Evening star., 1923-10-22

Profits of wv per cent over their
prewar margins have been taken by
wholesalers in the coal industry dur
ing recent wears, the United States
Coal Commission announced today,
while retail coal dealers, notwith-
standing Undressing costs. have been
taking legs The commissions
studies of coal distribution resulted
in its Recommendation to President
Coolidge a3id Congress that the fed
eral government be empowered to
regulate fuel distribution in times of
shortage, b9t that the retail handling
of coal be left chiefly for local
treatment.
Anthracite stove coal reached its
ton price ih Washington in Novem-
Der, 1922, when it cost $19.35 a ton
here Margins of profit of seven
dealers in fhat month were $4.S5 and
S2.67. Peal coal reached its peak of
price here i'm the same month.
Although Sthe commission ended It's
work on september %. the text of
it's report ON coal distribution became
available t9day in complete form for
the first tiuhe. The conclusions were
unanimously adopted by the member
ship of tbe commission, including
Chairman tJohn Hayes Hammond,
XII
DIR. Georgd Otis Smith, Charles P.
Neill and Edward T. Devine.
Too Many Wholesalers.
THE conhmission's study indicates
that theref are altogether too many
wholesalers" the report said. but
that notwif fhstanding this fact. the
wholesale ttrade has made large
profits in MOST of the ten-year period
from 1913 10 1922. inclusive. and ex-
cesSiye PROFITS in the panic years 1917
and 1920. fThe year 1929 generally
showed mNre moderate and even
small earnN Ngs on account of the
curtailment Eof the tonnage by strike.
The commis$ $ion's study also indicates
that in timEs of shortage the pyra-
miding of Wholesale margins through.
the Speculative activity of whole
Salers resu rs in the enhancement of
prices WITHOUT furnishing the public
an equivalent in distribution service.
"RecurriTAg PERIODS or coal shortage
with wild Wholesale speculation point
to the naed of a public service
viewpoint Inspecting the entire coal
trade, backed by Legislation provid-
ing for strict regulatory powers on
the part ofe the federal government
over the erStire production and dis
tribution Interstate of coal. Exercise
of such regulation is especially need
ed in times of shortage and wildly
fiuctuating tprices.
FaiI,sre OF Competition.
"when reah competition for the pur-
chaser's ton mage exists such competi-
tion is probably the cheapest and
most efficietnt regulator of whole
sale margins, but in times of short
age il fails entirely. 1t may, there
fore, be desirable to set up skeleton
regulative machinery which will be
put in operation when, and only
when. in the judgment of the Presi-
dent, an emergency exists"
Taking 1913 as a base, the commits
sion found that the average whole
physically Handling the shipments
made a profit of Sc cents per ton
handled. and made an annual return
ness of 10 per cent. In 1920 the 333
wholesalersi in the United States
whose BOOKS the commission exam
ined took a, profit of Is cents per ton,
and made 5S.2 per cent on the capital
invested in their business. The year
1920, however, was the banner year"
in the business. the report said. add
ing that the figures were smaller in
other yearsS
The chiet addition to coal prices
the commission found, resulted from
the handins about of coal shipments
during shortages from one whole
saler to another, with two, three and
sometimes fPur wholesale profits be-
ing taken en- route. Its inquiry re-
suited in THE tracing out of a large
number of Buch operations, particu-
Iarly involving anthracite shipped to
New England during the winter of
1929, aftFr the coal strike.
Findt Hidden Margins.
"It resulteh in the uncovering of
hidden margins taken by dummy con-
Germs or closely affiliated whole
saiers, min$ operators, or individ-
uals" the commission said. I'm
considerable number of cases whole
saiers WHOSE names were at first not
reported haEe been uncovered some
where between the mines and the re-
taller, ,,Speciflc examples of this hid
den profit ttaking and ways in which
such profitsl were taken are described.
"The ma kimum number Of whole
saIers intervening between the mine
and the retailer was found to be
four"
The American Wholesale Coal As
sociation, the commission also de-
clared, had advocated an unfair
profit standard.
"FYom tn Is showing, 1t would ap-
near that with margins of 8 per cent
on coal" tfee report said, which fig
ure is adypcated by the American
Wholesale Coal Association, the en-