Henderson daily dispatch., 1937-03-19
Guffey Coal Bill Pattern
For Proposed MIRA Revival
(Contin,,ed from Sage One)

cheney in coal-burning; and CD
growth in use of competitive fuels.
Coupled with the excess mining cap
acity developed during the war, the
industry has been in poor shape. Out
put is off 80 per cent and prices have
suffered likewise. Although soft coal
at the mine sells for 80 per cent what
it did Is years ago, hard coal is down
nearly Onethird. In the past few years
prices have firmed up to some extent,
but they are still just equal or slight
ly under the cost of production. The
law of supply and demand works
slowly in this industry, for most OPP
orators prefer to run at a loss as long
as they can rather than to shut down
and let their mines deteriOrate.
Labor and Freight Costs.
The labor cost in producing soft
coal represents about 80 per cent of
the delivered price. John Lewis Unit
ed Mine Workers of America is a
powerful union. Hence coal operators
hape never been able to control wages
They have, however. made big econo-
mics by using mechanical equipment
in more recent years. Due to labor
saving devices and declining demand,
the number of workers has fallen
from $4,000 in 1923 to around $751;
600 at present. The biggest cost item
in the price you pay for ton of soft
coal, however, is not labor but freight.
Carrying charges eat up we'll over SO
per cent of the delivered price. This
means that the cost of hauling a ton
of coal is more than what the coal
sells for at the mine.
The coal industry is caught between
the upper milestone of competitive
fuels and the neither milestone of ris-
ing labor and freight charges. I say
rising charges" for the present wage
agreement runs out in less than two
weeks. The union wants a new con-
tract calling for a six-hour day, a five
day week. and a guaranteed annual
income of $1,000 for workers. The OPP
orators say this will add $14O,O0O 900
to the payroll, boost the cost of coal,
reduce orders. and throw more men
out of work. They. in turn, demand
that the present 35-hour week be ex-
tended to 40 hours so that they can
compete with other fuels. This dead
lock looks threatening, but it will
probably be quickly settled with high
er labor costs the major result.
Differs From Old MIRA.
This. then. is the background of a
typical "sick'' industry which the gov
eminent proposes to cure by public
regulation. The new coal-NRA now
being pushed through Congress, diff
fers from the old Blue Eagle act in
Io% &c oh of1 0f So u
practices. Collective bargaining and
high labor standards are declared to
he a public policy of the United
States, but are not made part of the
bill. A seven-man commission is to set
minimum prices based on average
costs and these costs are to include
wages. Hence, prices will indirectly
reflect wage costs. The significance Of
this bill spreads far beyond the
bounds of the soft coal industry, for it
NAV well be the pattern of regulatory
bills for all industries.
Regardless of this new legislation
competition from other fuels is still
cutting into coal consumption, hold
ing down prices, and destroying jobs.
The Guffev bill does not suggest how
to solve this basic trouble. That is
why | differ with the New Deal
theory of economic planning. I know
that there must be some regulation in
our complicated modern system For
instance, I have always been 100 per
cent for the stock exchange control
act. I am convinced, however, that
controlling hours wages and prices
is not striking at the soft-coal indus
trys real problem, which is how to
beat out oil, gas, and electric competi-
ton. Raising costs and prices does
not seem a logical answer to this puz-