764 



SCIENCE 



[N. S. Vol. XLIV. No. 1144 



not immediately consumed with the using. 

 At any rate, public opinion is more easily 

 brought to a high temperature by con- 

 sidering the price of coal than by consid- 

 ering the price of any other product unless 

 we except gasoline, recent discussion of 

 which has been almost explosive. 



Looking backward as well as forward, 

 one need not be an alarmist to suggest 

 that in the whole field of productive busi- 

 ness the coal industry seems the one most 

 likely to be threatened with government 

 operation. The foodstuffs are produced on 

 land owned and operated by the millions, 

 and so far as the production of the raw 

 material for them is concerned, "monop- 

 oly" is an unknown word, but when we 

 think of coal, terms like "barons'' and 

 "trusts" instinctively come to mind. For 

 these reasons the determination of certain 

 facts connected with coal production and 

 the analysis of the cost elements that enter 

 into the price of coal constitute a timely 

 subject for discussion. 



In discussing costs, however, we do not 

 overlook the too evident fact that at times 

 price may far outstrip cost. The price 

 of coal depends upon the balance between 

 necessity for fuel, on the one hand, and 

 ability to produce and to deliver, on the 

 other; the ability to produce is in turn 

 controlled by the labor available and the 

 ability to deliver is dependent upon car 

 supply. Increased foreign demand for 

 American coal, large industrial consump- 

 tion, unusual weather — all may have great 

 influence on the current price of coal, but 

 none of these is to be considered a factor 

 in the actual cost of production except so 

 far as it causes irregularity in operating 

 expenses and promotes a decrease in effi- 

 ciency of mine labor. To-day high prices 

 are being received for coal by those who 

 are able to produce and deliver more than 

 their outstanding contracts require. In 



other words, a few traders may be able and 

 willing to capitalize the urgent necessity 

 of the consumer and their own ability to 

 deliver. The premium for fuel now being 

 paid generally by the consumers of the 

 country and by such traders as have been 

 caught short in their contracts is in reality 

 not properly chargeable to cost of coal, but 

 to cost of car and labor shortage, just as 

 in the times of stress accompanying labor 

 troubles the premium paid by their con- 

 sumers is a part of the price the country 

 pays for strikes. 



Four general items of cost must be con- 

 sidered as normally controlling the price 

 of coal to the consumer — resource cost, 

 mining cost, transportation cost and mar- 

 keting cost. Under usual conditions each 

 of these items includes a margin of profit 

 which may seem either excessive or inade- 

 quate, according to your point of view. 

 Yet an unbiased consideration of these cost 

 items is absolutely essential as a prelim- 

 inary to the decision by the public whether 

 we are buying coal at a fair price, and if 

 not why not. As long as it is the popular 

 view that the price of coal is made up of 

 one part each of mining costs and freight 

 costs to two parts each of operator's profits 

 and railroad dividends, with the cost of a 

 certain amount of needless waste on the 

 side, the demand for investigation will con- 

 tinue, and in so far as there is any element 

 of truth in this view, legislative action is 

 justified, even though the prescribed reform 

 may approach the extreme of public owner- 

 ship and operation of mines and railroads. 



As the initial item of cost, the amount 

 charged against the marketed product as 

 the value of the coal in the ground, which 

 for brevity may be termed the resource 

 cost, is perhaps the item most often over- 

 looked by the coal consumer, and for this 

 reason that phase of the subject will be 

 fully considered after the other items are 



