The Birmingham age-herald., 1921-07-31

consumers are not laying in a supply or coal against the winters needs. and to the further factTof the unusual laXness in the steam icoal market. a situation confronts us of equal seri- ousness with that which we went through last winter. Excepting the Very few operators who are fortu- nate enough to have railroad and other public utility constructs for steam coal no mine operators are working more than two days week. and some of those mines which are working on a normal basis are steam coal mines strictly. and produce no domestic coal whatsoever, and at the same time the domestic coal con- sumers are not buying In anything like normal summer quantities. The result of this latter condition is that the retail dealers who are able to get coal at all on their contracts, have their yards stocked, and are un- able to take more because of their in- ability to make any sales. Unless relief is obtained. these conditions will certainly result In 8 serious coal shortage during the winter, for it is Impossible for the railroads to han dle, or the retailers to receive and deliver, a full winters supply of coal during the winter months alone.
 Situation Serious
 Realizing the seriousness of the situation, and in an effort to ward against the possible shortage the governor and committee of the do mestic coal producers concluded to advise the public, through advertise- ments in the newspapers of the state, the facts regarding prices or coal at the mines and the established freight rates, and in addition, the governor through the fuel administration, is undertaking to name reasonable gross margin of profit to be charged by retailers. On Monday, August |, there will appear In the papers of Birmingham, Mobile and Montgom- era, a display advertisement show ing the prices at the mines for Au- gust of domestic coal from 2S mines, which includes all the domestic coal producing mines in the state. This will be followed by advertisements showing prices for the succeeding months. This advertisement will show what is considered to be a req sonable margin of profit for the re- taller in II towns in representative sections of the state, and the estab- lished freight rate on each of the 2S coals to each of such towns Further information regarding prices and freight rates will be furnished by the fuel administration upon request made to the acting fuel administra- tor at Montgomery
 Thorough Investigation
 As thorough an investigation as is practical has been made into the whole subject, and the fuel admins tration does not. see any hope of re- duction in either mine prices or retail prices. This department would not be able to state whether the prices being charged at the mines are proper and reasonable without first going into extensive and time consuming audits of the books of the operators, which has not been considered prac- sticable for the purposes of this inyes- tigation. It can safely be stated, however, that the mines are operated on fixed heavy overhead expense, including pumping and ventilating plants, which is just the same whether the mines operate full time, half time, or are shut down, and with the mines running now only two days a week, and the market such that steam coal. which comprises 65 per cent of the whole output from the domestic producing mines, is neces- sarily sold for less than the cost of production, the claim of the operators that they are running at a heavy loss on present domestic prices must be given full credence. It looks to be question of coal at high prices or no coal at all. for the operators cannot be expected to run indefinite ly and stand these heavy losses. It should be understood however that this department, in making this Statement, Is of the opinion that if normal, the prices could and should be very much cheaper.
 Margin for Retailer
 The question of margin of profit of the retailer is affected by inc same condition that confronts the on orator, namely, the small amount of business now being done as com pared with a, normal summer season The retailer has fixed overhead ex- pense that runs on regardless of "hether he is selling any coal or not. so that any margin that would net nlm fair profit in normal times would not enable him to pay expenses at this time. The margin that has been determined upon is higher. therefore, than would be named if the coal business were normal. or nearly so. The margin is divided into four classes: First, the cities of Bir- mingham, Mobile and Montgomery; second. all other towns of 5000 pop ulaton and over; third. all towns of 5000 and up to 5000 population, and fourth. all towns of less than 5000 population. and all dealers who do not maintain a coal yard. but who de- 10 n = A k 4 v~~.< x<y< bin. by contract or otherwise. For the first class, a margin of $330 Is considered fair; but in order that the retailers in these cities may be enabled to offer some inducement to consumers to buy their coal at this time, the margin has been put on a sliding scale. lower now and increas- ing month by month: the scale is as follows: August. $s.1o; septembef s3.20, october. ss.30; November $s.40 December, s3.50. For the second class, s2.S0, for the third class s2.50 and for the fourth class S1, plus the cost of unloading and delivery.
 Quote Freight Rates
 The freight rates quoted in the table to be published are the present established rates, to which should be ed in each instance 3 per cent for war tax There has been good deal of publicity given to supposed re- duction in freight rates on coal at some early date. The fuel adminis- tration. from it's investigation. is con vinced that no reduction whatever is to be expected sufficiently early to affect the prices of coal the coming winter. On June Is MT. Hoover, sec retary of Commerce. publicly stated that the railroads and the represen- tatives of the coai industry had been unable to reach any conclusion as to the proposed reduction in freight rates on coal and that no voluntary agreement thereon was to be ex- pected On June % Chairman Clark