Economics - Regulation of the Coal Industry (With Discussion)

One who has been trained in belief in the law of supply and demand and its effect upon prices finds it difficult to adjust himself to the minute regulations imposed by the New Deal, and also to the bewildering changes of government policy as expressed within a short period of time between the antitrust laws and the N.R.A., and later by the Bituminous Coal Conservation Act of 1935. A survey of the coal industry since the World War, both in this country and Great Britain, however, shows that regulation of some sort is needed if any stabilization is to be achieved and if the wage structure and economic welfare of the many communities dependent solely upon coal are to be maintained. Let us look at what has happened to the industry since 1920, which can be considered as the end of the period affected by the war influence. This discussion will be confined solely to bituminous coal, although many of the general conditions are equally applicable to anthracite, the position of which now is at least as bad as that of the softer variety. Since 1920—to the end of 1934—the production of coal has decreased from 568.7 million to 358.4 million tons, or 37 per cent; the number of mines from 14,766 to 6,258, or 58 per cent; the average annual production per mine has changed from 38,512 to 57,425 tons, or 50 per cent. The number of large mines has increased considerably, and the number of men employed has decreased from 639,547 to 458,011, a reduction of 28 per cent, while the average output per employee has changed from 4.0 to 4.4 tons, or an increase of 10 per cent. The average price per ton of coal at the mine has varied from $3.75 to $1.75. During that time wages decreased largely until 1933 and since that time have increased, until now the rates paid are considerably above those in other occupations, although the actual yearly earnings are low, because of part-time work. From 1920 to the signing of the Jacksonville wage agreement in 1924, about two-thirds of the men were union members and practically all of the nonunion mines were south of the Ohio River; with the fixing of the high wage scale of that agreement, which soon proved to be an uneconomic one, many of the mines found that they could not retain their business, so gradually changed to nonunion. By 1928 the proportion