Evening star., 1950-03-16
Independent Dealers
Seek Story on Deal
Settling Coal Strike
Various Tales Are Told
About Settlement Made
AT Secret Meeting
By David Laurence

By David Laurence
Behind the scenes in the recent
coal-strike negotiation a signif1-
cant chapter in American eco
nomic history may have been
written that will bear analysis.
Independent coal operators are
coming here to find out what
happened in the smoke-f filled room
where the deal was made, presum-
ably in their behalf. The tales
that are told are various. But
they add up to the simple fact
that, in a secret meeting with only
three or four persons present, the
coal strike was settled and the
independent operators had to take
1t or leave it"
The operators were not really
united by a common interest. 1t
was this division on which John
L. Lewis always counted, and he
won out. He played one group
against the other successfully.
Fewer Mines Seen Likely.
The net result eventually may
be fewer coal mines in operation
and more unemployment for
miners. 1t may also bring losses
to stockholders of several coal
companies which in a year or two
may have to 60 out of business.
They will be forced out by form
of competition which is not to
their liking-the competition OF
larger producers, whose costs are
lower than theirs. tied into a
labor union monopoly that fixes
prices.
It's the same old story Of the
plight Of the marginal producer
who finds himself ground between
the upper milestone of the labor
union monopoly and the neither
milestone of pressure from the
large producers who have mech
anized equipment and low-cost
operations enabling them to alb
sorb higher costs and still make
a profit.
The accusation heard here from
among the smaller coal producers
is that the larger companies which
are also engaged in other lines OF
business can afford to pay tribute
to MIR. Lewis because they charge
off a portion of their loss on coal
to the profits they make on other
commodities. When it Is con-
sidered that one-fourth Of the bi-
luminous coal production in
America comes from mines which
are owned by companies In other
businesses-what are known as
Captive mines"-the leverage
which that group has in fixing the
wage costs theoretically is very
powerful indeed.
Result Could Be Cartel.
There was time when the rail-
roads owned coal mines but nearly
half century ago Congress.passed
a law prohibiting that form OF
ownership by the carriers. Though
legislation might be proposed to
prevent companies engaged in
any other business from owning |
coal mines, it is problematical
whether this would help the COM
petitive situation very much. For
the larger coal producers, even
with no other connections, can
mine coal more cheaply than their
smaller competitors and compete
readily against Southern pro-
ducers. for example. who have a
long haul from their mines to
the industrial areas that must use
coal in their manufacturing plants.
1t comes back to the fundamen-
tai fact that in America there
are high-cost and low-cost pro-
ducers and they logically should
compete against one another. But
actually John L. Lewis, and not
the antitrust laws, controls that
factor in the coal industry. The
head OF the miners union now reg
ulates production, creates search
ties, sends the cost of coal up
ward and makes his deal with the
large producers while ignoring the
plight of the marginal units alto
gether. Here is a labor price
fixing monopoly of the most pal
pable sort, and It means that when
big unionism and big business
team up together the end result
could be a cartel run by private
groups.
Certainly the public interest
would require that thorough in
quiry into what happened behind
the scenes be made-and that the
mediators and fact-fnding board
members be required to disclose
what were the economic pressures
that sent the coal bill of the Ma
tion up by $84.000,000 and intro
duced higher costs also in the sale
price Of products manufactured in
plants using coal.