CHAPTER II

CUT OFF FROM FIRE

Rome banished those who had been found to be public enemies by forbidding every one to give them fire and water. That was done by all to a few. In America it is done by a few to all. A small number of men are obtaining the power to forbid any but themselves to supply the people with fire in nearly every form known to modern life and industry, from matches to locomotives and electricity. They control our hard coal and much of the soft,[4] and stoves, furnaces, and steam and hot-water heaters; the governors on steam-boilers and the boilers; gas and gas-fixtures; natural gas and gas-pipes; electric lighting, and all the appurtenances. You cannot free yourself by changing from electricity to gas, or from the gas of the city to the gas of the fields. If you fly from kerosene to candles, you are still under the ban.

The report adopted by the National Association of Stove Manufacturers, at the Thirteenth Annual Convention, 1884, said: "While it is true that iron is a dollar or two lower than last year, and that the cost of labor has also been reduced, your committee is confident that there is not a manufacturer present who can truthfully say he can afford to reduce the price of his goods." "It is a chronic case," the President said in 1888, "of too many stoves, and not enough people to buy them."

The match company, by whose consent all the fires in the United States and Canada are lighted, was organized, as stated, by the Supreme Court of Michigan, for the purpose of controlling the manufacture and trade. Thirty-one manufacturers, owning substantially all the factories where matches were made in the United States, either went into the combination, or were purchased by the match company, and out of this number all were closed except about thirteen.

One of the company, who has been a conspicuous candidate for a nomination to the presidency of the United States, testified that the price of matches was kept up to pay the large sums of money expended to exclude others from the match business, remove competition, buy up machinery and patents, and purchase other match factories. This was told in a suit between two stockholders on a question of their relative rights; but the court, of its own motion, declared the combination illegal, and took notice of the public interests involved.[5]

"Such a vast combination is a menace to the public," said the court. "It is no answer to say that this monopoly has, in fact, reduced the price of friction-matches. That policy may have been necessary to crush competition. The fact exists that it rests in the discretion of this company at any time to raise the price to an exorbitant degree." "Indeed, it is doubtful if free government can long exist in a country where such enormous amounts of money are allowed to be accumulated in the vaults of corporations, to be used at discretion in controlling the property and business of the country against the interest of the public and that of the people, for the personal gain and aggrandizement of a few individuals."

Within the last thirty years, 95 per cent. of the anthracite coal of America--practically the entire supply, it was reported by Congress in 1893--has passed from the ownership of private citizens, many thousands in number, into the possession of the railroads controlling the highways of the coal-fields.

These railroads have been undergoing a similar process of consolidation, and are now the property of eight great corporations. This surrender of their property by the individual coal-mine owners is a continuing process, in operation at this moment, for the complete extinction of the "individual" and the independents in this field. It is destined, according to the report of Congress of 1893,[6] to end "in the entire absorption ... of the entire anthracite coal-fields and collieries by ... the common carriers."

Anthracite coal is geographically a natural monopoly contained in three contiguous fields which, if laid close together, would not cover more than eight miles by sixty. But bituminous coal, although scattered in exhaustless measures all over the continent, is being similarly appropriated by the railroads, and its area is being similarly limited artificially by their interference.

"Railroad syndicates," says the investigation of 1888,[7] "are buying all the best bituminous coal lands along their lines in Missouri, Kansas, Colorado, Arkansas, Tennessee, Alabama, and other Western States and Territories, no doubt with a view of levying tribute upon the people's fuel and the industrial fires of the country."

Canada remains unannexed politically, but its best coal deposits have become a part of the United States. In 1892 a syndicate of American capitalists obtained the control of the principal bituminous coal-mines of Nova Scotia. Among them were men connected both with the anthracite pool and with the combination which seeks control of the oil market of Canada and of the United States.

