The sun. [volume] (New York [N.Y.]) 1833-1916, 1876-02-20
THE COAL COMBINATION
WHAT 1T rs THAT SUSTATNs UNErt-
SONdBLE PRICES
The Rnpncitv Of the Read COMPANY Pres.
ident Gowan's MANAGEMENT Under In
tract which COmpcIs Extortionatc Rn,,.

| trHct Wutch tOmpcIS ENtOrtt0natp Rntp.
PoTTsvILIE, Pa, Feb. 17.-Minng onoro.
tons in tho counties OF tho anthracite coal field
| have always been more or less dissim l.r Nv
reason Of the situation Of the coal veins a.d 40
form OF enterprises that were put forth 20 de-.
velop them. The Lchigh Luzerne. and VIM
ming regions have always been more or less op-
| Grated by corporations which are both miners
| and carriers, while the Schuylkill, Northunbpr-
land, and Dauphin regions have been worked by
individual enterprise, with the PHILADELPHIA and
Reading railroad Company as their carriers.
This road with all this great interest at it, back
giving II carrying trade. somehow was never A
paying institution, the dividends being mostly
made in scrip. The stockholders who arc most
~ EnglishmeD. and who expected something
better, did not like such a state Of affairs, and
began TO look around for something that would
promise moro substantial dividends. franklin
u. Gowan was then practising attorney in
Schuylkill county, and had experience in tho
coal trade as a broker. The Democracy had
made him District Attorney. and upon the death
OF Christopher Loeser he was made the railroad
company's attorney. We next hnd him tho
President OF the company, under n contract that
he should screw out annual dividend of at
least ten per cent, IN consideration Of which hs
was to receive salary OF $4,000 per annum.
Now the "robbllnG up' process commenced
immediately. Every line OF railroad that could,
by any possible means become competitive was
secured nv lease or purchase. The people of
Schuylkill and ADJOINING counties revolteu, aud
were taking steps to build u rival line direct 10
New York, which was not only looked urou as =
relief for the operators from high tolls AMI
freiehts, but also as means to give to New Yurk
and the East cheaper coal and thus increase tho
consumption OF Il. This was prospective catas-
trophe to the Reading Company. The jirrine
between the mine workers and the operations
since the close OF the war. and the deprcssion
among tho operators, owing TO high rates II
freight over the road-oftcn 81 % a ton Tor dis
lance OF 100 miles or lcssas mucn AZ to the WAGES
demanded by the men, were plausible lroieN
for another scheme. The railroads had all zen
swallowed, and the lands aud mines must cone
next 80 that New Workers VINO were willing tn
combine with the people OF the coal REGIONS
upon coming here would find nothing wortn
taking So long this vast corporation exists.
there Is no use Of talking about building nval
line from New York to the coal regions. Wuo
COMPANY. and It owns all the lands and mines
worth having.
GREAT IMPROVEMENT COMPANY.
In 1871 bill was introduced In the Legislature
chartcrlnc the Laurel Run Improvement Compa-
ny. so glaring were the claims that no ont
dared to father the bill but II has since become
known that Mr.. Gowen had his secret agents on
the ground working assiduously for Its passage.
10 issue bonds to an unlimited amomnt and
with the proceeds to buy lands and anything
else. from coal breaker to pigsty. any.
where ~ Pennsyvania; and furthermore. thaU
any railroad company OF the state was
SSathor'zed, simply guarantse,plS ne
become the owner ana operator of tho concern,
No provisions we're made Ms regards stock. and
the consequence Il that this vast corporntlonn
with valuation. as made by Mr.. Gowen hiuself1
of over slQOOOO,Qn owning l5i,OOO acres OF ianoo
with over 100 cOllieries, besides vast number uR
iron mines, pays but 500 tax on capitol stOck.
