The labor journal. [volume] (Everett, Wash.) 1909-1976, 1922-06-09

ms Is the thlrd OF series o.
four articles written by Mr.. j. A. II
Hopkins, Executive Chairman of tn,
Committee of 48, for the Nationa
Bureau of information and Educa
ton. These articles are based upol
personal Investigations by Mr.. Hop
kins.)
In my two preceding articles
have dealt with the general condi
tions existing in the coal industry
today, and particularly in their rela
ton to the rights of the consuming
public and the rights of the opera
tives. 1t Is now my purpose to dea
with the rights of the operators anC
to suggest a method of procedure
which would justly meet their de-
mands without infringing upon thC
rights of either the operatives or the
public.
The operators furnish the capital
set up the equipment. and ship the
coal to its distributing points. II
the process of so doing certain legiti
mate financial risks from time tt
time have to be incurred. Under
these circumstances it follows that
they have right to demand a price
for their product which will allow
for a fair rate of interest on capital
actually invested. compensate them
! for any reasonable financial risks in
Cured, and pay them a fair per-
centage of profit upon the cost price
Of the coal laid down at point of de-
livery to the consumer. In order to
satisfy these demands they must,
| however, show that their capital
upon which they are allowed inter
est is actually and legitimately in
vested; that their allowance to cover
their other financial risks is based
on legitimate expenditures; and that
in agreeing upon proper percent
age of profit this must be based upon
the actual cost of production includ-
ing freight, and must include all
commissions and middlemens eX-
penses $50 far as the latter cannot
be avolded) as between the operator
and the actual consumer of the coal.
This latter requirement involves
the taking over by the operators of
the responsibility of distribution. In
other words, they are in precisely the
same position as the insurance COM
pany which has to market it's poll
cies through general agents, state
agents, local agents, and sub-agents.
The operators problem is of a SINH
lar nature, namely, to eliminate all
the Intermediates that can be elimi
mated, and then to fix a total per-
centage of profit Tor as the insur-
ance company would call it, commits
sion), out of which each of the dis
tributing agents takes his commits
sion in accordance with an agreed
scale. The public is interested, and
is entitled to be interested, simply in
the actual cost of producing the coal
plus a just and fair percentage of
profit, but it is not interested in
how this allowance may be divided
up nor how many distributing agents
are used by the coal operators in
accomplishing the delivery of the
coal to the consumer.
The first item in the schedule of
costs upon which the percentage of
profit must be figured (aside from
the question of interest on capital
is the cost of labor. Without labor
the coal would remain in the ground
The cost of labor should correspond,
as | have already pointed out, to all
agreed standardized cost of living,
and should be based upon a daily or
monthly wage, which will accomplish
this result This item. the wages of
labor must be the one irreducible
item in the bill of costs. Any at
tempt to scale down the wages of
labor below the cost of living will
not only gradually and inevitably
bankrupt the laborer, but perpetrate
the strike as his only weapon of de-
tense.
All the items going into the cost
of production should be certified
either by a system of state inspec
ton or by a commission on which
the operators, the operatives and the
public are evenly represented. The
duty of this body should be to see
that the coal is efficiently mined
that needless expenses are eliminat-
ed; and that the costs upon which
the operators, after adding their per-
centage of profit, finally base their
selling price, are correct and do in |
the coal and conveying it to the
point where it is delivered to the
purchaser. The percentage of profit |
and impartial hearing in which all |
be given a voice, and should then be
made the subject of single piece of
federal legislation fixing this per-
which can be charged over and
above the cost of production and de-
livery, following in this respect the
Anti Usury laws, which determine
and restrict the rate of interest
oil RI
charge as a fair return.
mined economically and in accord
ture, that is to say, from the mines
which will produce it at the lowest
cost. the productive capacity of the
lied, and this is one of the first
steps which must be taken in order
to solve our present problem. In
other words, the coal industry must
be purged of the unproductive and
ing artificially protected; and insofar
as these mines represent an excess
production over the total consump
ton they must be closed down until
the cheaper mines are exhausted.
This, as | have said, will necessitate
investigation of the mines from the
standpoint of their productive ca
pacity and a Standardization which
will separate the disable mines from
the unusable mines, at least until
the disable mines are exhausted.
Once the mines are standardized, the
price of labor fixed. based upon the
cost of living. the efficiency of the
hx, 20 lie hi /