Evening star., 1940-04-14
Minimum Price Plan
Adds S44,000,000to 10
Nations 'sCoa| Bill
Bituminous Examiners
Favor II Gents q Ton
Boost for Producers
BY NELSON M. SHEPARD.


minimum prices to be fixed for the
Nations soft coal industry, provid-
ing an estimated average increase Of
IL cents a ton for producers over
the 1887 prices they received at the
mines, were filed yesterday with
Director Howard A. Gray by the
examiners of the Bituminous Coal
Division of the Interior Department.
Designed to stabilize the industry
and put it on a paying basis" by
wiping out its sizable yearly income
deficits, the proposed minimum
prices would add approximately
$44,OO0,0OO to the consumers an
nual coal bill, II was estimated yes
6exday. They would establish a
N71oors below which the more than
$500 code member producers could
not sch at the mine without in
curing penalties. No minimum
prices are proposed or intended for
retailers.
The examiners, Thurlow G. Lewis,
Charles o. Fowler and Samuel H.
Jaffee, reported their recommended
prices would give the industry an
estimated minimum of $2.012 per
ton. This is as near to the $2088
average cost of production per ton
as it was possible to make IN
formulating minimum prices under
the Coal Act. In 1887, the most
recent period for which official
figures are available, the industry
averaged $1.964 per ton.
Large Income Deficits.
For the more than 100000 900
tons of bituminous coal mined an.
nually the income deficits incurred
by producers have ranged from
more than S22,O0O,000 for 1925 to
an estimated $50000,000 or more
each year since 1927, according to a
recent report of the National Coal
Association.
Fred Kirgis testified for the Cen
sumers Council of the Bituminous
Coal Division at recent hearings
that the proposed minimum prices
were designed to wipe out an esti-
mated S44.O00000 deficit incurred
in 1899. For that reason, he claim
ed, they could operate theoretically
to add that amount to the con-
sumers' coal bill.
The examiners recommendations
are subject to changes by Director
Gray who will announce shortly
the date on which he will begin
to hear arguments on exceptions
taken to the proposed prices. Then
he will make his determination of
the prices and marketing rules and
announce the effective date. Few
changes in the prices probably will
be made for the task of the examin-
ers required three years of study and
many months of hearings.
Cover Every Grade.
The recommendations cover every
grade of bituminous coal and the
destinations to which they are
shipped. They range from a low of
10 cents for a very inferior grade
of coal dust up to a high of $3.50
per ton for fine grade of "domes-
tic lump. The prices are classified
by 10 regions, with Pennsylvania,
Maryland, West Virginia, Virginia,
Ohio, Michigan, Eastern Kentucky
ana Northeastern Tennessee in
cluded in Region /. The District of
Columbia is in this region.
The average minimum price of
S20o8 per ton is proposed for No.
region, which is compared to the
average cost of s2128 per ton pro-
duced at the mine.
The report on the examiners
findings is yet to be filed but that
is merely perfunctory. While the
recommended prices represent in
creases over the present rates, it
was announced, these increases are
not spread uniformly over all the
coal sales to which they apply. The
examiners found producers often
have been forced to take whatever
prices they can get, with prices
f1uctuating from month to month,
depending on competitive marketing
conditions and other factors.
Below Cost in Some Regions.
While the 11-cent-a-ton increase
Is estimated for the country as a
whole, the minimum prices are
considerably below the cost of pro-
duction in some regions.
Director Gray announced recently
the Bituminous Coal Division would
not take it lying down" if retailers
boosted the prices unreasonably for
consumers because of the minimums
that are eventually established. A
close watch will be kept through
the Consumers Council.
Since the close of the hearings,
the examiners have studied more
. than $4,000 pages of testimony, 1000
exhibits and scores of other legal
documents. Mr.. Grays determina-
tlons should be issued in another
month and are subject to appeal
TO Secretary of the Interior Ickes.
They will have full legal effect
"a ~