Evening star., 1924-07-05
COAL INDUSTRY
NEARER TONORMAL
Babson Finds Demand Gain
ing on Supplies in Storage.
Urges Buying.
BY ROGER w. BABsON.

Special Dispatch to The Star.
WELLESLEY HILLS, Mass, July 5.
The coal industry. important in it
| self and because Of it's effect on other
| industries. Is getting back onto a
| normal basis.
The feast and famine program
promises to give way to something
approximating three square meals a
| day for the operator. the miner and.
! finally, the consumer.
The latest upset started last win
! ter with the threat of a strike for
this summer. To prepare for such
an emergency the operators rushed to
build up a. reserve supply. and the
1922 production of bituminous. total
ing 422.000,000 tons, was topped with
| volume of 545,000.000 tons in 1923.
January of this year followed suit
with 5o,oeo.eoO tons, and February
totaled 45,000,000. Then II became
apparent that business was slowing
up: the threatened strike was called
| off. and a three-year agreement with
the miners was signed.
Demand Declines; Prices Drop.
Demand declined and the operators
| found themselves with a tremendous
stock on their hands. In fact, April
| l showed our reserve supplies at Co.
| 100000 tons. the largest in recent
years. Prices dropped to $21e at the
mine and operations were curtailed.
During April. May and June prOduc-
| tion ran about 500 of the average
earlier in the year.
Stocks are still relatively heavy,
but prices are down to $2.01 at the
mine. and demand is overtaking the
it is probable that some Of the high
| cost properties will have to close,
but every one will be better or with
fewer producers working a greater
part of the time. Prices may not go
| much below present quotations, and
slightly higher levels. However,
| there is little in the present situation
| to justify any radical change In
| either direction. Production mean
| soned tendency with a possible slight
| increase as fall business demands
materialize. Prudent buyers are
| covering their needs in the present
| market.
Quiet Period Ahead.
Once the industry gets back into
| its stride, it should hold it until some
| shortage. then l suppose we shall all
| have to run the gantlet again, TAX
ing our lickings by turn. Such a
shortage ordinarily develops from a
| II
business gets to booming and the de-
mand for coal is unusually heavy,
| prices climb and the buyers rush in
to protect their need. Result, a tenn
porary shortage There sl Is nothing nIsdn IN
chart shows general business actiy-
| ity 13 per cent below normaD to
| promise any shortage from this
source for the remainder of this year
| at least.
Threatened labor difficulties have
similar effect on the market, but
| the three-year agreement now In
| force precludes the probability OF
| shutdowns on this score. The third
| factor is transportation. When coal
| cannot be moved from the mines it
| might as well not exist as Tar as the
| market is concerned. Plenty OF cars ana
no congestion promise rapid transporta-
ton of coal during the remainder Of the
year.
Hard Coal Status Best.
The anthracite industry has not
suffered so great slump as the btu
minous. because no strike was tnteat-
ened and stocks were not built up 20
1928 of 95,OoO.000 tons has been fol.
lowed by production around 100000
tons a month this year. Low prices 8
for the, year are ordinarily reacnea me-,
into effect to speed early deliveries.
This usual monthly increase is now
scheduled and will probably con-
tinue. Little change in wholesale
prices may be expected.
Retail coal dealers are facing
serious problem. The public is not
buying this summer in the usual vol
ume. Many of the retail dealers. lack
| ing more storage space or suhcient
capital, are being forced to refuse
their shipments as they come from the
mines. The operators in this case
curtail production and are only min
| ing as much coal as the dealers can
| take.
Thinks Prices Near Bottom.
If this continues we will find every
one clamoring for coal September 1.
1t will be physically impossible Tor
| the dealers to get and deliver in a
| single month the coal he should nave
been delivering all summer. Under
| these circumstances a local shortage
| NAV easily develop and we Will all
| be rushing around trying to get coal
at any price.
There is little chance of prices 60
ing any lower under the existing con-
| ditions and the wise man will get MS
coal in now when he can get deliv-
| cries, thus avoiding possible shortage
| prices and the bother of trying to get
| it late this fall.
Shortage Les7 likely.
The consuming public may also be
interested in the recent nndlngs OF
| the Canadian geological survey, which
renorts on new fields in Alberta,
which promise to supply anthracite.
bituminous, and Ignite coal for All
| of Canada for many years. This speiis
smaller exports from our own supply
and precludes the probability OF more
shortages, as severe as the last t"o'