3. To allow larger ownership by companies utilizing the coal (now only 3 per cent owned by such companies).
4. To place restrictions on over-capitalization, which leads to wasteful mining in order to secure quick and large returns on large capital.
5. To remove restrictions on concentration of control. This means, as a corollary proposition, virtual restriction of competition. Concentration of control into comparatively few hands has undoubtedly favored conservation. It is easy to see that the stronger financial condition of the large companies makes it possible for them to take fuller advantage of modern methods of extraction, distribution, and marketing.
This proposal was especially urged for the bituminous coal industry before the war in order to avoid over-production and over-development. The very wide distribution of the bituminous coals, their enormous quantity, and their exceedingly diversified ownership had led to over-development of coal properties. Quoting from Smith and Lesher:[54]
In estimating the aggregate losses incurred by society by reason of the large number of mines not working at full capacity, the facts to be considered are that the capital invested in mine equipment asks a wage based on a year of 365 days of 24 hours, while labor's year averaged last year only 230 days in the anthracite mines and only 203 days in the bituminous mines, with only five to eight hours to the day.
These conditions prevented in some cases even the most modest introduction of better methods, or of changes that would enhance the average profits through a relatively short period of ten or fifteen years at the expense of the present year. It was necessary to get at the best of the coal available in the cheapest possible way, regardless of the losses of coal left in the ground.
To some extent the force of this argument was minimized by war and post-war conditions, but even yet development of coal mines is ahead of transportation and distribution.
6. To allow coöperation in the limitation of output, in the avoidance of cross freights, in gauging the market in advance, and in division of territory, all of which would allow cheaper mining and thus give larger leeway to conservational measures. This necessarily would be accompanied by government regulation. According to Van Hise,[55] who was active before the war in advocating this conservational measure, such a procedure
is neither regulated competition, nor regulated monopoly; but the retention of competition, the prohibition of monopoly, permission for coöperation and regulation of the latter. In Chicago there cannot be one selling agency for the different coal companies which operate in Illinois, but there must be many selling agencies, and the coal of Pittsburgh must come into Illinois and the Illinois coal go toward Pittsburgh; every one of which things makes unnecessary costs, but all of which are inevitable under the extreme competitive system. Because of these facts it is necessary to waste the coal. If at the very same prices the different mines could coöperate in the limitation of the output, avoidance of cross freights, gauging the market in advance, and division of territory, they could mine their coal more cheaply, have a greater profit for themselves and conserve our resources.
To some extent the plan here advocated was put into effect during the war by the United States Coal Administration; but the conditions of this trial were so complicated by special war requirements, that the conservational advantages of unified control were not demonstrated.