Some Trends in the Bituminous Coal Industry

• Author: Harry L. Gandy
• Published date: 01 January 1930
• Date: 01 January 1930
• DOI: 10.1177/000271623014700111
• Subject Matter: Articles

Some Trends in the Bituminous Coal Industry
By HARRY L. GANDY
Executive Secretary, National Coal Association, Washington, District of Columbia
I F the word &dquo;trust&dquo; is to be under- circumstances, it would be extremely
stood in its popular sense as
diflicult, if not impossible, to establish
denoting a combination of otherwise
trust control over production and price
independent producers, with sufficient
in any single producing field. At any
economic power to control the output of
rate, no such undertaking has as yet
the product to the extent of regulating
been successfully carried out.
prices, then there is no such movement
The mining of bituminous coal may
in the bituminous coal mining indus-
well be cited as a typical competitive
try. The explanation of this fact is to
industry. With its large number of
be found in the conditions under which
independent competing units, it illus-
the industry is carried on. It is essen-
trates in its activities all the advantages
tially an industry of small units.
and disadvantages of unrestricted com-
petition. For reasons to be hereinafter
A COMPETITIVE INDUSTRY
developed, that competition is ex-
The largest individual operating
tremely active, and results in a prevail-
company in the bituminous mining in-
ing price, which does not yield a reason-
dustry produces less than five percent
able return to the capital invested. No
of the total annual output of the coun-
industry is more in need of the stabiliz-
try. With an annual production in the
ing effect of trust control, but in no
neighborhood of 525,000,000 tons, and
place other than in agriculture is the
a total of 6,450 mines operating in 1928,
establishment of such control more
there were less than 100 companies
nearly impossible.
that produced as much as a million tons
If the tendency to cut-throat com-
apiece. There were only about 150 com-
petition among bituminous coal opera-
panies that produced as much as 500,000
tors is to be eliminated and production
tons each.
At the other end of the
and prices are to be stabilized, it must
list there were 2,752 of the 6,450
be by some other means than through
mines, each of which produced less
the establishment of trusts, and that
than 10,000 tons annually. The large
without regard to the legal difficulties
number of small competing units cre-
in the way of such combinations. Con-
ates a situation in which any such con-
ditions in bituminous coal mining are im-
certed action as would be involved in a
proving, as a result partly of the working
real trust movement is impossible of
out of economic forces and partly of self-
realization.
regulation within the industry. For
What is true of the country as a
the benefit of those who are prone to
whole is almost equally true of the in-
bring charges of incompetency against
dividual producing fields. In every
the industry, it may be worth while to
field, even though there may be one
point out a few of the main difficulties
or two large units of production, there
with which it has to contend-di~.-
is a much larger number of medium
culties which, in my opinion, do not
and small sized operations. Under such
exist to the same degree in any other line.
84



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85
rior freshly mined coal. Producers’
SEASONAL DEMAND
stocks cannot be utilized as
a
The fundamental difficulty to be
method of equalizing bituminous pro-
overcome...