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operated by the coal companies alone, of which we kept a record. In addition to that we discovered that, for some reason or purpose of their own, the amount produced at each colliery was reduced about 12 per cent, and in many collieries more than that. Taking the Reading Coal and Iron Company alone, the total loss was over a million tons. The losses of the others seem to have been in the same proportion. We discovered by a comparison that, as the veins vary, the time required to mine a ton of coal varies; and there seemed to be a standard in the minds of these men of about $2.50 as a basis. Therefore, when the miner mined a sufficient quantity of coal to produce approximately $2.50, he quit work. In some of the collieries he worked less than four hours to produce that quantity of coal; in others it would take four and a half or five, but no man worked long enough to exceed $2.60 a day. When we called Mr. Mitchell's attention to these facts before the Civic Federation, he said that the United Mine Workers had not authorized it and that all the strikes were unauthorized. Our reply was then that “You are not able to control your men,” to which there was no answer except he stated that if he had a written agreement, instead of a verbal one, he might be able to do better. The trouble is, according to my individual judgment, that men belonging to the unions were gradually forgetting to pay their dues, and that this strike and these extraordinary demands were framed for the purpose of preserving the organization. They had to promise the men something to justify their existence. As Mr. Thomas's letter will show you, there are about 22 different languages and dialects spoken in the region, and it is impracticable to reach all to reason with the men.
Now, on the question of wages, I submit to you for use of the President a pay roll which I have taken at random. It is a November pay roll of last year, as that was before this controversy began, and it is at your service, to see what we pay our men, and the number of men, the day's wages, the average per day, and the classification of men a full statement of the cost of mining coal for the month of November. I also submit a statement, taken from that pay roll, to show the daily pay of the larger groups of workmen. For example, the lowest scale of wages is 85 cents, as you will see, for boy slate pickers; 3,000 of them get 85 cents a day; men slate pickers, who are too old to do any other kind of work, get $1.20.
Mr. Thomas. We had boys earning 14 cents an hour when their fathers were working on the track at 12 cents an hour.
Mr. BAER. Now, to show the business side of it, I have had a careful statement made of the actual cost of mining for the last four years. In 1899 the cost of labor entering into mining a ton of coal was $1.067, the material used in the colliery, $0.314, general expenses, $0.208. The total cost of a ton of coal in 1899 at the mines was $1.589. In
1900 the labor increased to $1.121, the material to $0.35, general expenses decreased to $0.19, and the total cost of a ton was $1.667. In 1901 the labor raised to $1.263, the material to $0.365, and general expenses were $0.19.
The total cost was $1.823 per ton. For the ten months ending April 30, 1902, the labor was $1.383, material $0.416, and general expenses $0.192, so that the total cost was $1.991. It must be understood that the Reading Company mines the greater part of its output from its own land, held in fee, and there is no charge of royalty or for sinking fund in this whatever.
I also submit a statement to show what the average daily wages of all the employees are, without regard to classification, including breaker boys and everyone, taken from our pay roll. In January, 1902, we had 15,976 inside laborers and 9,828 outside laborers, a total of 25,804
The average pay per day, which included the boys in the breakers and at the veins, was $1.89. February, 1902, 26,270 men, and the average per day was $1.898; March, 26,729 men, and the average per day, $1.896; in April, 26,829 men, and the average was $1.906.
I submit the balance sheet of the Reading Coal and Iron Company for the fiscal year ending June 30, 1901, to show that we have invested, in round numbers, $87,000,000. This is an actual investment. There is no fictitious value or watered stock in it. When the company was reorganized the coal lands were appraised and every item of property is as near actual valuation as we could get it. The cost of these lands was much greater than what appears on our balance sheet, and the colliery improvements, which are represented by $7,000,000, are worth more than twice that amount. We have fortyfour collieries, and a modern colliery costs from $100,000 to $500,000; I mean by that the shaft, pumping machinery, and the breaker. So that all these things are under valuation rather than over. On this investment there were mined from lands owned and leased 9,253,974 tons. The profit and loss for the year showed only $555,394. There was, however, taken out of current expenses $113,000, which was 5 cents a ton, for depreciation of land. If we had paid the common royalty of the region on coal, the operations would have been carried on at a loss. The same general results are shown in the Lehigh and Wilkesbarre balance sheet, which shows that the profit and loss of that company was only $239,804. The Lehigh Valley Coal Company's report shows a loss of $491,576.
