Smyrna times., 1923-09-05
HIGH COAL PRICES LAID BY
COAL BOARD TO WHOLESALERS
EXTENT ACTIVITIES DEPENDS
ON WHAT PUBLIC WILL STAND
Fear New GOuging.-Instance Cited
of Middlemen Getting Profits
From One Fuel Purchase

From One Fuel Purchase
Responsibility for high prices paid
by the consumer for anthracite last
winter was laid directly to "the spec
ulative jobber or wholesaler" in re-
port issued Wednesday by the Coal
Commission. In some instances, it
was found by commission investiga-
tors, four wholesale purchases inter-
vened between the mine and the re-
taller, margins" running from 20
cents to an aggregate of $4.75 ton.
Should stOppage of mining occur
on September l." said the report, at
will accentuate the already panic de-
mand for anthracite, and unless the
buyer, and the retailer representing
him, learn from past experience, un-
scrupulOus wholesalers will have an
other opportunity to repeat their
speculative activities of, last fall and
winter on any anthracite coal that
may be on the market after Septem-
Der l, as well as following the re
sumption Of mining" "In the alb
sence of any definite regulatory pow
ers over either mine prices of whole
salers' margins, on the part of the
State and Federal authorities, the eX-
tent of such activities, and the
amount of premium added by whole
salers' will depend largely upon the
willingness of the retailer and the
consuming public to pay the prices
demanded. 1t is only with the re-
tailers' consent that the middle man
may receive as much in margin as
the coal miner receives in wages from
the same ton of anthracite" Declar-
ing that under normal conditions,
wholesalers have a proper place in
the distribution of coal, the report
continued: "They furnish an outlet
for the coal of small mines, whose
total tonnage is too small to warrant
the maintenance of a selling organi-
zation: In times of normal market
competition among wholesalers fol-
the operators available tonnage OF
the one hand and for the consumers
and retailers trade on the other
keeps margins and prices low, anC
commensurate with the services rend
cred as distributors of coal. In tim,
of a panic or sellers market, how
ever the Independent wholesalers
tend to become spectators, and buy
and sell among themselves, thereb,
pyramiding margins and advancing
prices without rendering any equival
ent service in bringing the coal near
er to the consumer.
Inter-lOcking Often Noted
"The wholesalers, whose activitie
resulted in premium prices last win
ter are, nominally at least, not di
rectly connected with the mines pre-
ducing the coal, although there al
many cases in which operators an
wholesalers, while separate and dis
tinct corporations, are relate
, through inter-lOcking stock owner
ships, inter-locking directorates an
inter-locking officers. In some case
the inter-relations extend to a chai
of operators and wholesalers. 81
times of sellers market, anthracite
: passed from one to another of the:
Q closely related interests, each takir
= a profit on the transaction, with Il
f result that wholesale margins a
pyramided and the consumer pays e
!. tremely high prices and profits to
e group of related interests. In 9th
$ cases the pyramiding results fro
: speculative buying and selling amol
wholesalers who are separate and j
dependent. Many cases of pyrami
o ing of margins, both by related j
" terests and among really separa
and independent wholesalers ha
- been traced by the commission. "A
thracite coal especially yields its,
n, to speculation among wholesale
l. whenever there is an interruption
If production due to strikes, railro
lie disability, or any other cause.
is tracing carloads of high premium a
If thracite coal, purchased by New En-
i, land retailers last winter, it W
e found that as many as four wholesS
r. purchases and sales sometimes int
n vened between the mine and the ]
10 taller. "SOme mining companies we
70 found to have had special arrang
n ments with wholesalers, by which t
in mine billed the coal to the whOlesi
p er at the price approved by the Per
le sylvania Fair Practices Committ
III with the understanding that if I
k wholesaler sold the coal at a pr
to above the mine price billed, plus
at stipulated wholesale margin or co
e, mission, the wholesaler remitted {
t. balance to the operator"
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