December 1, 1916] 



SCIENCE 



765 



treated. These other items need less dis- 

 cussion in this paper for several reasons: 

 the item of marketing cost is one that can 

 be brought directly under observation by 

 the consumer if he will but study the mat- 

 ter intelligently, the transportation cost 

 can be learned by simple inquiry and its 

 control lies within the province of the 

 Interstate Commerce Commission, and the 

 details of mining cost can best be set forth 

 by the mine operators themselves, for they 

 have now adopted the policy of free dis- 

 cussion of these matters, which they once 

 regarded as sacred from public view. The 

 purpose of this paper, then, is simply to 

 give a summary statement of all these ele- 

 ments in the cost of coal, and some special 

 discussion of the resource cost. In pre- 

 senting the subject, the senior author as- 

 sumes responsibility for whatever may be 

 regarded as mere expressions of opinion 

 and the junior author stands behind the 

 statements of fact. 



The item of cost first to be considered 

 represents that part of the value given to 

 the ton of coal by the mine operator and 

 the mine worker. This may be termed 

 mining cost, but it must include the oper- 

 ator's selling costs and other overhead 

 expenses as well as the mining costs proper, 

 which include the larger expenditures for 

 wages, supplies and power. This cost plus 

 the resource cost — the royalty or deple- 

 tion charge — and the profit or loss on the 

 sale make up the value at the mine mouth. 

 The mining cost varies not only between 

 mines of different companies in separated 

 fields, but even between adjacent mines of 

 the same company in the same field. Both 

 nature and man contribute to such varia- 

 tion. 



It is not practicable to assign a very ex- 

 act figure to the mining cost — the census 

 of 1909 indicated an average of $1 a ton 

 for bituminous coal and $1.86 for anthra- 



cite, but these figures are believed by some 

 operators to be too low. It is possible, 

 however, to show in a general way the dis- 

 tribution of this item; the cost of mining 

 is divided between labor, 70 to 75 per cent. ; 

 materials, 16 to 20 per cent. ; general ex- 

 pense at mine and office and insurance, 2 

 to 4 per cent. ; taxes, less than 1 per cent, to 

 3 per cent, for bituminous coal, and 3 to 7 

 per cent, for anthracite; selling expenses, 

 nothing to 5 per cent., and recently to 

 these items has been added the direct and 

 indirect cost of workman's compensation, 

 which may reach 5 per cent, for bitumin- 

 ous coal. The charges for labor, material 

 and general office expenses are easily 

 understood, as is also a charge for depreci- 

 ation of plant and machinery; but taxes 

 and selling expenses are important items 

 that may be overlooked by the casual ob- 

 server. Some figures recently published 

 show that the taxes levied in West Virginia 

 last year on coal lands and coal-mine im- 

 provements — that is, on the industry as a 

 whole — were equivalent to nearly 3 cents 

 per net ton of coal produced, which is 

 doubtless fully as much as the profit made 

 by many of the operators in that state. 



The cost of selling coal is nothing for 

 the companies that use their own product, 

 including the steel corporation and a large 

 number of others, and is little or nothing 

 for the producers who sell nearly all their 

 coal to such large consumers as the rail- 

 roads. Companies that produce coal for 

 domestic use and the general run of steam 

 trade must figure on a selling cost as high 

 as 10 cents or more per ton, the cost de- 

 pending on the extent of their business. 

 The average selling cost for bituminous 

 coal is probably 5 to 10 cents a ton, and for 

 anthracite the usual charge of sales 

 agencies is reported as 10 cents a ton for 

 steam sizes and 15 cents for the prepared 

 sizes. 