It is a fact that, taking the companies which are known as the principal coal companies, the Reading, Lehigh Valley, and Erie, neither 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 + 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. Forty per cent of the anthracite coal is sold in the market below the cost of mining. The reasons are that these coals compete with bituminous coal. The steamboat coal is used almost exclusively in pig-iron furnaces. Its price is regulated by the price of coke. Coke is a better fuel for smelting iron than anthracite, because it bears a heavier burden; and while formerly the furnaces of the Schuylkill region and the Lehigh region used anthracite coal exclusively, it is impossible to use anthracite fuel now alone, as the crushing weight of the material is so great that anthracite coal would become a compact mass, which will not let the blast through. Therefore, anthracite coal is confined to low-stack furnaces, or to high-stack furnaces where a certain percentage can be used. For instance, a company uses 40 per cent of anthracite to 60 per cent of bituminous. The rice and smaller sizes of coal, which would be waste, are sold as low as 41 cents per
ton. The buckwheats
and the peas run up until the highest price we get for those sizes is $1.65 for pea. That puts the whole burden of any advance price on 60 per cent of our production, which constitutes the domestic sizes. All the other sizes must be sold in competition with bituminous coal, and they must be sold to enable us to take precedence over bituminous coal, or they can not be sold at all. The other 60 per cent, which are known as the prepared and domestic sizes, must bear the raise in price, and it comes upon every workingman and everybody who uses coal, for primarily this coal is used for household purposes, not for manufacturing; and were we to increase the price of coal then the cry would be that the coal barons are oppressing the poor. And the only suggestion that has been made to us when we presented these figures both to the Civic Federation and to Mitchell was that we should put this burden on the public. If we did, there would not only be general indignation, but many of the Western and New England markets would be taken from us; and to further increase the price of anthracite coal is absolutely to restrict its output and to injure the miners and injure us. So that it is not a matter of sentiment, but a hard business proposition. It is impossible to go any further than we have gone. If the President wants to send an expert to examine our books, they are at his service. But we can not meet the expectations of all the politicians and philanthropists of this country.
You may say to the President that we honestly believe that, so far as we know ourselves, we are men of as good consciences and as good intentions as anyone; that we have the interests of labor more at heart, because we are brought in daily contact with it, and that we have the interest of the business and the prosperity of the country more constantly before our eyes than all the members of the Civic Federation and the philanthropists put together. We can help to destroy the prosperity of the country by meeting the foolish demands of those who are asking for more than it is in our power to give.
Regarding an estimate of the increased cost of production as a result of the demands, the unknown fact is how much the production of the mines would be reduced by an eight-hour day. You can see that the investment is there; the machinery, pumping, and care of the mines goes on for twenty-four hours; the general superintendents and the men who are paid by the month (and there are a great many who must be paid by the month). A mere increase of 20 per cent in wages on the cost of prepared sizes would be about 46 cents a ton increase. To that must be added the increased cost by reduction of output, the general expenses all going on. Probably that might be estimated at 14 cents, making the whole about 60 cents.
The total amount of wages paid in the anthracite fields last year was, so far as I can ascertain, about $66,000,000. So that there would be an increase of probably $20,000,000.
There is another factor which is involved in this question of labor. We have been unable to have any discipline in the mines at all. The men work when they please since the last strike. We have no control over them.
Mr. Olyphant then said: I was only going back a little to say that in the strike to which Mr. Baer alluded, in 1876, the wages in the Wyoming region were different from those in the Schuylkill region; one was a basis and the other a fixed price per ton. We had twentythree years of perfect peace-nothing to trouble us in our mines anywhere. Throughout that time we adhered to the rate of wages paid, no matter what the condition of trade was. In our company we passed years when we did not come anywhere near making our fixed charges, but the men had their wages all the same. When we came
toward this strike in 1900 the great hue and cry was that the anthracite miners had been getting no more than they had received, while in the bituminous and iron industries the wages had been raised; though in both these industries wages had been carried to the lowest point that men could stand, and we had never in that region given one cent less than we had agreed at that time. This was the condition when these men came in upon us.
Mr. BAER. 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.
(On request of Commissioner Wright, Mr. Olyphant and Mr. Thomas corroborated all that Mr. Baer had said.)
Mr. OLYPHANT. I have nothing more to say, excepting this: That after the period of which I spoke of these men have been coming in, having first sent their delegates to incite the men and make them feel that they could get more-in 1900 they came forward with their demands, which, as acceded to under the pressure which was brought upon the mine operators, amounted to nearly nine millions of dollars. That we considered to be an annual payment which we had to make. Eighteen months afterwards, not at all satisfied, they make demands which, as originally stated, would have amounted to fifteen millions, but have reduced them so that they would amount to about eight or nine millions, and have stated that they were coming again in 1903. Now, what is to be done in such a case?