Coal Age

AUG 2012

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1930-1939 Decreases in coal consumption by both railroads and public utilities hit industry hard. But "encroachment of substitute fuels" was "a subject of increasing importance. Fuel oil continued to gain in 1930, though at a slightly reduced rate; natural gas enjoyed a boom year with no evidence of recession in the near future." Coal was being squeezed between cheap oil and natural gas market expansion on the one hand and declining needs by traditional customers—the same customers for whose needs many mines had been opened and for which they were pro- ducing. To best face common problems, coal companies began creating new combi- nations and associations to best legally coor- dinate their responses. To get a better sense of how to advise the coal community, Hale and the editorial staff sent out queries to dozens of mine execu- tives nationwide. In the May 1931 issue, they revealed that the predominant response was the necessity of further mechanization. "First installed for the purpose of cost reduc- tion as an end unto itself, the machines have since demonstrated their utility as weapons at high-wage mines to combat the destruc- tive competition of mines which have been driving down wages and prices in their war for business." However, "patience is a virtue which must be practiced in mechanization. The new methods are revolutionary to the job habits to which the miner has been long accustomed. On a contract basis, the miner was his own boss. For some time he is lost under the new conditions and, unless prop- erly handled, may expect the company to take every bit of the responsibility for his job and his safety." Mechanization, however, was also hav- ing a stabilizing influence throughout the industry. "Mechanization at this early stage of development has cut down labor require- ments as much as 50 percent…Machines are putting mines paying high wage scales"—generally meaning mines with unionized workforces—"on equal footing with operations where wages are lower and working hours longer. It is felt that wages cannot be driven beyond the lowest limit now prevailing; that for this reason the plants now mechanized will enjoy a consid- erable measure of profit in the future over and above their present return. Tonnage gains to mechanized mines are being trans- ferred from hand-loading mines." For the September 1931 issue, Coal Age presented to the industry a plan for stabi- lization. Not intended as a detailed blueprint, the plan was meant to stimulate further conversations and actions as the mining community continued to suffer incredible contractions. Looking back at the history of mining from 1870 through 1910, the editors stated the industry's biggest problem during that time was assuring pro- duction ahead of demand. However, due to these various challenges "productive capac- ity was developed to a point outstripping peak demand, while the stimuli which gave the speculative surge to 'good times' in the bituminous coal trade either have disap- peared or no longer excite. In the meantime, increased efficiency in the utilization of coal by the larger consumers and inroads of com- petitive fuels have been working to check the normal expansion of demand." Because of this, the industry now has "too many mines, too many operating companies, a declining market for coal as a raw fuel, weak marketing policies and methods, lack of research to develop new uses for its product, inadequate sales real- izations, and an unstable labor situation. While the law of the jungle is driving out some of the inefficient, it is also draining the resources of the many producers who richly deserve to survive. Under the law of the jungle, the lion is little more secure than the jackal." Stating that "a gambling basis of profit for an industry so important to the industrial welfare of the nation as bitumi- nous coal is neither conducive to stabiliza- tion nor safe for the nation or for the industry itself," Coal Age presented its sev- en part plan: "More production control; sound merchandising; stabilized industrial relations; more mechanization; coordinat- ed research to develop new uses for coal; more consolidations; and more safety." Surviving Through the Bottom: Roosevelt Brings Stability To what extent these ideas were adopted or practiced is difficult to ascertain, but things did keep getting worse for the industry. 1931, 1932 and the first half of 1933 were "lost years" where companies were doing all they could to hold on having foregone hope of any profit: they just tried to keep money coming in the front door. Handloading con- tinued to be a drain on the industry and, as more mines shut or slowed production, it was always the mechanized mines that held on. 1931 production figures from Illinois published in the February 1932 issue illus- trated this point. Though overall production fell more than 9.1 million tons in 1931 to 42.9 million tons, mechanical output only dropped 223,817 tons. Handloading was down 9 mil- lion tons overall. "In other words, practically all of the tonnage drop in the state was lost by un- mechanized operations." 66 www.coalage.com Coal Ageeditorial page carrying the National Recovery Act's Blue Eagle. *Coal Age, October 1933 100th Anniversary Special Issue August 2012

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