Classifying the wages paid by the Philadelphia and Reading Coal and Iron Company as to inside labor and outside labor and total from January, 1902, to April, 1902, inclusive, Mr. Baer submits the following table:

AVERAGE DAILY WAGES EARNED BY EMPLOYEES OF THE PHILADELPHIA AND READING COAL AND IRON COMPANY FROM JANUARY, 1902, TO APRIL, 1902, INCLUSIVE.

Month.

Number Days Average Number Days Average Number Days Average of men. worked. per day. of men. worked. per day. of men. worked. per day.

I have in my possession a very elaborate statement in detail of the cost of mining coal by the Philadelphia and Reading Coal and Iron Company for the month of November, 1901, made prior to the present strike. This statement thoroughly verifies the figures given in the above tables (see statement of Mr. Baer in Appendix E, pages 1206, 1207).

The reduction of time, which is included as a part of the demand for increase in compensation, is put forward by the miners on the ordinary arguments for the reduction of the length of the working day everywhere. Their work takes about two hundred days in the year; the remainder of the time they are idle unless they find something to do in the way of farming or occupation in other industrial lines. They claim that if the time per day should be reduced 20 per cent without loss of pay-that is, if they were employed eight hours a day on the basis of payment of the present ten-hour day-they would work something like two hundred and forty or two hundred and fifty days during the year; that this would increase their pay practically the same percentage, because there would be no reduction in the per diem; that they would be in better condition, because more constantly employed, less idle time resulting, and they believe that an increased output of coal would be the result. They are willing, however, to accept nine hours per day instead of eight, as originally demanded.

The operators meet this demand with the statement that they are able to market only about 60 per cent of the capacity of their mines; that their fixed charges have to be maintained throughout the whole year without reference to the amount of coal that can be marketed; that much of the machinery, the pumping, and the care of the mines go on for twenty-four hours each day; that the general superintendents

and the men who are paid by the month must all be maintained; that an increase of 20 per cent in wages would mean about 46 cents a ton increase, to which must be added the increased cost by reduction of output, while the general expenses are all going on. The latter are estimated at 14 cents, making the total addition per ton about 60 cents. The total amount of wages paid in the anthracite coal fields last year is stated by the operators at about $66,000,000. The increase under the original demand would be $20,000,000, as estimated. (See statement of Mr. George F. Baer, president of the Reading companies, Appendix E.)

In respect to output Mr. Baer says (page 1210):

In 1900 we all felt that the only substantial grievance that the men had in our section was the fact that during the depressed times we were unable to run our collieries to their full capacity. It was not the basis of wages paid, but that we could not give them sufficient work. But for the last eighteen months the condition has been just the other way. We can not produce as much coal at our collieries as the market will take. They will not mine it for us. The condition of the whole anthracite trade has changed with the general demand for fuel all over the United States. It will not last long; a reaction is bound to come.

Mr. Loomis, already quoted (see Appendix D), says that the average hours contract miners worked per day for the four districts under the control of his road was five; that the average number of hours the breaker worked per day was seven and three-fourths, and it is claimed by operators generally that the contract miners do not work as many hours as the breaker runs, and hence that there is no ground for the demand for less hours.

The operators also claim that there are constant stoppages of work on account of various causes, such as picnics, excursions, and matters of that kind, and that the fixed charges have to go on during these various stoppages. They also submit that they can not comply with the demand for an increase in wages, whether this comes about through an advance in the pay per ton or a reduction in time (which is the same thing) of men paid by the day.

The Philadelphia and Reading Coal and Iron Company submits the following statement showing the cost of labor, material, general expenses, etc., from 1899 to April 30, 1902:

COMPARATIVE COST PER TON OF MINING COAL BY THE PHILADELPHIA AND READING COAL AND IRON COMPANY FOR THE FISCAL YEARS ENDING JUNE 30, 1899, 1900, AND 1901, AND FOR TEN MONTHS TO APRIL 30, 1902.

MONTHLY PERCENTAGE ABOVE BASIS ON SYSTEM OF WAGES FIXED ON A BASIS OF $2.50 PER TON FOR COAL AT PORT CARBON FROM OCTOBER, 1900, TO MAY, 1902, INCLUSIVE.

THE PHILADELPHIA AND READING COAL AND IRON COMPANY,
Philadelphia, June 2, 1902.

