Government into Coal?

Out of the economic murk enveloping the bituminous coal industry last week emerged the outline of a startling relief proposal at which most big mine operators, harassed by low prices and labor troubles, clutched hopefully. This was it: let the Federal Government declare soft coal mining a public utility and regulate it accordingly. Sponsor for the proposal was no less a figure than John D. A. Morrow, president of the $165.000,000 Pittsburgh Coal Co., second largest bituminous producer in the U. S.

At a conference last month with Secretary of Commerce Lament, Mr. Morrow and his coal colleagues agreed that overproduction and cut-throat competition were the curse of their industry. If they attempted to get together and regulate themselves by production and price-fixing, they faced prosecution under the Sherman Anti-Trust Act. If, as Mr. Morrow proposed, the Government should step into control of the industry, it could close down the smaller mines, guide the larger ones safely around the Sherman law to profitable mergers and otherwise act to conserve a natural resource. If soft coal mining were put on a paying basis, Mr. Morrow argued, prices would rise sufficiently to adjust miners' wages and thereby eliminate strikes. Secretary Lamont pondered the idea, promised nothing.

Small bituminous companies protested the Morrow plan bitterly. Conservative businessmen looked shocked at what seemed nothing short of Putting the Government into Business, and Socializing Industry. Mr. Morrow, vexed by premature opposition, retreated into silence, declared that any further announcements would have to come from the Hoover Cabinet. But already he had lined up potent support for his plan. Samuel Pursglove (Pittsburgh Terminal Coal) declared: "It always was my idea of what should be done." Other coal operators in favor included Frank E. Taplin (North American). Howard W. Showalter (Continental), Edmund R. Weise (South Fayette), J. H. Jenkins (Hutchinson).

Sound industries do not voluntarily seek government regulation. When it is forced upon them, as upon electric power, they buck and fight vigorously. Oil. lumber, shipping and agriculture, on the other hand, have begged and received government aid because they were economically sick. In the Interstate Commerce Commission the railroads have a protection against ruinous competition which they would not give up for anything. When it was making good money, the bituminous coal industry bridled angrily at the mere suggestion of Federal regulation.

But there were many obstacles to the Government's taking the coal industry into its portfolio. Bituminous coal is mined in 26 States and, unlike power and railroads, cannot readily be fitted in under the interstate commerce clause of the Constitution. Before Congress could act --and act it must--it would have to find some legal means of declaring coal a public utility. A revision of the anti-trust law to allow soft coal mining to regulate itself is one possibility, as President Hoover in his message to Congress last December, pointed out. Another is legislation in the name of conservation whereby the Government would buy up unprofitable mines and hold their contents as a national reserve in much the same way oil on public lands is now held. Operators favoring this step declared that for $25.000,000 the Government could purchase enough mines in western Pennsylvania to put all the rest in that area on a profitable basis.

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