December 1, 1916] 



SCIENCE 



767 



our cellars or in the bins of a power plant. 

 Coal that gets a long way from the mine 

 may pass through many hands before it 

 reaches the consumer, and it not only pays 

 commissions all along the line, but is sub- 

 ject to shrinkage and deterioration, both 

 of which enter into the final selling price 

 to the consumer. Brokers are usually satis- 

 fied to make a gross profit of perhaps 10 

 cents a ton, but as several brokers may 

 make a "turn over" on the same car before 

 it is unloaded this element of cost may be 

 several times that amount. 



About half of the anthracite and around 

 15 per cent, of the bituminous coal is re- 

 tailed in less than carload lots, and the 

 greatest number of individuals are directly 

 concerned in the marketing of this portion, 

 regarding the profits on which there is the 

 widest divergence of opinion. The margin 

 in the retail business between cost on cars 

 and price delivered is between $1.25 and 

 $2.00 a ton and is not more than enough to 

 give on the average a fair profit. The 

 shrinkage and, in part, the deterioration 

 are together seldom less than 1 per cent, of 

 the weight and may exceed 4 per cent., and 

 the retail dealer also must provide in his 

 selling price for uncollectable accounts. 



Advertising is a large expense — in part 

 carried by the retailer directly, but all 

 borne by the industry. The largest single 

 item in the cost of retailing is of course 

 that representing the labor of handling 

 and the local cartage, which together make 

 up about half the marketing cost. 



There now remains to be considered the 

 first major item, or the resource cost, which 

 is what the operator has to pay for the 

 coal in the ground— the idle resource, which 

 he starts on its career of usefulness. This 

 cost is expressed as a royalty or a deple- 

 tion charge. 



One of the latest leases by a large coal- 

 land owner provides for the payment of 



27 per cent, of the selling price of the coal 

 at the breaker. This percentage is there- 

 fore not only a royalty figured on the min- 

 eral resource, but also a commission based 

 on the miner's wage. To bring this right 

 home to you and to me, it may be said that 

 the practical result is that if the anthracite 

 we burn in our range this winter happens 

 to come from that particular property, we 

 will pay fully $1 a ton into the treasury 

 of the city trust that owes its existence to 

 the far-seeing business sense of a hard- 

 headed citizen of Philadelphia. Whether 

 such a royalty is excessive or not, the fact 

 remains that this is the tribute paid to 

 private ownership. 



The present average rate of royalty on 

 anthracite is probably between 32 and 35 

 cents a ton on all sizes, which is from 12 

 to 14 per cent, of the selling value at the 

 mine. The minimum rate (about 10 per 

 cent.)- is found in some old leases, and the 

 maximum (20 to 27 per cent.) in leases 

 made in the last five years. R. V. Norris 

 states that in the late sixties, when the 

 annual output of anthracite was around 

 15,000,000 tons, royalties were 8 to 10 

 cents a ton on prepared sizes, but that no 

 charge was made on the smaller sizes. In 

 the seventies the rate rose to 25 cents on 

 prepared, one half that on pea, and one 

 fourth on smaller sizes. By the middle 

 eighties, when the output was a third what 

 it is now, the rate was about double that 

 of the seventies — that is, 40 to 50 cents on 

 the larger sizes and 5 to 10 cents on the 

 smaller sizes. The tendency is still up- 

 ward by reason of increases in the rates for 

 intermediate sizes and the operation of 

 royalty rates based on a percentage of the 

 selling value, an increasing quantity. 

 Figured on the output from the Girard 

 lands, which is nearly 3 per cent, of the 

 total production, the gross return to the 

 estate from its coal lands is over 50 cents 

 a ton. 



