Distribution of selling price f. o. b. mine, based on each dollar of sales realization.

Labor. Supplies. General

expense.

mine
f. o. b.
Total

cost.

profit).
(not
Margin

I have another exhibit, Senator, which I have initialed, Exhibit D, which shows in graphic form, by periods, from June, 1917, to October, 1920, inclusive, the cost of supplies, general expenses, labor, total expense at the mine, total realization at the mine, and the margin.

The margin in the first period figures 64 cents, January, 1917, to April, 1917. That was before any sort of Government control.

From May, 1917, to November, 1917, the margin is shown as 91.3. That was during price control by the Federal Trade Commission up to August 23, and by the Fuel Administration from August 23, to November 30, 1917.

From December, 1917, to October, 1918, the margin was 51 cents per ton. That was still during the control of the Fuel Administration.

November, 1918, to March, 1920, the margin was only 14.8 per ton. Federal control ended on January 31, 1920, and therefore only three months are included in that period under the control of any Government-price restriction.

The last column shows April to October, 1920, a margin of 48.1.

It will be noted that the margin of the individual operators was greater prior to Federal control and during Federal control than it has been at any time since the control was removed.

On the right of this statement I have shown a table indicating the distribution of the selling price f. o. b. mine, based on each dollar of sales realization. Also divided into the five periods to correspond with the other part of the statement.

The first period shows labor, the amount paid for labor out of each dollar of sales realization at the mines was 487 cents; in the second period, 46.9 cents; in the third period, 54.8 cents; in the fourth period, 64.3 cents; in fifth period, 62.2 cents; the total f. o. b. mine cost shows in the first period, 83.2 cents; in the second period, 78.8 cents; in the third period, 89.2 cents; in the fourth period, 97.4 cents; in the fifth period, 93.2 cents.

The margin of profit out of each dollar of sales realization was, for the first period, 16 8 cents; second period, 21.2 cents; third period, 10.8 cents; fourth period, 2.6 cents; and the last period, 6.8 cents. That is further illustrated on a graphic chart "F," which I would like also to put into the record, Senator.

(The Exhibits D and F referred to are here reproduced.)

Mr. THOMPSON. That is all I have, Senator, unless you have some questions.

The CHAIRMAN. I was just going to ask you about this chart that you first presented here.

The first period, from January to April, 1917, the chart shows the margin to be 64 cents.

Mr. THOMPSON. Sixty-four cents.

The CHAIRMAN. And how did you explain this high margin of 91.3 cents for the period from May to November, 1917?

Mr. THOMPSON. During May, 1917, the individual operators were permitted by the Federal Trade Commission to charge 75 cents more per ton on their domestic sizes than was allowed to the railroad affiliated coal companies.

Senator FERNALD. I did not get that, Mr. Thompson.

Mr. THOMPSON. During May, 1917, the individual operators were permitted by the Federal Trade Commission to charge for their domestic sizes 75 cents per ton in excess of the price to which the railroad affiliated coal companies were restricted.

The CHAIRMAN. Well, on what do you base that statement? The Federal Trade Commission had no control over their prices.

Mr. THOMPSON. I think my statement is correct, Senator.

The CHAIRMAN. Well, you are mistaken about it, I am certain. I think the fact is that the administration was concerned at the manner in which you were raising prices, and that you were told that if your prices advanced beyond a certain figure that your names would be published. There was no authority anywhere, as I am informed, and as I remember it, to control your prices during that period when your margin ran up to 91.3 cents.

Mr. THOMPSON. May I refer back to our statement again?
The CHAIRMAN. Oh, certainly.

Mr. THOMPSON (reading on page 5):

The prices of anthracite in effect in the spring of 1917 were influenced to some extent by the fact that as early as September 15, 1915, there was in the territory east of Buffalo and Harrisburg a shortage of coal, due to the heavy exportation of munitions of war, necessitating large production and a heavy consumption of coal. The tendency was to withdraw bituminous from the domestic markets in other parts of the country in order to satisfy the steam demand in the eastern territory.

