Bertha-Consumers Co. and predecessor companies, sales for the years ended December 31-Continued

Mr. EATON. Now, Mr. Jones, I understand from this table that you have filed you that received $2.52 per ton from the Pennsylvania Railroad for railroad coal in 1923, and $2.06 from the same railroad in 1927. Is that correct?

Mr. JONES. I can state it from the table. I don't remember. Do you want me to check it?

Mr. EATON. Yes.

Senator GOODING. I think it would be better to give us those prices from the table. It will only take a few minutes.

Mr. JONES. What do you want, Mr. Eaton?

Mr. EATON. Does the Senator wish to pursue his inquiry any further?

Senator GOODING. I think he should go right along with the prices. Mr. JONES. From the Pennsylvania?

Mr. EATON. From the Pennsylvania.

Mr. JONES. In 1920 one division paid $3.39 and the other division of the Pennsylvania paid $3.09 a ton. Shall I go on through? Senator GOODING. Go right along.

Mr. JONES. In 1921, $3.41; in 1922, $3.53 and $3.52; in 1923, $2.52; in 1924, $2.13; in 1925, $1.88; in 1926, $2.02; in 1927, $2.06. I might explain that they did not separate it. Some of that was straight mine run and some was slack. I recall the price paid in 1926 was $2 at the beginning of the year for mine run and $2.50 in the last part of the year. I see they have averaged part of the year. I see they have averaged the slack up with the mine run, which really does not give a true picture.

Mr. EATON. Are you selling that railroad any coal now?

Mr. JONES. Yes.

Mr. EATON. What is the present price?

Mr. JONES. $1.90.

Mr. EATON. Now, Mr. Jones, you have a general knowledge of the financial condition of the coal companies operating in western Pennsylvania, West Virginia, and Kentucky?

Mr. JONES. I know a good many of them.

Mr. EATON. From your knowledge what have you to say as to whether or not it is a fact that the financial distress of these coal companies is just as great, if not greater, in the nonunion fields of West Virginia and Kentucky as it is in Pennsylvania?

Mr. JONES. I would say it is as great.

Mr. EATON. What have you to say as to what accounts for that condition, as to whether it is internal competition between the companies?

Mr. JONES. The biggest competition we have in our district is between each other in the particular district. You will find a variation. I have lists of prices received by different companies, and I have seen as much as 15 to 50 cents a ton difference in prices received by different companies, between the highest and lowest, I should say.

Mr. EATON. Then it is the internal competition, and not the external competition, that is the major factor in producing this distress, in your opinion?

Mr. JONES. The internal competition with each other in the particular district is for the greatest tonnage shipped in the different districts. In other words, the Morgantown district competes with

the Pittsburgh district in Ohio at certain places, but it is only for a certain percentage of the business.

Mr. EATON. Could you tell the committee to what extent that internal competition per ton depresses the prices and prevents them from realizing a bigger price?

Mr. JONES. Well, that is a problem.

Mr. EATON. Of course, it would only be your opinion, Mr. Jones, and that is all I am asking for. Let me put it to you this way: If this internal competition were eliminated, would it be fair to say that from 10 to 25 cents more could be obtained per ton for the coal? Mr. JONES. I think each district could realize 25 cents a ton more for their coal if they worked in harmony with each other in that particular district.

Mr. EATON. Then, as a result of that, is it fair to say that the cutthroat competition is responsible for this condition of financial distress?

Mr. JONES. I think the operators are their own worst enemies. It is lack of cooperation and lack of harmony that is creating this trouble.

Mr. EATON. Do you find any realization of that as expressed in market prices, for instance, where there is a short spell of cold weather? Is that reflected in the market price?

Mr. JONES. Well, in the past year or two the market has been very spotty, and it is regulated by the weather to a very great extent to an extent.

Mr. EATON. What would be your opinion, Mr. Jones, as to the effect in the way of stabilizing the prices of some sort of a selling agency under Government supervision?

Mr. JONES. If a selling agency could be established in each district, and the operators would do team work, there would be no trouble whatever in establishing a fair price for coal.

Mr. EATON. How would that affect the consumer? Would it be satisfactory to him or otherwise?

Mr. JONES. I think if we could eliminate these strikes and stoppages, he would not pay any more or as much as he has paid for coal in the past.

Mr. EATON. And would or would not a stabilized price, which the consumer knew he was going to pay in the near future, be satisfactory to him, in your opinion?

Mr. JONES. I can only speak for some of the large companies. The Pennsylvania Railroad, the Baltimore & Ohio, and some of the larger companies have told me several times that we should work out some plan whereby we could stabilize the prices; that they did not want to buy their coal without a profit to the operators.

Mr. EATON. Now, then, Mr. Jones, under the present conditions, and assuming that no relief is given, what do you think is going to be the end of all this? Can the coal companies last?

Mr. JONES. No. Many of them can not. A company that has $20,000,000 and can afford to lose $10,000,000 or $15,000,000, while the balance of the fellows are going to the wall, might live; but, taking it as a whole, we are going to see more shipwrecks this year than we have ever seen before.

Senator WHEELER. Do you mean in the coal industry?

Mr. JONES. Yes, sir.

Mr. EATON. Did you hear Mr. John L. Lewis's suggestions?

Mr. JONES. I did not.

Mr. EATON. One of them was with relation to promulgating some rule governing the railroads, so that their bargaining power could not be expressed in such as way as to favor, for example, a non-union district as against a union district. What have you to say as to whether or not that would be an advisable or inadvisable thing?

Mr. JONES. Well, I do not agree with Mr. Lewis there. I do not believe in getting too many restrictions. I think the railroads will be fair in buying their coal. I am not one of these fellows that will say they have not tried to buy it cheap, because they are like anybody else buying coal, but they have always treated us fine, and if all our business was like the Pennsylvania Railroad business we would have no trouble.

Mr. EATON. What about the question of consolidating some of these coal companies in larger units? Would that have beneficial effect?

Mr. JONES. It would.

Senator WHEELER. Has not the Pennsylvania Railroad Co. tried to beat down the price of coal?

Mr. JONES. We negotiate with them, Senator, just the same as we do with other people, and when the price goes down to a certain point that there is a profit in it for the operator I have never known them to try to beat it below that. For instance, in the fall of 1926, prices went up temporarily to $4 a ton. We kind of thought the railroads ought to pay $3, but they thought $2.50 was enough, which was a good price, and we took it and were satisfied. They have never shown any tendency to beat the price down below a fair price, based on conditions existing at the time they bought the coal. That has been my experience with them.

Senator WHEELER. What are they paying you for coal now?
Mr. JONES. $1.90.

Senator WHEELER. You could not mine coal for $1.90, could you, and pay the Jacksonville scale?

Mr. JONES. No; but the price for which we are selling coal to them at the present time is based on the 1917 scale, the scale in existence at the present time; not the scale, but I mean the wages being paid.

Senator WHEELER. Take the statement of the Pittsburgh Coal Co., to which reference was made here by the attorney for the miners' union, to the effect that their labor cost was $1.80.

Mr. EATON. $1.80 to $1.90.

Senator WHEELER. At the present time.

Mr. EATON. Under the Jacksonville agreement.

Mr. JONES. Senator, as I said before, I think that must be a mistake, because no coal company could do that. They must have their figures confused. Of course, I do not know anything about their business. We don't sleep together.

Senator WHEELER. They surely could not sell coal at $1.90, if their labor cost was anywhere near like that.

Mr. JONES. They could not.

Senator GOODING. Mr. Jones, I do not think you gave the committee the total cost, including interest on your bonded indebtedness