the event the Government, by legislation, enters the field of private industry. Instead of having a government of delegated powers where States are sovereign in all matters not delegated, we would have, not what we have now, but a paternalistic government which would meddle in the affairs of every private citizen, and liberty of action as concerns private initiative and private effort in industry would be destroyed. The form of government that we have and now enjoy would be substituted by a socialistic state-such a socialistic state, as at different intervals during all past human history certain people have sought to put into effect, but such efforts have, each and every time, ended in miserable failure. While we realize the many ills that to-day prevail in the coal industry, these ills have not been brought about by the Government and their remedy lies not within the power of the Government to control the industry. The coal people, it seems, until the recent past, have been separated from one another to such an extent that their wills and intentions did not coordinate. There has been too little cooperation. Such as there has been lacked strength and judgment and did not enter deeply enough into everyday life. We have helped to develop a world-wide industrial and commercial system which depends on coordination, which, accordingly, has been constantly growing in power and effectiveness. It requires people to pull together. The fact that we have not pulled together in the past, as perhaps we should, has not been entirely the fault of the coal operator, but has been due in great measure, to causes and conditions over which he had no control. We realize that there is no adequate adjustment of production to consumption, supply to demand, because these things have been left too much to the personal motives of individuals and smaller groups. This condition, it seems to us, is becoming appreciated throughout the country by thinking people, and is being remedied by the industry itself as rapidly as the complexity of the situation admits. The positive task of creating a new and better order calls for knowledge of a rare order and is engaging the best thought of the best minds in the industry. And I just want to digress there enough to say that if the people who have spent their lives in this industry can not work it out, how is some one else, who hasn't any knowledge of the industry-how can he work it out? And I have heard it stated here that there is no leadership in the bituminous coal industry, evidently portraying the proposition that the men in this industry are not competent as they are in other industries. It has been my pleasure during the last 20 years to associate, I think, with able men, more or less, in this country-politicians, statesmen, and otherwise, and I am not eulogizing anybody, but in my humble judgment there are as many men, compared with the numbers engaged in this industry, who are capable, in the coal business as there are in any other business; the coal business being quite different from other businesses, however. And I do not think that in this country there is any reason or cause for saying that men engaged in this great industry are not as capable in their line as are men engaged in other industries. Senator GLENN. Well, there is a cause for that, and the reason for it is the result which they have obtained. Mr. BELCHER. Various reasons. Senator GLENN. I say, that is the argument that leads some people to think that. Mr. BELCHER. How is that? Senator GLENN. The reason that leads some people to charge or to say that is the result which these leaders in the industry have brought about, as compared with the results which have been brought about by leaders in other great industries. Mr. BELCHER. Yes; and those who think that have not been on the inside to know, and do not realize just what the problems have been. Let us take this illustration since the war: We say there are too many mines in this country; that is true. Too many men in the industry; that is true. But during the times of national strikes and times when the coal production was stopped in certain States of the Union nonunion mines were opened; certain individuals opened up mines thinking that American Mine Workers, able as it was, would not give up the fight, but would keep on; thinking that there was an opportunity to sell their product when all these other mines were shut down, they engaged in the industry to an extent that they would not have done had it not been for those conditions. And the result is that that is one of the things that is, perhaps, responsible for bringing about the opening up of mines that would not otherwise have been opened up, certainly not in non union fields. The positive task of creating a new and better order calls for knowledge of a rare order and is engaging the best thought of the best minds in the industry. The call is to those persons who can lift into conscious thought and purpose what is already the hope and we may say the common understanding and striving of all engaged in the industry. There never has been a time in the history of the world when the sources for progress that mankind needed were inaccessible to man. The very nature of the situation that confronts us in the industry is the stimulus for a gigantic effort which is being made within the industry itself, and not by extraneous forces, and which will bring about a readjustment, progress, and contentment to those engaged in the industry. We have no hope in any other solution of the problem. Senator COUZENS (presiding). Do you want to ask any questions? Senator SACKETT. I would like to know what that gigantic effort is. Senator COUZENS. We have seen no effort, those of us that sit around the table. Mr. BELCHER. Well, it may be that the whole case has not been presented. I want to supplement my statement by introducing into the record-I have not the time to read it-portions of a statement made by Mr. George J. Anderson, which was reprinted from the Atlantic Monthly of December, 1928, entitled, "How much coal is enough? " which discusses the question what a dictator would do if he were given full charge of the industry, and which sets out in a more able manner than I am competent to set forth, just what troubles this dictator would have, and how it would be impossible for him to function. It will be recalled Mr. Anderson was the man Mr. Lewis referred to so much in his statement. Senator COUZENS (presiding). You do not ask to have all that printed in the record? Mr. BELCHER. No; just a few pages, which I have indicated. HOW MUCH COAL IS ENOUGH? (By George J. Anderson) [Reprinted from the Atlantic