The above table is explained by Mr. Baer, in his statement filed as Appendix E, page 1205, in the following way:

Prior to the time of the strike in 1900 the basis of wages had been settled and proved satisfactory in the Schuylkill region and in the Lehigh region for a period of nearly thirty years. The wages were paid on a system of profit sharing. The basis was that when coal at Schuylkill Haven was worth $2.50 a ton the wages should be paid according to a scale then adopted; and that for each increase of 3

cents in the price of coal 1 per cent should be added to the miners wages. For illustration: If a miner on the basis received $2 a ton and coal advanced to $2.24, the wages of the miner were increased 8 per cent, equivalent, on a $2 basis (which is merely an illustration), to 16 cents. To show you how that would work out if no change had been made in the wages in the strike of 1900: The men on the old basis of $2.50 a ton would have received in October 15 per cent advance; in November 16 per cent advance, and in December 16 per cent advance. In September, 1901, they would have received 20 per cent advance. In other months the percentage, being according to the price of coal, as in the summer months coal is lower, would fall, so that practically the 16 per cent advance made was no greater than they would have received under the sliding schedule.

The Scranton Coal Company and the Elk Hill Coal and Iron Company, which are operated jointly, report the distribution of the gross receipts for the year ending December 31, 1901, as follows:

There is no charge included for depreciation, although the companies' fixed charges include a payment on the principal of the funded debt (virtually a sinking fund), based on the tonnage removed. No dividends were earned or paid on the stock of either of these companies. The excess of percentages over 100 represents the deficiency in earnings over charges.

PROFITS ON COAL MINING, AND PRODUCTION.

It is alleged by the miners that the profits on coal mining are sufficient to warrant the increase in wages as demanded by them. The preceding table as to cost of labor, material, etc., together with other data furnished, gives the opportunity to calculate the net receipts at the mines for the coal mined by the Reading companies, the total cost per ton, and the net profit. It is shown that in 1899 the total cost was $1.71 per ton; in 1900, $1.865; in 1901, $2.11; in 1902, $2.25. The net profits were, respectively, $0.13, $0.198, $0.287, and $0.259. These figures show that in spite of the increase of wages in 1900 there was an increase of the net profit per ton in that year, in 1901, and so far the present year.

In respect to profits, it is shown by Mr. Baer (Appendix E, pages 1207, 1208) that the balance sheet of the Reading Coal and Iron Company for the fiscal year ending June 30, 1901, shows that the company has invested, in round numbers, $87,000,000, this being actual investment, there 9491-No. 43-02

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being no fictitious value or watered stock in it. He states that the company has 44 collieries, and that a modern colliery costs from $400,000 to $500,000; that the profit and loss for the year showed only $555,394, there being taken out of current expenses $413,000 (which was 5 cents per ton) for depreciation of land; that the latest balance sheet of the Lehigh and Wilkesbarre Company shows that the profit and loss of that company was only $239,804. Mr. Baer continues his statement as follows:

It is a fact that, taking the companies which are known as the principal coal companies-the Reading, Lehigh Valley, and Erieneither of them has been enabled to pay dividends on stock for many years. It is commonly said that where the coal companies are owned by the railroad companies the loss in the coal companies is made up in the transportation. This is a great error. If you will take the history of the Reading Company, which has not paid a dividend in practically fifteen years, except within the last two years, when it has paid a dividend of 4 per cent on $28,000,000 of stock, you have this result. There is invested in the Reading Coal Company $85,000,000; in the Reading Railway Company and what is known as the Reading Company there is outstanding $140,000,000 of stock, making an investment, with the coal company assets, of $225,000,000. No dividends have been declared in the last fifteen years on this stock, with the exception of two years on the preferred stock, which amounts to $28,000,000. Taking the total earnings, without regard to dividends, of the Reading Company (which includes the railway company) and the coal company, the total earnings for last year were $2,663,087 before the payment of the Reading Company's dividend and the general mortgage sinking fund. So that, in point of fact, for many years these companies have not been able to earn dividends on their stock. What I have said of the Reading is true of the Lehigh Valley, and the same thing is practically true of the Erie, for which Mr. Thomas will speak. With my experience in operating the Reading Railway Company, I find that we have only been able to increase its revenue by increasing our merchandise, passenger, and miscellaneous traffic, and that just in proportion as we have been able to increase that traffic the financial affairs of the Reading Railway have improved, and not by reason of the coal business. You will see what I mean by that. In 1894 and 1895 the merchandise traffic of the Reading Railway was $6,400,000; last year it was $10,579,000.

Now, as a business proposition, it is absolutely impracticable to increase the cost of mining anthracite coal. Year by year, for reasons which we can not control, the cost will increase, and by the increased cost of the material we must use in the mines, and by deeper mining, which not only adds to the original cost of sinking shafts, but enormously to the cost of pumping and hoisting.

Reference should also be made to the statement of Mr. E. B. Thomas in the course of this investigation (see Appendix F).

The miners claim that the output of anthracite coal has increased largely under unionized conditions and since the settlement of 1900. In order to consider this claim intelligently, Dr. E. W. Parker, coal