The process of consolidation is shown by official and judicial investigations to have been in progress in the bituminous fields at least as far back as 1871, with the same purposes, methods, and results as in the anthracite fields, though more slowly, on account of the greater number and vastness of the deposits. From Pennsylvania to the Pacific coast these are narrowed to the territory along the railroads, and narrowed there again to the mines owned or favored by the railroad managers.

The investigations by Congress in 1888 and 1893 both state that the railroads of the country are similarly becoming the owners of our iron and timber lands, and both call upon the people to save themselves. A new law of industry is rising into view. Ownership of the highways ends in ownership of everything and everybody that must use the highways.

The railroads compel private owners to sell them their mines or all the product by refusing to supply cars for their business, and by charging rates for the transportation of coal so high that every one but themselves loses money on every ton sent to market. When the railroads elect to have the output large, they furnish many cars; when they elect to have the output small, they furnish few cars; and when they elect that there shall be no output whatever, they furnish no cars.

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]

This in anthracite alone. How many hundreds, perhaps thousands, of millions more have been taken by the railroads which control the bituminous coal-fields from Pennsylvania to the Pacific, there are no adjudicated means of estimating.

By the same power which has crushed out the independent coal-miner, the retailer in the cities has been reduced from a free man to an instrument to despoil his neighbors--with whom he is often a fellow-victim--for the benefit of absentee capitalists; he is hounded by detectives; by threats of cutting off his supply, is made a compulsory member of a secret oath-bound society to "maintain prices." "Combinations exist," says the Canadian report, "among coal-dealers in Toronto, Ottawa, Montreal, and London. Detectives are employed and the dealers placed under surveillance.... Oaths of fidelity to the constitution and rules are required not only of the members, but also of their salesmen, and the oaths in the cases of these employés are made in some instances retroactive as well as prospective. All violations of oaths are adjudicated upon by the executive committee referred to, the penalties being heavy fines or expulsion.... In accordance with arrangements made with the American coal-dealers, those who were in default in membership, either from inability to pay fines or from other causes, were prevented from purchasing coal in the United States."[15]

The retailer dare not tell his wrongs even in the committee-rooms of Congress. "Your committee," says the report of 1893 to Congress, "experienced great difficulty in obtaining testimony from retail coal-dealers, who apparently labor under fears of injury to their business in case they should appear and give evidence."

"During the first forty years," Congress reported in 1888, "the mines were worked by individuals, just as are farms. The hundreds of employers were in active competition with each other for labor. The fundamental law of supply and demand alike governed all parties. As to engagement, employer and employé stood upon a common level of equality and manhood. Skill and industry upon the part of the miner assured to him steady work, fair wages, honest measurement, and humane treatment. Should these be denied by one employer many other employers were ready to give them. The miner had the same freedom as to engagement, the same reward for faithful service, and protection against injustice that the farm-hand possesses because of the competition between farmers employing hands.... This virtual combination of all employers into one syndicate has practically abolished competition between them as to wages; and gradually, but inexorably, the workmen have found themselves encoiled as by an anaconda until now they are powerless."[16]

There was an investigation of the coal combination by the Pennsylvania Legislature in 1871, the testimony taken in which showed that when, after a thirty days' strike by the men, a number of private coal-mine owners acceded to their terms, and wished to reopen their mines and send coal again to market, the railroads, by which alone they could get to market, raised their freights, as their men were still on strike, to three times the previous figures. These great corporations had determined not to yield to their men, and as they were mine-owners and coal-sellers as well as carriers, they refused to take coal for their competitors.... The result was that the price of coal was doubled, rising to $12 a ton; the resumption by the private mine-owners was stopped; and they, the workmen, and the consumer were all delivered over to the tender mercies of the six great companies.[17]