The CHAIRMAN. Well, I do not want to just read a lot of stuff into the record unnecessarily. You are going back of this period. Mr. THOMPSON. That is true.

The CHAIRMAN. You are going back to 1915.

Mr. THOMPSON. We are speaking about the top of page 56, Senator.

The CHAIRMAN. I have read that several times.

Mr. THOMPSON. The first Government regulation of anthracite prices was in May, 1917, by the Federal Trade Commission.

The CHAIRMAN. Now, where is your authority for that?

Mr. THOMPSON. I have no authority except it is my understanding, Senator, since I have been interested in the anthracite business. The CHAIRMAN. Well, supposing it should turn out that is not so. In what way would you account, then, for this heavy margin of increase? Suppose it should be found out that you have based that upon an assumption of fact that is not a fact. You would have to find some other reason, would you not?

Mr. THOMPSON. If it is not correct that the Federal Trade Commission in some way controlled the selling prices of anthracite coal, and did not permit the individual operators to sell at 75 cents a ton more than the railroad affiliated coal companies, then the only way to account for that increased margin is the fact that they actually sold at a greater realization per ton on all sizes than they had sold during the previous period.

The CHAIRMAN. Well, I guess that is all, Mr. Thompson.
Mr. THOMPSON. Thank you very much.

The CHAIRMAN. I am very much obliged to you, sir.
We will call Mr. Armstrong.

STATEMENT OF MR. JOHN M. ARMSTRONG, GENERAL MANAGER PITTSBURGH COAL CO., PITTSBURGH, PA.

The CHAIRMAN. Mr. Armstrong, will you state your full name to the reporter?

Mr. ARMSTRONG. J. M. Armstrong.

The CHAIRMAN. What is your residence?

Mr. ARMSTRONG. Pittsburgh, Pa.

The CHAIRMAN. And your business?

Mr. ARMSTRONG. I am general manager of mines for the Pittsburgh Coal Co.

The CHAIRMAN. How large a producer is your company?

Mr. ARMSTRONG. Well, last year it was about 11,000,000 tons, and it has run from that up to 23,000,000 tons, the maximum in a year. The CHAIRMAN. In fact, it is the largest producing company in the country, is it not-single company?

Mr. ARMSTRONG. One of the largest; yes, sir.

The CHAIRMAN. Where are your mines located?

Mr. ARMSTRONG. In the Pittsburgh district, within a radius of 35 miles of Pittsburgh, and the company is also interested in some mines in Ohio, in the Hocking district.

The CHAIRMAN. In Ohio?

Mr. ARMSTRONG. Yes; the Hocking district in Ohio. They have been interested to a limited extent in Illinois, but lately they have sold their interests out there.

The CHAIRMAN. The coal that you produce is entirely in the bituminous fields?

Mr. ARMSTRONG. Yes, sir.

The CHAIRMAN. Senator Reed, you may take the witness.

Senator REED. What year was it you produced 23,000,000 tons? Mr. ARMSTRONG. I think it was 1913.

Senator REED. What is the reason you fell off from 23,000,000 to 11,000,000?

Mr. ARMSTRONG. Well, largely on account of the lack of business, lack of cars, and lack of labor.

Senator REED. For how long have you been troubled with these three lacks just mentioned?

Mr. ARMSTRONG. You do not get two of them at the same time. You have either a shortage of cars, a shortage of labor, or a shortage of orders, and those fluctuating in different portions of the year, reduce the tonnage.

Senator REED. You say last year you produced about 11,000,000 tons?

Mr. ARMSTRONG. Eleven million.

Senator REED. Well, now, Mr. Armstrong, this committee is interested in knowing all of the causes that have produced a shortage of coal, or excessive prices for coal, and I would like you to tell us the coal situation from the operator's standpoint. What have been your troubles?

Mr. ARMSTRONG. Just from an operating and producing standpoint?

Senator REED. From the standpoint of the producer. I mean by that, getting your coal to market; getting your coal sold.