The Development of the Anthracite Combination

• Author: Francis Walker
• Published date: 01 January 1924
• Date: 01 January 1924
• DOI: http://doi.org/10.1177/000271622411100128
• Subject Matter: Articles

The Development of the Anthracite Combination
By FRANCIS WALKER
Chief Economist, Federal Trade Commission
AMONG the numerous industrial But even when this element is elimi-
combinations in this country few nated-and it seems to be now the least
have attracted more attention, or en-
difficult problem in the case-there still
countered more criticism, than that in
remain the problems of concentrated
the anthracite industry, while on ac-
ownership of the coal reserves for the
count of the length of its existence, the
remote future, of an industrial organi-
peculiarities of its development and the
zation habituated to tacit collective
urgency of constructive reformation in
action, and of a harassed consuming
the coal industry it is of special im-
public confused by divided counsels
portance &dquo;at this time. Only by ob-
and failing therefore to make its vast
serving how it has developed is it likely
power felt by an unambiguous declara-
that suitable measures will be devised
tion of its will and an effective exertion
to correct the abuses found. The way
of its economic strength.
by which the industry strayed into
In the history of the development of
these by-paths may be partly retraced,
this combination three major periods
and may furnish a safer way out than to
have been unrolled up to the present
try some imaginary route of political
time: (1) the early stages of the in-
dreamer or social fanatic.
dustry, in which, however, some of the
An advocate of the mine workers
later problems were clearly fore-
recently described the anthracite com-
shadowed, (2) the period of combina-
bination in the following picturesque
tion by agreements and mergers, and
though somewhat fanciful terms:
(3) the present period during which
The anthracite
numerous successful efforts have been
industry has been organ-
ized into
made to undo certain elements of the
a huge combination, a monopoly
combination. As to this last
very similar in structure to an octopus.
period
Its head and body are a very small group
there was naturally an extensive in-
of banking interests. Its entwining arms
termission as a result of the war.
are seven railway systems which control at
While this last movement of Govern-
their extremities the anthracite mining
ment intervention has not yet finished
operations of the country.
1
its course, its momentum may be re-
Before entering into the detailed
tarded or its direction diverted, if its
story of its development, it may be well
aim and its goal are not properly
to observe that up to the present time
understood.
this combination has been quite as
It should be remembered also that
much a railroad combination as a min-
this combination was a long time in
ing combination. The desire to secure
building, and that it cannot be abol-
tonnage for railroad transportation
ished in a day by ordinary political and
was one of the chief motives of combi-
legal methods, particularly as those
nation, as well as one of the chief causes
who are striving to protect and prolong
of improvident coal mining activities.
its existence are past masters of the
1

game with many strong allies.
Lauck: Before the United States Anthracite
The anthracite
Coal Commission
mining region is a
Summary, Analysis and State-
ment I,
small coal field of
p. 37, 1920.
less than 500 square
234

