New Ulm review., 1922-05-24
POINTS AT ISSUE
IN COAL STRIKE

In IUAL OlklAE
OPERATORS RIGHTS DEFINED.
SOLUTION OF PROBLEMS
INDICATED.
SOME COAL FACTS-The
Rights Of the Operators.
This is the third of series Of four
articles written by Mr.. j. A. H. Hop
kins, Executive Chairman Of the
COMMITTEE of .48, for the Nation,
al Bureau Of Information and Educa-
tion. These articles are based upon
personal Investigations by Mr.. Hop
kins.
In my two preceding articles have
dealt with the general conditions ex-
isting in the coal industry today, and
particularly in their relation to the
rights Of the consuming public and
the rights OF the operatives. It is
now my purpose to deal with the
rights of the operators and to suggest
a method Of procedure which would
justly meet their demands without
infringing upon the 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. In the
process of so doing certain legitimate
financial risks from time to time have
to be incurred. Under these circum-
stances it follows that they have a
right to demand price for their pro-
duct which will allow for fair rate of
interest on capital actually invested,
compensate them for any reasonable
financial risks incurred, and pay them
a fair percentage Of profit upon the
cost price Of the coal laid down at
point of delivery to the consumer. In
order to satisfy these demands they
must however show that their capital
upon which they are allowed interest
is actually and legitimately invested; !;
that their allowance to cover their
other financial risks is based ON legi-
innate expenditures; and that in
agreeing upon a proper percentage of
profit this must be based upon the ac-
tual cost of production including
freight, and must include all commits
sions and middlemen's expenses $50
far as the latter cannot be avoided) 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
spany which has to market its policies
through general agents, state agents,
local agents, and sub-agents. The
operators problem is Of a similar ma
ture, namely, to eliminate all the in
termediaries that can be eliminated,
and then fix total percentage Of pro-
fit (or as the insurance company would
call it, commission), out Of which each
of the distributing agents takes his
commission 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 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 ac-
complishing 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 capitaD is the
cost Of labor. Without labor the
coal would remain in the ground.
The cost Of labor should correspond,
as I have already pointed out, to an
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 la
Dor below the cost Of living will nto