The Philadelphia Coal Company, mining be
three or four collieries and owning no land. pnyn
1880. The bill was passed and hr. Goweq
afterward said that the arguments that Induced
its passage were that the corporations workin n
the upper regions possessed undue advantarcO
In the double privileges of miners and carriers
immediately after the passage Of this tll a
change of the concerns name to the phildcla
phia and Reading Coal and Iron COMPANY waI
made, and the Philadelphia and Reading RhilJ
road Company at once became the owner thg
guarantee OF Its bonds All the valuable ooIE
lands were bought up, with many Of the uiines,
and the operators discovered that II Their ag-S
peals for cheaper transportation were never 81
tened to before, they had now become entirely
useless In fact, this matter became an instrIS
ment in the hands OF MIR. G0wen 10 squeeze the
he wanted them, he added more toll. Once. TOD
the purpose Of preventing the operators from
accedng TO tue demands OF the workngmen'
when the trade would have permitted II, hO
r4ised the transportation to 50 per ton from. hero
crushed many operators. Tue centr.iilinc pr pro-
| cess was completed by the establishment II
s sna ,I, which SUPPLIED all the material
| Of the railroad and 1t Philadelphia a large nam
Der OF individuals, many of them broken oaer-
| ators, had set up coal yards, ana were maknc
! living, There was profit which Mr.. & ven
mediately established a lively opposition.
E40,OOO,0OO MIGHT HAVE BEEN SAVED.
All these opposition interests being out o. tho,
! way. MIR. Gowcn could have chcapcned con to.
the consumers at least 81 per ton, winch would
have been n saving 70 the people OF not less than
$iOOONO wear. Bat there was something to
! prevent TINS the 10 per cent. on more than
| Sl00,W0,0o0. which chiefly goes into the pockets
| of British stock and bond holders THIS amount.
must be Forthcoming whether the trade Is good
| or bad. Mr. Gowen set ABOUT making overtrrcs
| to the other great companies for close combi-
nation for the regulation " the trade. and they
| entered II, although a refusal and two veArs OF
fair competition would have sent MIR. Gowens
bonded corporation to the wall and left them
situation.
has Tor It's purpose the allotment to each II SIX
companies It's proportion OF the annual trade.
and the regulation OF the trade AZ 10 insure
equal aud remuneratiye prices. At the opeRlus
| OF the shipping season minimum price I, T eoal
Is established to which IS added from toili cents
per ton month to the END Of the season. and no
company Is allowed to sell coal at less pr,ce. or
to send more than its allotted prop portion into
the market. One person from each cOu lauy
makes "a committee to make allowances :" for
impurity OF coal tmperfcction In preparation,
short weight, or any other reas on and without
| their sanction no allowances are made. MIR.
Gowen summoned the few Individual oUeratu.s
who Nv his grace, or by reason Of Operating
mines upon the Girard lands, which canno; he
sold, were stu permitted to exist, and with them
formed the scnuylkill Coal Exchange. adopt,ug
a constitution aud bylaws which clearly stamp
! as conspiracy TO enh ancc the price Of coal.
In II these parties. with Mr.. Gowen a. the c,u-
trolling spirit, aud each member haynG "a vote
Tor every 5JOO tons OF coal shipped. are tnund
to pool" their cOa-that r., throw tn,u. IT,
gether with that OF the complny. aud TEL TIC
latter sell the whole product, leaving M Cowpn
10 represent them IN al matters concerning tho
r9Suaton of the trade. The trade is to udo
va pidOtH lfdtutu Nv Tue lAcallug fuht. ti ~ ,
branches, but Determinations may az any iIu.o
he made Tor or against any place. II % TCrson
orders coal from any OF the parties to ta!~ COM
pact, ana refuses II because Of poor QIaiitf. ur
some othcr re son, no coal Is 90 he so.d To IA
10y any one until he has paid expenses t. &C. adj
Judged hy committee of the Coal LACLahgc.
The King Is thus complete.
ADvANClNG THE PRICE.
In 1877 the average prize OF coal at wholesale
was S31O. This WAS deemed too low, tat tho
Coal Rings claimed that an advance of - to 20
cents yer ton would make the trade renUucra-
tive Tins was before the combination was
formed. In 1873 the price rose 10 an aNcr 2, Of
| $3.50. This was 20 cents per ton nor th.H was
| deemed suniclent To make the trade remnnera-
| tive. In 1874 another - cents per ton was uub
| on, making tue average $J.l3. The Reading
| Company made out Of this rise alone ia Isl
| $1OnOO and IN 1874, although SHIPPING lar
| In the last session Of the Legislature charges
| were preferred against tins corporation sriinx
| forth that Its charter obtained by fratldu-
| lent represent ttlOns, and that IL had entered
into an unlawful conspiracy to imprOuer COM
| troll the mining, transportation, and lT,e cf
| coal. A committee has reported on TINS, aud
llaa.f t..NaN ~ g..