One of the few surviving independent coal producers, who is losing heavily on every ton he sends to market, but keeps on in the hope that the law will give him redress, was asked by a committee of Congress why he did not sell out and give up the business? He was willing, he said, to abide the time when his rights on the railroad could be judicially determined. There was another reason. "It might be considered a very sentimental one. I have spent, sir, considerable time and a large amount of energy and skill in building up my business, and I rather like to continue it."
"In other words, you don't want to be forced to sell out?"
"No, sir; I don't want to be forced to sell my product, any more than I want to be forced to sell my collieries."[8]
Though coal is an article of commerce greater in volume than any other natural product in the United States carried on railroads, amounting to not less than 130,000,000 tons a year; and though the appliances for its transportation have been improved, and the cost cheapened every year, so that it can be handled with less cost and risk than almost any other class of freight, the startling fact appears in the litigations before the Interstate Commerce Commission and the investigations by Congress, that anthracite freight rates have been advanced instead of being decreased, are higher now than they were in 1879, and that coal is made by these confederated railroads to pay rates vastly higher than the average of all other high and low class freight, nearly double the rate on wheat or cotton. These high freight rates serve the double purpose of seeming to justify the high price of coal, and of killing off year by year the independent coal-producers. What the railroad coal-miner pays for freight returns to its other self, the railroad. What the independent coal-producer pays goes also to the railroad, his competitor. "This excess over just and reasonable rates of transportation constitutes an available fund by which they (the railroads) are enabled to crush out the competition of independent coal-producers."[9]
By these means, as Congress found in 1888,[10] the railroad managers have forced the independent miners to sell to them or their friends at the price they chose to pay. They were the only possible buyers, because only they were sure of a supply of cars, and of freight rates at which they could live.
The private operators thus being frozen out are able, as the investigation by the New York Legislature in 1878 showed, to produce coal more economically than the great companies, because not burdened with extravagant salaries, royalties, and leases, interest on fictitious bonded debts, and dividends on false capitalization of watered stock. By the laws of supply and demand they would compete out the unwieldy corporations, but these administer a superior political economy in their supply and demand of cars and freight rates. The unfittest, economically, survives.
"The railroad companies engaged in mining and transporting coal are practically in a combination to control the output and fix the price.... They have a practical monopoly of the production, the transportation, and sale of anthracite coal."[11] This has been the finding in all the investigations for twenty years. "More than one, if not all, of the anthracite monopolies," Congress reported in 1888, "run several of their mines in the name of private operators to quiet the general clamor against carrying companies having a monopoly of mining also."
The anthracite collieries of Pennsylvania could now produce 50,000,000 tons a year. The railroads restrict them to 40,000,000 or 41,000,000 tons,[12] nine or ten million tons less than they could furnish to ward off the frosts of winter and to speed the wheels of the world, and this creation of artificial winter has been in progress from the beginning of the combination.
In the ten months between February and November, 1892, the price of coal in the East, as investigated by Congress in 1893,[13] was advanced by the coal railroads as much as $1.25 and $1.35 a ton on the kinds used by house-keepers, and the combinations, the report of Congress says, "exercise even a more baleful influence on the production and transportation of coal for the Western market." The extortion in the price fixed by the coal railroads was found by Congress, in 1888, to be an average of one dollar a ton—"considerably more than a dollar a ton"—on all consumed in the United States, or $39,000,000 in that year, and now $40,000,000 to $41,000,000 a year. The same investigation found that between 1873 and 1886 $200,000,000 more than a fair market price was taken from the public by this combination.[14]