770 



SCIENCE 



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



the basis of the United States Geological 

 Survey estimate of 2,000,000 million tons. 

 At a valuation of coal in the ground of 

 only 1 cent a ton, which he stated is less 

 than has been paid for large holdings, this 

 deal would require a capitalization of 20 

 billion dollars, and the fixed charges on 

 the bonds of this United States Coal Cor- 

 poration would require an interest charge 

 alone of $2 a ton against a production of 

 600 million tons a year. Mr. Cushing char- 

 acterizes such a financial undertaking in 

 mild terms as hopelessly impossible, and 

 yet his figures, which do not include taxes, 

 are most enlightening as affording some 

 measure of the cost of possessing an unde- 

 veloped resource. Incidentally, these star- 

 tling figures furnish a strong argument for 

 the present policy of the national govern- 

 ment in retaining ownership of the public 

 coal lands, at least up to the time when the 

 market conditions justify the opening of a 

 mine and then either leasing or selling a 

 tract only large enough for that operation. 

 The consumer of the next century simply 

 can not afford to have private capitalists 

 invest to-day in coal land for their great- 

 grandchildren to lease. 



The burden that seems inevitable under 

 unregulated private ownership of a nat- 

 ural resource like coal is that because the 

 lands containing these national reserves of 

 heat and power are taxed and because the 

 individual or corporation properly charges 

 up interest at current rates on his large 

 holding, the consumer must pay a resource 

 cost which takes into account the long pe- 

 riod of undevelopment. Even the high 

 rates of royalty on the lands of the Girard 

 estate may be found less excessive than 

 they seem if a century's taxes and interest 

 charges are figured. Yet the fact remains 

 that the royalty for anthracite represents 

 a much larger proportion of the cost of 

 the mined coal than any bituminous roy- 



alties. Moreover, we believe the highest 

 royalty prevailing in the anthracite region 

 has far more influence in fixing the selling 

 price than the lower rates of the older 

 leases. 



Any study of costs in the coal industry 

 finds its point in the question not who, but 

 what, fixes the price of coal. The cost of 

 mining coal, like the cost of living, is in- 

 creasing. Exact mining costs, however, 

 can not be determined until the operators 

 have accomplished their reform of stand- 

 ardizing accounting. Too often the oper- 

 ator includes in his account only the two 

 largest and most obvious items, labor and 

 material. Thus, when the market for bitu- 

 minous coal is dull, the company whose 

 land costs little or nothing is able to set a 

 lower limit of price than the company 

 whose coal must stand a charge of 5 to 10 

 cents per ton or even more, be that charge 

 called royalty, depletion or amortization. 

 At such time the operator with the large 

 resource cost must sell at a real though not 

 always recognized loss, but of course with 

 the hope of recouping himself at times of 

 high prices like the present, if fortunately 

 he has any coal to sell not already con- 

 tracted for. 



Even with the average low resource cost 

 of bituminous coal, the state of competition 

 that is tied up with idle and half-worked 

 mines results in an average total cost that 

 is little below the average selling price. Of 

 course in this business there are those, both 

 large operators and small, who make a 

 profit in lean as well as in fat years, just 

 as there are those for whom the prosperous 

 years are too infrequent to keep them out 

 of the hands of receivers. 



In the anthracite fields the mining costs, 

 and especially the resource costs, are higher. 

 But here, with an average market demand 

 that normally exceeds or at least equals the 

 available supply (and with the passing 