---

THE DEVELOPMENT OF THE ANTHRACITE COMBINATION
235
miles in the northeastern part of
The usual statistics of the industry
Pennsylvania. The anthracite region
commence with the shipment of 365
is divided into several districts, the
tons to the Philadelphia market in 1820
Wyoming (or northern), the Lehigh (or
by the Lehigh Coal & Navigation Com-
eastern middle) and the Schuylkill (or
pany. This Company, like the other
western middle and southern), and each
important pioneers in the anthracite
of these districts has its peculiarities as
industry, was both a miner and carrier
a mining region and its own distinctive
of anthracite, and a canal was used, be-
history. It is the only important an-
cause the railroad had not then been
thracite field in this country.
developed. In the Wyoming field the
The original quantity of coal in the
first important enterprise was the Dela-
ground has been authoritatively es-
ware &
Hudson Canal Company, while
timated at about 19,350,000,000 tons.
in the Schuylkill field, it was the
There remained in 1912 about 14,082,-
Schuylkill Canal. The Delaware &
500,000 tons, which, with the prevailing
Hudson Canal conveyed the coal to
mining methods and practices as to
New York, while the Schuylkill Canal
extraction (about 50-60 per cent), in-
and the canal of the Lehigh Coal &
dicated that approximately 7,853,000,-
Navigation Company brought the coal
000 tons then remained to be won.2
2
On
to Philadelphia. Apparently for both
this basis about 7 billion tons are prob-
the Delaware & Hudson and the Lehigh
ably still available.
Coal & Navigation Companies the origi-
The most important use of anthracite
nal motive and plan was to mine and
is for domestic consumption (though it
market the coal, and the canals were
was once an important metallurgical
built for that purpose. The Schuyl-
fuel), for which the familiar &dquo;domestic&dquo;
kill Canal, however, was purely a
or &dquo;prepared&dquo; sizes, such as egg, stove
transportation enterprise. With the
and nut, are chiefly sold. The small
introduction of the railroad soon after,
sizes are chiefly used for boiler fuel in
the Delaware & Hudson Canal and the
competition with ordinary bituminous
Lehigh Coal &
Navigation Company
steam coal.
In the early days only
combined the use of both instruments
the domestic sizes were shipped to
of transportation. The railroads fur-
market, and the small sizes were
nished better opportunities for rival
thrown on dumps, but for many years
lines than canals, while the topography
these have commanded a high enough
of the mining region, and various other
price in the market to pay a profit on
factors of an engineering or commercial
shipment, more or less as a by-product.
character, led to the greater use of rail-
ways and the gradual elimination of the
EARLY HISTORY
canals.4
.
Into the antiquarian history of the
The Lehigh Valley Railroad and the
first discovery of anthracite and the
Delaware, Lackawanna &
Western
beginnings of mining and traffic, it is
Railroad first clearly emerge from
not necessary to enter here.3
smaller enterprises in coal mining and
2
Griffith and Conner: Our
Anthracite Coal
et seq
.
(by Richard P. Rothwell); Report of the
Supply and Its Conservation
.
Original Communi-
Committee of the Senate of Pennsylvania upon
cation 8th International Congress of Applied
this subject of the Coal Trade, Harrisburg, 1834.
Chemistry, 1912, Vol. XXIV,
4

p. 92.
Cf. Report of the Commission to investigate
3
Cf. Jones: "The Anthracite Coal Combina-
the increase in the cost of anthracite coal in the
tion," 1914; Roberts: "The Anthracite Coal
Commonwealth of Pennsylvania to the Governor
Industry," 1901. "Evolution of the Anthracite
and Legislature pursuant to Joint Resolution of
Coal Trade;" "Mineral Industry," 1895, p. 141,
June 15, 1915. (See pp. 40-3.)

---

236
THE ANNALS OF THE AMERICAN ACADEMY
transportation about the middle of the
The Delaware & Hudson Canal Com-
century. The Lackawanna Railroad
pany and the Lehigh Coal &
Naviga-
tapped the Wyoming field and ran to
tion Company were charged not only
New York. From the beginning this
with exacting exorbitant tolls, but also
railroad company operated coal mines
with locking up huge reserves of coal
directly. The Lehigh Valley Railroad,
land, and thus preventing the initiation
after 1875, used subsidiary companies
of profitable coal mining enterprises by
for mining coal. The Central Railroad
others.
of New Jersey formed close relations
The labor factor, which was later to
with the Lehigh Coal &
Navigation
assume importance in the development
Company, and became another route
of the industry, did not have a con-
for the transportation of coal to New
spicuous influence in the early period,
York Harbor. Later it acquired vast
although it is recorded that, in the mid-
coal deposits. In the Schuylkill region
dle of the century in the Schuylkill dis-
the Philadelphia & Reading Railroad
trict, strikes were called from time to
became a rival of the canal as a carrier
time to procure suspensions of produc-
about 1842, and before many years
tion, and thereby to improve the prices
absorbed it.
The Reading Road, like
of coal and the wages of the coal miner.
6
the canal, while engaged in the trans-
portation of anthracite, did not acquire
TONNAGE AND PRICE AGREEMENTS
any mining interests during the early
After the Civil War, anthracite
period of development. The interests
prices, which had been very high, fell
of the Pennsylvania and of the Erie
persistently to lower and lower levels.
railroads in the anthracite traffic also
The natural result was marked de-
developed somewhat later.
creases in wages, and the organization
The Schuylkill region was charac-
of labor unions and strikes. Neverthe-
terized by the great number of its
less, the anthracite railroads had found
mining operations, generally conducted
the coal tonnage so attractive that new
on a small scale, and it was realized,
lines, or extensions of old lines, were
even in those primitive times, that,
continually being built, and this great
where the transportation companies
rivalry that existed for coal tonnage
were not themselves interested...