77/ /v L'OAL S/rCATIOX J\ Till-: I Mil:!) s/wrj'js 



;)r 



illlH cllrrl ;U niicc, lidWCM'l'. lu'cjlUsc dl 



juvvious c-(mtr;icts which liad hri'ii 

 iMJido, I'liCnriibh' liy hnv, ;il iiuich 

 . hii,''hi'r liiriircs. Hut it i> cxl rcincly 

 ]irol)iibh' that, had nut this hiw bi'i'ii 

 ])assod and the Fuel Adininistralioii 

 establishfil. the price ol" foal for the 

 coimtrv woidd liave bocu at least .$".'.<»<) 

 a tt)ii hiiiiiei" tliaii it is, for jiriees under 

 the coniiK'titive ]dan iindnuli!e(||y 

 woiihl have ednliinied tn ad\anre. 



l-;\ell at the eonsel'N at i\e e-liniaie III' 



$v\00 a ton, the saving- on :):)(». Odd. (Hio 

 tons of hituniiiioiis coal would he 

 $l.ldd.ddd.ddd. 



The jM'iees tivst fixed have been soine- 

 wliat niodilietl by the Fuel Adminisli-a- 

 ti(Ui. aetiniT umlei' proideiil iai a|i- 

 l>rova]. In price lixini;' the Kuel Ad- 

 iniiii>l I'al inn has had the |ir(ib]ein lo 

 strike the nice balance which will result 

 ill the ji'reatest benefit to the people of 

 the United States ; a ])rice high enough 

 so that there shall be increased produc- 

 tion over that of |)revi(>us years, but not 

 so high as to place too heavy a burden 

 of cost upon the people. In the case of 

 bituminous coai it is to be noted that 

 the plan has been to fix the piicc sn 

 that each operator shall receiNc a lim- 

 ited profit. Hence the price is rela- 

 tively low for coal from the thick seams, 

 easily and chea})ly mined, and high for 

 the thin and poor seams fiom which it 

 is more expensive to mine. 



The difficulty of the problem may be 

 illustrated by the very small mine 

 which under ordinary circumstances 

 would not be able to operate. Many of 

 these jiroperties do not even have rail- 

 road facilities: these are known as 

 "wagon mines." in conseciuence of 

 their lack of facilities they cannot prn- 

 duce coal as c-heaply as the larger mines 

 with better facilities: hence if they are 

 operated at all. it is necessary for them 

 to receive a high ])rice for their jti'od- 

 uct. which is no better: indeed, is likely 

 to ])e on the average poorer than that 

 from the largi^ mines. 



While differences in jn-ices exist for 



like products in the >ame districts, it 

 has been the aim of tln' Fuel Adminis- 

 tration not to make the dilferentials 

 grealei- ilia II nece>sai-y in order to se- 

 cure a grcal proiliict mu. The larger 

 pari oft he \ ai'ial ions in i he prices an- 

 nounced for liil umi non> cojd i> due to 

 dilference in (pialily of ihc cnnl and to 

 freight dilVei'eillials. 



Till' practice followed is in complete 

 coni ra\en(inn of economic theories ac- 

 cepicd before I he w ;i r. If a mine were 

 rich and coinenicnl l\- located it gained 

 a milch larL'vr prolil per ton than did 

 iIk' poor mine badly located. The 

 owner of the lictler propcrfv gained all 

 the ail\aiii;Mc> of cheapness of opera- 

 lion ami coiixeiiienee in transportation. 

 l-;\eii with I he prices fixed, this is still 

 the situation to a considerable extent, 

 Init the ell'ect of the price fixing is to 

 reduce the differences between the 

 gains of the I'icli and the poor mine. 



I'nder the fuel law another method 

 of attack would have been possible. 

 The law autlioi'ized the government to 

 be the exclusive buyer and seller of the 

 coal of the country. Had this author- 

 ity been used, the coal mined would 

 have been sold to the Fuel Administra- 

 tor at a fair profit for each operator. 

 The coal, then the property of the Fuel 

 Administration, could ha\e been |)oolcd 

 and sold at prices dependent u))on its 

 value, taking into account its thermal 

 ]»oM'er, its other qualities, and its ]»osi- 

 tion in the country in regard to freight 

 and demand, the prices being fixed so 

 as to return to the Fuel Administration 

 its cost with a sulTicient amount to 

 cover administration. Indei'd. this was 

 the plan of the Federal Tiade ('omniis- 

 sion. except that the plan- of the Coiii- 

 mis.-ion went c\en further and rcipiired 

 the operation of the mines. 



Had this suggested procedure b:'en 

 followed, the inecpudity of cost of the 

 same quality of coal at the same plac(» 

 Would have been a\(iiilc(|. The Fuel 

 Ailiuinistrat ion. however, would have 

 had the extremely difficult problem of 