The coal companies in the anthracite regions keep thousands of surplus laborers on hand to underbid each other for employment and for submission to all exactions; hold them purposely ignorant when the mines are to be worked and when closed, so that they cannot seek employment elsewhere; bind them as tenants by compulsion in the companies' houses, so that rent shall run against them, whether wages run on or not, and under leases by which they can be turned out with their wives and children on the mountain-side in midwinter if they strike; compel them to fill cars of larger capacity than agreed upon; make them buy their powder and other working outfit of the companies at an enormous advance on the cost; compel them to buy coal of the company at the company's price, and in many cases to buy a fixed quantity, more than they need; compel them to employ the doctor named by the company, and to pay him whether sick or well; "pluck" them at the company's stores, so that when pay-day comes around the company owes the men nothing, there being authentic cases where "sober, hard-working miners toiled for years or even a lifetime without having been able to draw a single dollar, or but a few dollars, in actual cash," in "debt until the day they died;" refuse to fix the wages in advance, but pay them upon some hocus-pocus sliding scale, varying with the selling price in New York, which the railroad slides to suit itself; and, most extraordinary of all, refuse to let the miners know the prices on which their living slides--a fraud, says the report of Congress, "on its face."[18]

The companies dock the miners' output arbitrarily for slate and other impurities, and so can take from their men five to fifty tons more in every hundred than they pay for.[19]

In order to keep the miners disciplined and the coal-market under-supplied, the railroads restrict work so that the miners often have to live for a month on what they can earn in six or eight days; and these restrictions are enforced upon their miners by withholding cars from them to fill, as upon competitors by withholding cars to go to market.[20]

Labor organizations are forbidden, and the men intentionally provoked to strike, to affect the coal-market.

The laboring population of the coal regions, finally, is kept "down" by special policemen enrolled under special laws, and often in violation of law, by the railroads and coal and iron companies practically when and in what numbers these companies choose. These coal and iron policemen are practically without responsibility to any one but their employers, are armed as the corporations see fit with army revolvers, or Winchester rifles, or both, are made detectives by statute, and not required to wear their shields. They provoke the people to riot, and then shoot them legally.[21]

"By the percentage of wages," says the report of Congress, "by false measurements, by rents, stores, and other methods, the workman is virtually a chattel of the operator." It says, to summarize: "The carrier drives out both operator and owner, obtains the property, works the mine, 'disciplines' the miner, lowers wages by the importation of Huns and Italians, restricts the output, and advances the price of coal to the public. It is enabled to commit such wrongs upon individuals and the public by virtue of exercising absolute control of a public highway."[22]

The people of Pennsylvania, in 1873, adopted a new Constitution. To put an end to the consolidation of all the anthracite coal lands into the hands of the railroads, this Constitution forbade common carriers to mine or manufacture articles for transportation over their lines, or to buy land except for carrying purposes. These provisions of the Constitution have been disobeyed "defiantly." "The railroads have defiantly gone on acquiring title to hundreds of thousands of acres of coal, as well as of neighboring agricultural lands." They have been "aggressively pursuing the joint business of carrying and mining coal." So far from quitting it, they "have increased their mining operations by extracting bituminous as well as anthracite."[23]

Instead of enacting "appropriate legislation," as commanded by the new Constitution, to effectuate its prohibitions, the Legislature has passed laws to nullify the Constitution by preventing forever any escheat to the State of the immense area of lands unlawfully held by the railroads. Every effort breaking down to meet the evil by State action, failure was finally confessed by the passage in 1878, by the Pennsylvania Legislature, of a joint resolution asking Congress to legislate "for equity in the rates of freight."

In 1887 Congress passed the Interstate Commerce Law, and established the Interstate Commerce Commission to enforce justice on the railway highways. The independent mine-owners of Pennsylvania appealed to it. Two years and a half were consumed in the proceedings. The Commission decided that the rates the railroad charged were unjust and unreasonable, and ordered them reduced.[24] But the decision has remained unenforced, and cannot be enforced. The railroads treat the Commission with the same contumely they visit on the Constitution of Pennsylvania, and two years after the decision Congress in 1893 found their rates to be 50 cents a ton higher than what the Commission had declared to be just and equitable.[25] The Interstate Commerce Law provides for the imprisonment in the penitentiary of those guilty of the crimes it covers. But the only conviction had under it has been of a shipper for discriminating against a railroad.