The New York herald., 1878-02-26
THE COAL TRADE.
Legislative Inquiry Regarding the
Great Combination.
HOW 1T CAME ABOUT.
Testimony Of Presidents Dickson,
Hoyt and Sloan.

". Erekcoyt,
Chase, chappen, Aivora, Peck. wemple, Mailer and
Baker The nrst witness examined was Mr.. Thomas
Dickson. President Of the Delaware and Hudson
Canal Company, who testified that he was also
director In the Erie Railroad Company and the
New York and New Engaud Railroad. He was
present all tho meetings in this CITY, which od TO
the so-called combination. The matter was hrst
agated last spring, requests beng sent by the wit
sess to all producers connected with railroad
companies. The coal trade had been demorazed by
excessive production and it designed to limit the
supply to the demanded for consumption. Tho
FIRST meeting was attended by Samuel Sloan, OF the
Delaware LackawanDa and Western Railroad; Mr..
Gowen OF the Philadelphia and Reading; Mr. Sayre
OF the Lehigh Valley Company; Mr. Hoyt OF the Penn
sylvania Coal Company Mr. Pardee, as represe native
Of individual operators in the Lchign Valley, and
Mr Greg, 10 the interests OF the individual operators
Of Schuyikiii county. Judge Packer OF the Lehgh Val
ley Company. also invited to be present. The pro-
ceedings limited 10 informal discussion OF the
trade. when adjournment was had to the month OF
Alay In order to ascertain tho amount Of production
OF each company 1t was not proposed to reduce tho
production below the demand, but to advance coal
ui,y per ton, the prevailing prices subjected
the companies TO constant loss The amount oi pro
allotted between the companies was In accord
ince to their producing and carrying capacity. In
Ihe OF the company represented by witness the
percentage OF production was arranged on Its pro-
ducing capacity only the Lehigh Valley was the only
exception TO this basis OF allotment
THE pEcKMBER MEETINGS.
In December last the lrs meeting brought together
Messrs. Sloan Hoyt, Gowen Clark, OF the Lehigh and
Wilkcsoarre Railroad; Sayre and Dr. Linderman, OF
the Lehgh interest; President Scott and Vice Presi
dent Cassatt Of the Pennsylvania Central The carry
ing companies the witness said paid the private pro-
aucers in accordance with the price Of labor which 1uc
tuated from minimum OF 81 25 per ton; the carrying
companies refused to give transportation TO the
coa of private producers. Judge Packer did not at
tend this meeting, as he represented carrying COM
pany, but agreed to abide by the arrangement made.
II was estimated that about twenty million tons
would DO required to meet the demand OF 1878, and
the allotment to the several companies based
upon this calculation, the production OF each company
duriag the years past being considered TO deter
mine the proper percentage OF each. The inter.
ests were represented at a second meeting
during the month The committee that re.
ported favored the organization OF an anthracite
coal association, which was acted upon the witness
beng made its president; the Board Of Control met
alternately in New York and Philadelphia; the CON-
panes agreed divide the whole amount OF coal pro-
uuced IN accordance with cortain percentages, but
there was no determina alton then reached regarding
the percentages, there was difference OF opinion
In the matter OF the amount the maj ket would re-
ouire tor the year; the witness and Others thought
tnat 49, 900 be all that tod, but
Mr. Gowen cousiuered that 2l, Ooo 900 tons would be
wanted
THE pIRsr INTERRUPTION.
The question ol the effect OF such combination upon
the chartered rights OF the companies also DIS
being that had right to do what they proposed
There was no suggestion that the production should
be less than the demand. The arrangement was
verbal one, being suggested that signatures were
unnecessary.
said that be wus counsel for some OF the companies
interested and that he objected TO questions being
asked the witness the steps they had taken
gardIng legal ADVICE. He advised Mr. Dickson not 10
answer such questions.
