Show REPORTS ON investigation correspondence between the fair price commission ot of utah and the officers 0 of the utah idaho retail coal dealers brought orth forth isomo boroo interesting data herewith the letter from the pair fair price commission er may itlay 28 1920 IV C stark president of 0 the utah coal dealers association city dear sir the federal fair price commission for utah has noticed the recent advance in the price of coal to the consumer and will be glad to receive from you a statement as to the ost cost ot of coal and profits taken and any further 0 observations ser rations ions you may care to make a as throwing light on the present situation the reasons assisi ked for the advance and how costs and margins prevailing in this state compare with those in effect elsewhere JAMES W FUNK fair price commissioner per N L WILSON WIDSON secretary upon receipt of tills this letter immediate immediate steps were taken to collect the data conal contained ned in the response from your officers which is printed herewith june 8 1920 clr mr N L wilson secretary fair price commission salt lake city utah dear sir answering your letter of T may the recent advances in prices ot of coal to consumers are the results of several causes chiet chief among which being the present car shortage due to this shortage caused by by tho the switch mens strike coal mines in this region have been working broken time during april these mines lost 11 days and 2 hours due to car shortage and in may lost time from the same cause amounted to 11 days and 3 hours total ot of 22 days loss ot of operation means au an actual loss ot of tons ot of coal and it is therefore readily apparent that the shortage ot of coal resulting from car shortage is most serious to convey a definite idea ot of the seriousness ot of the shortage I 1 might say that the he present shortage ot of tons of coal is is sufficient to supply salt lake city tor for about one year coal mines in order to operate at all during the period ot of broken time caused by car shortage must raise prices at the mine retailers musi must fet zit only meet the advance made by the mine but roust must add such additional charges as are necessary to maintain their percentage of 0 profit this percentage is set out on the sheet which is enclosed and I 1 believe you will agree that it would be impossible for dealers to operate on a binalver bin aller margin and remain in business retailers are surrounded by a number of conditions which operate against making the retail coal business a profitable one the most serious of these conditions is that the business Is a seasonable one and whatever profit is made must be made in the months ot of october november december be january february and march Remaining months usually show a loss heretofore we have operated on the favorable end of the inexorable law lav of supply and demand but last year and especially this year conditions have changed to such an extent that retailers are no longer importuned importuner by pro dubers to take coal in former years retailers were given the benefit ot of a summer or shortage price which benefit was passed on to the consumer then it was necessary tor for utah i nines mines to make such inducements in order to work continuously but with a heavy demand tor for utah coal from the west coast utah dealers now find it necessary to compete with outside markets to obtain their belr supply this condition has a decided tendency to stabilize prices the same condition is general over vile the country recently chicago dealers found it necessary to bid against outside markets to acquire illinois coal tor for chicago and pittsburg dealers are required to bid against the lake trade as coa coal for lake points must be moved eyed during navigable months the present and alarming shortage ot of oil Is a decided factor in the demand for coal es especially pecia ily in tills this market many oil burning plants in fit california are being replaced with stokers smokers and utah must supply the coal tor for these plants so front from present indications utah dealers may expect to operate on an advancing market another condition we are required to meet but which does not show in our cost sheets is the loss 0 of coal in transit railroads require that all cars be loaded to capacity retailers are required i to pay mine weights but lew few it any cars will show this weight at destination this loss in transit must be borne by the retailer as the destination weights bill although really a law has never been forced degradation is another item in our costs not sufficiently covered pro pared sizes it if stored slack heavily and when exposed to the weather lor for some time subjects the dealer to a loss loas much in excess ot of that shown on the cost coat sheet submitted the same loss 1098 occurs in handling coal there Is one possibility for a reduction in the price ot of coal that the fair price commissioner may assist the dealers to bring about at present much coal sold here is sold on a credit basis this practice Is wrong as burned coal Is not a tangible e asset and tho the collection ot of the account rests upon the moral responsibility ot of the person buying tho the coal this loss could be eliminated as aa well as the expense of accounting tor for credit sales it if coal were placed on a cash basis responsible pon sible dealers some of them costs experts estimate the credit expense at 25 cents a ton on prepared sizes this reduction it passed to the consumer would bo be a welcome one and would prove no great inconvenience other businesses have foaud this plan advantageous the laundries ot of the city are all on a cash basis and managers to whom I 1 have talked state that were they to resume credit relations an immediate advance in prices would be necessary in n tills this connection I 1 might inight say that recession in price I 1 see no chance tor for ot of coal ex except cepLas as outlined above producers generally take a pessimistic view ot of tile the car shortage and the only way in which the mine price can bo be reduced Is by con continuous sinuous operation broken time is expensive and it if coal is to be mined at all it must be ruined mined at a profit pr fit at least not a loss recently railroads carrying coal have asked tor for a general advance in rates ot of 2391 per cent it granted the retail price ot of coal here will advance about 75 cents per ton retail coal labor compared with other unas linos is not well paid yard men work ten hours a day tor for drivers work on a split basis which means that they receive one halt half ot of the amount they earn hauling coal with a company team at ton they work from ten to twelve hours a day in winter time and an all 1 average wage is about itt in summer months the average wage is with slightly shorter hours in former times companies were able to show a profit on their hauling outfits which profit partly compensated tor for their own low margin but with oats selling at a hundred and hay lay at a ton and all other expense items greatly increased each ton on ot of coal Is hauled at a loss lose retailers are now considering an advance ot of 25 cents a ton on the hauling charge and it Is evident that it must be obtained it if competent drivers and yard men are to be secured with all recent advar wes coal retailers cheaper in salt lake than elsewhere unless it be in towns and cities immediately adjoining coal mines tho the price chart which i is s appended is made up from telegrams received from large dealers in cities shown tho the original telegrams are on tile file and I 1 will gladly submit them it if you so desire may I 1 draw your attention to the tact fact that in only one ot of the places mentioned is the dealers gross margin as low as it Is here and in only one place where the cost ot of delivery is mentioned is it lower than our charge ot of this thia exceptions exception is denver where coal is sold by the denver post to subscribers at cost in conclusion I 1 wish to pledge to you sir Colli commissioner missioner the unqualified support ot of the utah idaho retail coal dealers association in your efforts to investigate prevailing coal prices our members have nothing to conceal were their balance sheets to be collected and compiled a lamentable condition would be exposed and our members teel feel that tile the result of an impartial investigation would bring an immediate mined ate advance in the present margin very truly yours W C PARK president |