The labor world. [volume] (Duluth, Minn.) 1896-current, 1920-07-10
TURNS LIGHT ON
HARD COAL PACT
Trust Methods Exposed BY Ex-
pert for United Nine Workers
Who Reveals System.
Continued From, Page One.

Continued From Page One.
that the entire anthracite industry Is
dominated by banking interests and
that huge and tllegitimate profits
have resulted from deliberate at
tempt to Justify low wages and high
profits. Step by step on the basis Of
concrete evidence that investigation
shows the following facts:
Seven Roads Control.
"G) The anthracite industry is
today organized into seven great rail-
way systems, each of which controls
sale to local dealers of its quota of
the total anthracite annually con
sumed.
"(2) Before the end of the nine
teenth century the railroad compan-
les, either operating directly or
through their coal companies, had
come into the ownership of over 30
per cent of the unmined coal. If we
add the amount controlled through
contract the percentage of unfnined
coal free from the control OF the rail-
road companies amounted to less than
four per cent.
"(3) Almost without exception
the important anthracite companies
in the field today are the creatures
of these railroad companies, having
either been created by them or &C.
quired through stock purchase. They
are really simply separately incorpor-
ated coal departments OF these anth~
racite roads. The fact that these two
branches of the industry, mining and
transportation, really form 4 single
business is demonstrated by inter-
stock ownership, by interloeking d.
rectorates, and by the Nnanimity
shown in the determination OF policy.
Evidence OyeFwhelming.
go AS a matter of fact the book
keeping evidences OF the unity be-
tween the railroads and their coal
companies are overwhelming, The
railroads established such high rates
for the transportation OF anthracite
that it became impossible for 4 coal
company to operate at q profit. The
railroad coal companies were then
supported by subsidies granted in ono
form or another by the parent rail-
road company. This was made pos
sible by a bookkeeping system WHICH
rendered the finances OF the two
companies practically one. Tho rail-
roads have carried bonds, made good
losses; granted working capital, and
in other ways assisted the coal COM
panies financially, charging either 4
low rate of interest or none 1T all.
"(5) This has involved the treat
ment of profit policy from 4 single
standpoint The railroad coal COM
panies have practically without ex-
ception failed to make profit. This
has been the result of deliberate pol
icy on the part of those who control
the entire system. It could have been
modified. 1t could be today so ar
ranged that the anthracite companies
would show a profit. But this does
not fit in with the self interest of
those who control the situation. The
profits of the industry have appeared
almost altogether in the dividends,
reserves and bond interest OF the
seven anthracite Enthusiastically
also in the dividends of certain sales
companies whose stock Is owned by
the stockholders Of the railroads.
Costs Are Inflated.
"(6) Legitimate costs and profits
In the anthracite industry have been
inflated through the over-capitaliza-
ton which seems to characterize the
organizations and denominations Of
industry in which the banking group
have a. hand. This is so important
g. phase Of the matter that / am going
to bring several aspects Of it to your
attention. For every step in the pro-
cess OF monopolization has contributed
Its share to the present condition Of
the Industry which affords an appar-
ent basis for tho vicious argument
that despite high prices the COM
panies are unable to pay the mine
workers a living wage.
"The first fact which I wish to call
to your attention is that in tho rush
to monopolize anthracite reserves the
railroad companies bought thousands
OF acres of unproductive land. To the
extent that a so-called just return on
such Investment 10 making it impos-
s1ble for the companies to lower prices
or pay decent wages, to just that OK
tent are the consumer and the mine
worker being asked to pay 4 return
on the mistakes made by men in their
rush after profit. Much Of tho land
bought will not BE- used tor many
years. Yet legitimate profits are
asked on such; investment. This
means simply that 4 profit 10 bsinx
asked upon money invested IN order
to prevent others from gettinx a.
chance. to mine anthracite. such
profits are an illesitimate drain upon
the money which should so to estab-
fishing just wages.
Rueh 10 Monopoly.
Again we lind that tho rush to
monopoltze the reserves OF anthracite
caused, the value Of such coal lands
to be highly inflated. Land bought
In at enormous prices was further in
Hated whenever it became necessary
to find physical assets to back in.
flated capitalization.
Cash resources were not available
to enable these companies to mako
such enormous purchases. This
forced them to pursue Z policy of
mortgaging the stocks and phy.ical
assets Of their various purchaser, Thus
the process Of securing Z moponolY
OF anthracite aaddled the anthracite
railroads with enormous bonded debts.
the interest charges ON which have