^11, they had the title anc the unifor:n of a
police officer pnc'pn authority v^r^ieh soruHc: fro^a the Co.nuion"eplth
itseli.
The first statute in Pennsylvania peri.uttin.'r; private persons and
corporations to -opy and direct their o-n '-'olice '"ita commissions granted
oy the governor wps enacted in IboS. This Act related to I'plroads.
In 1866 the systea '"as extended to operators oi any "colliery, furnace,
or rolling ;nill", anc later it '^^as extended to certain utility coiTOanies.
The various statutues, f-xcept tnose dealin.-- '^itn rp^lroad police, "-ere
.assembled in a sin^rle stp*ute providing for "Industrial Police" fAct
Oi Anril 16, 19S9 F.E. E46.)
This Act aut;;. ■fi7ed the i>overnor to a-n'c0i.nt incustrial police
on the application of "any corporation, ssi-.ociptiun o:- indivirual
O'-ning, leasing or being in --OEsession of any collier^', furnace or
rolling mill, and any "-ater coicipany, i-ater supply coinpanv, wpter po"'er
coapany, electric light companv, electric PO'^fer co ipany, electric
trpnsmission co ipany, mineral, mirine^: or qurriyxn.:; comprm'', or express
cojiprny, ifithin its Corai.ion"'eplth" . (**) A requirement of residence
in Pennsylvania for at le-~st one yer^r prior to the appointment '^'as
made and the Governor "'as reouired to inverti^pte the tappointee's
Qualifications. The a^'-^ointee hac to r:ive bona --ith a corporate surety,
Tiie 'T-overnor could revo]:e any com.iission at his pleasure. Tne industrial
policeman ^'ts paid by the coiapany securin.-; his appomtiat nt. ■ He had "the
powers and prerogatives conierred by lav upon me'-ioers oi the police force
01 cities 01 tht first clasF, nd upon constables". He ''ore a uniform
^■pi'^roved L-y the Governor and a badge bearing the vorcs "Industrial
rolice" anr the employers' npie. Tne Act -'as an imnrovement on the
previous statutes in that it reouired ever/ industrial roliceman to
nave been a bona lide resident of the Com:.iOn"'e? 1th for one year and
it reouired a surety bond for each appointee.
The coal and iron police "ere, in lost instances, ar:ried men
employed by certain co .ipanies to protect their interests. Since their
police pover s '"ere ■■•ranted by la"' and their coi.'i;.iissions '-■"'ere issued
by the C-overnor, their ei. ectiveness as a kind oi private militi-'^ '^'as
consic" rrbly inci eased. Abuse oil autnority cid not .aake the t-aplover
liable for damages unless speciiic directions for unla"'iul acts nad
beer issued. (***)
(*) Iieport to G-overnor Gifford Finchpt oy the ^ouiisr^ion on Special
Policing in Industry, Special bulletin Vo. 3d, 1934, page 18,
Harrirburg, Fennsvlvania.
(**) loir, EUPra, p. 19
(***) -:agan v, "ittsburgh Ter.iinal Coal oorporation, :77, Pa. 109; 1930,
9637
1
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