May 6, 1921 



The Rorists^ Review 



19 



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DANGER IN COAL SLUMP 



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HAVE YOXJ BOUGHT YOUR COAL? 



Danger in Postponement. 



Though some growers have begun to 

 .)uy their coal for next season, a great 

 many are postponing their purchases, 

 for the same reason that the general 

 public is holding off; namely, hopes of 

 lower freight rates at a later date and 

 a consequent lower cost. But it is ad- 

 visable for them to consider that, while 

 the possibility of lower freight rates is 

 remote, the prospect of high fuel prices 

 is quite likely. The "buyers' strike" 

 thus far this year has cut production 

 to a figure never reached before at this 

 season and never at any other time of 

 year except once, at the time of the 

 strike in November, 1919. The rail- 

 roads, at a season when they can move 

 coal easily, have none to move. The 

 rush that will follow when cold weather 

 commences in the autumn will, under 

 present transportation handicaps, pro- 

 duce congestion, delay a.i^ high specu- 

 lative prices similar to those of last sea- 

 son. 



The lack of demand, despite retail 

 coal dealers' advertising in the news- 

 papers more than is their custom, has 

 brought coal prices to a figure thought 

 impossible six months or so ago. In- 

 deed, it is asserted that bituminous coal 

 is selling at below the cost of produc- 

 tion in some instances. It is quite safe 

 to figure that at no time during the re- 

 mainder of the year will it be possible 

 to buy coal at prices lower than those, 

 prevailing at present. Aside from that, 

 there is positive danger that those who 

 delay buying will have diflaculty in ob- 

 taining coal at. any price when the 

 actual need for it comes. 



The Present Situation. 



The situation is simply one of supply 

 and demand, with the complication of 

 transportation difficulties thrown in. 

 There has been extremely little demand 

 for coal for a long period. Consequent- 

 ly the bituminous mines are not running 

 to more than forty per cent of capacity. 

 Soft coal cannot be stored in any quan- 

 tity at the mines; it takes up more 

 room than is available and the extra 

 handling naturally adds to the cost. A 

 coal mine is like any other industrial 

 plant. When there is no demand for 

 its product it curtails operation. To do 

 otherwise would mean bankruptcy. 



Anyway, reserve stocks at the mines 

 would not be the answer to the problem. 

 This country uses a great deal of coal, 

 and when coal is moving actively into 

 consumption the biggest reserve stock 

 that could be piled up at the mines and 

 in dealers' yards is merely a drop in 

 the bucket. The country's largest coal 

 storage plant is the consumers' bins. 

 Another most important point is that 

 of getting the coal from the mines to 

 where it is needed. Every ton of coal 

 that moves into consumption in this 

 country has to be moved by the rail- 

 roads and they are not equal to the task 

 of transporting it all at once. That was 

 demonstrated last season. 



Just now the railroads are begging 



for business. There are hundreds of 

 thousands of empty cars standing idle 

 along sidings and freight crews have 

 been reduced to a minimum. Coal 

 could be moved easily and promptly 

 and the consumer, taking advantage of 

 the present low prices, would be as- 

 sured of his winter's supply at reason- 

 able cost. In a few weeks the idle 

 freight cars are going to be put in serv- 

 ice carrying materials for road build- 

 ing and industrial use; still later there 

 will be the crop movement, which uses 

 every available car and, even under the 

 most favorable transportation condi- 

 tions, which do not exist at present, 

 causes bad congestion on the railroads. 

 By the time that is finished the cold 

 weather is usually with us and there 

 are the problems of frozen coal, frozen 

 switches and storm delays to be over- 

 come. 



No Lower Prices. 



Florists have the experience of last 

 season to warn them of the results of 

 delayed buying. Nobody wants a repe- 

 tition of such a market, least of all the 

 coal men. But such a condition will un- 

 doubtedly result if the present stagna- 

 tion continues much longer. 



A coal man's words are: "Neither 

 anthracite nor bituminous coal can be 

 sold profitably below present prices. 

 There are wage contracts, put into ef- 

 fect by government commissions and 

 expected to remain in effect until 1922, 

 which preclude any thought of lower- 

 ing the cost of production. Both an- 

 thracite and bituminous are now sell- 

 ing as near the cost of production as 

 they can be — too near, in many in- 

 stances. A steady consuming demand 

 from now on through the summer 

 months would keep prices reasonably 

 steady. An active demand, coming all 

 at once and late in the year, when the 

 mines, owing to a long period of in- 

 activity, are unable to produce "the coal 



fast enough to supply the country's 

 needs and when the railroads will be 

 unable to handle it, anyway, will force 

 prices up out of sight, and even the 

 high values will not insure a sufficient 

 supply. ' ' 



A Matter of Production. 



To see the country safely through its 

 soft coal supply, as well as to meet the 

 export demand, it is calculated that ap- 

 proximately 550,000,000 tons must be 

 mined each year. The output runs 

 higher in some years and lower in 

 others. 



Experience has shown that what is 

 called the "line of safety," which the 

 public, as well as the producer, must 

 keep in mind, so as to guard against 

 any contingency of soft coal shortage, 

 is an average production of approxi- 

 mately 10,500,000 to 10,750,000 tons a 

 week. When it falls below those figures 

 for any material period of time there 

 invariably is the danger of a pinch 

 later on. 



During the recent congressional in- 

 vestigation into the industry it was 

 brought out that the coal burned the 

 country over during the seven fall and 

 winter months each year is always 

 greater than the amount of coal actual- 

 ly hauled by the railroads during that 

 period. That means nothing else than 

 that a quite considerable tonnage of 

 coal must be mined and hauled and 

 stored in the consumers' bins during 

 the other five months of the year if the 

 contingency of a jam in transportation 

 is to be avoided. 



Slump in Output. 



When there is a condition of "no 

 market" — that is, lack of orders from 

 the consumer — inevitably there comes 

 a partial shutdown of mines. With the 

 normal output of coal at once inter- 

 rupted, there looms ahead the threat of 



Million 



net tons 



2.4 



Estimate of average total production per working day of bitununous coal including 

 coal coked, made by the United Sutes Geological Survey. 



0.0 



Heavy Black Line Shows Slump in Coal Production in Last Four Months. 