Monthly, December, 1928] I. For the first time in history, bituminous coal finds itself a national issue. Suffering from nearly the same economic ills as agriculture, and nearly as prolonged, the industry has become an object of political concern. Impressed by its serious predicament, both major parties voiced in their platforms a con sciousness-apprehensive, though vague of its import. My purpose is not to prejudge the case. Within the necessary limits of a brief statement I propose to touch upon a few salient points in this complex situation. Thereafter it is for the reader, if and when a legislative remedy is offered him, to assay the efficacy of its cure. In the attempt at diagnosis let us begin with the consumer of bituminous coal. What are his just demands on the industry? They are, I take it, essentially two: First, an adequate and continuous supply; second, a reasonable price. Has the coal consumer any present grievance on these two points? Personally, I think not. For five years at least the industry has stood prepared by actual demonstration to supply two tons of coal for every one the consumer normally requires. During that period, with large numbers of mines either shut down from lack of orders or idle from other causes, it has not only met a high level of usual demand; in addition on two occasions it has also supplied concurrently for months large deficits caused by the strikes of the anthracite miners at home and of the British miners in markets abroad. But how about prices? Again, it seems clear that the consumer has no grounds for complaint. Throughout these five years the price level of the industry has been continuously falling. To-day it rests approximately on the basis of 12 years ago. During the current season the consumers of bituminous coal will pay possibly a billion dollars less for their annual supply at the mines than they paid in 1920. I say "at the mines," for the coal producer is not responsible for and derives no income from those changes in the consumer price due to freight rates. At least one-half of these huge savings has gone to increase the net income of more favored industries-the railroads and the power utilities-over whose own revenue rates the public stands guard. Indeed, the prices now realized by the producer are so low that the annual loss to the industry is estimated at sums reaching far into nine figures. As with supply, the consumer has no grievance over cost. I doubt if any other question about industry can be put in this country to which the reply will come back so readily, so tersely, so unvaryingly, issu ing alike from legislative halls, public platforms, editorial rooms, and the chummy conclaves of Pullman smokers; reiteration has made the verdict unanimous. The diagnosis has already been adopted by acclamation: "Too many mines and too many miners!" Each doctor to the dilemma, of course, states the case according to his own therapeutics. "Too many sidings and too many coal cars," complain the railroads. "Too many coals and too many salesmen," growls the buyer. "Too many wage cuts and too many idle days," pleads the miner. "Too many expenses and too many price cutters," groans the management. "Too many competitors and too many losses," states the investor. "Too many risks and too many failures," decides the banker. Too many strikes and too many alibis," says the public. 66 In brief, everything about coal is too much or too many. Nevertheless, be neath this apparent conflict of opinion lies an essential unity. It is excess, And the root of all the evils is the excess capacity for coal production. That 66 much is clear. The real confusion begins when one poses the second query, short, simple, but full of high explosive for the unwary, How much is enough?" II. Try to apply this test to some of the chief factors, and one is at once bewildered by the labyrinth of chaotic corridors that is coal. Let us rush in, however, where angels might well fear to tread. For the moment let us assume a dictator appointed, and armed-under the Constitution we know not how-with full power to straighten out this economic snarl. To decide where his Mussolinian methods should be applied, his tools at the start need be only a pencil and a pad of paper. Our first problem is a relatively simple one, and simply arrived at: How much coal is enough? That is to say, looking only at total requirements, based o a normal cumulative average, what is the annual output of bituminous coal that will meet the country's needs? This is well known to be something over 500,000,000 tons. If it be true, then, that present mines can produce twice this supply of coal, our dictator is next faced with the problem: How many mines are enough? And now he is fairly launched on his sea of troubles. Far more light-heartedly than the dictator, we shall pass serenely by some stubborn facts. Coal is produced in more than half the States of the Union and in several times that many separate districts. Between these districtseven among mines of the same district-exist wide variations in the coal, both in size of vein and in chemical analysis. While pigs may be pigs, coal is not just coal, for different uses in the same market require unlike fuels. Even similar coals for like purposes are restricted to different markets by an intricate structrue of freight rates. Adjacent mines of nearly identical coal, reaching the same markets, contract not merely as to management but in natural conditions. Mine capacity differs radically from factory capacity in many particulars. Among these are the process of growth and decline in underground development, unrestricted by four walls; the daily struggle with nature as to gas, drainage, slate, and the like; an output dependent not merely upon these factors of physical extent and natural obstruction, but upon a constantly changing railroad system to move the product from vein to surface; a labor capacity affected not alone by mobility and numbers, as the factories are, but by shelter and supply, as an army in the field. And so on. Any one of these details will provide an interesting afternoon for our dictator when he comes to the leisurely selection of enough mines, and no more. However, just as we have not questioned his legal powers to eliminate the surplus mines, so likewise we shall not doubt his ability to choose the fit for survival. We rest secure in the faith that his decision on all these points. affecting thousands of mines scattered from Pennsylvania to the Pacific, and from Michigan to Texas, will be somehow good. In the end, we shall have not "too many mines," but just enough to produce our half billion tons. The next problem is to man the mines. Obviously the list of factors just cited will affect the decisions as to the force at individual mines. We are now interested only in total man power. Our dictator knows-as who does not?