Division of Responsibility Between Government and Private Interests in the Conservation of Coal
A review of the conservation measures above listed indicates that many of them are already in operation, and that the initiative for such measures has been largely supplied by private ownership endeavoring to advance its own interest. In this category are to be included most of the improvements in physical methods of mining, preparation, and utilization of coal, the use of substitutes for coal, the concentration of control into larger groups better able to introduce new methods, and the improvement of labor and living conditions; also, under recent conditions, the increase in selling price, allowing for a wider application of these measures. Another group of conservation proposals, which have not yet been put into substantial effect, are obviously beyond the power of private interests; and must be introduced, if at all, by the application of government power. These include the elimination of resource or royalty costs, the control of over-capitalization, the removal of restrictions on concentration of control, the granting of permission for coöperation among competitive units, the regulation of selling price minimums in order to insure during normal times the use of better physical practices, and the control of distribution. In short, it appears that there are two great spheres of conservational activity—one within the field of private endeavor, and the other possible only by collective action through the government. The principal advances thus far made have been in the field of private endeavor.
The government has aided greatly in the advancement of conservation measures arising within the field of private endeavor. One need only refer to many governmental investigations, to the spreading of information as to best methods, and to local compulsory requirements that the best practices be made uniform and that backward interests thereby be brought into line.
Recognition of the fact that there is a large body of sound conservational practice in the coal industry which falls within the range of self-interest seems essential in planning further changes in the direction of conservation. Conservational measures do not all require sacrifice of the individual to the public, nor of the present to the future generations. An exercise of public power is not in all cases essential to the advancement of conservation. The respective limits of the fields of public and private endeavor are not sharply defined, and vary from place to place and time to time, depending upon local conditions and special requirements.
In general, the sphere of private interest includes measures which will bring adequate commercial return. The interest rate is the limiting and controlling factor. When it is possible—by improvement of methods of mining, better planning, better preparation of coal, better transportation and distribution, or better utilization—to secure a larger average return on the investment, or to insure return through a longer period of years, self-interest naturally requires the introduction of such methods as rapidly as financial conditions allow. Even some of the improvements in labor and welfare conditions have been introduced in this way, with a view to securing a more permanent and more efficient labor supply, and thereby aiding the enterprise from the commercial standpoint.
Within the sphere of government activity lie the removal of unnecessary restrictions on private initiative, and such conservation measures as involve some sacrifice of individual returns—in other words, a reduction of the normal interest rate. Exercise of government power may be directly helpful within the field of private endeavor without materially sacrificing private interests; but beyond this point there are additional large possibilities of conservational activity which are clearly beyond the control of private interests. The introduction of any of these latter changes would evidently be so far-reaching in effect, and would require such broad readjustments not only within but without the mineral industry, that the necessity or desirability is not in all cases so clear as in the case of measures already introduced for private interest.
The most obviously helpful step possible to the government in the immediate future is to permit coöperative arrangements under private ownership,—which would make it possible to use common selling agencies, thereby reducing the cost of selling; to divide the territory to be served, thereby avoiding excessive cross freights; and to allot the output in proportion to the demand from various territories, thus eliminating excessive competition and over-production. All of these measures could be accomplished without detriment to the public if properly regulated by the government. The very large saving possible by this means would allow the introduction of conservational methods at the mines without raising the cost to the public.
War conditions required even more immediate and sweeping application of government power than above indicated, but conservational purposes were quite overshadowed by other considerations.
Where the mineral resources are already owned by the government, or can be acquired by the government, some of the troublesome factors in the problem are removed. In such cases it is possible to work out an intelligent plan for government control without the difficulties which arise in dealing with private ownership,—although, of course, new difficulties are introduced (see also pp. 345-347.)
The fact that there are conservational measures possible only to governments has been widely used as an argument for introducing government ownership or control. Recent vigorous demands for the nationalization of natural resources in Europe, and the increasing discussion of the subject in this country, may be regarded as phases of the conservation problem. It is not the purpose here to argue either for or against the drastic exercise of government power in the conservation of natural resources, but merely to call attention to the measures which are being discussed.