BITUMINOUS-COAL TRADE IN 1923

In the bituminous-coal fields 1923 was a year of truce in labor relations--a year of recovery after the upheaval of the great strike of 1922. The shortage created by that strike dominated the market for months and buoyed up demand above the level of current consumption. The comparatively high spot prices in the first six months and the heavy buying which continued throughout the year obscured the causes of instability latent in the industry. Yet by the end of the year signs were not lacking of the severe and unequal competition which was to become so dominant in 1924.

Labor relations in 1923.-On January 1 the union bituminous mines were operating under the Cleveland agreement, by which the strike of 1922 had been ended and which was to run until March 31, 1923. By this agreement the union won its fight against a reduction of the wage scale. The peak rates of 1920 were retained, including the advance of $1.50 to daymen in the summer of that year, which carried the day scale to $7.50. Under these rates, as illustrated by the Indiana scale, which is roughly typical of the union fields, pick miners were receiving 77 per cent more than in 1912, machine loaders 104 per cent, and inside daymen 164 per cent.

Although some apprehension was felt among union employers as to their ability to pay the scalo, no serious opposition to a renewal of the

agreement arose. The United States Coal Commission, which had been created in September, 1922, urged that the agreement be extended for another year, until it should have time to complete its studies and make its report, and after some discussion a contract was signed by representatives of Illinois, Indiana, and Ohio at New York on January 24 to run from April 1, 1923, to March 31, 1924, which continued the existing scale. Although" Pittsburgh was not represented, the contract was believed to mark a return to the method of bargaining through the Central Competitive Field, which had been abandoned for other methods in July, 1920, and August, 1922; and Pittsburgh and the outlying districts quickly negotiated corresponding agreements.

The market.—In thus renewing the scale with its $7.50 day rate, the union operators were influenced by the state of the market. For the moment nonunion and union wages and costs were on a parity, and the competition of nonunion coal was not oppressive. Demand was active, and prices, though declining, were still high. (See fig. 28.) The industries of the country were recovering from the great depression of 1921, and consumption was increasing: (See fig. 22 and Pl. VI.) In March, April

, and May the production of pig iron established a new high record and the consumption of coal in the manufacture of coke was close to the war-time maximum of October, 1918. Added to purchases for current consumption was a heavy demand for storage. At the end of the strike of 1922 stocks had fallen to 22,000,000 tons. By January 1, 1923, they had risen to 36,000,000 tons, but this was far short of the level which consumers desired to maintain. Buying for storage continued heavy throughout the summer of 1923. Figures 25–27 show the steady flow of coal into storage. In consequence the usual summer decline in output did not appear, and the curve of production (fig. 24) shows remarkably little change from week to week. By July 1 stocks had risen to 46,000,000 tons, a level which would have been deemed sufficient in some other years, but buying for storage continued, partly because the recollection of the shortage of 1922 was still fresh in the minds of consumers, partly because as the expiration of the agreement drew near the possibility of another stoppage was sensed. Ву December 31 the very large reserve of 62,000,000 tons had been

The total quantity of bituminous coal added to consumers' stocks in 1922 was thus 26,000,000 tons. The production for the year was 565,000,000 tons, or more than that of 1917 and second only to that of 1918 and 1920.

Transportation.— The heavy production of 1923 was handled by the railroads with far less complaint of car shortage than in other years of large output. The after effects of the strike of the railway shopmen that broke out July 1, 1922, were apparent in the transportation service in the following winter, and car shortage and other forms of transportation disability were reported at many mines in January, February, and March. Thereafter the railroads handled the coal offered with remarkable facility and dispatch. The improvement over other

years of heavy coal traffic was due to a number of causes. Coal-carrying facilities had been increased, and greater operating efficiency was obtained. Not the least factor was the offering of the coal traffic of 1923 to the railroads in reasonably even installments, instead of in extremes as low as 3,700,000 tons a week and as high as

built up.

13,000,000 tons, such as had characterized the preceding years. The experience of 1923 was thus a practical demonstration of the possibility of equalizing coal shipments through off-season storage and in thereby handling maximum

quantities of coal without great additional investment in railroad equipment and facilities. To this equalizing of coal traffic the railroads largely contributed through their far-sighted program of summer storage of their own fuel. (See fig. 27.)

Prices in 1923.-As consumers' stocks were accumulating spot prices were declining (fig. 28). In January, when the wage agreement was signed, Coal Age's weighted average price of 14 coals f. o. b. mine stood at $4.38. At this price it was possible for the highcost commercial mines and thousands of wagon mines to operate. But as stocks increased prices dropped, until in June they reached $2.56. By this time the wagon mines had closed and the smaller commercial operations were following their example. Shipments under contract continued in heavy volume, but the gradual decline in open-market prices left less and less room for profit on spot sales. Pressure to reduce costs followed, and before the end of the year wage cuts were reported in some of the nonunion fields.

Idle, part-time, and full-time mines. Significant of market developments in 1923 is the changing proportion of full-time, part-time, and idle mines among the 2,500 commercial operations that were reporting weekly to the Geological Survey (fig. 29). The mines included in the Survey's weekly statement were substantially the same from week to week, and the reports are comparable. These were not wagon mines, but commercial operations of some size. Altogether, the 2,500 mines yield about one-half of the output of the country, and they may be taken as fairly representative of the commercial as distinct from the consumer-owned output.

In Figure 29 each bar represents the condition of these 2,500 mines of a typical week. The sections of the bar stand for the percentage in the total number of mines that were entirely idle in that week and the percentage that worked 1 day, 2 days, and so on up to 6 days, or full time. ·Now, in October, 1922, just after the great strike, when prices were high and car shortage was prevalent, practically all mines that could get cars at all were in operation, and only 4.2 per cent of the total mines reporting were idle. Another 8.8 per cent worked one day, 26 per cent worked 2 days, 25 per cent 3 days, and so on to the group working 6 days, which constituted 13.1 per cent of the total. The next bar shows the condition in the week of February 17, 1923, after the renewal of the wage agreement was assured and the effects of the great strike were rapidly disappearing. Demand was still very active and the number of mines closed had increased but slightly. Production of the mines at work was limited chiefly by the available car supply, and few mines were able to get both cars and orders sufficient for full-time operation. As 1923 passed the

market grew less and less active. More and more properties closed, with the result that in the week of November 17, 32 per cent of the mines reporting to the Survey were idle, a percentage almost four times as great as that in the preceding February. Not

less significant than the increase in idle mines was an increase at the other end of the

1 See Tryon, F. G., and McKenney, W. F., International Railway Fuel Assoc. Proc., 1924, pp. 210–239.

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