-that we have "too many miners." How many are enough? According to the latest Government reports, there were something over 590,000 men employed in the mining of bituminous coal. This is a marked reduction from the peak force in 1923, when the figure was 110,000 higher. It will, of course, not be difficult to decide, in theory, how many more men can be released. Without trying to decipher all the calculations on the dictators' pad, we know he will take into consideration the following: Full-time work, daily output per man, and an allowance for absenteeism. All industry has to reckon Somewhat with the latter item, but it is abnormally present in coal. From its involuntary aspect it must be noted that mining is a hazardous trade, with even a normal injury rate that accounts for a considerable decrease in force. Its voluntary phase is perhaps even more unusual. The miner is traditionally an independent artisan, seldom successfully ruled by the disciplined routine of his factory comrades. The fortnightly pay days, in mining, are notoriously accompanied by widespread lay offs. If the miner chooses to take a week-end jaunt he considers it no one's affair but his own. The coal not dug to-day will be mined some other time, and idle days will still intervene. It is the experience of most companies that the rate of voluntary absenteeism tends to rise with increased rate of operation. Consequently even a dictator may well pause to estimate conservatively his practical power to enforce a veto on 'the miner's freedom." In brief, my personal guess is that he will decide that a maximum of 440,000 miners is enough, and that consequently there are now about 150,000 "too many." Happily, being assigned only to solve the problems of coal, it need not concern him what is to become of this tragic army of toilers. His is not the task to decide what communities are to receive them, or what industries-many of them also overequipped and likewise steadily reducing their labor force-are to employ them. It is sufficient for him that they are numbered among the too many," and that they must go somewhere. 66 At this point, however, it seems essential to interrupt the swift motion of the dictatorial pencil. Inclined as we are to have faith in his selection of both mines and miners, it is not agreeable to suggest any added problems or to perplex him with any statistics other than his own. Nevertheless, for his sake as well as ours, we submit the following: Granting that the owners of the "too many mines" will submissively close their properties, and that the "too many miners" will, with equal docility, transfer themselves from the partially employed to the unemployed, at this juncture there is another group with whom to reckon. They are the coal consumers. Now, do not misunderstand me. There are not too many consumers. Rather are there too few! The problem here is of different stuff. We do not have "too many mines" merely because the owners of coal properties insist on staying in business at a loss or refuse to go into bankruptcy with good grace. We do not even have "too many miners" merely because the employees insist on their freedom to work part time with decreasing income. A goodly number of both continue in part because the cosumers' habits of buying create the fascinating mirage of an oasis of work in a desert of idleness. Our dictator, for example, has no doubt planned on the eminently sound premise that his task is to insure an adequate and uninterrupted supply of coal; to select for this purpose a minimum number of the best-adapted and most efficient mines; to man them properly with a minimum force of employees to whom full-time work will be given. Quite clearly, however, this assumes an even, regular flow of coal from the mines to the consumer. Ah, there's the rub! There is so little of flowing regularity about coal consumption. As a matter of fact, our friend the consumer does not need, often will not use, sometimes can not possibly store or receive an even supply. What are the facts? As I have remarked, it is not my wish to add perplexity by a maze of statistics. Some time ago, however, I made a foray into this most baffling of all problems in coal production-its seasonal and cyclical variations in demand. The raw material from which my data were assembled for analysis is available in Government reports to those with an urge for figures or a desire to check the findings. For the present purpose I ask you to accept a general summary. III. Going back over a decade or more and omitting certain months distorted by strikes or other causes, the average swing between spring and fall daily production is nearly one-third. This tendency seems to be on the increase rather than otherwise. For example, the difference between April and November daily outputs for the period 1916–1923 was 23 per cent; for the years 1924-1926 it averaged 56 per cent. Throughout the entire period of 12 years, the absolute difference between the high and low months of the calendar year, regardless of season, was nearly 50 per cent. In other words, our dictatorial friend will early confront this knotty fact: Within any typical calendar year-if current consumer practice continues-he must be equipped in mines and in men to supply half as much coal again at some period as he does at others. Nor is this all. Bituminous coal is chiefly used for industrial purposesfor transportation and the production of power. In other words, it is inextricably bound to the ebb and flow of our industrial tide. As the cycles of general production come and go, in similar ratio will the needs of the coal market wax and wane. Let us pause to consider a few percentages again.. In this case I shall confine myself to the recent period of 1921-1928. In the month of April, 1923, our dictator would have needed to have the mines and the miners produce nearly 67 per cent more coal than was required in the same month two years before. In the month of November, 1926, he would have needed to supply nearly 62 per cent more coal than in the same month of 1921. Just as we have noted a seasonal swing of from 30 to 50 per cent within calendar years, so now we observe a cyclical swing of over 60 per cent at the same season between different industrial years. A combination of the two reveals a spread between the daily output of April, 1921, and that of November, 1926, amounting to nearly 120 per cent. Yet only 18 months after, in April, 1928, this latter output would have been 85 per cent too much. |