Chairman Prescott did not want the interference OF
lawyers when Counsellor Brisbane objected TO the
ruling, and was sustained by Committeeman Aivord,
who held that any witness had right TO be repro
sented by counsel and 10 be examined by him. II was
finally agreed TO allow counsel to be present and take
part In The proceedings.
Messrs Gowen, Clark and Linderman drew up the list
OF percentage each company entitled to, anu on
the 25th OF January in this city, the nnal arrange
ment was made. inc witness was chosen pres,deut
and Mr.. Gowen secretary OF the Anthra-
cite Board OF Cortroi. This board was for
The purpose OF regulating prices, making u
Uniform rate ana controlling the trade generally. Mr.
Dickson had acted 10 this matter upon his sole respon
sbty, believing from conversations with the direc.
tors OF ms company that his course would be
tained. The Delaware and Hudson Canal Company
mined about two hundred ana forty thousand tons of
coal IN January, more than In the corresp ondng
month OF any previous years anu about two
hundred thousand tons tbus lar the present
month The effect OF the organization had been
ube to the general condition OF trade The Of
aud the Pcnnsyiv had put up Their prices; the
Delaware, Lackawanna and Western Company sold It's
coal ut The comp my that Mr Dickson rep
resented the only neced with the arrange
York.
In reply to Yr. Alvord the witness said that the
amount OF annual production not limited to
TO- 0OO 900 IONS, or any other amount: total produc
ton was assumed merely TO fix the percentages. 1t
had been suggested by committee OF safes that an
Incorporated coal exchange, where coal could be
bought and sold like merchandise In the Produce Ex.
NOT ADVANCE PRICES
The combination had not been formed TO advance
coal. which would restrict consum pton, but Il was
expected that an advance In price would follow. The
iuterosts of the consumer ana producer were inc
eame, ruinous aiways after reaction.
Coal mad been sold as low as 81 20 per ton IN this har
Dor. anu durDg the war ~ had brought SIS and $14
per ton, Inc average price at this time So 05 last
year it loss tnan SO. about So 90 IN 1876 and
Something over 81 IN 1875. When asked by Chairman
without loss he remarked they had lost
last year. A. tho present price OF labor SO rs per
Ion would pay fixed charges including interest
on nvestm ent and the absolute cost OF mining and
transportation, but the stockholde would make
anything AZ such rate The average cost OF putting
ton vi coal the at the mines was 81 IS with
out Including the value OF the cost before mining,
The expense of transporting 20 New YORK was about
81 80 per Coal had been sold by his company as
low as " 20 per ton. That was IN December last
In 1877 the losses on their leased lines
$500 000 they usually yield profit Of 500 900
or $500 900. The entire losses OF the company
through It's coal business which absorbed ali tho
profits OF the other business In the year
S1,50O 900 The company paid dividends 1876 ana
lo76 due to prods ON the coal business. There
not word Of truth in the report that his company
had refused to transport coal tor persons bought
II at the mines. or ior the private producer; anybody
could have transportation.
In answer 10 his counsel Mr.. Brisbane the wtnoss
sara that ali the meetings concerning wbich no naL
been questioned had cu minated only In tho arrange
mcnL already known; there was other agreenlvn
or understanding other than the msmoranaa pup
lshed; there was no purpose expressed any inten
ton Of shutting out INDIVIDUAL operators; the m"n
purpose aud object was ~ prevent The market from
being guted, as It had before been the case; all tho
rights OF wItness' company as producers OF coal
we're uerved IRON tho State vi Pennsylvania
Mr Dickson then, with permission, sald that tho
sxamiuaton mad taken wider range than be ex-
pected and IN some respects outsiuc oi the
luton ordering the committeo TO proceed. lie had
been IN the coal business from Doynood, and ecven-
teen eighteen years with the company of which he
now president He knew what could be done
by the companies. aud unless the trado could 10
lifted out OF It's present demoraiiz,d condition
bankruptcy would oyeItake tho lot. Tue prostraton